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Hi everyone, Judge Andrew Napolitano here for Judging Freedom. Today is Monday, February 13,
2023. It's about 1045 or so in the morning here on the east coast of the United States.
Silicon Valley Bank, candidly,
I never heard of it until three or four days ago, a relatively small, if you compare it to
Wells Fargo or Bank America or JPMorgan Chase, a relatively small bank centered in California and
known for making loans to tech startups in the United States, in Great Britain, and in Israel,
famously failed over the weekend, meaning it was unable to meet its obligations. Its debts were
greater than its assets. Its outflow was greater than its income, and it wasn't able to return depositors' money to it, and the federal
government took it over. Why did the federal government take it over? Well, because we have
a banking system in the United States that is micromanaged by the Federal Reserve and by the
Department of the Treasury. Banks that fail should be permitted to fail and the people who deposit
their money in there, I'm sorry to say this unless they went out and purchased their own
insurance, are going to lose the money that they deposited there. Why should the government be in
the business of insuring banks? I mean the government can't do anything right. The government
kills, look at what it's doing in Ukraine.
The government goes into debt itself by $2 trillion a year because it can just print money.
If you want to get a little snarky, the government can't fill potholes or stop robocalls.
Who would trust the government to take care of banks?
Now, there's two issues here. One is to bail the bank out, which would mean to bail out the investors in the bank. That the government is not doing. If you own shares of stock in Silicon Valley Bank, those shares are worthless this morning and the government is not goingout if you're a depositor there. The Federal Deposit Insurance Corporation insures all deposits up to $250,000. If you have a million dollars in the bank, you have to break that up into four bank accounts of $250,000 or five bank accounts because the $250,000 is going to be earning interest and you're only insured up to
the $250,000. The federal government has decided to break its own rules. What a surprise. And insure
all deposits, even those that are over $250,000. Breaking its rules, where does the money come from?
Take a guess. It's going to borrow it.
The feds will borrow it by printing money or selling bonds or getting money from their
friends at the Federal Reserve, and they'll use that money to bail out the depositors in this bank.
How does the government decide whom to bail out? That's the problem. That's why the free market should regulate these
things and not government bureaucrats. Who decided just to bail out the depositors and not to bail
out the passive investors? All right, the president wanted to sound like a tough guy.
Here he is about half an hour ago. The management of these banks will be fired.
If the bank is taken over by FDIC, the people running the bank should not work there anymore.
Okay, that makes sense.
But the if is what is troubling.
The federal government is one of limited powers.
The Constitution does not authorize the existence of the Federal Reserve.
It does not authorize the federal government to micromanage banks.
It doesn't even authorize the federal government to own a bank.
Even though there's a Supreme Court opinion, one of the worst in history, called McCullough versus Maryland.
It's an 1824 opinion articulating the federal government can own a bank.
It wasn't the Federal Reserve.
It was the Second National Bank of the United States,
which eventually became the Federal Reserve.
But all of these shenanigans with respect to the government and banking
are perpetrated by people who don't recognize the Constitution
as imposing a restraint on the federal government,
they employ the Wilsonian view of government. The Madisonian, as in James Madison, view of the
federal government is simple. The federal government can only do what the Constitution
authorizes it to do, and all other government functions, read the 10th Amendment, are reserved to the states or to the people.
If to the people, meaning government can't regulate it at all, like government can't regulate thought or speech or the press.
If to the states, then the states would have to regulate these things that are not authorized for the federal government to do.
That's the Madisonian view of the government.
The Wilsonian view of the government, as in Woodrow Wilson is, the federal government can do whatever there is a national political will for it to do, except that which is expressly prohibited
to it in the Constitution. So these are the opposite. Madison, the government can only do
what is expressly authorized. Wilson, the government can only do what is expressly authorized.
Wilson, the government can do whatever it wants except that which is expressly prohibited.
We have had the Wilsonian version of the Constitution and of the federal government since Woodrow Wilson was president of the United States 110 years ago. And every president since then, including even Ronald Reagan,
has followed that Wilsonian model.
The Constitution be damned unless there's some express authorization,
or excuse me, unless there's some express prohibition in the Constitution,
we're going to do what we want to do because we want to get reelected.
So Joe Biden comes off as a hero by bailing out all the depositors, American and foreign,
in this bank whose deposits exceed $250,000.
If your deposit is under $250,000, the FDIC bails you out.
Where does the FDIC get its money from?
Well, from two sources. One,
the banks are forced to fund the FDIC, so nobody really buys insurance anymore to insure their own
bank accounts, which is the way it should be. The FDIC, of course, also gets cash from the
federal government. Where does the federal government get cash? It takes tax dollars from you and it prints money. It doesn't literally print it
anymore. It just adds zeros to the accounts of the banks in the Federal Reserve. The whole thing
is a Ponzi scheme, which if you or I engaged in this, we would all be prosecuted, but the federal government, of course, is one huge
Ponzi scheme by spending money that it doesn't have, and so it exempts itself from the prosecution
for its own laws. What happens when the government breaks its own laws? Well, as well. The government gets away with it. There is a proud boys trial going on in Washington,
D.C. as we speak. Well, it was going on until Friday afternoon. Friday afternoon, an FBI agent
on the witness stand admitted to the following. One, that she was asked to edit out the name of another FBI agent who was present
at a very critical meeting that the courtroom is scrutinizing because that FBI agent has some
personal baggage and didn't want to be called as a witness. Two, that she was asked by her bosses to destroy 338 pieces of evidence. Three, that she and her FBI
colleagues have been spying on the communications between one of the Proud Boys in jail, they're all
in jail, nobody gets bail in these January 6th cases, and his lawyers. So you have an FBI agent
on the witness stand admitting she was told to alter evidence,
to destroy evidence, and to participate in a violation of the attorney-client privilege by
spying on the communications between one of the lawyers in the courtroom and his client seated
next to him in the courtroom. What will happen to this FBI agent? Nothing. What will
happen to her bosses who instructed her to do this? Nothing. The only time FBI agents get in
trouble is when they receive money for their rogue behavior. But when they violate the Fourth
Amendment, when they engage in computer hacking, when they violate the attorney-client privilege, when they assault the right to a fair trial, all of which they've sworn to uphold.
They took the same oath that I did to preserve, protect, and defend the Constitution of the United States.
When I became a judge, it's the very same oath that they took when they became FBI agents.
What will happen to them?
Nothing.
What will happen to the Proud Boys?
Well, the Proud Boys
are charged with sedition. Sedition is a conspiracy, a conspiracy to overthrow the
government of the United States. A conspiracy is an agreement by two or more persons to commit a
crime where at least one of those agreeing takes one step in furtherance of the crime.
Should people be prosecuted for an agreement to commit a crime that's impossible to commit?
How could six people, there are six defendants in this case, possibly overthrow the government
of the United States by violence? It is impossible. I have argued that these people
shouldn't be prosecuted because when you prosecute someone for entering into an agreement that is impossible to carry out, A, there's no harm. B, you can think whatever you want. You can even think horrible things
about the government. And you can say what you think and publish what you say. That's the beauty
of living in a country based on natural rights. Except when, of course, the government doesn't
honor or respect those natural rights. I don't know what's going to happen to the trial. This
is the subject of my column this week. I just finished doing all
of the research and I'm writing the column now. You'll see it at judgenap.com on Thursday morning.
You'll see it at Washington Times and lewrockwell.com and the other places where my column
goes, where it is posted and printed. But it is infuriating that this should happen to criminal defendants in
the United States of America. What should the judge do? Dismiss the indictments. Throw the
cases out. Order the federal government to prosecute the FBI agents that did all this. Don't hold your breath. Ray McGovern on CIA lying and killing at 11 o'clock this morning, Eastern.
More on all of this as we get it.
Judge Napolitano for judging freedom.