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Tailor: A Capitalist’s Defense of #OccupyWallSt

October 24, 2011

Failed businesses should be the ones punched into a grainy sand-like texture by the merciless fist of the invisible hand of the free market; not the public.

I’ve been following Occupy Wall St since its inception, and I’m generally in support of it. Although a brunt of pundits in America claim that it has no core message, whereas the right-winged pundits generally mock it (a la Don Cherry) as a movement of pinkos, it is hardly the truth. This is a movement bound together by a core emotion, more so than a core message. It’s premised on common, collective anger against banks which gave out loans to those they knew who couldn’t afford it, at interest rates which would fluctuate based on the central bank interest rate. They packaged those bad loans into “collateralized debt obligations”, got their cronies at a couple credit ratings agencies to stamp them AAA, and then sold them to unsuspecting investors, such as teachers unions and small towns halfway around the globe. To top it off, these very banks bet against those loans in derivatives markets, so that even if those loans didn’t get paid off, they’d still make some money out of it.

Of course, as we all know, everything began to unravel the moment the Ben Bernanke thought to meddle with interest rates, which forced the banks to also raise interest on the loans they gave out. Eventually, people weren’t able to pay back their loans, and started to default on them. People lost their homes as collateral, and the entire housing market began to crumble. House prices began to dip, which compelled those who could pay off their loans to default anyway, since they were paying more money than their house was worth. It was a financial doom spiral into economic and fiscal hell. In the end, the American tax payer was forced to bail out these very same institutions. Chief executives were punished with a nice bonus, while shareholders, workers, the American public, and the rest of the world was rewarded with financial loss.

Or just watch this 

If there is anyone that deserves to protest, it’s these very “jobless hippies” that sit right now on Wall Street. Although the ages of protestors vary, a good bit of these are college and university grads, who took up monumental amounts of student loan debt, only to be thrown into an economy with no jobs for them. They have inherited a Congress that is broken, a government that is eye-level in debt, and an entire regulatory system rife with cronyism where regulations towards industries are enforced by those with deep ties to those very industries. The Boomers and Generation X voted the system, both political and economic, into the ground, gave themselves all the nice entitlements (OASDI and medicare), racked up monumental deficits, made a mockery of the banking system, and the youth of today who aren’t at fault for it are now expected to spend the next decade cleaning it up. Furthermore, at the end of it all, they likely won’t even receive a stable, state-funded pension when they retire.

Forgive my simplifications, but this isn’t like the end of World War II, where debts were racked up in defense of ensuring the liberty and freedom of future generations. Nor is it like the Cold War, albeit its intricacies, where governments racked up debt in deterrence of nuclear annihilation. Those were debts paid by the youth of the time, today’s boomers, Gen X, as a debt to those that ensured the marginally more peaceful world they (and we) live in as of now. However, today, this isn’t the case. Decisions premised on greed were made by consumers, bankers, and government officials, who all collectively borrowed trillions from the future to pay off for their hedonistic spending binge today. These are trillions of dollars that will have to be paid off by those who are the youth of America today with higher taxes and less public services, which only serve to exacerbate stunted economic growth. It’s like if your parent or guardian drunkenly gambled themselves away into debt, and expected you to spend the next few years to pay for all of it.

If anything, the youth at Occupy Wall Street deserve to be angry. After having their future unwillingly mortgaged off for the next decade or two, it’s the least you could give them.

2 Comments leave one →
  1. October 24, 2011 9:02 pm

    This occupy situation is more akin to a bowel movement. The anger in Canada has been manufactured by a select few and of course the unions and the ndp. This is right up their ally. I agree with some of the occupation as it relates to Wall Street. The Banks in Canada however have not been in the same role and Canadians have not had their homes confiscated. The lending rate in Canada has been at a steady low and we must not forget that they are in business to make money. Banks are not there to act as a moral social compass for our society. Those that take the most from our services are the very ones protesting rather then working and paying a fair share of the burden we all face each and every day. There is no cause for this occupation to be in existence in Canada. The U.S. however is an entire different matter. Let us focus on our own Country and the problems directly related to Canadians.

    • Sushil Tailor permalink*
      October 24, 2011 9:12 pm

      That’s why this piece was only about Occupy Wall St. :)

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