OWS, Right or Wrong?

Okay so it’s been a while since I’ve blogged.  Hey, October is the busiest month of the year for me and time is very limited…so shoot me.  Anyhow there has been a lot happen since my last blog such as the Penn State University scandal, a high profile torture and murder trial, a couple of elections, Congressmen and women getting busted for insider trading (which ironically is not illegal for them) and I saw a funny video of a dog with peanut butter stuck to the roof of his mouth.  All of these are worthy topics to blog on and generally I try to blog on stuff that inspires me to write which most of the time involves motorcycles, guns, education, etc.  But recently we have had a lot of press around the Occupy Wall Street movement, the 99% (whatever that is) versus the 1% (whatever that is), corporate greed, perceived economic inequality, etc. 

Now before I get too deep into this please understand, I sympathize with the OWS group on several fronts.  First, they are correct to be outraged and afraid, our elected leaders have indebted the next 3 generations of Americans to such an extent that for the first time in American history, the Baby Boomer generation will actually have a higher average standard of living than their children will.  That’s right, the greed and corruption of the Baby Boomer generation has saddled Generation X, Y and whatever is after that with unprecedented debt and little to show for it.  This will and has adversely affected the economy to where people are not retiring out naturally, wages are depressed, jobs are more scarce, etc.  Generation X’ers are thus forced into lower status and pay professionally than their Baby Boomer counterparts had at a similar age, and Generation Y who is just emerging in the workplace are stuck with jobs below their talents and abilities with little opportunity for advancement into the near future.

Second I believe the OWS group has a right to protest on public land for as long as they like.  It is a dangerous precedent to set in allowing the police or politicians to determine when and for how long a protest is suitable.  Protests by nature are contentious and will make the power elite nervous (or should) as it is a form of civil unrest.  The police need to realize they work “for the people” not for the politicians.  That said the OWS crowd have done themselves a grave injustice in not policing the actions of those within their own camps and thus have lost a lot of sympathy from the general American public.

One thing the OWS protest did bring to light is (in my opinion):

·        A general sense of entitlement

·        Unrealistic expectations of the marketplace

·        A gross misunderstanding of basic economic principles (especially capitalism vs socialism)

·        That civil unrest is apparent on the Left as well as the Right and Americans in general are very unhappy, to the extent that Washington had better pay attention soon

So on the first point, my generation (X or Y depending upon who you ask) has demonstrated a general sense of entitlement.  It’s fairly easy to see why, we’ve been raised in a culture where people commonly demand their “rights” in highly public ways, from celebrities to celebrated criminals to the average disgruntled worker, everyone is screaming for their “rights” and have been doing so since the early 1990’s.  The problem is most of these people believe their “rights” are whatever they say they are.  They confuse “rights” with “wants” or even “needs”.  Our generation has not only been surrounded by this publicly, but have grown up in a world of Social Security, pensions, Medicare, Medicade, full unemployment benefits, disability claims, lawsuits galore, health care on demand, unions and of course mass marketing aimed at equating materialism with those “deserving of success”.  We are thus a byproduct of our upbringing which by in large has been self centered, self serving and of course ever demanding of “what can you do for me now”.  We view employment as a “right”.  We view benefits and pay equal to that of our parents as our just “entitlements” and we are unwilling to step down in the lifestyle we have been living to (provided by our parents generally) to something less than what we are accustomed.  “Paying dues” or “working your way up” mean virtually nothing to most of us and for good reason, because employee loyalty, hard work and dedication are no longer rewarded as reliably in the workplace as historically so.  Work hard, start at the bottom, give a job everything you’ve got and they’ll outsource you without a second thought.  On the flip side this has lead to…

Unrealistic expectations of the marketplace.  Look, if you’re in your mid to late twenties to your mid thirties, let me tell you something your parents and obviously your high school and college counselors won’t tell you, the job market demands skills that employers can leverage to make them (the employer) money.  In other words if you have a degree in Gay, Lesbian and Transgender Theatre, don’t expect to jump into the workplace and make $75,000 a year.  That is  unless someone has figured out how to make far, far more money by hiring you and using your skills to further their own, personal wealth.  What’s that you ask?  They are going to make money off of you?  Oh yeah, bet on it, that’s how the world works.  Jobs are not given because you are entitled, neither are they given out of generosity.  Employment is nothing more than cold, calculated business.  It does not take into account your feelings, your worth as a human, your individuality or how popular you might be on Facebook.  Employment is about money and only money, that’s why they call the bottom line (read $$$) the “bottom line”.

Which brings me to point 3…a gross misunderstanding of basic economic principles.  Part of the problem here is because general economics has largely been co-opted by sociology types and not business types (not always but frequently).  Unfortunately this is usually because the brightest sociology majors “teach” while the brightest business majors go out into the marketplace and “produce”.  Either way this allows for a lot of theories on human behavior, some math thrown in, a little bit of research, a lot of assumptions and a dab or two of pure voodoo.  The truth is Adam Smith basically had things right from the beginning and that is we can always count on  2 things, first that people by and large are greedy and self serving and 2 that an economic system designed to equate productivity (defined as meeting a demand) to greed will result in an economic engine that will be perpetually run on an inexhaustible fuel supply…effort driven by greed (or need).  This system is known as capitalism as it allows individuals to determine how to meet their own needs (and greed, wants, desires, etc.) by producing something that someone else will exchange their own wealth, services or resources for.  The beauty of Smith’s original model is that it takes into account that resources are finite but that greed is infinite, thus innovation will naturally evolve as people find newer and better ways to fulfill their wants.  Note that I am defining greed as the desire for anything beyond the bare necessities of food and shelter which, thank God, our ancestors have struggled for generations to satisfy and we are reaping the benefits.  This brings me to the counterpoint of point 3, socialism.

Socialism in a nutshell is a controlled economy.  This model basically believes that people are so inherently greedy as to be self destructive to the detriment of the whole and thus the means of wealth and production should be controlled by a centralized, select “few”.  Now the ironic thing about socialism is that by and large it discounts the possibility that a select few could be corrupted in a way as to cause massive social and economic inequality or otherwise be detrimental to the whole.  If you believe that I have a snow cone stand in the Arctic I’d like to sell you.  The other tenet of socialism is the distribution of resources, services and wealth to those who do not necessarily produce or innovate to satisfy their own greed (wants, needs, desires, etc.).  The really damaging part is that this discourages innovation, growth, effort, etc. and cripples that economic engine that Adam Smith imagined by starving it of fuel (that is individual effort). Now there are extremes in socialism (like Cuba) and there is moderate socialism (like Greece).  Some can be somewhat sustainable though not optimal like England and others are a complete humanitarian disaster like post World War 2 China. 

The United States has historically been capitalist, trending towards socialist measures in what we call “modified capitalism” or some such like term.  To an extent, much of our socialist measure are driven by something that is almost unique to U.S. culture, that is empathy.  We don’t like to see children living on sidewalks begging, we don’t want to see elderly people and the sick turned away from hospitals.  We don’t like seeing the crippled or impaired left behind because of their disabilities and so we put measures in place to help these people and it is not wrong to do so.  In cold hearted, calculating business sense this is less than optimal, but can be done. 

Let’s give an illustration.  Suppose you have a supercharged, V8, 400 horsepower 1970’s hot rod.  We’re talking roaring exhaust, hood scoops, chassis twisting, torque here.  Just raw power…this represents economic potential.  Now you are planning on running this vehicle on gas (labor, innovation, effort) and resources (oxygen, spark).  A pure capitalist society would be this vehicle topped off with a full tank, wide open air ports, good spark plugs and just raring to go.  Granted the byproduct of this would be massive exhaust and noise but all the power in the world to go forward would be present.  If you begin to add entitlements (free healthcare, pensions, etc.) you begin to starve the vehicle of resources (air and spark), if you begin to add wealth distribution you begin to starve the vehicle of fuel to burn (effort, innovation, labor).  Do enough of either and you stall the car out completely and regardless of potential, what you have left is a gigantic paperweight.  A little of one or the other or even both and the vehicle may still run, it may in fact still be absolutely powerful, the trick is to find the balance.  How do you do the humane, empathetic thing but without stifling resources or fuel?

Of course no discussion on economics in America would be complete without mentioning Keynes.  Basically he believed the government should act to prevent economic destructions (recession and depression) through policy.  The problem is the government has taken what is originally narrow in scope and abused it to such an extent that some question if we will ever recover.  Would Smith agree with Keynes?  Who knows...

Back on topic, the basic premise of capitalism is that people do not go to work and bust their humps out of the goodness of their hearts, they do it for money.  Now granted, you may love your job, you may even feel it is a calling, but at the point the lights get turned off and there’s no bread on the table, labors of love go out the window and need becomes the ultimate driving force.  If my employer were to stop paying me or even to pay me half (for example), I’d quit my job and look elsewhere without a second thought, despite how much I love what I do.  I get up and go to work for money, not mirth, not good will, not for the heck of it. I am driven to work harder and to gain more skills by the possibility of more money, not because I want to be superman.  I understand that I am paid for what I can bring to the table in terms of potential to earn not just for myself, but for someone else as well.  It’s just business.

Which brings me to the final point, our elected leaders and their failures.  For generations now Americans have labored for the promise of a better tomorrow.  We have been taught to embrace liberty and freedom, that capitalism is good, communism is bad.  That we have individual liberties guaranteed to us by the Constitution and that we are responsible for our own happiness.  Recently however we espouse capitalism and borrow money from communists, we talk about civil liberties yet our own police forces are turned against us, we have attorney generals who refer to veterans as potential terroristic threats, we’re told we’re “free” just as long as we not get in the way of our elected leaders.  We’re forced to pay for legislation we not only don’t want but that we yell and scream at our officials for at town hall meetings to get them to listen to us yet our “representatives” cram it down our throats anyway.  We are arrested for tax evasion, they aren’t, we would go to jail for insider trading, they won’t, we would do life in prison for they way they run Social Security but they won’t even allow it to be referred to as the Ponzi Scheme it so obviously has become.  They (Congress and Senators) have twisted, distorted and perverted their office to such an extent that most Americans would almost be willing to scrap both houses altogether.  We have been robbed time and again, with privatization of profits and socialization of losses.  We have been saddled with unwanted debt that we cannot sustain.  We have been depleted of our motivation, our pride and our will to innovate and work.  They lie and lie and lie again and wonder why we have no faith in them.  Lastly, they too seem to lack basic economic understanding which bodes poorly for our country in the future. 

For example, look no further than the current Presidential debates.  Obama is trying to “create jobs”.  The GOP is promising to “create jobs” but what nobody is saying is that the government itself is utterly incapable of producing one single cent of wealth.  Why?  Because government taxes from producers to sustain, theoretically had they not removed those resources from that producer that producer would have the means to hire more labor (increase effort/fuel) to further their own wealth.  In other words they (the government) stifle fuel and resources to our economic engine (potential) and nothing more.  The government produces no more “new” jobs than the crud that gets caught in your fuel filter produces horsepower.  They have the ability to dramatically retard economic growth but are very, very limited in their ability to encourage it (some would argue not at all).  The government needs to get out of our way, loosen restrictions, loosen financial constraints and let this engine do what it naturally wants to do, which is move forward.

Watch the President say "we can't wait to create jobs".  

The OWS movement is right to be afraid and angry, but their efforts are misdirected.  They should be occupying Washington D.C., as should we all.