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Do you want to puke every time you hear anyone in the MSM state that there are many similarities between the TEA Party movement and the Occupy Wall Street (OWS) insanity? I sure do. I’m not sure really the purpose of writing what follows, but let’s look at this and see if it leads us to any conclusions. I had this very conversation this morning with probably the most liberal friend I have (and he is only moderately left) from (you guessed it), the Socialist Republic of California.
One irrefutable fact first…The OWS is a union, Socialist, Communist, Anarchist, Revolutionary backed movement intent on one goal. And that is to overthrow the free market system, not just in America, but worldwide. As always with these groups, they must enlist the help of their throngs of useful idiots (and there is no better nor more accurate way to describe them).
The segment of the useful idiot protesters that I’d like to talk about are the ones who are part of OWS because of the resonance of the slogan. “Banks got bailed out, We got sold out”. For those who are occupying solely based on this thought, I give them a pass, if they are really sincere. Like them, I do agree with the meaning of this battle cry slogan. I suggest, though, that such sincere occupiers make up only a very small percentage of the gang. So, because of this opinion, the protesters are essentially assassinating the Capitalist (free market economy) system. And this is where their idiocy manifests itself as I try to explain below.
A free market is absolutely the most efficient economic system in the history of mankind. Unfortunately, the US has not operated in a free market environment since around the 1960s. How so, you might ask? Free market principles are based on economic activity driven SOLELY by one thing. A willing seller selling a good or service to a willing buyer at a price agreed to by each party. At the instant that this model is affected by ANY outside force, the system leaves the realm of free market. More on this below.
It’s really very simple to understand how a free market controls itself. In fact, almost any ten year old knows what I’m going to suggest even if he or she can’t articulate it. Absent any outside influences, the free market rewards (usually handsomely) good ideas and innovations and punishes (unusually severely) bad ideas and scams. Why should it be any different? The fact is, it should NOT!
The real beauty of a free market economy lies in who makes the decisions to reward entrepreneurs and who makes the opposite decision to punish others. Is it the President? Is it the Congress? Local government? Private citizens who have bought the ears of the nation’s leaders? CEOs of multi-national corporations? Well, in America today it is all of the above. In a real free market economy, the answer is none of the above. No, in a FME, the decider of success is you, me, and all of the other 300 million American consumers. The question that needs to be addressed is, who do you most trust to make such decisions? A bunch of elitist, out of touch political hacks who are likely to vote their own interests above all else or the 300 million Americans who announce their verdicts every time they spend their own money? If you can’t answer that question correctly, please don’t apply to be a contestant on “Are You Smarter Than a Fifth Grader”.
The best example of the way that the federal government, in particular, has bastardized the FME can be found in the spate of Department of Energy loan guarantees made under Obama’s porkulus. Solyndra’s loan of over a half a billion dollars, of which American taxpayers will see NO repayment offers us a perfect example. In a FME, private companies working the alternative energy (I hate that term) industry would fund their research from the own checkbooks, other private investors, and from bank loans. So why is someone in Washington “investing” taxpayer monies into these industries? Could it maybe just be that their “product” would rightfully be “punished” by the 300 million American “deciders”? Duh…of course that’s the reason. The fact is that if any entrepreneur could actually create an economically viable way to produce and sell electricity from sunlight, the FME would reward them beyond all imagination. Such an inventor’s personal wealth would make Bill Gates look like a pauper. The conclusion is equally simple…the technology that exists today cannot generate affordable electricity from the sun.
If that seems logical to you, then you must wonder, why in the world the Obama Administration forked over more than 2 billion taxpayer dollars to this industry. And that, fellow Patriots, is the question that takes us off the path of a FME. Not all of the solar companies in America were recipients of any of the $2 billion. No, the targets of this taxpayer largesse were much focused, but on what basis? It is now clear that if a company was to receive any of “our” money, they must have strongly supported Barack Obama and the DemocRATic Left. Not just in words, but in monetary deeds. Strange, isn’t it, that every company who received kickbacks similar to Solyndra had someone in their senior management who was a MAJOR Obama fundraiser or bundler. ALERT: Given that Solyndra has failed miserably, even after receiving $500+ million of our money, do you think that without this “aid” the owners of Solyndra would have continued to pursue the technologically impossible if they had been paying for it themselves? I think not and this is a great example of something wasting a tremendous amount of public money on a product that the “deciders” in a FME would have quickly buried.
This is but one example of how outside intrusion from any source brings down Capitalism’s basic tenants of willing buyer / willing seller and supply and demand. Money payments, while the most visible of the government’s varying methods of intruding upon (and degrading) the FME, are far from the only one. Regulation, or more accurately over-regulation, on the part of the government is even more insidious because only those businesses impacted by them even know they exist. For example, being a CPA and real estate developer, I have to secure bank loans from time to time. I was told to my face by the CEO of one of our local banks that one of my loan requests had to be denied. The first time in my life I had been turned down on a loan request. Without going into too much detail, suffice it to say that my businesses and my personal credit ratings are exemplary so I insisted on knowing the reason for the denial. After initially resisting, the CEO explained that due to absurd “new” FDIC regulations, if the bank funded the loan, they would have to reserve a portion of it this year in the bank’s loan loss reserve. Essentially, this meant that if the CEO loaned us the $750,000 we were requesting, he would have to take a hit against current year earnings of $75,000….and he simply couldn’t go to his shareholders and explain why annual earnings were down so much, since, apparently, the FDIC was requiring that every new loan secured by anything other than cash would have to be reserved by 10%! So, we have a situation where the multi-national Wall Street Banks were being given taxpayer money and local banks were effectively being told they couldn’t lend money (and that is the way the local banks make their profits). The point here is, again, that government continues to “intrude” on the FME through both handouts and regulations. And, not only do the lamebrains in Washington pick winning and losing industries, but they also pick individual winners and losers within a particular industry.
In closing, let’s look at the industry that has been subject to the worst of the UNfree market system that we have today…housing. I’m not unsympathetic to any Americans facing foreclosure today if they bought their homes with the good faith belief that they could pay for them. The statistics indicate though, that such situations comprise a very small percentage of the homes in or waiting foreclosure. I refer to the majority of foreclosures as Community Reinvestment Act (CRA) foreclosures. Under the CRA, Washington uber-liberals such as Bawney Fwank and Chris Dodd saw to it that the CRA was passed. The CRA effectively held mortgage lenders hostage almost making it illegal to deny a mortgage to anyone who merely “stated” that they could pay for the home. They then made the problem far worse by causing Fannie Mae and Freddie Mac to guarantee a large percentage of the mortgage when (oops…should) these poor credit risks defaulted on their loans. The facts are these:
• Had the mortgage lender retained all the risk associated with default on CRA mortgages, some experts estimate that some 80 percent plus of those mortgages would have never been funded.
• As a result of the simple strike of a pen, the government again inserted itself into the FME and single-handedly began pumping up what we now refer to as the “housing bubble” taking prices to levels that anyone with a brain would have recognized as unsustainable.
• When the economy slowed, hundreds of thousands of CRA mortgages stopped paying…and the US taxpayers through Fannie and Freddie wiped out the risk to the lenders that should have been inherent in any lending transaction.
Remember what was stated earlier, the FME is based on the laws of supply and demand. Even after the housing debacle that was CAUSED BY THE GOVERNMENT (do not lose sight of this), the morons in Washington continue to compound the problem it created. In recent years, the Obama Administration has attempted numerous “government assistance programs” to stem the foreclosure epidemic. “Quit intervening in the FME, all you can do is make it worse!” In a real FME, mortgage holders would try to work the mortgage out with those who are delinquent, and if that fails, they would foreclose immediately on the home, repair it, put it on the market, and sell it for what a willing buyer will pay.
Yes, that action would probably bring down the housing values in the most affected area of the Country, but at least then everyone could estimate with some accuracy the values of their own homes. No reputable economist will argue that the “trickling out” of foreclosed properties onto the market does anything but delay the inevitable. And, during this process, no homeowners could predict with any confidence what their homes are worth. By delaying the inevitable, what, the government thinks that owners in default will magically be able to pay for a house they never could have afforded anyway? In a FME, you acknowledge the sins of the past, get them off the books, restart from a market value baseline, and then you do everything possible to learn from the mistakes and never make the same ones again.
It is my hope that most of what I’ve discussed above supports my position that Capitalism is best economic system ever devised by man, but the most important point is that Capitalism or a FME (whichever you prefer) CANNOT succeed if there is external intervention into it. Virtually all such intervention is perpetrated by the government, or more specifically, by elected officials, most of whom would sell their mothers if it furthered their own personal or political gains.
The next time you hear an OWSer advocating the overthrow of Capitalism, you might ask them how they are so sure since (unless they are in their 50s or older) they have never experienced a free market economy. Explain to them that you are just as angry about the current system of CRONEY CAPITALISM as are they, but that things like the TARP, the Porkulus, and government loan guarantees to private concerns are complete abominations and affronts to Capitalism. Much of this must sound Libertarian to many, but that is not my ideology. Yes, there must be some rules and laws governing American enterprise, but those rules should be directed at protecting the public…not protecting the careers of smarmy politicians.
One irrefutable fact first…The OWS is a union, Socialist, Communist, Anarchist, Revolutionary backed movement intent on one goal. And that is to overthrow the free market system, not just in America, but worldwide. As always with these groups, they must enlist the help of their throngs of useful idiots (and there is no better nor more accurate way to describe them).
The segment of the useful idiot protesters that I’d like to talk about are the ones who are part of OWS because of the resonance of the slogan. “Banks got bailed out, We got sold out”. For those who are occupying solely based on this thought, I give them a pass, if they are really sincere. Like them, I do agree with the meaning of this battle cry slogan. I suggest, though, that such sincere occupiers make up only a very small percentage of the gang. So, because of this opinion, the protesters are essentially assassinating the Capitalist (free market economy) system. And this is where their idiocy manifests itself as I try to explain below.
A free market is absolutely the most efficient economic system in the history of mankind. Unfortunately, the US has not operated in a free market environment since around the 1960s. How so, you might ask? Free market principles are based on economic activity driven SOLELY by one thing. A willing seller selling a good or service to a willing buyer at a price agreed to by each party. At the instant that this model is affected by ANY outside force, the system leaves the realm of free market. More on this below.
It’s really very simple to understand how a free market controls itself. In fact, almost any ten year old knows what I’m going to suggest even if he or she can’t articulate it. Absent any outside influences, the free market rewards (usually handsomely) good ideas and innovations and punishes (unusually severely) bad ideas and scams. Why should it be any different? The fact is, it should NOT!
The real beauty of a free market economy lies in who makes the decisions to reward entrepreneurs and who makes the opposite decision to punish others. Is it the President? Is it the Congress? Local government? Private citizens who have bought the ears of the nation’s leaders? CEOs of multi-national corporations? Well, in America today it is all of the above. In a real free market economy, the answer is none of the above. No, in a FME, the decider of success is you, me, and all of the other 300 million American consumers. The question that needs to be addressed is, who do you most trust to make such decisions? A bunch of elitist, out of touch political hacks who are likely to vote their own interests above all else or the 300 million Americans who announce their verdicts every time they spend their own money? If you can’t answer that question correctly, please don’t apply to be a contestant on “Are You Smarter Than a Fifth Grader”.
The best example of the way that the federal government, in particular, has bastardized the FME can be found in the spate of Department of Energy loan guarantees made under Obama’s porkulus. Solyndra’s loan of over a half a billion dollars, of which American taxpayers will see NO repayment offers us a perfect example. In a FME, private companies working the alternative energy (I hate that term) industry would fund their research from the own checkbooks, other private investors, and from bank loans. So why is someone in Washington “investing” taxpayer monies into these industries? Could it maybe just be that their “product” would rightfully be “punished” by the 300 million American “deciders”? Duh…of course that’s the reason. The fact is that if any entrepreneur could actually create an economically viable way to produce and sell electricity from sunlight, the FME would reward them beyond all imagination. Such an inventor’s personal wealth would make Bill Gates look like a pauper. The conclusion is equally simple…the technology that exists today cannot generate affordable electricity from the sun.
If that seems logical to you, then you must wonder, why in the world the Obama Administration forked over more than 2 billion taxpayer dollars to this industry. And that, fellow Patriots, is the question that takes us off the path of a FME. Not all of the solar companies in America were recipients of any of the $2 billion. No, the targets of this taxpayer largesse were much focused, but on what basis? It is now clear that if a company was to receive any of “our” money, they must have strongly supported Barack Obama and the DemocRATic Left. Not just in words, but in monetary deeds. Strange, isn’t it, that every company who received kickbacks similar to Solyndra had someone in their senior management who was a MAJOR Obama fundraiser or bundler. ALERT: Given that Solyndra has failed miserably, even after receiving $500+ million of our money, do you think that without this “aid” the owners of Solyndra would have continued to pursue the technologically impossible if they had been paying for it themselves? I think not and this is a great example of something wasting a tremendous amount of public money on a product that the “deciders” in a FME would have quickly buried.
This is but one example of how outside intrusion from any source brings down Capitalism’s basic tenants of willing buyer / willing seller and supply and demand. Money payments, while the most visible of the government’s varying methods of intruding upon (and degrading) the FME, are far from the only one. Regulation, or more accurately over-regulation, on the part of the government is even more insidious because only those businesses impacted by them even know they exist. For example, being a CPA and real estate developer, I have to secure bank loans from time to time. I was told to my face by the CEO of one of our local banks that one of my loan requests had to be denied. The first time in my life I had been turned down on a loan request. Without going into too much detail, suffice it to say that my businesses and my personal credit ratings are exemplary so I insisted on knowing the reason for the denial. After initially resisting, the CEO explained that due to absurd “new” FDIC regulations, if the bank funded the loan, they would have to reserve a portion of it this year in the bank’s loan loss reserve. Essentially, this meant that if the CEO loaned us the $750,000 we were requesting, he would have to take a hit against current year earnings of $75,000….and he simply couldn’t go to his shareholders and explain why annual earnings were down so much, since, apparently, the FDIC was requiring that every new loan secured by anything other than cash would have to be reserved by 10%! So, we have a situation where the multi-national Wall Street Banks were being given taxpayer money and local banks were effectively being told they couldn’t lend money (and that is the way the local banks make their profits). The point here is, again, that government continues to “intrude” on the FME through both handouts and regulations. And, not only do the lamebrains in Washington pick winning and losing industries, but they also pick individual winners and losers within a particular industry.
In closing, let’s look at the industry that has been subject to the worst of the UNfree market system that we have today…housing. I’m not unsympathetic to any Americans facing foreclosure today if they bought their homes with the good faith belief that they could pay for them. The statistics indicate though, that such situations comprise a very small percentage of the homes in or waiting foreclosure. I refer to the majority of foreclosures as Community Reinvestment Act (CRA) foreclosures. Under the CRA, Washington uber-liberals such as Bawney Fwank and Chris Dodd saw to it that the CRA was passed. The CRA effectively held mortgage lenders hostage almost making it illegal to deny a mortgage to anyone who merely “stated” that they could pay for the home. They then made the problem far worse by causing Fannie Mae and Freddie Mac to guarantee a large percentage of the mortgage when (oops…should) these poor credit risks defaulted on their loans. The facts are these:
• Had the mortgage lender retained all the risk associated with default on CRA mortgages, some experts estimate that some 80 percent plus of those mortgages would have never been funded.
• As a result of the simple strike of a pen, the government again inserted itself into the FME and single-handedly began pumping up what we now refer to as the “housing bubble” taking prices to levels that anyone with a brain would have recognized as unsustainable.
• When the economy slowed, hundreds of thousands of CRA mortgages stopped paying…and the US taxpayers through Fannie and Freddie wiped out the risk to the lenders that should have been inherent in any lending transaction.
Remember what was stated earlier, the FME is based on the laws of supply and demand. Even after the housing debacle that was CAUSED BY THE GOVERNMENT (do not lose sight of this), the morons in Washington continue to compound the problem it created. In recent years, the Obama Administration has attempted numerous “government assistance programs” to stem the foreclosure epidemic. “Quit intervening in the FME, all you can do is make it worse!” In a real FME, mortgage holders would try to work the mortgage out with those who are delinquent, and if that fails, they would foreclose immediately on the home, repair it, put it on the market, and sell it for what a willing buyer will pay.
Yes, that action would probably bring down the housing values in the most affected area of the Country, but at least then everyone could estimate with some accuracy the values of their own homes. No reputable economist will argue that the “trickling out” of foreclosed properties onto the market does anything but delay the inevitable. And, during this process, no homeowners could predict with any confidence what their homes are worth. By delaying the inevitable, what, the government thinks that owners in default will magically be able to pay for a house they never could have afforded anyway? In a FME, you acknowledge the sins of the past, get them off the books, restart from a market value baseline, and then you do everything possible to learn from the mistakes and never make the same ones again.
It is my hope that most of what I’ve discussed above supports my position that Capitalism is best economic system ever devised by man, but the most important point is that Capitalism or a FME (whichever you prefer) CANNOT succeed if there is external intervention into it. Virtually all such intervention is perpetrated by the government, or more specifically, by elected officials, most of whom would sell their mothers if it furthered their own personal or political gains.
The next time you hear an OWSer advocating the overthrow of Capitalism, you might ask them how they are so sure since (unless they are in their 50s or older) they have never experienced a free market economy. Explain to them that you are just as angry about the current system of CRONEY CAPITALISM as are they, but that things like the TARP, the Porkulus, and government loan guarantees to private concerns are complete abominations and affronts to Capitalism. Much of this must sound Libertarian to many, but that is not my ideology. Yes, there must be some rules and laws governing American enterprise, but those rules should be directed at protecting the public…not protecting the careers of smarmy politicians.