In Ayn Rand’s “Atlas Shrugged,” set in a dystopian U.S. future, the American population is divided between the “looters” and the “non-looters.” The looters became strong enough at the ballot box to elect officials who used taxation, fines and welfare to legally seize the wealth of the non-looters.
We seem to be settling into that kind of America. People earning significant money through their own efforts are taxed at sky-high rates, while 47 percent of the population pays no income tax at all.
America’s wealth creators, especially business owners, are branded by looters as greedy and evil. Over the last several years, businesses have become fair game to be fined — “looted” — by bureaucrats at the Department of Justice, Comptroller of the Currency, the Securities & Exchange Commission, the Commodity Futures Trading Commission and other agencies. Hundreds of billions of dollars have been extorted by federal regulators pretending they are merely “protecting” consumers, not stockpiling money for government budgets.
The government extractors’ current target for maltreatment is JPMorgan Chase which has been used as a money tree by swarms of government regulators and prosecutors. JPMorgan has been under siege by seven federal agencies, forced to spend nearly $19 billion in legal fees since 2008. It has set aside an additional $23 billion for litigation reserves, to satisfy feasting federal attorneys. The company has been required to hire 5,000 more compliance employees, bringing the total to 15,000 JPMorgan employees hired to deal with regulators.
“Government lawyers are backing up the truck again, to extract another haul from the country’s largest bank,” The Wall Street Journal reported.
Now here’s why government’s behavior is outrageous: JPMorgan avoided the mortgage credit problems that slammed its competitors during the mortgage meltdown. JPMorgan’s practices were so sensible that in 2008, regulators begged the company to rescue other financial firms, including Bear Stearns and Washington Mutual, “for the good of the order” in America. Now, JPMorgan has been charged with alleged wrongdoing at those other firms before it was asked to rescue them! Government agencies are now suing JPMorgan after the firm helped avert a crisis by helping to end the crisis.
JPMorgan is the one major bank that needed no taxpayer assistance during the financial crisis.
Why is this happening to the venerable company? First, CEO Jamie Dimon dared chastise the Beltway crowd for hurting the economic recovery with anti-business, destructive behavior and new, smothering regulations. That meant Dimon and his company needed to be punished because he wasn’t reading from the big-government political script, and didn’t support Obama in his second election. Second, light bulbs lit up in the heads of Beltway Democrats, who decided they could extract money from JPMorgan because the firm made errors in business judgment, having failed to prevent one of JPMorgan’s London traders from taking a $6 billion trading loss with the firm’s capital. Never mind that the loss hurt none of its public customers, or that this matter should have been settled between firm management and its shareholders. Bad business decisions in the private sector shouldn’t justify government punishment and fines. But liberal politicians sniffed money to be looted for government coffers, so they let loose government-backed extortion vampires to seize money belonging to JPMorgan’s shareholders.
Looting practices affect not only JPMorgan. Government filings show that Bank of America has been plundered for more than $20 billion in legal costs. The Wall Street Journal reported that “50 full-time regulators are now stationed at Morgan Stanley. There were none before 2008,” when Obama took office and began gorging.
What’s going on here? The purpose of regulation is compliance, not harming shareholders by extracting revenue or exacting revenge. U.S. regulations’ total cost is already at $1.9 trillion annually, nearly 12 percent of gross domestic product. Business labors under layers of regulation from local, county, state and federal rules, crippling prosperity. The American economy is under enormous strain, in danger of collapse in some areas. Yet government uses regulation as a prime source of new revenues, pirating more and more money to fund its vote-buying entitlement programs and dreaming up even more assaults on the non-looters. We are watching the gutting of the profit motive, a sure path to economic breakdown.