Is American Justice Dead?
By David Galland, Managing Director
The rule of law is essential to any nation and closely linked to its economic vitality. As noted by Peruvian economist Hernando de Soto, a strong legal framework fosters economic growth. However, the real test of a law’s strength lies in its immunity to manipulation for personal or political gain. A well-functioning judiciary encourages investment by promoting a stable environment where laws are clearly defined and applied fairly.
Inconsistent legal systems create uncertainty and heighten risks for entrepreneurs, much like the current situation in Argentina, where persistent new regulations complicate business operations.
American Justice in Decline
The troubling state of American justice is epitomized by a recent action from the US Justice Department, which settled a case against HSBC for facilitating money laundering for Colombian and Mexican drug cartels. The bank was fined $1.9 billion, barely a fraction of its revenue.
In his insightful piece for Rolling Stone, Matt Taibbi articulates the folly of this verdict, emphasizing that HSBC has engaged in criminal activities at the highest levels for years, creating a seamless collaboration with drug traffickers. In one instance, drug lords even used specially designed cardboard boxes to smuggle cash through HSBC teller windows in Mexico.
While I wholeheartedly oppose the “War on Drugs” and the resulting incarceration of countless Americans for non-violent offenses, it is scandalous that those behind the drug trade escape accountability. The United States boasts the highest incarceration rate globally, primarily due to drug-related offenses, while the masterminds behind the cartels’ operations face minimal repercussions.
A Divided Judicial System
The disparity in justice becomes apparent when comparing the treatment of powerful financial institutions like HSBC to ordinary citizens. The rationale used to shield HSBC’s management from criminal prosecution is rooted in the belief that they are “too big to fail.” Should even one executive face consequences, it could allegedly trigger a global financial meltdown.
This situation brings to mind another significant issue: the LIBOR scandal. A coalition of banks conspired to manipulate interest rates, impacting a staggering $300 trillion in loans. Despite being aware of the fraud, former US Treasury Secretary Tim Geithner, who was positioned at the Federal Reserve Bank of New York, faced no consequences. Instead, the focus shifted to minor players, leaving the key perpetrators untouched.
Even individuals like Jon Corzine, a former senator implicated in the collapse of MF Global, remain free despite clear evidence of wrongdoing. This has established a disturbing precedent where financial institutions operate without fear of legal consequences.
Continued Corruption
The corruption infiltrates not only the judiciary but also pervades various levels of government. A troubling instance was Hillary Clinton’s convenient illness, which allowed her to avoid testifying about the Benghazi consulate attack. Furthermore, new federal regulations on mortgages look promising at first glance, but they provide banks with greater immunity against lawsuits, ultimately protecting them from accountability while endangering consumer rights.
Across the Atlantic, we see Julian Assange, who remains confined in the Ecuadorian embassy in London, surrounded by police as he seeks asylum. His situation stems from charges that, under most legal systems worldwide, would be viewed as minor offenses. Yet, the significant expenditure to detain him might hint at further political motivations rather than a genuine pursuit of justice.
Crisis of Governance
The Federal Reserve’s decision to inject over a trillion dollars into the economy each year highlights the stark disparity in benefits among political elites. While politicians claim to be addressing economic issues, they merely replace genuine market mechanisms with inflationary tactics that harm average citizens.
The rise of “enviro-socialists” further exacerbates issues by employing questionable science to burden key economic sectors, harming growth while benefiting a select few.
What Does This Mean for Us?
The overwhelming majority of the public remains either unaware or indifferent to the rampant corruption among political elites. Even when citizens express their concerns, the reality is that their influence is minimal in a system designed to protect entrenched interests. Writing to your representatives or protesting often leads to dismissal rather than change.
This leads to the unfortunate conclusion that individuals must make choices to navigate this corrupted system. Here are some potential paths:
- Accept the situation. Recognize the things beyond your control and live your life to the best of your ability.
- Capitalize on the chaos. In tricky environments, determined entrepreneurs often thrive and find lucrative opportunities, even amidst apparent adversity.
- Consider relocation. Evaluating options might involve moving to different areas where conditions are more favorable.
- Engage with the system. Understand the complexities of government operations and, if you feel inclined, find ways to benefit from them.
- Rebel against corruption. In desperate circumstances, societal breakdowns can lead individuals to take extreme measures to reclaim their sense of justice and autonomy.
The recent chaos in Argentina, marked by mobs engaging in theft, serves as a warning signal of potential unrest fueled by disillusionment with a corrupt system. This kind of societal unraveling could occur anywhere, especially in the current climate of distrust and discontent.
While projections are uncertain, protecting oneself and one’s assets in these times remains prudent. It’s crucial to stay informed and prepared as the political landscape unfolds.
Sincerely,
David Galland
for Economic Prism
[Editor’s Note: Those who recognize the shifting tides can prepare for the changes ahead. Insightful investment strategies can yield transformative results. Doug Casey, a radical libertarian thinker, offers wisdom in his new book, Totally Incorrect. This book encourages fresh perspectives on investing and politics. Get your copy today.]
