Occupy Wall Street - Trouble ahead.

Posted by Arkady K. On 10/12/2011

I have been resisting commenting on this movement hoping secretly that the notion of scapegoating the 1% of America's wealthy would not gather any steam - guess I was wrong.  At first blush the movement and its message appear to be quite appealing, after all, the imbalance in this country is frightening and the widening gap between the wealthy and poor is growing.  However it does not take a genius to figure out that the issue with our growing wealth disparity, mounting debt and increase in poverty has very little to do with the wealthy and everything to do with the political class that enables the injustice in the first place.  On top of that and more importantly, the general animosity and hate of success and the generalization that anyone making more than a million dollars is somehow evil and should be punished is misplaced and wrong - this is like jailing the crack addict in hopes that crack would go away - oh wait... 

So the first thing we must do as observers is to understand specifically what this movement is comprised of and the general message - assuming there is one.  Because there is no clear leader or clear coherent goal, we must use what we have available to us and what I am finding is disturbing to say the least. 

For starters, a list of demands by one user on the official website is fascinating as it provides for a window into the mindset of at least *some* of the occupy protesters. 

Demand one: Restoration of the living wage. This demand can only be met by ending "Freetrade" by re-imposing trade tariffs on all imported goods entering the American market to level the playing field for domestic family farming and domestic manufacturing as most nations that are dumping cheap products onto the American market have radical wage and environmental regulation advantages. Another policy that must be instituted is raise the minimum wage to twenty dollars an hr.
Demand two: Institute a universal single payer healthcare system. To do this all private insurers must be banned from the healthcare market as their only effect on the health of patients is to take money away from doctors, nurses and hospitals preventing them from doing their jobs and hand that money to wall st. investors.
Demand three: Guaranteed living wage income regardless of employment.
Demand four: Free college education.
Demand five: Begin a fast track process to bring the fossil fuel economy to an end while at the same bringing the alternative energy economy up to energy demand.
Demand six: One trillion dollars in infrastructure (Water, Sewer, Rail, Roads and Bridges and Electrical Grid) spending now.
Demand seven: One trillion dollars in ecological restoration planting forests, reestablishing wetlands and the natural flow of river systems and decommissioning of all of America's nuclear power plants.
..and my favorite...
Demand eleven: Immediate across the board debt forgiveness for all. Debt forgiveness of sovereign debt, commercial loans, home mortgages, home equity loans, credit card debt, student loans and personal loans now! All debt must be stricken from the "Books." World Bank Loans to all Nations, Bank to Bank Debt and all Bonds and Margin Call Debt in the stock market including all Derivatives or Credit Default Swaps, all 65 trillion dollars of them must also be stricken from the "Books." And I don't mean debt that is in default, I mean all debt on the entire planet period.

OK.  So clearly these are demands by an idealistic, mostly likely very young and awfully ignorant individual. Dispensing free education, free healthcare, living wage regardless of employment and a ridiculous minimum wage is straight from Marx's Communist Manifesto.  Based on the feedback in the comment section, it is at least somewhat comforting to know that these insane demands are not fully embraced although they have generated way more discussion than they deserve.

Of course there is this kid, who thinks that billionaires should pay his tuition because it is just unfair that they have so much money.  He seems to lack even basic knowledge about America's tax system, but that does not stop him from demanding money like a spoiled little brat - I am sure his parents are quite proud.

Isolated events?  Unlikely.  This morning on NPR, Tom Ashbrook invited several OWS activists and interviewed them for an hour without interruption.   The primary spokesman was Jon Phoenix, a 23 year old Northeastern senior who tantalized Tom Ashbrook with his eloquence and amusing knowledge of history.  Phoenix's primary grievance was the high cost of tuition and his big question was how to solve this vexing issue.   For one hour we heard about the failures of capitalism, demands for universal healthcare and living wages with Phoenix at one point just outright demanding Socialism in America.   Nice to see that NPR really vets their guests, but judging by the volume of callers who supported the rhetoric and gleefully trashed capitalism perhaps NPR is just catering to its listening audience?

Anti-capitalism appears to be popular message that is coming through many of the protesters regardless of which city is being occupied.  Many have reported that posters and t-shirts featuring Che Guevara have been spotted frequently.  Indeed, the main photo from yesterday's NYT story confirms the rumors:

Should we just laugh at these socialists?  After all, they appear to be harmless right?  Or is this video from an OccupyLA protest a sign of bigger trouble?

The fact that he endorses the French revolution which resulted in a spree of murderous terror is disturbing enough, but Americans cheering "long live Socialism" is just exasperating. 

A perfect combination.

America is wounded, no doubt.  We have been badly plundered by the ruling elite and the crony capitalists that benefit from our broken system.   Our Government has spent more and more money on education, healthcare, military and the environment.  The result is that we are massively in debt, our colleges are not affordable, health care costs are crushing salaries, we are not any safer than we were 11 years ago and everyday we hear about solar companies going bankrupt with millions of taxpayer funded loans going down the drain.

On top of that, the quasi-private central bank known as the Fed has utterly devastated savers, devalued the dollar making everything more expensive and discouraged capital formation by making people chase risky investments just to keep up with inflation.  

Yet the very same politicians who constantly push for these failed policies are now embracing this occupy movement that is reeking with Marxist and Socialist thought and has the potential to get much worse as time progresses.  Even Al Gore has to chime in, care to guess where he stands on the issue?

We have spent trillions of dollars, gone further and further into debt and have not fixed anything.  Our banks are still under-capitalized and potentially very much compromised with their European exposure and mountains of MBSs that have yet to be cleared out of the system.  Unemployment benefits, medicaid, medicare and social security are all facing the same daunting prospect - where will the money come from?   Our economy is not in any position to create jobs because the bad debt has never been cleared out after 30 years of monetary expansion by the Federal Reserve.  Non-stop expansion of Federal handouts in the form of unemployment,  housing, healthcare and food stamps has created legions of dependents.  These very same dependents who are now on Wall St. protesting the very people who pay for almost a quarter of the very same benefits that these protesters rely on!  

We even heard comparisons that this occupy movement is the Left's response to the Tea Party movement.  Oh really?  Tea Partiers mobilized largely due to TARP and later emboldened by the Federal takeover of healthcare known as ObamaCare.   Many Americans found the bailing out of failed banks to be entirely anti-capitalist, anti-American and economically dangerous and stupid.   They also recognized that due to Medicare/Medicaid and mandates of employer funded health insurance that our Gov't is ruining our health care.   Their anger was not against any particular group, did not espouse distribution, debt forgiveness or handouts.  They simply wanted our markets to work properly with minimal intervention.   While I do not embrace the religious component of the Tea Party movement, their primary grievances were for the restoration of things that once worked.   While this movement is calling for and demanding forms of economics and Governments that have failed in every country while causing death, poverty and hardship for all.  

Yet this is exactly what makes it so dangerous.  This occupy movement has the sympathies of Hollywood, our media, the youth and the unemployed.  As our economy continues to struggle, unemployment continues to rise the protesters will be further emboldened by their screeching cries for "equality".    What makes matters worse, is that because of the partisan split that is clearly manifesting itself, if the GOP takes the Senate and possibly the White House then the movement will be injected with a healthy dose of steroids.  Imagine, if there is already so much attention being given to these protesters with Obama the liberal darling in the White House - what will happen by the end of next year?
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"It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a ‘dismal science.’ But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance.” - M. Rothbard