Tuesday, October 11, 2011

The Occupy Wall Street protest:
Not quite ready for Prime Time

Commentary by James H. Shott

The protest movement known as Occupy Wall Street is in its fourth week and has spread from its original site in New York to other cities. This movement is terribly confused and without focus, but the occupywallst.org Website says this about the purpose of the protest: “Occupy Wall Street is a leaderless resistance movement with people of many colors, genders and political persuasions. The one thing we all have in common is that we are the 99% that will no longer tolerate the greed and corruption of the 1%.”

Some reports tell us that some protesters had cited serious issues and that some express their ideas clearly and effectively. But while they identify some real problems that need correcting, like the money connection between politicians and special interests that produces inequities, they recognize only the connection between corporations and politicians, and ignore the connection between labor unions and politicians. Both are equally inappropriate and harmful.

According to the Christian Science Monitor, protesters and sympathizers say that “it’s Wall Street bankers who should be arrested for their role in the country’s economic difficulties. ‘The world's economy has been wrecked by these rapacious traders,’ author Salman Rushdie [of “Satanic Verses” fame] tweeted. ‘Yet it is the protesters who are jailed.’”

If you look back to 1977 and examine what the government did relative to banking, you’ll see that “Wall Street banks” are only one factor in the financial crisis, and much of what those banks did was what government over-regulation forced or allowed them to do.

The Monitor’s story continued: “On the ‘Wall Street Campout’ Facebook page, the protest is described as ‘an ongoing nonviolent demonstration opposing what participants view as negative corporate influence over US politics.’”

It isn’t difficult to find cracks in this logic, like, for example, the assumption that 99 percent of the people in the United States are philosophically bound together against the other one percent, and that the one percent indulges in greed and corruption and is the cause of all discomfort. But the real weakness of the movement is the gross logical fallacy in its method of identifying demons, and the sheer absurdity of the demands the movement thinks will fix things.

On the Occupy Wall Street Website, a proposed list of demands includes:
• Immediate debt forgiveness for all
• Free college education
• Elimination of free trade
• A $20-an-hour minimum wage
• Guaranteed “living wage” regardless of income
• Open borders
• $1 trillion government spending on infrastructure
• $1 trillion government spending on ecological restoration
• A racial and gender equal rights amendment and
• Easier unionization voting procedures

If that left you scratching your head, it gets worse: The Website asserts that “these demands will create so many jobs it will be completely impossible to fill them without an open borders policy.”

Watching video interviews of some of the protesters, it is clear that the movement is comprised of people who have no idea what economics is all about. One young male protester gave a spirited and well-expressed, but logically incoherent, criticism of the capitalist economic system, which he said needs to be replaced. But when asked what he would replace capitalism with, he just stood there, as if he’d never thought about that.

The philosophy, such as it is, behind this movement is a classic example of what economist Dr. Thomas Sowell calls “stage one thinking,” which is failing to look beyond the immediate result of an action. To them, “if capitalism is the problem, getting rid of capitalism is the solution. That’s all we need to know, now let’s protest.”

Another young man gave this moving testimony: “I was born to be here right now. The Founding Fathers have been passing down the torch to this generation to make our country great again.” Clearly, this fellow has no idea what made the country great, but he’s ready to fix it, nonetheless.

Our capitalistic system is so distorted by over-regulation, political favoritism and other government interference that it doesn’t work like it is supposed to, so the protesters blame this distorted version of capitalism for their discontent and want to replace it with “something else.” This position is based on ignorance, and if they had any idea what free markets are and how a capitalistic economy is supposed to work … but, like they say, “If a frog had wings …”

Right now this movement is an exercise of only the passionate expression of discontent and lacks a coherent and compelling message. It will not be taken seriously until it becomes organized and focuses on identifying specific problems and making sensible suggestions for fixing them.

Simply saying “we need to get rid of capitalism and punish greedy bankers and corporate managers. And then give us a free college education, a $20-an-hour minimum wage, wipe out all our debts, open the borders so that anyone who wants to can come in, spend money we don’t have on infrastructure and ecological restoration, abolish free trade, and let government make all of our decisions for us” doesn’t make the grade.

Cross-posted from Observations

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