The Patriot Post® · Too Big To Fail vs. Too Small to Matter

One of a political columnist’s jobs is to spot trends. Beginning in 2011, this writer began exploring the effort to mainstream transgenderism, writing about the State Department’s announcement that it would be removing the words “mother” and “father” from passport applications and replacing them with “gender neutral terminology.” By the end of last year, Glamour Magazine had named Bruce “Caitlyn” Jenner Woman of the Year, and the UK’s Telegraph had championed the “transitioning” to another sex of 80 primary school-aged children, some as young as four. In short, transgenderism, with all its intended societal upheaval attached, has been force-fed to the public. So what’s to be “normalized” next?

“Few places are tilting toward a cashless future as quickly as Sweden, which has become hooked on the convenience of paying by app and plastic,” The New York Times approvingly reported the day after Christmas. But that story was hardly an anomaly. In March of last year, Washington Post blogger Dominic Basulto published an article entitled, “Don’t show me the money: Why eliminating cash may be the secret to prosperity.” The piece extolled the ability of emerging nations in sub-Saharan Africa to maximize the economic potential of “society’s poorest members” by eliminating cash.

In April, Bloomberg News revealed that Willem Buiter, Citigroup’s chief economist, wants to eliminate cash because it’s a pesky inconvenience for banks that wish to charge negative interest rates to offset economic crises. “In a new piece, Citi’s Willem Buiter looks at this problem, which is known as the effective lower bound (ELB) on nominal interest rates,” Bloomberg reported. “Fundamentally, the ELB problem comes down to cash. According to Buiter, the ELB only exists at all due to the existence of cash, which is a bearer instrument that pays zero nominal rates. Why have your money on deposit at a negative rate that reduces your wealth when you can have it in cash and suffer no reduction? Cash therefore gives people an easy and effective way of avoiding negative nominal rates.”

In other words, earning nothing on your money isn’t good enough for a elitist financial class that has amassed trillions of dollars of debt with no rational way to unwind it — other than taking the Average Joe to the cleaners.

Buiter is hardly alone, however. In May, Harvard economist Kenneth Rogoff echoed that sentiment in the Financial Times, explaining that getting rid of cash “would eliminate the zero bound on policy interest rates that has handcuffed central banks since the financial crisis. At present, if central banks try setting rates too far below zero, people will start bailing out into cash. Second, phasing out currency would address the concern that a significant fraction, particularly of large-denomination notes, appears to be used to facilitate tax evasion and illegal activity.”

Banks are “ handcuffed?” What about millions of ordinary people getting no return on their savings for almost a decade in what amounts to one of the most pernicious “tax” hikes in history? As for tax evasion and illegal activity, is cash manipulation more of a problem than computer hacking, such as that perpetrated by an international ring that stole almost a billion dollars?

In September, Bank of England’s chief economist Andy Haldane added his voice to the chorus, bemoaning the ability of people to “hoard” cash because it once again hampers central banks that wish to set interest rates below zero. Eliminating cash, he asserted, “would allow negative interest rates to be levied on currency easily and speedily.”

No doubt.

Rogoff gives the totalitarian game away. “Without going into gory detail, in both the eurozone and the US there is roughly $4,000 in circulation for every man, woman and child, and it is not easy to find,” he writes.

In other words, for the elitist class, hard-to-find money is a bug in the system because it gives people a measure of anonymity and privacy. Sentient human beings understand that cash might be the last bastion of resistance to the elimination of that privacy — along with the liberty such privacy ultimately engenders.

Unfortunately, sentient thinking is no match for mindless convenience. “No one uses cash,” said University of Gothenburg student Hannah Ek, 23. “I think our generation can live without it.” Former ABBA band member Bjorn Ulvaeus is equally clueless. “Everything speaks in favor of a cashless society,” he said. “It’s a utopian thought, but we’re very close to it.”

Utopian? Buiter believes the Federal Reserve should have been able to lower its interest rate to negative 6% during the financial crisis that began in 2007. The financial crisis was precipitated by a hideous alliance between government progressives and financial institutions. The former insisted that any resistance against their effort to turn home ownership into a de facto affirmative action project constituted racism, and the latter decided that, once the sub-prime mortgage racket was in full swing, extending equally risky prime loans to virtually everyone was the order of the day.

And when it all blew up, what did American taxpayers get? They got left holding the bag on $700 billion in TARP funds, four rounds of Quantitative Easing (QE), Zero Interest Rate Policy (ZIRP), trillion dollar-plus annual deficits, and a $789 billion “shovel-ready” stimulus — all of which were supposed to kick-start the demand side of the economy. What it did instead was kick-start the weakest recovery in American history. Moreover, as former Federal Reserve bond buyer Andrew Huszar framed it, the Fed’s machinations amounted to “the greatest backdoor Wall Street bailout of all time.”

What didn’t the American taxpayer get? A single prosecution, or even a single resignation from the nation’s self-proclaimed “best and brightest,” in return for that bailout, and the trillions of dollars added to the national debt.

But governments and financial institutions learned their lesson, right? “Despite widespread talk of ‘deleveraging’ after a global credit bubble burst in 2008, the world continues to pile on more debt,” reported CNBC last February. “According to a new study by McKinsey, the world ended last year some $57 trillion deeper in debt than it was in 2007. The total tab — owed by governments, companies and households — is now more than twice the value of the world’s total economic output.”

As night follows day, the elitist message is clear: If we don’t eliminate cash, we’re headed for financial Armageddon when the credit bubble bursts — again.

And just as the normalization of transgenderism is intensifying, we can expect an equally feverish push for the elimination cash. “There are understandably concerns about privacy, especially when payments are made through social networks,” the Washington Post’s Basulto declares. “At the end of the day, however, there is a direct correlation between becoming a cashless society and becoming a digitally innovative society. The end of money may just mean the beginning of prosperity.” A prosperity that sacrifices privacy and liberty, sold under the banner of innovation, convenience and “utopian thought.”

Too big to fail versus too small to matter is more like it.