Most Americans cling to the old-fashioned notion that a bank honorably holds their money and pays interest on that money, with the interest coming from the fact that the bank loans that same money to others for an even higher interest rate. We all imagine Jimmy Stewart explaining how banks work to his Bedford Falls neighbors in It’s a Wonderful Life. That’s not true anymore and, Australia’s experience illustrates that, in the 21st century, banks have almost unlimited control over people’s lives.

My parents were loyal to Australia’s Commonwealth Bank way beyond what was logical. It took a lot of evidence from the bank’s own actions for them even to consider changing banks, and even then, it was emotionally painful for them. The reality is that banks have been appalling for a very long time, and their pathology has been progressing exponentially lately, as they no longer try to hide their craven intent.

Here in Australia, for a $10.00 “overdraft” that exists for less than 24 hours, banks charge $25.00. They call this a “fee” because, if they acknowledged that it’s an interest charge, that rate per annum would be over 90,000%!

Image: Banking by rawpixel.

Banks block our accounts for any number of reasons. My favorite is because a government bureaucracy decides the accountholder transgressed. As we all know, in the world of bureaucracy, everyone is guilty until proven innocent. Getting access to the account again is an uphill battle. You must spend time and money proving that the money you earned and that you put into the bank for safekeeping is, in fact, your property. The costs associated with that proof are yours alone to keep you in your place—and the interest during that time is the bank’s bonus.

Banks devise “products” that promise to pay you interest at a rate that is competitively commercial but build into it certain hoops that you must jump through to achieve that commercial interest rate. They call the hoops a service to help you—to save you time and to focus your energies—but the reality is that they use the fine print to reduce the commercial interest to a theft rate and laugh each month that you fail to comply with the minutiae of their scam.

Banks offer loans that transfer your hard-earned income to their palatial corporate headquarters, where they promote fiscal irresponsibility by lending higher and higher proportions of property value, and they pitch interest rates to reflect risk, even as they assure that they never take a risk. All costs are passed on to the client so that a loan of one million dollars may cost three million by the time the bank forecloses—and it will magically force foreclosure just as the property price and legal fees hit three million dollars. Inflation drives property value increases, and banks help drive that inflation.

One can make a good argument that banking is part of global economic problems. The system allows banks to get bigger and bigger, with profits going, not to people who create, but to those who despoil. This is no longer a case of lenders driving capitalism. Instead, it is a closed system that works with the government to police people and entices them into bad financial decisions (think of the 2008 collapse over equity-free housing loans). It promotes spending much of our productivity, national and personal, on banking services.

Currently, the world is run by moneymen. You only have to look at the way Vanguard and BlackRock own everything between the two of them, even as they use our money to drive those companies into socially destructive and economically wasteful ESG policies (e.g., green energy, DEI, CRT, trans ideology, etc.). (And no, this Reuters article does not debunk the charge, because it ignores the fact that the companies are driven more by ESG policies than by working for their investors. ESG is a huge breach of fiduciary duty.

What the new system means is that we have lost control. We are all working to pay interest on debt that we didn’t need in the first place. Debt investment has created Big Tech, Ukraine, and so much more—unaffordable fads swirling around so-called climate change, unaffordable social programs based on fact-averse policies, all leading to what I’ve heard is 300 trillion in global debt this year (which I suspect underestimates the scope of the problem).

I have a very simple understanding of finance, and probably no understanding of global finance. As I see it, the world works if individuals are in charge of production, innovation, and entrepreneurship, with enterprises functioning at a human level.

The mess we are in is no longer human scale. It is no longer controllable, and to continue to pretend that it is requires short-sighted stupidity at a level no one thought possible two years ago. When we lose human scale, we lose humanity. I’d like to point the finger of blame at a specific person, party, or institution but, basically, it is us. We let it happen.

Nodrog is a pseudonym because Australia is no longer a free country.