A popular canard of the “progressive” line of thinking is that interest rates are a tool of exploitation – yet another in the long line of misunderstood stories of oppressors versus oppressed. To suggest that interest is unique to capitalism or comes from capitalism is in itself a laughable claim, particularly since nothing like capitalism existed until the Industrial Revolution. Further, there are stories of interest in the Bible and even in some earlier recorded literature.
But that does not deter the serious “thinkers.” That is just my “view” they say. I am a privileged white-male (read: oppressor) who knows not the suffering of the oppressed.
Sure.
But if interest is a result of transacting in money and if interest is unique to capitalism, then how come land in places with no money or without capitalism is not infinitely priced? And we don’t need money prices, we simply need some measure of what people do to obtain land and protect land. Or even better, if interest is unique to capitalism, then how come the government charges you a fee if you are late in paying your taxes? Or how come when governments issue consols, they do not obtain an infinity of resources from people just dying to get access to an infinite stream of income from the government?
Feel free to add your own favorite proof.
The real crime being committed now is the program to buy $85,000,000,000 (did I get the zeroes right, WC?) of ten-year Treasurys AND unspecified toxic loans from The Banks Too Big to Fail. It looks like this will continue until unemployment gets to the seventies normal of 6%, which may occur when GM stock sells for $70 per share, which may be never.
Silently, red state people with equity are being robbed of interest on their certificates of deposit, and they will be whipsawed if they buy long-term bond mutual funds with greater risk in search of needed income. I have never seen such a bias toward debtors and banks, who perversely count as assets loans.
There is one for your money and banking class. What happens when government by force favors debtors over creditors for long?
I know the first lesson in banking is to buy two banks, and have one bank bet interest rates will rise, the other bank bet they will fall. Keep the one that succeeds, and let someone else hold the bag for the failure.