A radical, economy-destroying extension of liability

Alexandria Ocasio-Cortez needs to understand how liability works. Her line of questioning directed at Wells-Fargo over the Dakota Access pipeline represents dangerous ignorance. A bank that financed the pipeline should be responsible for a leak in a pipeline they do not operate? Really?

Blaming banks for every downstream result of what people do with money lent to them is an incredibly dangerous precedent. If banks are legally responsible with what people do with the money lent to them, then they will not lend anyone any money at all. There is no logical difference between holding a bank responsible for an oil pipeline leak and holding a bank responsible for drunk drivers who financed the purchase of their cars. What about people who use their cars to commit crimes? Should the bank be liable for that?

The way liability law works is that if you sell a defective product, you are liable for injury or property damage caused by that defective product. This is why Ford was liable for the Pinto, which was prone to explode when hit from behind. But money loaned to someone is not a defective product or inherently dangerous. The question is what people do with that money after they get the loan.

Why should we stop at banks? Should we also hold employers responsible for what employees do with their paychecks? Should we hold people who donate to a charitable organization responsible if the money they donate is used illegally? There is no end to the number of people who can be held liable for the downstream results of money changing hands, if we follow the “logic” presented by AOC.

Obviously, Ocasio-Cortez thought she was going to “own” the banks with her line of questioning. That is not unusual, as politicians at all levels love to use their official position to promote themselves in televised meetings. What is much more dangerous that one of the Democratic Party’s most heavily promoted rising stars demonstrates colossal ignorance of how the economy works and had clearly not considered the ramifications of her attacks on big banks. This is why these people should not be running our economy.

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