This is the second part of a two-part series. Click here to read the first part.
HE SAYS:
The Occupy movement wants to change the rules as an expedient and self-serving solution to the recession so that they can benefit from those that successfully pursued our American Dream. There are frightened politicians all over this country preparing to raise someone’s taxes. If not your taxes this time around, just wait until the Occupy movement gets a taste of blood and goes on a feeding frenzy for more taxes from anyone who has achieved any measure of success.
You and I know just as the Occupy group knows, this influx of tax money will not create jobs, will not reduce the deficit, and will not build equality, but, will be spent as fast as it comes in on an endless list of give-away programs. The Occupy group has come to expect free resources as they protest, has talked about socialized healthcare, subsidized college educations, and now wants free houses by forcing banks to forgive foreclosures. Who knows what will be next?
If they get their way, we will have created a society that requires one group, far more than 1% of us, to try ever harder to satisfy the insatiable demands of the group, much less than 99% of us, represented by the Occupy movement. If you and your family own a business or want to start a business and you achieve any success or you build a successful career, which side of that miserable equation do you think you will be on?
It is no longer possible to be on the sidelines. If you want to protect the fruits of your efforts, you need to reject the Occupy movement and take action. To do nothing is to give in to the forces that want to fundamentally change this country in a way that will prevent us from ever again being the home of great opportunity where everyone has the chance to succeed or fail on their own terms. This is not a struggle between those that “have” and those that “have not”, this is about those that “do” and those that “do not.”
If you own a small business or you are building a successful career, at some level, you still believe in the true American Dream. It is time to speak up before it is taken away! As we wait for the long anticipated “Demands” of the Occupy movement, we should start putting together our own list of “Demands.”
I offer no slogans or empty rhetoric, just some basic and simple truths. I suggest that we demand of ourselves and of our fellow citizens the following:
1. We should not live beyond our means and then expect to have other people subsidize our lifestyle by increasing their taxes. We can all support charities and government programs that help the truly needy but no one should otherwise be forced to support anyone but themselves and their families.
2. We all need to take responsibility for our debts instead of blaming the banks and the credit card companies.
3. Anyone who used student loans to get a college education should own up to this obligation and find a way to pay back the money.
4. We can’t expect to receive free healthcare, or a free college education or any other free benefits as they are not free nor can we expect other people to pay for it for us. If someone is too disabled to work or to help themselves, then we can all offer help, but, otherwise we all need to provide for ourselves and our families.
5. We all should accept and embrace the realities and benefits of a free and open capitalist society where anyone can have the opportunity through their skills, efforts, and great ideas to accumulate wealth without being accused of being evil or greedy. It is not unfair as that is how a free and competitive society is supposed to work.
6. We need to understand that if we can’t find a job and/or got downsized, laid off, or let go that the best way to create jobs is by encouraging success and a vibrant small business community.
7. We all need to take ownership of our choices and if things have not worked out as we had hoped we should have faith in ourselves and keep trying.
There is no need to leave the comfort of our homes or abandon our businesses or careers and camp out in the streets. We can save the American Dream if we speak out, send letters to the editor, send letters and e-mails to our congressmen, post comments here and on social networks, and, generally, voice our opinions loud and clear before it is too late.
If you are concerned about the Occupy agenda, pass this and Part 1 on to other concerned citizens.
Next Monday, Joe uses his personal experiences to suggest that sports provide many benefits and life lessons in “Sports Are A Reflection Of Life”.
January 18, 2012 at 1:05 pm
Please look at these charts:
http://www.businessinsider.com/what-wall-street-protesters-are-so-angry-about-2011-10?op=1
This is an article by Henry Blodget, not a left-wing radical.
The middle class is being destroyed in this country, and we can’t let that happen, because they are the source of our prosperity.
The Occupy Movement has no formal leaders or demands. When you write about their call for wealth redistribution, you are only describing a small fraction of the people participating. Just like the tea party, there are many diverse ideologies at play in the movement. Do not paint them with a broad brush.
I’m a devoted capitalist, business owner and job creator. But it would be a huge mistake for me, or anyone who cares about our country, to disregard, discount, or despise the Occupy movement. It has grown because of real problems. These problems need to be taken seriously and engaged with. Right now, people are in denial – for the same reason you are, no one wants someone to come and take their money away. But by having such a narrow view and knee jerk reaction, you ensure the problems are not addressed and will continue to worsen, to the detriment of us all.
Don’t hate the canary. Fix the coal mine.
January 18, 2012 at 3:17 pm
Andy, these charts are the same ones you gave us back in November. Again, we all acknowledge that unemployment is too high and that there are people (businesses) in this country that have great wealth. I don’t necessarily see the cause and effect as you may suggest. We do not have high unemployment because there are a small percentage of people with great wealth. Nor is that great wealth gained at the expense of the unemployed or the middle class. The Occupy movement is not upset with the wealthy because they caused the problem; they are upset with the wealthy simply because they are wealthy. That’s called resentment. In a very real sense no one obtains great wealth unless someone else believes they are worth it and gives them great wealth. In other words, a movie star gets $20 million for six months’ work because the movie studio makes a business decision that he is worth the investment. Likewise for a highly paid athlete and a highly paid CEO.
We are starting to see improvement in the economy and job creation and some economists feel that this will continue. This has happened not because of any sweeping and fundamental changes in the way this country operates as demanded by the Occupy movement but because the present capitalist system of entrepreneurs (small businesses, in particular) are creating jobs the old fashion way by slowly rebuilding their businesses.
As an aside, much of the sudden unemployment was precipitated by the sudden collapse of the housing market which, in turn, was caused by the failure of many people to pay their mortgages resulting in bank bailouts and foreclosures which, in turn, was caused by many living beyond their means.
Finally, I am not against everything the Occupy movement is seeking and I have already acknowledged that; however, I still believe that at its core it is about seeking other people’s money. You and I as arm chair observers of this movement can pick and chose what we like or dislike about it but that does not change the fact that many in the movement are just out to help themselves to free healthcare, free educations, free houses, and on and on all of which will be paid for not just by the super wealthy but you, I, and the rest of the middle class. I hope I am wrong and you are right, but unless they change their message I cannot agree with their core values.
January 20, 2012 at 1:26 pm
Joe,
RE: “The Occupy movement is not upset with the wealthy because they caused the problem; they are upset with the wealthy simply because they are wealthy.”
I think the above comment is just about the silliest thing I’ve seen in print. While it might be easy and expedient to reduce the Occupy movement to a singular “rich v. poor” notion – perhaps based on the battle cry “We are the 99%!” – such a myopic perspective, while convenient, fails to take in a much larger, more complex picture. What is even more dangerous is that it effectively marginalizes and objectifies the very real human beings with very real human concerns who’s collective voices have created the movement.
Marginalize and de-humanize “them” if it makes you feel better, (that’s the purpose of marginalization: to prop up an individual or group’s righteous superior or inferior status) but do so at your own peril.
We’re a powerful nation in deep poop. We’re a people more polarized now, perhaps, than at any time since the days of the Civil War. Our current state of polarization is unsustainable.
Part (only one part!) of what triggered the Occupy movement is the huge, tax-free profiteering that has expanded, un-checked, in the dark corners of the complex world of financial derivative products. Derivatives are complicated and enigmatic, essentially designed to produce nothing, add nothing useful to an economy, (nothing new or tangible is actually created) with the exception of hefty profit for their creators and a very few with the ways and means to play in that particular dark arena. Keep in mind that these things didn’t even exist 10 or 20 years ago! I don’t understand them well enough to say a whole lot more. What I do understand is that, based on current tax codes, the folks who make millions or tens of millions (and more) from this stuff pay little or no taxes on their huge profits.
The brilliant minds that create derivatives aren’t small business people and they aren’t generally hiring dozens or hundreds of other folks. The next Microsoft or Apple or Google is unlikely to sprout from their foreheads. Do they really need we real small business owners to stand with them and defend the tax loopholes they currently enjoy..?
I have to say, as a small business owner making a semi-comfortable 6-figures a year, the thought that I pay a much larger percentage of my income in taxes than someone making, in some cases, hundreds of millions of dollars more than me makes me physically ill.
Re: “As an aside, much of the sudden unemployment was precipitated by the sudden collapse of the housing market which, in turn, was caused by the failure of many people to pay their mortgages resulting in bank bailouts and foreclosures which, in turn, was caused by many living beyond their means.”
OK. That’s easy and convenient, too. And there is a grain – and little more than a grain – of truth in it.
When those folks bought their homes they likely had jobs and weren’t necessarily living beyond their means. (Sure some were. Some always do…) But what about the artificiality of home values, easy credit availability, etc., fed by those strange “mortgage-backed securities” that made it possible for banks to make bad loan after bad loan, because some genius worked out clever ways to make a buck gambling on someone else’s mortgage, which was essentially backed by what… a piece of paper or a flawed, well-dressed, under-insured gamble that real-estate is, in fact, a safe investment and will always be..?
Many of those folks were gainfully employed or, believe it or not – small business owners like many of us – as were their spouses. They bought their homes when there was no way of knowing that 2 or 5 or 10 years down the road they would be without work. They didn’t know they would be “under water,” owing far more on their homes than they were actually worth.
So easy to blame those who are down and out without being even moderately curious about how they came to get there. So easy to lump them together into one big, easily defined sub-class and accuse them of being welfare leaches. So very, very easy…
The Occupy movement has some excellent points that badly need to be heard and engaged with. But like I said above, marginalize them away if you wish. After all, it makes life simple and “black or white” or “red or blue” or “conservative or liberal” are much less, pardon the pun, taxing on one’s constitution.
Either / or is so much easier than than the willingness to be curious and the rigor required to really wrestle with the shades-of-grey complexities of an issue.
January 23, 2012 at 10:33 am
Ken,
You can try to denigrate my criticism of the Occupy movement by calling my statements silly and accusing me of marginalizing the people involved just as I could dismiss your arguments in support of the Occupy movement as being disingenuous and accuse you of unduly glorifying the people involved but let’s try to put our debate on a higher level. I do find it interesting that you selected two isolated sentences from all of the comments I have written to incite your anger.
As I have said before and will say again, I am not against everything the Occupiers are fighting for, but, I am not in favor of their demand for the redistribution of wealth since I find it to be unfair and it smacks of the strong arm tactics of a socialist revolt or the beginnings of a totalitarian state nor am I in favor of the free giveaway programs they seem to want for themselves. As for the “at your peril” comment are you confirming that the Occupiers are a threat to our country if they don’t get their way?
Now for my statement that upsets you, let’s be honest with each other. There are and always have been people who resent and covet the wealth of the super wealthy. It would be naive of us to believe that no one has gravitated to the Occupy movement because they are motivated by such resentment against the rich and powerful. As you pointed out, the Occupy movement chose to define their enemy as those in the top 1% of income which would clearly imply that they view their struggle as them against the wealthy. Their central theme was the large disparity between their incomes and resources and those of the wealthy who are portrayed as being evil and greedy and they originally rallied against Wall Street which is the symbolic epicenter of wealth. In fact, I recall seeing a video in support of the Occupy movement that was solely based on mocking and ridiculing the supposed frivolity and shallowness of the so called yacht and jet set. There can be no doubt that there is a deep seated animosity toward the wealthy within the Occupy movement. This was not intended as a wholesale condemnation of the Occupy movement; however, it was a valid observation on human nature and to deny it would be silly of you.
As more people on the sidelines of the movement like you get involved, the professed goals of the Occupy movement have evolved, expanded and become more complex from the initial protests which has the effect of giving the Occupiers more credibility than they may deserve. For example, I find it hard to believe that the average Occupier who had the time and inclination to hit the streets and camp out for several months was motivated by his burning aversion to, as you put it, the very complicated and obscure derivative market. If this is, in fact, a concern of the Occupiers I would imagine that it is of recent origin.
Your assessment of the derivative market raises more questions than it answers. Derivatives are simply futures and options on underlying assets such as stocks and commodities that do, in fact, have their own value. Even though they were refined and came into vogue in recent years, they are not new as there has been a derivative futures market for rice for over 100 years. I am not sure how they are taxed; however, it has been my experience that very few things in life escape the tax man. It has also been my experience that the tales of glaring loopholes are usually more myth than reality. Taxes may be deferred at times but rarely eliminated. It is my understanding that these transactions are not tax free but the taxes may be deferred for a considerable period of time. Perhaps, an accountant can help us with this one. Also, the facts (as per the IRS) are that the top 10% of taxpayers pay close to 70% of all taxes collected. If so many wealthy people are not paying taxes where is all of this tax money coming from? I have no doubt that there are wealthy people who abuse the tax system just as I am sure that there are people who are not wealthy who cheat on their taxes. I wonder if you are as bothered by your average tax cheat.
I could accuse you of engaging in convenient and incongruous arguments when you suggest that the wealthy represent the dark forces of evil or are flagrant tax dodgers. I could also adopt a sanctimonious tone and lecture you that when we resent or dislike a group of people (like the wealthy, for example) we invent or exaggerate their faults and impute all kinds of sinister motives and activities to them so that we can justify our resentment and hatred which, of course, would be wrong since they are human beings just like us. However, I will not accuse you of demonizing the wealthy just as you should not accuse me of de-humanizing the Occupiers.
Let’s get to the real question on your mind. Why would I as a member of the middle class who operates a small business care what happens to people far wealthier than you and me?
First, there is the principle of fairness and as a person of principles I do not find the call to increase only one segment of the population’s taxes to be fair, particularly, since the facts show that there is already a disproportionate tax burden at the top. I find it heavy handed, over reaching, and abusive for one group of people to demand other people’s money for their own use.
Second, I do not believe that this movement intends to stop just with the super wealthy. If I can paraphrase a warning from another era, “first they came after the super wealthy but since I was not one of them I said nothing; then when they came after the moderately wealthy, again, since I was not one of them I still said nothing; and then when they finally came after me, there was no one left to say anything.” I am speaking up now before they get around to demanding my money.
Third, I am more concerned about our country than I am about the super wealthy and I do not believe that the core values of the Occupy movement would be good for any of us. Yes, we are a powerful country that has dug a big hole for itself; however, I believe the way out is to do better what we do best and that is to be an innovative, aggressive, and competitive capitalist, success oriented society. I do not want to throw in the towel, for short term gain, and become some sort of welfare state where people strive for subsidies instead of their own success and are satisfied with comfortable conformity. I feel that if we level the playing field by lowering the bar instead of raising the bar we will have traded limited economic security for spirit numbing mediocrity. In countries that have highly subsidized benefits where everyone is, essentially, middle class, people have limited luxuries, wait for health care and housing to be doled out by the government, and have traded a wealthy elite for a bureaucratic elite. If tightening tax loopholes and having more oversight over banks makes you happy, then go for it, but let’s not change the fundamental nature of our country in the process.
Finally, I embrace and endorse our capitalist system and do not begrudge those that have successfully pursued and achieved great wealth nor have I ruled out that I and/or my children will achieve greater financial success. I also do not like it when people who pay fewer taxes than I do start to demand that I pay even more.
According to many economists, the current recession started in December, 2007 and was initially caused by the bank losses incurred on sub-prime loans when the underlying mortgages used as security were defaulted which, in turn, was brought about by the collapse of real estate prices when the speculative real estate bubble burst. This process was accelerated by the panic that ensued upon the fall of Lehman Brothers in September, 2008. The massive unemployment we suffer today was brought about by this collapse of the real estate market not the other way around as you suggest. We would not be in the situation we are in if people had not speculated on real estate and pushed prices to unrealistic and unsustainable levels and then defaulted on the mortgages they could not afford.
You blame the banks for making bad loans; however, the loans were only bad because people borrowed more than they could afford. You accuse the banks of causing the real estate speculation. The banks may have provided the money but the consumers provided the demand. It was consumer greed and imprudence as much as anything that caused the hardships we are suffering. Of course, it is also true that once this problem started and escalated, a vicious cycle developed where as more people lost their jobs, they in turn defaulted on their mortgages because they could no longer afford it and could not sell their homes and so on; however, I do not believe that the Occupy movement has the answers. This is not about knocking people who are down this is about learning from and taking responsibility for our mistakes rather than just lashing out at convenient scapegoats. Ken, do the research and find out for yourself.
Ken, once again for all those who would like to cherry pick my statements to find fault let me say that I am (and I believe everyone else should be) against the redistribution of wealth and free giveaway programs for those who are not truly needy for all of the reasons I have been stating for months. As for the derivative market and other possible financial and social issues that may be of concern to the Occupiers, they can debate those issues with someone else.
January 23, 2012 at 2:39 pm
Joe,
Thanks for your detailed response.
First, I’m not angry about what you’ve written. Never was.
I certainly take issue and clearly disagree with some very specific bits and pieces, but I think that’s just plain healthy – and I believe we, as a good friend of mine says, are probably in “violent agreement” on any number of points – most notably the idea that artificially imposing a re-distribution of wealth is a lousy idea.
Besides, since a blog format is an open invitation to discussion that both agrees and disagrees, I believe (I certainly hope) you want and expect some push-back now and again.
My main point is really that Occupy is not a single issue movement, and those moved to participate are not single-issue people. It isn’t simply have-not versus have – even though there may be instances caught on video of people taking opportunistic pot-shots at the very rich. (I might be missing something, but I haven’t heard any unified voice from Occupy asking for free housing or other grossly large entitlements. I have heard a more moderate request asking that the voices of those who are not well-off at least be heard and taken into consideration.)
The peril I speak of is really about a much larger, longer view of this nation’s over-all path, including the financial future – specifically as it relates to the barely-holding-on middle-class. Any time hundreds of thousands of people are motivated to stand up, sit-in, or camp-out in service of raising a collective voice, it’s pretty clear that some worth-while chord is being struck. It was so during the civil rights movement, it was so during the Viet Nam protests, it was so during the recent rise of the Tea Party, and certainly so this past spring across the Middle East.
If Occupy is a symptom – and I would strongly assert that it is – what complex disorder might it be a symptom of? What has it persist?
Re: The top 10% paying 70% of total taxes. Stands to reason, because we (I’m a part of this particular “we”) collectively make 70% of the total earnings in a given year. To me that’s an indication of what works in our system. On the other hand, if it’s being tossed out as an injustice, that’s sort of like saying “I invited a family of 7 over to have dinner with my wife and son, and would you believe it, they ate 70% of the food, while the three of us only ate 30%!” (I don’t think this is what you’re saying. I sure hope that’s not what you’re saying…)
On another note, I stand by my assessment that the large financial institutions, through the creation of mortgage-backed securities, had a very, very large responsibility in crashing the economy in the first place, because without those mortgage-backed instruments, it would have never been possible to offer sub-prime mortgages to begin with.
It’s certainly true that people who never should have had mortgages were able to get them way too easily – in many cases with tiny down-payments (well below 20%) – or none at all. That’s just plain nuts… But the banks were happy to provide the loans anyway.
Had those mortgages had been toys, they would have been found faulty and potentially dangerous, taken off shelves and recalled immediately. Unfortunately, the relaxation of financial regulations that allowed banks to become monolithic one-stop “too big to fail” financial shops weren’t quite as stringent as the regulations that protect kids. (The danger, of course – and one of the other perils I was pointing to – is that as soon as the current storm passes, we start this same cycle all over again.)
It’s equally true then, that the banks had a responsibility not to grant those loans in the first place, but they were pumping them out as fast as they could – after all, the speculative profit potential was huge, and the prevailing thought was that risk exposure was a non-issue, covered by layer upon layer of paper “protection” – a direct result of the creation of some fairly shady derivative hedging, complex number-crunching and maneuvering, designed mostly to cover the behinds and pocketbooks of their creators.
Were those sound, ethical business principles at work..?
I think the behavior of the banks was akin to the role enablers play in addictions – similar to the family that see’s Uncle Frank’s alcoholism, but rather than deny him, they put a bottle and glass on the table and hope for the best when he drives home every Sunday evening.
Uncle Frank sure needs to get his drinking under control, but doesn’t the family, recognizing the risks, have some ethical responsibility to call it like they see it and not to feed his addiction..?
In a culture addicted to credit, don’t the lenders have to take at least some responsibility for encouraging and feeding that addiction? Not all the responsibility, but certainly some..?
I see boundaries in lending as an ethical responsibility. (Just because shelling out funds to someone is possible – and wanting them because they are available is human nature – doesn’t make giving them out the right thing to do.)
For what it’s worth, I fully expect to pay more taxes as my business and income grow. As others have pointed out, I use the infrastructure, enjoy the security our military provides, send my kid to the excellent Saratoga public schools, and like having my streets plowed, etc. I expect to pay for all that.
Don’t get me wrong, I’m as happy an entrepreneurial capitalist as ever walked the Earth. I love owning and growing my own business and seeing others grow theirs. I’m grateful for all I have been given and all I have yet to receive, yet I know our current system ain’t working as well as it could, and the dream of business ownership along with it’s attendant innovation is suffering from the same malaise as the middle class. (Yes, there will always be exceptions and rising stars, but there could be so many more.) In the spirit of giving more people more chances, I think the Occupy Movement is worth paying attention to, and will happily bang heads with anyone who thinks otherwise.
January 23, 2012 at 3:54 pm
Ken, I agree that the Occupy agenda is complex and as varied as the people involved and, yes, I fully expect that those who support the Occupy movement will never agree with me. One point, according to the IRS the top 10% of taxpayers pay 70% of all taxes but only earn 43% of all reported income, so, there really is a disproportionate tax burden. As for the banks, I am not a big supporter of banks; however, when it came to bad loans, I am not sure what is worse, using your analogy, the enablers (banks) or the addicts (consumers). Well, anyway, let the debate continue as a healthy exercise of our freedom of speech.