My thoughts on the Occupy Wall Street Movement #OWS

By now, almost everyone is familiar with the Occupy Wall Street (OWS) movement.  It has spread globally and is often know locally as occupy “insertcitynamehere” in major cities.  Yet none of us really know what their clear objectives are.  As it turns out, neither do most of the protestors.

What we do know is that people are frustrated and fed up with a system that seemingly ignores them.  Many feel they can’t get ahead and are barely getting by.  They see the lifestyle that their parents had and they want that for themselves.

Education is prohibitively expensive and jobs are scarce. Well paying jobs seem even harder to come by.  Meanwhile, government is cutting funding to programs that benefit the middle class, while giving the rich tax breaks.

Executives of major corporations earning gargantuan compensation packages, while their companies lose money and cut jobs are adding fuel to the fire.  The gap between the rich and the poor continues to grow and the middle class are quickly becoming the new working poor.

Back in 2008, America was tired of the status quo.  Many of the frustrations that the OWS movement are expressing today were felt by those who voted for Barrack Obama back then.  The tears shed from the massive crowds that gathered in Washington for his inauguration were indicative of the sentiment that day.  People felt they’d finally been heard and that their country would be back in their control.

So far, the OWS protests are basically gatherings where people share their frustrations. It’s kind of an open mic format, where everyone is allowed their moment on the soap box.  Although not exclusively, much of the group is comprised of the twenty something Gen-Y demographic.  Well versed in using social media, they’ve leveraged technology to spread their message and rapidly expand their support base.  People hear what they’re doing and can relate to their frustrations.  They feel something must be done, but they don’t know exactly what.

It’s easy to criticize those who have and sympathize with those who have not.  The story of Robin Hood resonates with people because it embodies the basic principles of socialism.  Tax a poor man and it’s unfair.  Steal from a rich man and it’s justice.  Many from the OWS movement feel that the rich have more than enough wealth and should be willing to share some of it with other 99 percent.

America was once the greatest nation on earth. They fought for independence from a tyrannical government in England and won.  They didn’t win independence because of their superior military might(England was far more powerful militarily), but rather because they had a clearly defined reason “why” they were fighting. To England, America was just another colony. To Americans, they were fighting for their right to life, liberty and the pursuit of happiness.  They had far more to gain and also far more to lose than did England and thus won the battle.

America’s founding fathers believed in a small government and a powerful people. The constitution was written to ensure that their country never became like England and that their republic would always remain independent and for the people.  It was really quite a simple plan, but it required the grit and full faith of its citizens to succeed.

Flash forward to today and America has a massive government.  In fact, many of the highest paying jobs in the country are government jobs.  They’re less of a republic and much closer to a kleptocracy as it currently stands.  The England that America fought for independence from, was a mere pimple compared to the cancerous growth of government that’s presently spreading throughout every facet of the nation.  Government is creating layer upon layer of bureaucracy, while at the same time stripping civil liberties and freedoms away from citizens and making it more difficult for small businesses to thrive.

America has racked up Trillions in debt and continues adding to it every day.  Worse still, much of their debt is owed to communist China.  It’s estimated that by 2015, the interest payments alone paid to China will entirely fund their communist People’s Liberation Army.  America is indirectly supporting the very communism it once fought!

But it’s not just America. Canada, Switzerland, the U.K. and many other G-8 nations have become increasingly government heavy and violated citizens rights. Politicians around the globe continually promise entitlements to angry and demanding citizens without even the most rudimentary plans of how they’re going to fund them.

Citizens continually demand more from their government and they’re relinquishing their civil liberties and basic freedoms in order to get it.  This dangerous trend has made it far easier for kleptocratic leaders to emerge.  Promise the world, take away the power of the voters and profit by serving the wealthy elite.

The OWS movement are correct in that they recognize something is wrong with the current state of affairs. They’re just misguided and perhaps, somewhat unaware of the true source of their frustrations.

Blaming Wall Street and corporate greed as the source of society’s problems is the lazy approach.  It’s like blaming drug dealers and prostitutes for practicing their trade.  Sure, we feel it’s morally wrong and damaging to society at some level.  It’s easy to vilify them and sweep them under the rug.  Yet they wouldn’t exist if there wasn’t demand for their products or services from the general population in the first place.  Is the problem the dealer or the junkie?  We need to detox as a society from dependence on government entitlements and rely on ourselves and each other.

While many unscrupulous corporations and individuals have reaped windfalls at the expense of others, there are also many positives to free market capitalism.  Companies like Amazon, Apple and Google may never have materialized without the help of Wall Street investors. Average citizens wouldn’t be able to participate in the wealth generated by these corporations without modern capital marketplaces such as the NYSE and NASDAQ.

Sure, greed got out of control on Wall Street and we’re living through the fallout from that.  But main street can’t claim innocence either.  Most of those sub prime mortgages were taken on by ordinary citizens who saw dollar signs and got greedy themselves.  Is it Wall Street’s fault that people didn’t do their homework by doing their own research instead of relying on others to do it for them?  No one forced those people into taking on too much debt. In fact, the process was started by the government, not Wall Street.

When the Federal Reserve decided to keep interest rates at record lows for an extended period, banks and ordinary investors began to see opportunities in real estate.  In addition, the government decided to guarantee mortgages of otherwise unqualified individuals, so that they too could participate in home ownership.  These manipulations into the free market economy created risk imbalances and resulted in the subsequent housing bubble and bust.

If the free market were truly in control and interest rates were actually set by the lending institutions based on the full consequences of the risk falling onto their own shoulders (as it used to be throughout most of modern history), this boom and bust would never have occurred.  Bankers would have been forced to be selective to whom they lent money to, to avoid losing money themselves.  If the government offers to take on all of the risk of default of a loan, the bank has nothing to lose and everything to gain.

Obviously things spiraled out of control even further where financial institutions were trading derivatives based on derivatives using complex quantitative mathematics that seemingly proved the risks were minimal. And in theory, they were. Unfortunately, as diversified as their portfolios appeared by spreading risk miles wide and an inch deep, they overlooked the fact that they were all heavily invested in one primary sector; US real estate. So when the market imploded, everyone sank with it.  Trillions of dollars evaporated overnight and lending ground to a halt.

So here we are in 2011. Unemployment remains stubbornly high, wages are stagnant at best, home prices remain depressed while health care and education costs continue to rise.  Meanwhile, the rich are seemingly profiting while everyone else continues to suffer.  OWS are rightly frustrated, yet they need to focus that frustration toward the right people and causes.  Guess what?  It’s not Wall Street.

It’s congress stupid!  They need fight for a change in government.  They can’t continue to expect entitlements.  Instead, they should leave charity to their fellow citizens to look after and get the government out of their lives.

I close with my dream of a truly great economy.  I dream of less, not more regulation, a simplified tax code, of not having to pay personal income taxes or social security, of protecting the purchasing value of my money by going back onto a gold standard.  I dream of a ban on corporate lobbyists and an even playing field for everyone to have a chance to be heard.  I dream of getting the government out of health care and education, of an end to all illegal and undeclared wars, bringing the troops home.  Finally, I dream of a society that makes starting a small business as easy as it was for a kid to start a lemonade stand back in the day.  Presently, the government machine has become so out of control that they’re even regulating those!

And please, if you ever hear the following words, run: “I’m from the government and I’m here to help you.”