Posted on 10/28/2011 6:43:38 PM PDT by sickoflibs
Last week, I spent the afternoon visiting the Occupy Wall Street demonstrations in lower Manhattan. I brought a film crew and a sign that said "I Am The 1%, Let's Talk." The purpose was to understand what was motivating these protesters and try to educate them about what caused the financial crisis. I went down there with the feeling that much of their anger was justified, but broadly misdirected.
Indeed, there were plenty of heated discussions. I did little more than ask how much of my earnings I should be allowed to keep. In return, I was called an idiot, a fool, heartless, and selfish. But when we started talking about the issues, it seemed like the protesters fell into two categories: those who generally understood and agreed that Washington caused this mess, and those who could only recite Marxist talking points. It was the latter who usually resorted to calling names once I pointed out the hypocrisy of their positions. They might shout, "the banks have taken over the regulatory agencies, so we need more regulations!" Obviously, this is paradoxical. If they're blaming government for causing this problem, why would they suggest more government as the solution?
I think some of the leadership of Occupy Wall Street comes from this kind of radical Marxist background - and perhaps they're smart to intentionally keep quiet about their goals. Because the vast majority of protesters I met did believe in capitalism - they're just tired of being screwed over by crony capitalism. Noted school-choice activist Michael Strong calls it "crapitalism," and that's what it is. It's a rotten deal for everyone, and they know it.
The problem is that many of these people are under the mistaken impression that Wall Street banks are to blame for this state of affairs. That's like blaming the dogs for getting into the trashcan. Sure, it's bad behavior, but the ultimate responsibility lies with the authority figures - in this case, Washington. After all, it's not the New York metro area that has benefitted the most from this crisis. Rather, the counties around DC are now ranking as the wealthiest in the country. And while wealthy New Yorkers have historically made their living providing essential financial services to the global economy, Washington has always made its living one way: at our expense.
That's why I have trouble sympathizing with people calling themselves the "99%", implying they stand in opposition to wealth no matter how it's earned. I own a brokerage firm, but I didn't receive any bailout money. In fact, I have to work twice as hard to compete with bigger financial firms that are propped up by the US government. The least I deserve is the ability to keep what I earn.
Remember, if the IRS weren't taking so much from the wealthy who have earned it, there would be that much less for Wall Street bailouts. A hundred years ago, major banks had no business lobbying Washington, because compared to their free-market earnings, the government simply didn't have that much money to dole.
The other tool the government didn't have to use against us back then was the Federal Reserve. Even if we drastically reduce taxes, the Fed might decide to do what it has been doing: printing money to finance government profligacy. This acts as a secret tax on everyone with a bank account, and is critical in transferring wealth from hardworking Americans to politically connected elites. So, really, the protests shouldn't be on Wall Street but around the corner on the ironically named Liberty Street, site of the New York Federal Reserve Bank - the heart of this dishonest system.
Until these twin sources of financial oppression are brought under control, the average American's standard of living will most likely continue to fall, more jobs will leave for increasingly capitalist emerging markets, and more young kids will be left with nothing better to do than block traffic.
One common refrain I heard at the protests was that our problems result from the rich not paying enough taxes. Most feel that economy was better when marginal tax rates were higher, and that lower rates are a cause of financial decline. Forget about the faulty logic of this assumption, it ignores two key points. First, while it's true that marginal tax rates were much higher after World War II, the tax code also used to contain many allowances and exceptions, such that very few people actually paid the nominal rate. Second, prior to 1913, the rich paid no income taxes at all; yet, lower- and middle-class living standards rose much faster in the 19th century than in the 20th!
Overall, I think there was a real lack of understanding of basic economic principles among the Occupiers. Protesters thought that the rich owed a duty to share their wealth with society. However, they failed to see that in true capitalism, the rich can only acquire their wealth by serving others. No one succeeds in a vacuum. Consider the late Steve Jobs. He became a billionaire by sharing his wealth. Think about the millions of people around the world whose lives are vastly better because of Apple products. Think of all the Apple employees who benefit from high-paying jobs he created. Think about all those investors who made money from Apple stock. Steve Jobs shared his wealth with the entire planet before he ever paid one dime in taxes. In fact, any money Steve Jobs did pay in taxes likely prevented him from creating and sharing even more wealth. Had Jobs tried to hoard his wealth instead, he never would have acquired it in the first place. Of course, the idea that Occupy Wall Street protesters have a right to share directly in the private profits earned by others is immoral. The protesters were correct in being outraged by having to share in Wall Street's losses. But if they do not want to share the losses, they have no right to demand a share of the profits! One protester equated the low wages paid by Wal-Mart to slavery, yet thought the government should take 70% of my income. In the case of Wal-Mart, employees are free to choose other jobs. What choice would I have when faced with a 70% income tax? They call it "slavery" when Wal-Mart offers workers better opportunities than they could find elsewhere, and "justice" when government enslaves me by forcibly taking 70% of the fruits of my labor. Another protester challenged my claim that businesses create jobs by stating that consumers create the jobs by spending money. When I asked him where the consumers got their money, he replied "from their jobs," which actually proved my point. Without jobs, consumers have no purchasing power. And without production, there is nothing to purchase.
I'm calling for these protesters to educate themselves on the causes of the current financial decline and not to waste their time attacking the wrong target. They have every right to be angry, but also an obligation to be part of the solution. Yes, I am the 1% - but I've earned every penny. Instead of trying to take my wealth away, I hope they learn from my example.
If you realize both parties in Washington think that our money is theirs and you trust them to do the wrong thing, this list is for you.
If you think there is a Santa Claus that has some magic easy cure for the economy; someone who is going to get elected in Washington and fix everything just by cutting your taxes, investing (more government spending) a few trillion more we don't have and will never have, and who will just command some countries to lower their prices and others to raise their prices all to suit your best interests, then this list is not for you.
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The Austrian Economics School’s Commandments plus :From : link
1) You cannot spend your way out of a recession
2) You cannot regulate the economy into oblivion and expect it to function
3) You cannot tax people and businesses to the point of near slavery and expect them to keep producing
4) You cannot create an abundance of money out of thin air without making all that paper worthless
5) The government cannot make up for rising unemployment by just hiring all the out of work people to be bureaucrats or send them unemployment checks forever
6) You cannot live beyond your means indefinitely
7) The economy must actually produce something others are willing to buy
8) Every government bureaucrat should keep the following motto in mind when attempting to influence the economy: “First, do no harm!”
9) Central bank-supported fractional reserve banking is an economically distorting, ethically questionable activity. In particular, no government should ever do anything to save any bank from the full consequences of a bank run, no matter what the short-term consequences.
10) Gold is God’s money.
Add mine:
1) Businesses don't hire workers just because of demand for products or services, they hire because it makes them money. Sorry to have to state the obvious.
2) Government spending without taxing is still redistribution
3) Taking one man's money and giving it to another is not a job.
4) Paul Krugman and Bernake have been wrong about everything, as well as the other best and brightest Keynesian's who have been fixing our economy for over a decade.
5) Republicans in the minority (esp out of the White House) act like Republicans, in the majority they act like Democrats .
Equity bubble rules:
1)If something goes up too fast, it is going down faster,
2) By the time it looks like everybody is getting rich, it’s too late, stay out!
3) To get rich you have to get in early start of recovery and get out at the first really 'bad' news, and ignore the experts that claim that they will stop the next crash(our buddy Bernake.).
4) Don't invest money you will probably need, or worse money you don't really have.
“I did little more than ask how much of my earnings I should be allowed to keep. In return, I was called an idiot, a fool, heartless, and selfish.”
Shoulda saved the trip and come here and said you thought a flat tax was the most equitable. Same result, and you wouldn’t have to leave your armchair.
Truer words never spoken...
Thanks
I stole that one from Peter in early 2009. It was in a video or editorial I posted of him here. I really liked it and it ruffled a few feathers then, now it's like a mantra here.
I’m the 1%, I’m the 99% - excuse me, but it seems like the singular goal of the ‘99%’ is to drag down the 1% so that they’re earning just as little as the rest to provide for the bloodsucking 5% who never intend to ever lift themselves off of government dependence. A better question should be: How hard should a few people work so that so many can simply sit on their rumps and do nothing?
I hope you are not talking about Perry's not-so-flat 'flat' tax.
I prefer a consumption tax and I liked Cain's 9-9-9 plan except for the elimination of the payroll deduction that Schiff pointed out last week.
No, I think the guy who went out and engaged the OWS did more good.
No, I think the guy who went out and engaged the OWS did more good.”
Heh heh. And had better feedback.
Full 'Schiff takes on OWS Marxists' video :
Peter Schiff Speaks for 1 Percent at Occupy Wall Street (video)
Schiff did a great job!
One big reason that I started posting Schiff late 2008 was he has a gift of making clear easy to understand points defending capitalism, and he making it entertaining too.
Compare him within Ron Paul who also believes in Austrian economics, Paul is no communicator and is many times counterproductive when he speaks.
Of course Schiff is correct. But what good does it do to argue with Idiots? 90 something percent of these people are economic ignoramuses. Most of these people will show up at any type of protest. They are part of the “rent-a-mob” crowd that’s prevalent in NY, SF, LA & a lot of other places. They are incapable of logic & reason, & I think Peter Schiff is wasting his time trying to reason with them. But this video is good because it reveals just what types of idiots are in this OWS movement.
Because he does it on camera and shows millions of people around the world that the OWS protestors are idiots.
Exactly. He might also have educated one or two of them, and that’s one or two more than before.
I can’t sit through this.....listening to these morons : )
The problem with 9-9-9 is that the politicians are not going to keep those numbers at 9 for long. Herman is adding a new tax, and inevitably, they will all increase. Reagan fell for the Democrats’ promises when he accepted the elimination various deductions in exchange for lower rates. Well, didn’t stay lower, and the deductions were not restored.
bflr
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