Amendment 2 a risky business venture
The proposed Amendment 2 to the Hawaii constitution is to make it easier for agriculture-related ventures to obtain loans by using the taxpayers, i.e. government credit, to protect lenders against potential losses. To understand how dangerous this amendmant is, some background is helpful.
It is the idea of no-risk investment. No-risk investment is how financial corporations are able to accumulate tremendous wealth, which later turns out to be at taxpayer expense. It’s very simple. Loans and investments always have risk. Some provide gain while others incur loss. Overall, profit is made by making prudent investments to minimize potential loss while maximizing potential gain. This is pure and simple logic.
Now, let’s consider what happens when the investments become risk-free, for example, when taxpayers are willing to cover the losses. Now loans and investments can be made without care. Anything goes — even transferring large amounts of capital to gamblers, friends, co-conspirators, etc., since all losses will be paid by the taxpayers who probably won’t even know about it until after the players are long gone.
This is exactly what happened to create the biggest theft in U.S. history — the banker bailout of 2008, where the U.S. taxpayer was assigned to cover the losses, the “toxic assets,” that had been accumulating and were held by the “too big to fail” banks. This added tens of trillions of dollars to our taxpayer debt.
The question I have is this. Do you think there are bankers out there right now watching to see if this amendment is made to the Hawaii constitution? Do you think they would sieze an opportunity to exploit risk-free financing if it becomes written in law that the taxpayer will pay for the losses? Do you think that a government agency assigned to decide on the worthiness of a particular investment, is sufficient to prevent abuse?
Whether or not you think that the amounts involved — at least $5 million per case — are large enough to “influence” a government agency, let’s not be naive.
David Webb
Pahoa