Too Big To Fail

Did you vote for that? Did you consent to that?

The Great Taking outlined by David Rogers Webb is the ultimate climax of the ‘too big to fail’ scheme we are living under. Who and what are deemed too big to fail? Ben Bernanke, former Chairman of the Federal Reserve put it this way in testimony before the Financial Crisis Inquiry Commission formed following the 2008 financial crisis “A too-big-to-fail firm is one whose size, complexity, interconnectedness, and critical functions are such that, should the firm go unexpectedly into liquidation, the rest of the financial system and the economy would face severe adverse consequences.”

The theory is that the failure of one or more of these ‘too big to fail’ banks (also referred to as systemically important banks) threatens the entire financial system with negative impacts on the economy and on each of us. The consequences would be so severe, the bankers warn, that our financial system and our entire economy would not recover. That sounds pretty bad, and yes there would be far reaching consequences because we have allowed these big banks and financial firms to have far too much control. But before we agree to support the too big to fail theory at the cost of losing our freedom and property, we should first fully understand the nature of the financial system today and how it works (or doesn’t) for us.

Is our current system worth saving?

The question simply put - is our current financial system worthy of protecting with our blood and treasure? This system that allows the big banks, the federal reserve, and other financial institutions to gamble with our property, devalue our currency, and turn us into debt slaves. When these protected class entities win with their risky investment schemes, they reap the profit and pay out hefty bonuses. But, when the house of cards collapses their losses are socialized, that is absorbed by the government, meaning us – and then they pay out hefty bonuses. Heads they win, tails they win. What a deal! This is the financial system that must be protected at all costs? Really?

We’re supposed to be grateful?

We are told by ‘the experts’ that the products and services these banks provide are the very foundation of our lives. That untold individual and societal harm will come if a ‘too big to fail’ bank goes under. They actually think that once we – the huddled masses - recognize the magnanimity and benevolence of these banks we will demand too big to fail bailouts and gladly sacrifice our savings on bank ‘bail ins’. Sacrifice that is required for the common good, of course. The believe we should bow down and kiss the very ground these magnificent ‘masters of the universe’ walk – because they walk and work for us! Pass.

It should come as no surprise that James S. Rogers, lead drafter of the 1994 Uniform Commercial Code (UCC) Article 8 revision used that same argument to defend upending 200+ years of personal property rights. Rogers referred to our long history of private property law as ‘primitive property notions’.¹ Founder John Adams had slightly different take on those ‘primitive property notions’.

“Property is surely a right of mankind as really as liberty…. The moment the idea is admitted into society, that property is not as sacred as the laws of God, and that there is not a force of law and public justice to protect it, anarchy and tyranny commence.”²

I am siding with John Adams on this one but for Rogers those ‘primitive property notions’ work against us as investors by placing too much risk on the big banks. Something had to be done and that something was the 1994 UCC Article 8 revision that gives you a ‘security entitlement’ when you buy a stock, bond, or mutual fund instead of traditional (if primitive) property rights. The result Rogers argues, benefits everyone while protecting our property rights would actually hurt us. Yes, he said that in the article cited in the footnote above.

UCC Article 8

This UCC law in effect in all 50 states is the foundation of The Great Taking and its purpose is to protect the big banks (the financial Armageddon planning I referred to in an earlier post). Lead drafter of the law, James S. Rogers, argues that legal certainty for banks that lend money to financial services firms is necessary and for our benefit. It is the grease that spins the gears to provide the financial services that benefit everyone. Financial services, he believes, we cannot live without. Essentially, the benefits we reap as investors requires capital and the only way for banks to provide that capital is to give them priority over your investments in the event of a major financial crisis. Oh, and without your knowledge or consent. Does that make you feel better?

How we were once hypnotized to willingly participate in a financial system that robs our wealth and our future while we blissfully Netflix and chill is a story for another day.

But we are awake now.

The ‘red pill’ option is to dismantle our current global financial system ultimately eliminating the Federal Reserve, the Bank of International Settlements, and the rest. The good news is that this path starts locally in all 50 states by amending UCC Article 8 to restore personal property rights. There will be a steep price to pay because the architects behind the current law will not go quietly in the night. But this path holds the promise of freedom, security, and a better world for our grandchildren.

The alternative is the ‘blue pill’ option. Return to the illusion we are living under; continue on the path we are on – deceiving ourselves into believing that someone somewhere is looking out for us while others are picking our pockets. There is no off ramp on this path – it ends in subjugation and debt slavery.

Which path? The choice is in our hands.

1. James S. Rogers POLICY PERSPECTIVES ON REVISED U.C.C. ARTICLE 8 43 UCLA Law Review 1431, 1517 (1996)

2. The Works of John Adams. Edited by Charles Francis Adams. 10 vols. Boston: Little, Brown & Co., 1850--56.