The Fourteenth Banker Blog

May 18, 2010

Whitehouse Amendment

Filed under: Running Commentary — thefourteenthbanker @ 7:36 AM

Yesterday I argued that Meredith Whitney was wrong in saying that the regulation movement was counterproductive.  Perhaps all she meant was that it was counterproductive to the big banks whose stocks she covers.

Here is another take on the issue.  An excerpt:

Aristotle called usury the “most hated form” of wealth-accumulation. Dante sent practitioners to the seventh circle of hell. The Qur’an proposes that usurers are controlled by the devil’s influence, and we’ve all heard how Jesus, that avatar non-violence, was stirred to a round of ass-kicking when he found the money lenders in Herod’s temple.

Screwing the poor through usury has been considered an abomination throughout human civilization – a disease of the body politic that sickens people morally and economically.

Usury is what this amendment is about.  Usury laws in one state are supplanted by locating the credit card company HQ in a state with more liberal usury laws.  This opportunistic strategy seems to serve the organizing bank because it extracts more profit.  I submit that it does not serve the organizing bank because it makes it parasitic, and who wants to be a parasite?  There are consequences and the reform making its way through Congress now is a result of all the actions of banks over many years.  These choices now haunt them.  The spiritual references above represent universal truths.  Left out is a word we use often, Karma.  The banks have bad Karma.

Karma is not punishment or retribution but simply an extended expression or consequence of natural acts. Karma means “deed” or “act” and more broadly names the universal principle of cause and effect, action and reaction that governs all life. The effects experienced are also able to be mitigated by actions and are not necessarily fated. That is to say, a particular action now is not binding to some particular, pre-determined future experience or reaction; it is not a simple, one-to-one correspondence of reward or punishment.

There is an important book coming out soon that challenges the basis of our monetary system.  It does not invalidate banking. It puts banking in a larger context of human well being.  You can read about the author here and some links are below. I’m not sure I would endorse everything Bernard Lietaer will say, but I know it will be very thought provoking.  Bernard posits that the nature of interest is that it creates monetary scarcity.  This creates profit opportunity for some and redistributes wealth in society.  I hope I have not dumbed that down too much.  All this amendment does is seek to return regulatory control to states, which would have as one effect the moderation of interest charges.

Following my normal theme, this amendment would force banks to adapt.  If Credit Cards are not an opportunity to pillage, perhaps there will be some return to the village, to trade in the village as a citizen of the community.

More tonight on this topic.



  1. Oh, boy, ANOTHER must have for my reading list! 🙂

    The only thing that keeps me relatively sane is my belief in the law of karma. Except right now I want some of John Lennon’s kind – INSTANT!

    My fear is that the perpetrators of the usury, greed and avarice are not unaware of what they are doing to the rest of us; they know, they just don’t give a rat’s butt, because they have convinced themselves that they will somehow escape the result of the pollution, degradation, and bad management they have inflicted on us all.

    I worry for my daughter, and am glad I am not just starting out.

    Comment by Sandi — May 18, 2010 @ 11:26 AM | Reply

  2. This may not be specifically on target, but it speaks to how economic models, stats, etc. often leave out real people, and don’t tell the whole story –

    From the NYTimes magazine article, “The Rise and Fall of GDP”

    “The main barrier to getting progress has been that statistical agencies around the world are run by economists and statisticians,” Michalos said. “And they are not people who are comfortable with human beings.” The fundamental national measure they employ, he added, tells us a good deal about the economy but almost nothing about the specific things in our lives that really matter.

    Comment by Sandi — May 19, 2010 @ 11:17 AM | Reply

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