Friday, February 23, 2018

Progressives Upset Bankers

After kicking right-wing users off various platforms such as PayPay, Airbnb and domain hosting, one progressive thought to take it a step further: shut down all financial transactions involving guns. The NYTimes didn't think it was insane; it published it. According the the writer Sorkin, executives he talked to said it was a good idea. Whether they were serious or afraid of being burned at the stake I honestly cannot guess.

But at least one banker realized this was insanity.

Call for bank crackdown on gun sales is deeply misguided
What Sorkin is suggesting is more of the same, although perhaps with worse consequences. If banks take action where policymakers do not or cannot, they are essentially putting themselves above the law. And if banks start playing that role, where does it end?

What if, for example, banks and credit card companies decided to stop processing payments for any retail purchase of cigarettes? After all, cigarettes are demonstrably bad for all consumers, and secondhand smoke can harm innocent people. Should banks step in to help protect society at large?

Or what if banks decided to stop processing payments for abortion clinics because they believed the practice was immoral? Is it fair for financial institutions to make abortion effectively illegal? What if President Trump called on financial firms to cut off access to environmental groups he believed were delaying projects that could bring jobs to local economies? Maybe banks should freeze Colin Kaepernick’s checking account until he stops kneeling during the national anthem?

Many of these examples are extreme, but you get my point. Just because banks can be used to have a dramatic impact on our society doesn’t mean they should be.
Truth be told, I can't imagine cryptocurrencies displacing the existing financial system because of path dependency. In less developed countries, cryptocurrencies should take off faster because they lack infrastructure, similar to how less developed nations adopted mobile phones more quickly. However, if there's one surefire way to bring about the destruction of the existing financial system and replace it with crypto, it would be to put progressives in control. If you think progressives might win back power sometime in the next decade, all the more reason to support the breakneck pace of blockchain development.

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