Daily Archives: 9 December 2014

Maybe That’s The Point

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Banks are urging some of their largest customers in the US to take their cash elsewhere or be slapped with fees, citing new regulations that make it onerous for them to hold certain deposits.

The banks, including JP Morgan Chase & Co, Citigroup Inc, HSBC Holdings PLC, Deutsche Bank AG, and Bank of America Corp, have spoken privately with clients in recent months to tell them that the new regulations are making some deposits less profitable

And

The change upends one of the cornerstones of banking, in which deposits have been seen as one of the industry’s most attractive forms of funding….

“Loanable funds.” That’s what those deposits are called in economist circles. The funding in question is a major source of the monies that banks lend on to other customers for the latters’ investment goals—investment in things like capital plant improvement (new factories, new equipment to put in existing or new factories, computers for a company’s IT infrastructure or for employee productivity improvements), R&D, even short term to make payroll until payments for booked sales arrive.

The regulations in question here are intended to make our banking system “safer,” but this is a holdover from the government’s (read: regulators and remaining politicians) stinking…panic…over the Panic of 2008.

And as is usually the case with (especially big) government intrusions into our marketplace, there are unintended consequences.

Or maybe these aren’t so unintended. Recall that, for all the cover “panic” provides for suboptimal behavior, these are extremely intelligent men and women. It’s hard to believe they couldn’t predict these consequences: it’s Econ 101 that if you raise the price of something, you’ll get fewer buyers for it.

Also, keep in mind that the private sector competes with government in the marketplace.

Finally, keep in mind that fundamental tenet of the Democratic Party, the dominant party in American politics during the era when this sort of regulation was proselytized and expanded: Americans are stupid, and it’s OK to lie to us. For our greater good at the hands of our Betters. A step in this is to bring our financial system, beginning with our banks, to heel.

Who’s the Rape Victim in the “Jackie” Story?

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University of Virginia President Teresa Sullivan suspended until January the entire fraternity system at UVA. She did it on the basis of a newspaper story whose author—Sabrina Rubin Erdely—and which paper’s editor—Will Dana—consciously and openly stated that they had done nothing to fact check the claims made by this “Jackie” person and which Erdely published.

On the heels of that, we get Zerlina Maxwell writing in another newspaper article headlined

we should generally believe rape claims

That headline, incidentally, originally appeared in the online edition as automatically rather than generally, but apparently The Washington Post thought it better to weasel-word things a tad. What Maxwell said in the body of her article, though, remains unaltered:

We should believe, as a matter of default, what an accuser says. … Even if Jackie fabricated her account, U-Va. should have taken her word for it….

Which UVA did: not only the allegedly involved frat was suspended, all of them were. As far as I can tell, as of my writing of this the fraternities remain suspended, even with the “Jackie” story exposed as false. I’ll be happy to update this article if someone can show me that Sullivan has lifted her suspension prior to 9 Jan 15.

As a result, particularly of Sullivan’s actions, but actively aided and abetted by Maxwell and triggered by Erdely’s now known to be false story, an entire institution and every member of it has been irretrievably smeared. These young men have had their reputations trashed, or alternatively will no longer be able to claim affiliation with their fraternity or any part of the Greek system.

Worse, the victims of real rape now have an additional hurdle—credibility—to overcome as a result of these three women’s…behavior. Actual rape victims are being raped a second time, in advance.