“The state is a gang of thieves writ large.” Murray Rothbard

It is curious that this simple fact is not more widely accepted, however given that the state itself has mastered the magician’s art of misdirection (via state apologists given a platform in the public media coupled with the indoctrination of our children into venerating the state) it should perhaps not be all that surprising. We remain as blissfully unaware of our cage as fish are to the invisible boundaries of their aquarium. But sometimes cracks develop in those transparent walls revealing the deceit that has been there all along. A case in point is the recent EU-IMF bailout of Cyprus’ troubled banks this weekend. For those whose eyes glaze over at the prospect of a discussion of Eurozone financial policy I will spare you the gory details. In fact, skipping the details and looking at the big picture makes the crime occurring all the more clear. The bottom line is that the Cypriot government is confiscating between 6.5% – 10% of all money on deposit in Cypriot banks (more precisely they are being forced to buy an equivalent amount of bank stock). The short narrative is this: Cypriot banks gambled away depositors’ money on bad financial bets, then turned to the government to bail them out, who on their behalf went before the EU & IMF with hat in hand begging for a loan lest all their banks go bankrupt. The IMF agreed to a loan based bailout only upon condition the Cypriot government could prove it had the tyrannical cojones to take what it wanted from the people thus assuring the IMF of the loan’s solvency (insofar as the solvency rests on the ability of the government to confiscate and repay). This is simply gang initiation at the state level. It is crony capitalism at its worst and most blatant.

However it is as Barack Obama would say “a teachable moment.” What the Cypriot government has done is no different than what our government did with the TARP and other bailouts of our banks in 2008-9. The only difference is form, the result is identical, namely theft of the citizen’s money in order to benefit the banking elite. The countries that use the Euro cannot simply print up more to their heart’s content as we can with the US dollar. Therefore the only way to obtain needed euros is to a) borrow them or b) take them. The US government has a third funding source, which is c) inflate them (which is just a variant of (b)). Of course no government is honest enough to say “we’re taking your money” – no, this is a “one time tax.” So while the Cypriot government will simply take what it wants from depositors through the front door, our government comes in through the backdoor and through the inflation tax chips away at the value of the money on deposit. Naturally the whole scheme was justified on “greater good” grounds in that had they not gotten the bailout then the whole banking system might have collapsed and all depositors might have lost their money. Yes, the whole “you might benefit if we help these other people, therefore you must provide us with the means to help them” argument (put forth by every persuasion of statist, from the so-called conservative that supports publicly funded schooling to the super progressive advocating socialized medicine) is forever the justification for any and all types of state sponsored intrusion into the lives of individuals.

So for anyone taking solace in the notion that such bank account confiscation could never happen here please realize that it already has in the form of inflation sponsored bailouts. As long as we maintain a system of fractional reserve lending, legal tender laws, a central bank (Federal Reserve) and government “monetary policy” we will never rid ourselves of the gang of thieves bailing out their big banking friends with our money.