Why "Occupy Wall Street" and "October2011" Will Fail

Why “Occupy Wall Street” and “October2011″ Will Fail

 The ill-informed, misinformed, and completely ignorant occupying Wall Street are thinking they can make Obama stop Wall Street fraud without even understanding the types of frauds that are occurring, the basis for their becoming systemic and understanding what the proper prescription is for ending these malignancies. 

 The biggest fraud being pertpetrated by Wall Street is the derivatives market in which the side bets for futures has turned Wall Street into a casino whereby wealth is constantly being sucked out of the market by the banks via heavily leveraged speculation.  The 2008 banking meltdown was not about housing per se, but about the derivatives that were leveraged bets that housing prices would continue to rise forever.  These bets were many times the sum of the correction in the housing market.  Yet, we continue to allow banks to buy and sell credit default swaps and collateralized debt obligations and government forces us to underwrite their losses.

 The end result of the 2008 debacle is that the biggest banks were bailed out and they bought scores of other banks to multiply their power in becoming institutions the government is forced into underwrite by virtue of them now being WAY TOO BIG TO FAIL.  Banks are right now seeking to dump hundreds of billions in losses onto taxpayers and have transferred risk to taxpayers by transferring vast sums of money from their investment banking unit to their depository arm so that future losses as the result again of credit default swaps would be backed by the government, i.e., tax payer under the guise of FDIC insurance.  

 The protesters keep blaming the free market, but the problem is not the free market.  We have a fascist government system that socializes losses through government power while privatizing the profits made by those who have developed highly advanced mechanisms for perpetrating fraud, counterfeiting currency, radically leveraging risk, concentrating wealth, conducting criminal insider trading, manipulating the currency and keeping our nation on a perpetual war footing. It is not the corporations dumping their losses on taxpayers, for they have no power to do this except for it being provided by the government.  All these crimes rely on tyranny created through the partnership and cooperation of government and business.  This is a power that needs to be taken away from government and can only be done by someone who seeks to change the system.  Talking about having a kinder, gentler political party that displays the audacity of hope will not suffice.

 The market tempers greed through losses.  If businesses want to create derivatives that are worthless and are only created as a method of stealing money, then those who buy or bet on such garbage should lose.  In the end, people will not put their money in any investments involving credit default swaps and collateralized debt obligations and once again people will see that the market has the ability to discipline bad businesses practices and products.  The crooks will eventually find they have run out of customers to cheat.  However, those who commit fraud and conduct insider trading should be in jail.  Those who torture and engage in imperial wars ought to be charged with war crimes and crimes against humanity.   And, those who engage in tyranny ought to be charged with treason.

 The government needs to get out of the way of the free market and the criminal justice system disciplining crooks, stupid business decisions and the variety of frauds being perpetrated.  It is nothing less than fascist tyranny that is preventing what should and probably will be an eventuality. You can hold off reality for only so long.  The chaos that will eventually result from the correction as the result of attempting to maintain an unsustainable system will be in proportion to the amount of violence and tyranny that was used to keep such a system running.  As Ayn Rand said, you can ignore reality, but you can’t ignore the consequences of ignoring reality.

 Many occupying Wall Street demand jobs, but if all people want is jobs, Obama can provide a job in much the same way the Soviet government did.  And, as the government pretended to pay people, people pretended to work until the system collapsed.  If we are to create wealth we need productive jobs, not government make-work jobs that redistribute the profits of ever- dwindling list of productive individuals and businesses.

 The majority of protesters have no idea of how the Federal Reserve causes the business cycle, creates economic bubbles, nor even what M3 means and the implications of the Fed no longer reporting such information.  The protesters have no idea of what petroldollar recycling is, the dangers of fractional reserve banking using fiat currency, the implications of the dollar being the world’s reserve currency, nor any understanding of economics from a historical perspective.  They have no understanding of the money creation mechanism in a Keynesian system or its limits as they relate to our debt-based monetary system.  Very few have any understanding whatsoever of the Keynesian v/s Austrian economist dichotomy.  To understand these issues is of paramount importance for the movement that hinges on discerning economic pitfalls and devising solutions to government created problems that are duplicitously and self-servingly identified as the results of liberty and free markets by a system that seeks more authoritarianism.  The government always seeks to fix the failures caused by it tyranny with calls for more money and authority to be ceded to it.

 The Fed has to go.  If the people occupying Wall Street don’t understand this now, they will once they discover government can not create productive jobs nor an efficient economy that encourages investment and saving.  Their efforts at stopping fascism will be for naught unless they have someone explain basic economic principles that are as immutable and the laws of gravity.  Fascist governments do not accept any limits on their power or tyranny and exist for the expressed purpose of serving the powerful and their business interests at the expense of the masses. 

 Idealism without any philosophical mooring or sound economic understanding is pie-in-the-sky thinking.  It is nothing more than utopian thinking whereby wishing that a broken car would run, you believe the car will suddenly fix itself.  It is tantamount to asking a card shark to quit cheating you while you have no idea of the rules of the game so as to even begin to understand how you are being cheated.  Without knowledge you become part of the population of people who can be cheated all of the time.  You become an embarrassment to your cause, discrediting both yourself and your argument.

 I personally have seen people argue against government power by insisting that the government be granted more power.  These people simply have no idea that often times they are arguing against economic liberty, personal liberty and classical liberalism that serves as the basis for libertarianism.  They argue for more government power when it is government power that has been making them a victim.  Often they fail to recognize the inherent paradoxes that great thinkers have spent a lifetime identifying and resolving through the codification of tenets and doctrine and the lessons of history that served to distill a workable system that does not rely on absurdities, revolts against reason, utopian visions or false ideologies that end up fruitlessly depending on the violence of the state to create a “new man” to populate the utopian society.  The protesters are not schooled in unintended consequence, nor second and third order effects of violent intervention into the marketplace in all the forms through which government can manifest itself.  The people running the system have time, cool calculation, money and a monopoly on the use of violence serving their interests.  It will take more than silly focus groups making token gestures of disapproval to reform the system.

 Some of the greatest philosophers, statesmen, historians, economists and advocates for liberty have been from the Austrian school of economics or the school of classical liberalism.  These individuals have written enough books to fill a library.  To have complete ignorance of thinkers of the caliber of Carl Menger, John Locke, Ludwig Von Mises, Lysander Spooner, F.A. Hayek, Murray Rothbard and Hans Hermann Hoppe is to argue economic law and personal liberty using a comic book as your reference. 

 People want to blame corporations instead of banking.  The corporations hire the most innovative and creating minds that can build a computer for $300 dollars that will last ten years.  After two years that compter will sell for $100 dollars.  It will provide a tool to an individual who will use it for college and then as a personal and business tool.  It will increase that person’s productivity many fold and even create other jobs such a software writer, a repair man, and if it is used at a small business it will be directly attributable to providing jobs within that business by increasing business productivity.  By this way, through the free market, the best and brightest do not hold political power over us to serve themselves, but serve us by creating things we could never created in a lifetime and yet have been made available to us, the masses, for a very nominal fee.  By the free market those who would have been our masters have become our invaluable servants.

 You can not have a political movement without a revolution in thought.  You can not have republic without an informed and educated citizenry.  And, you can not do the same thing over and over again and expect a different outcome. History has shown that utopian societies based on revolution and equality will invariably fail.  The present course of events have proven the unsustainablity of our current system.  But, there is a third way that will work, but it takes power away from government.  For this reason the government will never support it and will work to prevent this solution from being enacted.  We can fix the problem by taking power away from government or we can remain its slaves.  If we decide to remain its slaves, how many more banking crashes from derivative disasters will the government force us to underwrite?