Boring: None Dare...pp. 48-66

 There's a point where someone writing a work loses the thread. They don't necessarily run out of things to say, but they lose that initial umph that was motivating their earlier work. If you've ever tried to bullshit your way through a paper for a class that didn't matter, or even worse, given a presentation that you remembered all of the facts for but can't string together the point. We've all been there. I've seen it from both ends as a student trying to muddle a defense in Philosophy of Language, to the student two years ago who had all of the incriminating evidence on FIFA but couldn't put it together the right way. 

In my case, as a student, it was just a course that I couldn't get my brain around. I knew the material enough to pass the tests but it was just difficult to formulate why Wittgenstein's position was so important. At least, however, I had the correct premise. 

That brings us to this week's selection, a much longer one than usual; and the reason why is because there's no energy to the end of this chapter. Part of that is on Allen and part of it is on me--but its Allen's fault. 

After dipping his foot into Anti-Semitism by claiming that, you know it's the ADL that's the real Anti-semites in the last chapter, we're back to regular banking talk. The section begins strong, even if it is quite the shift from the Anti-Semitic claims on the previous page. Allen talks about the inordinate power of the banks over countries...which is a problem but again, it's not the problem he thinks it is. He gets so close to the goal but then just gives it to the other team. He reports that the London Financial Times on 26 September of 1921, claimed that "half a dozen men a the top of the Big Five Banks could upset the whole fabric of government finance by refraining from renewing Treasury Bills."

I have no idea if this quote is accurate, but Allen doesn't understand it. The existent problem is not the treasury bills, which is what he's focused on. It's the fact that five banks have that much sway. Now, I have to be fair, Allen is concerned about this--but that's because he thinks the situation puts a country into the banks' debt. Which again, is a false premise. To repeat from two posts ago, the relationship between a bank and a government is not like it is between a bank and a private entity. That low energy of this chapter that I am feeling is because it's almost silly to read this with the understanding that the entire chapter is built on this false understanding of the economic system. 

Where Allen almost nails it in this quote is in condemning the power of the big banks. We saw this problem in 2008 when the housing market collapse also exposed the Madoff scheme. The world's governments had to bend over backward to prop up the banks in order to prevent an utter collapse. Let's be clear: all of that was necessary because the banks invested too much of our money into housing investments which then they bet that those investments were bulletproof. There's also the problem that those bulletproof ratings were based on rating agencies that had a financial incentive to rate those investments as AAA. And finally, the regulatory agencies had an incentive to look the other way because the regulators would hope to get jobs at the banks later. All of that is a bit simplistic, but overall is the gist of what happened over decades. Allen isn't worried about this, he's worried that the CEO of Goldman is going to order a nuclear strike against Texas and then tell Nixon that the Council on Foreign Relations is in charge of the U.S. because the debt is so high. The irony here is that what really happened was impossible in Nixon's day because of the Glass-Steagal act of 1932. 

The real real irony is when Allen tries to condemn the COMMUNISTS Marx and Lenin who both argued for national banks. According to The Communist Manifesto claims that the centralization of credit is one of the goals of the socialist revolution while he claims that Lenin claimed that 90% of communizing a country was establishing a central bank. What Allen misses here, and it's super important, is that Marx is arguing for a state-run bank, while all of the other problems that he brings up with banking concern private banks. The largest holders of treasury bills, according to Allen, are these multi-national privately owned banks. Meaning, that Marx and Lenin (I didn't check the Lenin quote), are offering the SOLUTION TO THE PROBLEM. 

It's not the solution to the problem to be clear. It's just the solution to Allen's problem. You don't like private banks? Ok, nationalize them and make them accountable. 

This is the problem with the entire chapter. Sure, we get some bullshit about the federal reserve, Allen namedrops Quigley (who claimed that Allen completely misunderstood his work), we get some more Anti-semitism, but it's all based on the foundation that national debt somehow places the country at risk of being controlled by a bank. It's tedious to read because every argument pops in my head as, "sure this would be a problem but you don't know how finance works so..."