Hot on the heels of former Biden Currency Comptroller nominee Saule Omarova’s exhibited thirst to follow China towards a government-issued, government-controlled digital so-called currency, Sen. Liz Warren (D-Massachusetts) has put aside her tomahawk and Indian war paint long enough to pick up the Omarova baton.
She, too, is touting the glorious future of a United States in which the central government-banking nexus not only will issue the currency, hand it to the specially connected, and then see its inflation of the money supply bid up prices by the time you get any of it - she's also dreaming a future USSA where that so-called “money” will be digital, always traceable by the feds, and open to deletion if you don’t spend it, among many other wonderful “god-of-the-state” traits.
In a chat with Warren-friendly NBC host Chuck Todd, Warren exuded condescension for us low-brows, adoration for the state to “regulate” what should be private exchanges between willing participants, and a toweringly conceited avoidance of the root of economic booms and busts: state/political influence of the money supply and financial sectors of the economy.
As CoinDesks’s Greg Ahlstrand observed, she’s fully aboard the “digital cash is coming, but don’t say we’re forcing it on people” train:
So a lot that banks do wrong, if you think, 'We could improve that in a digital world,' the answer is, 'Sure you could.' But in that case, let's do a central bank digital currency...
Notice how she blames the banks for “doing wrong,” and how she uses the collectivist, forced-inclusion “we,” as if she helped found a bank or investment company, when, in fact, anything the government creates is done through tax theft, force, and the claim of power, not through private, voluntary investment.
That’s pretty audacious, to deflect away from government, and, at the same time, imply that the government-forced “we” is the answer to what she, a government shill, claims are problems.
And, of course, part of her answer is a government-licensed, central-bank-issued “digital currency.”
Yes, I think it's time for us to move in that direction.
“Us.” It’s great to be included in her plans, isn’t it?
Responding to Todd's question on whether bitcoin (BTC) will face at minimum being regulated like a commodity, Warren responded, ‘I think it's going to end up getting regulated,’
Let’s pause to reflect.
Politicians are infamous for using the passive voice, rather than the active voice. Thus, even when they are the ones making the mistake, they will say, “Mistakes were made…”
Made by whom?
And here, we see Warren speaking with just that kind of a forked-tongue, jawboning about the government “regulating” Bitcoin, but she uses the passive voice to imply that said “regulation” – otherwise known as claims of government power to snoop, extort, and shut down – are just going to happen, like weather events.
And, as Ahlstrand notes, she cites for Todd the “subprime mortgage financial crisis that started in 2007 as an example of why it's needed.”
But virtually anyone familiar with the “subprime financial crisis of 2007," (which was not isolated to the “subprime mortgage” sector, and extended into 2008, 2009, 2010, and 2011) knows that even the label “subprime mortgage financial crisis” is a term designed to deflect.
The economic troubles to which she refers have roots going back much further in time than 2007 and going much deeper than the subprime mortgage market.
They stem from government policy and Federal Reserve control of both the money supply and interest rates.
The Ludwig von Mises Institute has a wealth of information on the topics of central banking, inflation, government-backed loans creating moral hazards (i.e. inspiring reckless behavior on the part of those institutions that no longer carry their own private risk), but for the sake of concision, allow me to refer you to an excellent 2011 BizPAC Review piece by John R. Smith, who traces the real source of the “housing” and larger economic problems Warren blames on pretty much everyone but the people who really are at fault.
As Smith notes:
The root cause of the (2007, etc) housing disaster occurred after the federal government gave the green light and bullied lenders onto an 8-lane highway toward making money available to all comers for home mortgages. Here is the true and fascinating story of how that started:
I will offer key portions, but I recommend his entire piece.
President Jimmy Carter sponsored the well-meaning Community Reinvestment Act (CRA) in 1977. It required banks and savings and loans to offer credit to ‘underserved populations’ so they could obtain credit, including home ownership.
Because, ya know, the power to do so is right there, in Article 8,000, of the Constitution.
Then, in the late 1980s, the unconstitutional Federal Deposit Insurance Corporation (FDIC) increased its insurance for bank deposits, thus inspiring banks to be less vigilant about their loans, and, in turn, handing out mortgages to many people who couldn’t afford them, causing an early 1990s collapse in mortgage payments and massive defaults.
The answer from government? More government.
In 1991, the Home Mortgage Disclosure Act required lenders to report rejection rates by race. Lenders were informed that their loans would be examined for evidence of bias. Violators would face fines — get this — as high as $500,000. The Democratic Congress in 1992 passed the Federal Housing Enterprise Act, providing HUD the hammer to carry out Congressional intent to ‘meet the mortgage credit needs of all potential home buyers, including those with low and moderate incomes.’
Mix that with the FDR-era creation of “Fannie Mae” and Johnson-era “Freddie Mac” – which are government-generated, government-backed corporations given virtually free rein to act as eager consumers of mortgage-backed securities, and you have a very dangerous mix that just keeps getting more hazardous.
The 1992 (Federal Housing Enterprise Act) was the fuse that lit the largest housing blow-up the U.S. has ever seen, because one provision required that mortgage giants Fannie and Freddie ‘should accept down payments of 5 percent or less, ignore impaired credit if the blot was over one year old, and otherwise loosen (their) lending guidelines.’
That also was a time when the Clinton “Justice” Department targeted local and regional banks if they did not lend a Clinton-administration-approved level of mortgages to “underserved” people in certain regions. These would be folks who, in a normal market, did not have the income to get properly functioning home loans because they were too high-risk.
As Smith puts it:
The CRA (Carter’s Community Reinvestment Act) was a club ‘used to force banks to subsidize poor communities with close to $1 trillion in high-risk loans…’
And George W. Bush continued the practice, even as, starting in 2002, the Federal Reserve dropped the Prime Rate to near zero percent, and lenders began trying to fill their government-mandated quota-like home mortgage goals by offering “variable interest mortgages.”
It turned into a free-for-all of banks approving loans for people who clearly couldn’t afford to repay them. By 1996, 42 percent of Fannie and Freddie’s mortgage financing went to borrowers with below-median income. This target increased in 2000 to 50 percent, and was 52 percent by 2005.
And when the banks increased the interest rates for those variable-rate loans, many recipients no longer could pay them.
Curiously, Liz Warren didn’t discuss that. Nor did she discuss her participation in the housing market carrion fest when many of those properties went up for sale at bargain prices.
But that’s okay. She’s got the answers to what she implies are other people’s errors: just bow to the government.
Joe Biden bragged about his economy, but refused to comment on the rampant inflation. pic.twitter.com/KIqrlXD5GE— MRCTV (@mrctv) April 4, 2022
(Cover PhotoL Gage Skidmore)