Mobsters and Racketeers

My wife and I watch a lot of movies on Turner Classic Movies (TCM). A recurring theme is about criminal enterprises. In 1930's and 1940's movies, the bad guys were into bootlegging and associated entertainment, the numbers racket, gambling and loan sharking.

Bootlegging was mostly done away with by repeal of prohibition, except in states like Mississippi that continued prohibition except for local option beer and wine. (Mississippi figured out a way to capture revenue from the illegal sales of liquor, while maintaining the moral purity of formal prohibition.)

Bootleggers were awash with cash and had to invent other enterprises. Some even invested in legitimate businesses. Joseph P. Kennedy, for example, went into movies.

In the last three or four decades, state governments have muscled into territory formerly controlled by mobsters and racketeers. The numbers game, for example, has been largely taken over by state lotteries. Gambling has migrated to casinos, many on native American reservations. States across the country either have their own ABC stores or regulate alcohol sales to their own benefit.

What's an honest bootlegger to do?

And now banks and other financial institutions regulated by the states and the federal government have moved into loan sharking in a big way. Much of the discussion at last night's Republican Party presidential debate was devoted to a plea for less regulation in order to free financial institutions interested in expanding the loan sharking business.

The struggle between the lending (creditor) class and the borrowing (debtor) class is an ancient one wherever there is a money economy. When you hear people speaking about "sound money," you know the speaker is representing the interests of the creditor class. In the late nineteenth century, the dispute was over use of gold alone or both gold and silver for coinage. William Jennings Bryan's famous "cross of gold" speech addressed the issue.

Today the same class and their lackeys rail against any inflation, no matter how slight, in favor of minimal regulation (if any at all) of financial institutions, in favor of draconian restrictions on bankruptcy and so forth.

It seems we have exchanged mobsters for banksters.