In this essay from 2001, Lew Rockwell discusses what were then new mandates on banks to spy on all depositors and investors. Such efforts are now commonplace, of course, and have merged into the current war on cash.
Spy vs. Spy
by Lew Rockwell
One of many pastimes of government bureaucrats is forcing foreign banks to cough up tax information on US citizens. This is a disaster for the cause of privacy, the right of contract, and freedom itself. If the campaign, which has been going on for years, finally succeeds, it will mean the end of bank privacy for Americans. It will also devastate foreign economies that see a comparative advantage in offering secure banking to people from around the world.A priority for totalitarian states is to smash the ability of citizens to escape the reach of government, particularly in their personal finances. The government wants money more than anything else, and the bigger the government, the more willing it is to use unseemly and evil tactics to get it. The US government claims to be the model for free societies but in its attacks on citizens banking outside its borders, it is acting in the tradition of the worst despots.
Adding to the outrage is the typical hypocrisy-insisting on a standard for other countries that the US will not apply to itself. And this is where the subject of bank privacy gets really interesting. It turns out that many citizens of governments around the world like to use US banks because they can be trusted not to steal the money, and also because the US doesn’t share tax information on foreigners with their governments. In other words the US, particularly Florida, is a tax haven for many foreign peoples.
Now, this is a good thing, something of which we can be proud. It is the best tradition of freedom to provide a safe harbor from grasping governments wherever they may be. But where does the US get off denouncing every tax haven in the world and strangling any other government that permits private banking? The hypocrisy is obvious, and the way to end it is to allow other countries to be havens from US laws in the same way the US is a haven from other governments’ laws.
The Clinton administration, in its final scary days, had the idea that it would deal with the evident hypocrisy by forcing US banks to cough up information on foreigners who do their business here.
This was consistent with the Clinton philosophy: The first and only purpose of any citizen anywhere is to serve the state. To the extent that the US can facilitate this, the Clinton regime believed, it should do so in every possible way.
