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Federal Reserve Finds No Documents at FRBNY Responsive to Bloomberg FOIA Request, Court Grants Emergency Stay Application

Res ipsa loquitur's picture




 

On August 28, 2009 the U.S. District Court of the Southern District of New York granted the Federal Reserve’s Order to Show Cause and motion for a stay of the Court’s recent Order compelling the Federal Reserve to produce “confidential” commercial and financial information concerning the financial institutions that have borrowed from credit facilities established by the Federal Reserve. The Federal Reserve’s current position is that the immediate release of documents would moot any appeal, and cause irreversible damage to the institutions whose information is disclosed.

In support of the Federal Reserve’s emergent application, the Clearing House Association, which describes itself as “an association of leading commercial banks” also filed a Declaration. Although the specific names of Clearing House members borrowing emergency funds were not revealed, General Counsel for the Clearing House did provide their members’ names in his Declaration, which include: ABN Amro Bank N.V., Bank of America, National Association; the Bank of New York Mellon; Citibank, N.A.; Deutsche Bank Trust Company Americas; HSBC Bank USA, National Association; JPMorgan Chase Bank, National Association; UBS AG; U.S. Bank National Association’ and Wells Fargo Bank, National Association. (ZH readers can learn more about the Clearing House Association, at www.theclearinghouse.org/about/association/000223f.php ).

The Clearing House disagreed with the Court’s decision regarding the competitive impact of disclosing a borrower’s participation in the FRBNY’s emergency funding programs, calling any disclosure of information, “potentially disastrous” and could result in “the immediate demise of an institution”.  General Counsel for Clearing House specifically stated in his Declaration, “If the names of our member banks who borrow emergency funds are publically disclosed, the likelihood that a borrowing bank’s customers, counterparties and other market participants will draw a negative inference is great….Survival can depend on the ephemeral nature of public confidence.”  (Of course, one could argue that this argument is greatly vitiated by virtue of simply naming Clearing House members in a court document).

Oral argument took place on August 27, 2009.  The Federal Reserve, as predicted, represented to the Court that an additional search of what the Federal Reserve considered “official files” at the FRBNY revealed no documents responsive to Bloomberg’s FOIA requests. Bloomberg has reserved its right to dispute this issue pending the outcome of the appeal. The Federal Reserve and Bloomberg consented to seek an expedited appeals process,  upon the Federal Reserve obtaining authorization to proceed with an appeal by the District Court’s September 30, 2009 deadline.

 

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Sun, 08/30/2009 - 18:49 | 53490 Anonymous
Anonymous's picture

All of Obama's players have been given enough money to do what is needed to take complete control of this country. There is trilions of dollars that the Fed can not account for. All of Obama's players have been given anough money to complete their tasks against us. Courts have been neutralized and any attempt to question any adminitrative moves have been stopped. The Constitution is being used as toilet peper by the White House and our form of government has ceased to exist. Obama has seized the economic train by destroying big and small businesses, other than the ones currently in bed with Obama. He will cut them loose as soon as his missiom is accomplished. The people will be silenced and will be unable to communicate with one another, lest we rise up against our oppressors immediately. Before the end of the year, for Obama this will be a "fait accompli". There is no time. We the people need to act quickly to stop the radical takeover. The courts are not going to help us. Congress is too stupid to help us. Our military is too far flung to help us. Obama's radicals have enough of an army to take us down and keep us down. Wake up before we no longer exist!

Sun, 08/30/2009 - 08:40 | 53270 Ned Zeppelin
Ned Zeppelin's picture

We need some clarity here on a single point.  Was Bloomberg's request limited to a request for information located only in the files and records of the Federal Reserve Bank of New York?

If not, this "mistake" can be rectified by by serving the same FOIA request on the Federal Reserve parent and on each and every Federal Reserve bank. 

However, I am also not buying the notion that the NYFed does not have documents responsive to Bloomberg's request.  My suggestion is that they check the Hoodlum Geithner's old office.

The judiciary may be our only hope here. God Save the Republic and the People of the United States!

 

 

Sun, 08/30/2009 - 03:35 | 53233 Mediocritas
Mediocritas's picture

Dammit, we're surrounded by idiot creationists.

Here's the thing. Revealing the names of the weakest financial organisms will place a selection pressure upon them that leads to their demise. Wah wah, poor babies. Meanwhile, said same selection pressure will promote the survival of the strongest institutions leading to improvement of the financial gene pool.

Our illustrious leaders need a little lesson in evolution, something the courts clearly *do* understand. Let the environment (free market) function correctly and stop being a bunch of idiot creationists intent on inventing fraudulent selection pressures (who can scam the taxpayer the best), in a futile attempt to stop nature taking its course (and it *is* futile; nature *always* wins in the end).

These banks are only trying to save themselves. If the aim is to save the financial sector, the economy and the country then the strongest outcome for all three in the long term is to embrace facts, embrace transparency and allow natural forces to eliminate the financial firms from the financial gene pool.

Sun, 08/30/2009 - 07:12 | 53260 Anonymous
Anonymous's picture

absolutely, you can't just keep bailing out total incompetance on the backs of the competant. I sense a time is coming when those that do it right say, no more.

It's been going on far too long.

Sun, 08/30/2009 - 01:46 | 53213 Anonymous
Anonymous's picture

free country? land of the free and brave?
what are you smoking?

Sun, 08/30/2009 - 00:08 | 53191 Anonymous
Anonymous's picture

A small fraction of the bailout money would have paid off EVERY existing home mortgage in America.

Instead the wealth of the country was used to bailout the perpetrators of the biggest financial ponzi scheme in the world to the detriment of existing and future taxpayers.

The indisputable truth remains, the wolves who pretended to be the sheepdogs guarding the sheep; have shown their fangs and their true identities.

We can only rely on ourselves or we can choose to delude ourselves that the government and its "appointees" have our best interests at heart.

The clearest sign is the unfettered and unauthorised powers of the Federal Reserve to utilize the wealth of the country, to underwrite the failures of irresponsible financial institutions through an ever-expanding debt burden without regard for the country's benefit.

And for these same institutions to have the gall to continue to pay "performance bonuses" in the face of fictional profits and increasingly likelihood of increased liabilities in the near future, is it not apparent to all that they believe profits are privatised and losses socialised for the "benefit" of ALL taxpayers.

Sat, 08/29/2009 - 22:33 | 53157 Anonymous
Anonymous's picture

COURT DOCUMENTS REGARDING THE BLOOMBERG FOIA REQUEST OF THE FED BOARD

http://news.justia.com/cases/featured/new-york/nysdce/1:2008cv09595/335178/

Sun, 08/30/2009 - 13:47 | 53151 xslashf (not verified)
xslashf's picture

I'm surprised there's not a disclaimer or something at the end saying its some sort of fiction playing on the ridiculous trading volume of C, et al.

good articles; good articles 4 slow news day ..http://www..
hat tip: finance news & finance opinions

Sat, 08/29/2009 - 22:10 | 53130 Anonymous
Anonymous's picture

THE FED BOARD NEVER LOOKED FOR ANY RECORDS NOR DID THEY TELL THE NEW YORK FED TO GATHER THE DOCUMENTS AS REQUIRED BY LAW UNDER FOIA.THE FED LAWYER IN HER OWN WORDS. SHE HAS TO BE CORECTED BY THE JUDGE AT ONE POINT...

Via: Bloomberg:

The Federal Reserve argued yesterday that identifying the financial institutions that benefited from its emergency loans would harm the companies and render the central bank’s planned appeal of a court ruling moot.

The Fed’s board of governors asked Manhattan Chief U.S. District Judge Loretta Preska to delay enforcement of her Aug. 24 decision that the identities of borrowers in 11 lending programs must be made public by Aug. 31. The central bank wants Preska to stay her order until the U.S. Court of Appeals in New York can hear the case.

“The immediate release of these documents will destroy the board’s claims of exemption and right of appellate review,” the motion said. “The institutions whose names and information would be disclosed will also suffer irreparable harm.”

The Fed’s “ability to effectively manage the current, and any future, financial crisis” would be impaired, according to the motion. It said “significant harms” could befall the U.S. economy as well.

The central bank didn’t say when it would file its appeal.

Fed lawyer Kit Wheatley told Preska in a conference call today that she did not know how long it would take for the Fed board to search the New York Fed for records.

“We really don’t know what’s in New York,” Wheatley said. “We don’t control the system of record-keeping in New York.”

The Standard

The Fed’s lawyer went on to say that she did not know what records would fall under a “delegated function,” which would be a task assigned to the New York Fed.

Preska interrupted Wheatley, saying that “Ms. Wheatley, I held that’s not the standard. You didn’t search under the regulation. You’re supposed to search under the regulation.”

Preska scheduled another conference call for 2:30 p.m. today to discuss the schedule for a search of the New York Fed.

“Nobody is going to deny you your right to an appeal,” Preska said on the call, “We’re going to do it expeditiously, not in a piecemeal fashion and hand it all off to the Second Circuit.”

The Fed has refused to name the financial firms it lent to or disclose the amounts or the assets put up as collateral under the emergency programs, saying disclosure might set off a run by depositors and unsettle shareholders.

Sun, 08/30/2009 - 11:19 | 53310 Cindy_Dies_In_T...
Cindy_Dies_In_The_End's picture

If you go on Pacer and look at the Court's actual Order it says "WHEREAS, the Board has represented to the Court and to the Plaintiff Bloomberg that an additional search of the Board's "official files" (as it construes that term) located...at the FRBNY...would be unlikely to identify any additional documents resposive to Bloomberg's FOIA requests...."

 

so quite simply the argument of what is an "official record" will wait for after the appeal.

 

Personally I would have sent a request their too, but the end result would have been the same.

 

Perhaps we ought to pay more attention to the names of the banks the Clearing House volunteered. Whining about disclosure and then revealing your name anyway? Hmmm...

Sat, 08/29/2009 - 22:04 | 53126 Anonymous
Anonymous's picture

IT SEEMS THE FED DID NOT SEARCH FOR ANY DOCUMENTS. THE FED LAWYER TOLD THE JUDGE THAT THEY DID NOT KNOW WHAT RECORDS ARE IN THE NY FED! THE FED LAWYER TOLD THE JUDGE THAT SHE DID NOT KNOW HOW LONG IT WOULD TAKE THE FED BOARD TO SEARCH FOR THE RECORDS!

ALL THE FED BOARD HAD TO DO WAS SEND A COPY OF THE FOIA REQUEST TO THE NEW YORK FED AND ALL OTHER FED DISTRICTS IF THEY DO NOT HAVE CENTRAL RECORD KEEPING (LOL!) AND TELL THEM TO GATHER THE RECORDS AND SEND THEM TO THE FED BOARD. APPARENTLE THEY DID ABSO;UTELY NOTHING TO RESPOND TO THE REQUEST!

Via: Bloomberg:

The Federal Reserve argued yesterday that identifying the financial institutions that benefited from its emergency loans would harm the companies and render the central bank’s planned appeal of a court ruling moot.

The Fed’s board of governors asked Manhattan Chief U.S. District Judge Loretta Preska to delay enforcement of her Aug. 24 decision that the identities of borrowers in 11 lending programs must be made public by Aug. 31. The central bank wants Preska to stay her order until the U.S. Court of Appeals in New York can hear the case.

“The immediate release of these documents will destroy the board’s claims of exemption and right of appellate review,” the motion said. “The institutions whose names and information would be disclosed will also suffer irreparable harm.”

The Fed’s “ability to effectively manage the current, and any future, financial crisis” would be impaired, according to the motion. It said “significant harms” could befall the U.S. economy as well.

The central bank didn’t say when it would file its appeal.

Fed lawyer Kit Wheatley told Preska in a conference call today that she did not know how long it would take for the Fed board to search the New York Fed for records.

“We really don’t know what’s in New York,” Wheatley said. “We don’t control the system of record-keeping in New York.”

The Standard

The Fed’s lawyer went on to say that she did not know what records would fall under a “delegated function,” which would be a task assigned to the New York Fed.

Preska interrupted Wheatley, saying that “Ms. Wheatley, I held that’s not the standard. You didn’t search under the regulation. You’re supposed to search under the regulation.”

Preska scheduled another conference call for 2:30 p.m. today to discuss the schedule for a search of the New York Fed.

“Nobody is going to deny you your right to an appeal,” Preska said on the call, “We’re going to do it expeditiously, not in a piecemeal fashion and hand it all off to the Second Circuit.”

The Fed has refused to name the financial firms it lent to or disclose the amounts or the assets put up as collateral under the emergency programs, saying disclosure might set off a run by depositors and unsettle shareholders.

Sat, 08/29/2009 - 21:46 | 53119 Joe Sixpack
Joe Sixpack's picture
Proclamation on the Federal Reserve System of the United States of America

 

www.RevokeTheFed.com March 2008

WHEREAS, Article I, Section 8 of the Constitution of the United States of America authorizes Congress "To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures";

WHEREAS, on December 13th, 1913 the US Congress enacted the Federal Reserve System;

WHEREAS, the Federal Reserve System is considered an independent agency within the federal government, with oversight of Congress and containing appointed public officials on its board of directors;

WHEREAS, the Federal Reserve System Controls the Federal Reserve Note, the official currency of the great nation of the United States of America;

WHEREAS, there may be controversies regarding the legality and constitutionality of the Federal Reserve System, it is recognized that the said system has operated continuously as the central banking system of the United States since the inception of the Federal Reserve Act of 1913;

WHEREAS, the Constitution of the United States of America granted Congress the authority to create the current Federal Reserve System, it also does grant Congress the authority to modify or revoke the Federal Reserve System;

WHEREAS, the actions of the Fedreral Reserve System represent the credit and currency of the United Stated of America to the citizens of this great nation and to the world;

WHEREAS, the Federal Reserve System, acting independently within the federal government allowed, supported, and even promoted parasitical and non-productive uses of the money and credit of the United States of America;

WHEREAS, the United States and likely the entire world's financial system is undergoing massive de-leveraging of the said parasitical and non-productive uses of the credit and money of the United States of America (as well as other nations' currencies);

WHEREAS, the US dollar, the "Federal Reserve Note" is declining in value due to these parasitical activites, as well as potentially other causes;

WHEREAS, it is recognized that the citizens of the United States and other nations did willingly participate at some level in the creation and propogation of said parasitical activities;

WHEREAS, it is also recognized that the United States of America, a sovereign nation, has the legal, moral, and God given authority to take actions to benefit its citizens and to protect its good name, credit and money in times of difficulty;

WHEREAS, it is recognized that the current time is such a time of great difficulty;

WHEREAS, it is recognized the parasitical financial institutions and their activities are at odds with citizens of the United States of America and the good credit and money thereof;

WHEREAS, the current indications are that the Federal Reserve System is acting to preserve the financial system currently flooded with the parasitical activities;

WHEREAS, the current indications are that the neither the Federal Reserve System, nor the Congress of the United States, nor the people of the United States have access to the books of the institutions being preserved by the Federal Reserve, and therefor the degree of inter-connectivity and risk associated with the institutions and other entities cannot be determined;

WHEREAS, the Federal Reserve System is accepting non-performing assets as collateral for credit with ultimate taxpayer responibility to entities not under its legislative mandate;

IT MUST BE CONCLUDED, that the Federal Reserve System is not acting to the benefit of the people of the United States of America, its credit, money, and good name;

WHEREAS, it is recognized that the political will and capability of the government of the United States of America may not be up to the task of prosecuting this proclamation ; It is also recognized that this may be the only hope for the continued survival of the United States of America as the great nation as it has historically existed.

NOW THEREFORE, it is PROCLAIMED by those supporting this Proclamation that the Congress of the United States of America FULLY NATIONALIZE the Federal Reserve System, and take full control of the credit and money of our great nation; The Congress must take whatever action necessary to seperate out, sequester, disown, or otherwise neutralize the effect of the parasitical financial activities which led to the current crisis; The Congress of the United States of America must reorganize, replace, or terminate the Federal Reserve System as appropriate; or otherwise devise a system for creation of the national currency.

IT IS FURTHER PROCLAIMED, that the Congress of the United States of America in cooperation with the Executive of the United States of America contact allied nations and any other nation willing to participate in the overhaul of the failing and parastical financial sytem currently in operation and create new treaties and alliances as necessary to create a sane and productive system of finance with the express goal of supporting a productive national, and by extension and through voluntary cooperation, world economy;

FURTHERMORE, it is PROCLAIMED that it should be the goal of such an international effort to maintain fair international trading practices allowing for protection in national interest of labor, resources, and productive capabilities;

WHEREAS, it is recognized that such a move on the part of the United States of America may result in the necessity of an isolationist policy IF the other developed nations do not follow our lead; If such occurs, so be it.

SO HELP US GOD!

Sat, 08/29/2009 - 19:53 | 53044 albion402
albion402's picture

This does not seem like a productive answer.

Sun, 08/30/2009 - 13:47 | 53149 xslashf (not verified)
xslashf's picture

if this is real, this is seriously fucked up. the country is going to hell all together.

good articles; good articles 4 slow news day ..http://www..
hat tip: finance news & finance opinions

Sat, 08/29/2009 - 18:44 | 52991 Anonymous
Anonymous's picture

"The Federal Reserve’s current position is that the immediate release of documents would moot any appeal, and cause irreversible damage to the institutions whose information is disclosed."

OK, but..

"...an additional search of what the Federal Reserve considered “official files” at the FRBNY revealed no documents responsive to Bloomberg’s FOIA requests."

Which is it? I guess we'll find out if this judge is as stupid as the Fed believes.

Sat, 08/29/2009 - 15:41 | 52906 JR
JR's picture


Von Mises Institute writes in 2009: “Since its inception in 1913, the Federal Reserve has helped to devalue our dollar by 95%. During the recent economic crisis, it has poured trillions of dollars into the economy with no oversight, made secret agreements with foreign banks and governments, and has refused to tell Congress who is getting the money or to give it the details of what deals are being made."

Rep. Louis T McFadden ( R-PA)  and Chairman of the Committee on Banking and Currency, said in 1932:

"THE FEDERAL RESERVE BOARD, A GOVERNMENT BOARD, HAS CHEATED THE GOVERNMENT OF THE UNITED STATES AND THE PEOPLE OF THE UNITED STATES OUT OF ENOUGH MONEY TO PAY THE NATIONAL DEBT. The depredations and the iniquities of the Federal Reserve Board and the Federal Reserve banks acting together have cost this country ENOUGH MONEY TO PAY THE NATIONAL DEBT SEVERAL TIMES OVER."

About the Federal Reserve banks, Rep. McFadden said:

 "They are private credit monopolies which prey upon the people of the United States for the benefit of themselves and their foreign customers; foreign and domestic speculators and swindlers; the rich and predatory money lenders. This is an era of economic misery and for the reasons that caused that misery, the Federal Reserve Board and the Federal Reserve banks are fully liable."

On the subject of media control he stated:

"Half a million dollars was spent on one part of the propaganda organized by those same European bankers for the purpose of misleading public opinion in regard to it."

Rep. McFadden continued: "Every effort has been made by the Federal Reserve Board to conceal its power but the truth is the Federal Reserve Board has USURPED THE GOVERNMENT OF THE UNITED STATES. IT CONTROLS EVERYTHING HERE AND IT CONTROLS ALL OUR FOREIGN RELATIONS. IT MAKES AND BREAKS GOVERNMENTS AT WILL. No man and no body of men is more entrenched in power than the arrogant credit monopoly which operates the Federal Reserve Board and the Federal Reserve banks. These evil-doers have robbed this country of more than enough money to pay the national debt. What the Government has permitted the Federal Reserve Board to steal from the people should now be restored to the people.

"Our people's money to the extent of $1,200,000,000 has within the last few months been shipped abroad to redeem Federal Reserve Notes and to pay other gambling debts of the traitorous Federal Reserve Board and the Federal Reserve banks. The greater part of our monetary stock has been shipped to foreigners. Why should we promise to pay the debts of foreigners to foreigners? Why should American Farmers and wage earners add millions of foreigners to the number of their dependents? Why should the Federal Reserve Board and the Federal Reserve banks be permitted to finance our competitors in all parts of the world? …

"The Federal Reserve Act should be repealed and the Federal Reserve banks, having violated their charters, should be liquidated immediately. FAITHLESS GOVERNMENT OFFICERS WHO HAVE VIOLATED THEIR OATHS SHOULD BE IMPEACHED AND BROUGHT TO TRIAL." [excerpts from Congressional Record] Two attempts were made on McFadden's life, a failed shooting and an apparent poisoning. 

"Déjà vu all over again" and again and again and again?

Sat, 08/29/2009 - 15:17 | 52901 Anonymous
Anonymous's picture

Shouldn't an 8-K be filed for emergency borrowing?

Sat, 08/29/2009 - 14:56 | 52893 AnonymousMonetarist
AnonymousMonetarist's picture

These banksters are too bankrupt to go broke.

 

Sat, 08/29/2009 - 14:39 | 52889 Invisible Hand
Invisible Hand's picture

Is it plausible that the FRBNY has "no documents" pertaining to financial institutions borrowing from the FED?  If that was the case, why did Clearing House members object to the FOIA release?  Why did the FED object to the FOIA release if there was nothing to release?  Does the FED think that the American public is that stupid? Judging by recent events in USA, maybe the FED is on to something.

Sat, 08/29/2009 - 15:27 | 52903 bonddude
bonddude's picture

Will A-N-Y serious reporter ask such a question?

What says Gasparino? Nyet?

Sat, 08/29/2009 - 15:24 | 52902 Anonymous
Anonymous's picture

so far they have been stupid...no doubt...!!!

Sat, 08/29/2009 - 14:17 | 52877 Anonymous
Anonymous's picture

Extend and delay, extend and delay, and every once in a while extrude a little polished turd of a 'fact' that happened far enough in the past to plausibly be ignored by the MSM.....

Sat, 08/29/2009 - 13:31 | 52870 Chippewa Partners
Chippewa Partners's picture

It is res ipsa..........the Clearing House is being closed in.

Come on Ron Paul, keep hammering them. 

 

Sat, 08/29/2009 - 13:29 | 52869 Anonymous
Anonymous's picture

Just like Ted Kennedy.

The rules dont apply to those at the top.

This country is sick and needs to be put out of its misery.

There is no rule of law.

There are no jobs (although schools are allowed to defraud with false employment stats).

I see UPHEAVAL in the future.

Sun, 08/30/2009 - 13:47 | 53148 xslashf (not verified)
xslashf's picture

They will find few buyers because their home grown weapons aren’t what Armies around the world needs.

good articles; good articles 4 slow news day ..http://www..
hat tip: finance news & finance opinions

Sat, 08/29/2009 - 16:46 | 52927 JR
JR's picture

The FedRes is never going to provide information that will lead to its own abolishment.  It either will provide misleading information or it will suggest that the information the court seeks does not exist.

I’m with Ron Paul.  It’s not the information or the audit we want.  We’re after abolishment.

The Fed’s crimes are so substantial that the country cannot co-survive with this System.  Maybe the predecessors of these Fed bankers thought they could run it forever as a sort of high-class parasitic program whereby they could steadily siphon off the incredible wealth of America.  But it’s clear the current set of banksters behind the Fed don’t think that.

They want all the power, all the money, now! Not for their grandchildren.  But for themselves! They are so greedy that the activities of the Fed these past few months alone indicate the Fed is not in a central management role.  It’s in a stealing role.  They are stealing money; they are not managing it.  This can’t continue.  If the FedRes wanted to continue to be a high-class parasite again, it would have raised interest rates, stopped the bailouts, let some of the big banks fail…  But it didn’t.

Wall Street elected Obama.  Wall Street and Hollywood paid for Obama to be president.  So, I ask, is the Fed going to let one of its big banks fail, is it going to let the public scrutinize its books?  Huh-uh.  Not after it paid to elect the president.

Sun, 08/30/2009 - 09:22 | 53284 Shell Game
Shell Game's picture

The parasite, with head imbedded in host, says 'do not remove me, systemic harm will come to you if you try to remove me!'

One cannot blame the parasite for its acts of self-preservation, but parasites must be removed and must die.

Sun, 08/30/2009 - 10:03 | 53298 Anonymous
Anonymous's picture

But this parasite, if not removed, eventually kills its host and move on to another.

Sat, 08/29/2009 - 14:42 | 52891 alien-IQ
alien-IQ's picture

“Then you will see the rise of the double standard—the men who live by force, yet count on those who live by trade to create the value of their looted money—the men who are the hitchhikers of virtue. In a moral society, these are the criminals, and the statutes are written to protect you against them. But when a society establishes criminals-by-right and looters-by-law—men who use force to seize the wealth of DISARMED victims—then money becomes its creators’ avenger. Such looters believe it safe to rob defenseless men, once they’ve passed a law to disarm them. But their loot becomes the magnet for other looters, who get it from them as they got it. Then the race goes, not to the ablest at production, but to those most ruthless at brutality. When force is the standard, the murderer wins over the pickpocket. And then that society vanishes, in a spread of ruins and slaughter.

“Do you wish to know whether that day is coming? Watch money. Money is the barometer of a society’s virtue. When you see that trading is done, not by consent, but by compulsion— when you see that in order to produce, you need to obtain permission from men who produce nothing—when you see that money is flowing to those who deal, not in goods, but in favors—when you see that men get richer by graft and by pull than by work, and your laws don’t protect you against them, but protect them against you—when you see corruption being rewarded and honesty becoming a self-sacrifice—you may know that your society is doomed. Money is so noble a medium that it does not compete with guns and it does not make terms with brutality. It will not permit a country to survive as half-property, half-loot.

“Whenever destroyers appear among men, they start by destroying money, for money is men’s protection and the base of a moral existence. Destroyers seize gold and leave to its owners a counterfeit pile of paper. This kills all objective standards and delivers men into the arbitrary power of an arbitrary setter of values. Gold was an objective value, an equivalent of wealth produced. Paper is a mortgage on wealth that does not exist, backed by a gun aimed at those who are expected to produce it. Paper is a check drawn by legal looters upon an account which is not theirs: upon the virtue of the victims. Watch for the day when it becomes, marked: ‘Account overdrawn.’

“When you have made evil the means of survival, do not expect men to remain good. Do not expect them to stay moral and lose their lives for the purpose of becoming the fodder of the immoral. Do not expect them to produce, when production is punished and looting rewarded.

Ayn Rand - Atlas Shrugged – 1957

Sun, 08/30/2009 - 08:42 | 53271 Ned Zeppelin
Ned Zeppelin's picture

Guess it's time to read that. 

Sat, 08/29/2009 - 14:50 | 52892 George the baby...
George the baby crusher's picture

Absofuckinglutely.

Do NOT follow this link or you will be banned from the site!