Sunday, June 5, 2011

The decay of the rule of law

Homeowner-Forecloses-On-Bank

This looks like an amusing story about sticking it to the banks. A bank files to foreclose on a house, except the homeowners never had a mortgage, let alone one to this bank. So they sue, and win, but the bank doesn't pay for months. Finally, their attorney shows up with the sheriff and forecloses on the bank.

Ironic, yes. But also a really, really, bad sign. If a private citizen tried to steal someone's house by filing fraudulent documents, they would go to jail, because that's a criminal act, not an "error." But that's not even the bad part. The bad part is this:

After about an hour of being locked out of the bank, the bank manager handed the attorney a check for the legal fees.

They ignored a legal settlement and court order for five months, but an hour after the attorney showed up with a man with a gun, they got paid.


Which leads to a non-funny cartoon: A guy goes into a bank with a gun and a withdrawal slip. When the security guard confronts him, he says, "It's OK, I have account here. I just want my money today."

2 comments:

Anonymous said...

I'm confused about how this is a 'bad sign.' Would you please elaborate?

MCPlanck said...

It's a bad sign because it portends the collapse of society.

What makes a society cohesive is trust. One of my long standing tests for a functional society is how you respond when the cops kick down your door. In some countries, people reach for a gun to defend themselves; in America, people reach for a piece of paper. Our faith in the Constitution is so great that we will allow strangers with guns to drag us away in the middle of the night. This is how we know America is a high-functioning society compared to places like, say, Colombia.

But here we have an example of a bank making a basically criminal attempt to seize someone's house. When they discovered their mistake, they didn't voluntarily retract it - they had to be sued. And after they were sued, they did not pay up until a man with a gun showed up to collect. So much for the rule of law.

Who would trust a bank after that? And if you don't trust a bank, what happens to finance? Pretty soon people are taking their money out and hiding it in their mattresses, and shortly after that we have a financial crisis that makes the last one look like a walk in the park.

The bank paid up an hour after the gun showed up. This means that they a) had the money on hand, and b) knew they were in the wrong. Both of those conditions were true for five months, and the bank just didn't care. It wasn't afraid of the piece of paper anymore; it was only afraid of a gun.

Do you see what I mean about a bad sign now?