In this episode I’m talking with Todd Zywicki, the George Mason University Foundation Professor of Law in the Antonin Scalia Law School and former Executive Director of the GMU Law and Economics Center.
He is also one of the most engaging and clear thinkers about the vast and complicated world of consumer financial services. He was Chair of the Consumer Financial Protection Bureau Taskforce on Federal Consumer Financial Law and served as Editor of the Supreme Court Economic Review.
Todd’s recent article “Restoring the Rule of Law in Finance” served as our launching point for a fascinating – and disturbing – conversation about how financial regulation has become a key weapon in the progressives arsenal to fundamentally change America.
The rule of law is in steep decline in the United States. And perhaps no more so than where I’ve spent most of my career: in finance and banking.
Financial regulation is unusually convoluted and secretive. It affects us directly every day, but most of us are not even aware of how it operates and its agenda, even though the financial system is an essential infrastructure of our society and economy. It enables people to have a bank account, buy a home, start a business, or simply make a purchase at the grocery store.
This sounds like it could be a commonplace, or even boring topic, but let me assure you, after listening to Todd explain what’s really happening, it is not.
The financial system increasingly is being used to advance the Left’s agenda in the culture war, punishing those with disfavored political opinions and religious beliefs by stripping them of access to financial services. It’s also being used to advance a broad and controversial climate change agenda through antidemocratic means.
“This started during the Obama administration under the Operation Choke Point initiative,” explains Todd, “where they targeted completely legal industries such as firearms dealers, payday lenders and sellers of what Obama deemed “racist” materials. They basically went to the banks and said, “It’s a reputation risk to deal with companies in these industries.” The big banks – in lock step with the agenda – enthusiastically agreed. And so these people lost access to bank accounts.”
“You couldn’t pass a law that prohibited gun dealers or payday lenders or so-called racist people, because the First and Second Amendment would prevent it. But what we’re seeing now is the use of leverage of the financial system to stifle dissent.”
This is now taking center stage with the coming rollout of programmable central bank digital currencies.
Just this week the G20 which includes the world’s leading economies, announced that they had agreed to build the necessary infrastructure to implement digital currencies and IDs. The plan would put in place the framework to allow government authorities to impose Chinese-style social credit score systems and decide how their citizens can spend their money.
The European Union is currently trying to introduce a bloc-wide “digital identity” app that would consolidate various personal information, including passports, driver’s licenses, and medical history.
And in the United States, the federal reserve and other financial regulators and the big banks are already preparing for the introduction of these type digital currencies notwithstanding the absence of any formal legal authorization.
This would be a game changer, essentially giving federal regulators control over our personal spending. And the SEC has a similar plan to require disclosure of all of our investment assets.
It’s time we wake up to what’s happening in the “boring” world of banking and finance. Todd explains it all in an engaging and understandable way. He is a man we need to listen to if we want to learn how to defend our privacy and protect our money.