Thoughts on Occupy Wall Street

[Thomas Beyer]

While I like the free expression of opinion in democratic states, what we are seeing over the last few weeks is another entitlement thinking: The state OWES ME .. free pension,
free education, free assembly on privately owned property, free food,
free policing, free public toilets ... well developed and nurtured by
left-wing politicians over the last 30-40 years .. vote for me and I
give you X .. no wonder we have such high deficits in cities,
municipalities, provinces and on the federal level.



While some initial protesters have expressed legit concerns, most multi-day "occupiers" have nothing else to do ..



Yes there are legitimate concerns about corporate greed such as high
frequency trading, the lack of a financial transaction tax, poor
securities fraud enforcement, or ratings agencies that rated junk AAA,
... Yes, there are legitimate concerns about political
meddling in the financial system, such as CMHC allowing 5% down for home
purchases in Canada (at the state's expense), such as the US forcing
irresponsible lending practices to folks who should never buy a home or
Europe forcing private banks to loan recklessly to indebted governments
..



Where is individual self-responsibility still taught ? At churches
(where 70% of population never attend) ? At schools (with often left
wing teacher in a forced unionized environment) ? At home (with 2
parents working so they can afford a big house) ? By peers in school or
university ?



The (ever poorer) "state" cannot afford to fix every ail of society or individuals. Individual responsibility is critical and needs to be re-taught again .. in schools, in churches, in blogs, in the home ..



Your thoughts here ?

 

[wgraham]

This is a very interesting movement. I am sympathetic to parts of it, as you have mentioned, the financial system is a mess with skimming happening at every level leaving nothing at the end of the day for the investor! Corporate "greed" and un-ethical behavior. The government which can't seem to move forward in any direction and looks like nothing more than well paid puppets of the corporations.
These practices all need to change!



They are at the same time, opportunities for you and I as ethical, performances based financial institution to help make a difference in everyday lives!!




We can no longer and never should have in the first place relied on corporate pension plans or government hand outs to help us through our senior years! People need to tak their heds out of the sand and realize that there is not enough pie to go around!
I take that personal responsibility to make my own future and my own path.
The entitlement ideals are about to come to a brash realization that the promises were empty!



Do I believe in health care and education YES! But the idea that everyone should be on a full scholarship to what ever Masters degree they want is obsured! We are and always will be a class based species where everyone has different paths and rolls.



I ask every person who I see post about the Occupy movement what the ARE doing to make sure they aren't at an empty trough with thousands of others at the end of the day and most don't have an answer sadly. They just have axes to grind with no positive ideas for change which starts with, as you so eloquently put it, self-responsibility!




It will be interesting to see where this growing movement takes us! Social media has taken down governments already. Which system will be next! twitter is the new revolutionist's gun and ideas are much harder to kill than men!
Excuse any typos (iPads suck for writing length posts

 

[Rickson9]

I think that this kind of discontent stems from the widening gap between the haves and have nots. This needs to be addressed in a meaningful way or our society is doomed to experience the consequences of the past.

 

[Thomas Beyer]

[quote user=Rickson9]This needs to be addressed in a meaningful way


such as .. tax increases ?



Why is Canada relatively well off .. and the US is not ?



Free healthcare, free decent school system, higher taxes, GST, less $ flow from corporations to political parties/candidates ?

 

[Rickson9]

TBH I don't believe that a solution is possible with our current societal
structure.



Individuals on both sides of the "1% vs 99%"
debate all want to have the 'right' opinion which implies that the
environment isn't solution-oriented.



History is destined to repeat
itself ad infinitum through the rise and fall of civilizations. "Let them eat cake" for the 1% and "off with their heads" for the 99%. These
same conversations happened thousands of years ago, they're happening
now, and they'll happen long after I'm dead. There's no solution.

 

[rforgiel]

They are protesting the gap between the super wealthy and the rest of the world. On top of this it is a realization business and the structures of our society are not set up for the betterment of society.



The link below gives a beautiful explanation of this feeling. I have posted this essay before but feel it is even more pertinent to this discussion.

http://devdutt.com/the-rejection-of-contenment/



It is written for an Indian/Hindu audience but the message translates well and quite profound.



Ralph Nadar in his novel "Only the Super Rich Can Save us Now" serendipitously taps into this feeling and offers the western perspective and possible future steps.



REIN has taught us to think in terms of abundance and not scarcity. If we have found a good deal, investors will come forward to make our deal possible.

Perhaps we should extend this belief to think of abundance in terms of there is enough for everyone.



We live in a society where 20% of the population controls 80% of the wealth. But still the materially wealthy have a mentality of scarcity and want increasingly more. In this world there is not enough to go around.



However, like Ganesha who can not satisfy his hunger by eating more, the wealthy will not satisfy what they are looking for by accumulating more material things.



Since the 80/20 (50/1 equally well describes this curve) ratio models wealth data extending back to the 1400's, our most noted scholar on modelling natural systems, Benoit Mandelbrot, stated "It is a social law....in the nature of man".



Rickson is correct, to fix this problem we need to change our beliefs and way of thinking.



If we think of the world in Vedic terms, 1000 years in not so long and the path to enlightenment not so dim.



Hollywood and the press have made much of 2012 and the end of the Mayan calendar, offering apocalyptic scenarios and exploding continents. Maybe the wisdom the ancient civilizations were trying to inpart to us was that in 2012 we would start to see the beginning of a change in attitudes and beliefs.



The Occupy Movement are starting to ask the right questions. We do not need to look on them as freeloaders wanting hand outs. This movement may grow or die. But others will increasingly be asking the same questions.

 

[Rickson9]

If an individual believes that the laws of physics govern the chemistry in their brain, then there is no scientific explanation for the existence of free will. The 99% have as good a chance of 'changing their attitude' as much as the 1%. Just enjoy the show, participants, and arguments that have repeated itself in history ad infinitum.

Self interest and the lack of desire to support an opposing viewpoint assures that history repeats forever.

 

[Nir]

Many poor people don't like rich people. good luck changing that!

Philosophically, one can understand they think they deserve to enjoy life just like you do. some obviously do as it's not all about money. others never will because they don't know how to.. but they still feel this way.

so in a way the demonstration is about being human and expressing feelings, wouldn't try to understand it much beyond that.

 

[2ndstory]

I don't like the idea of CEO's of companies getting bailed out by taxpayer's dollars being paid exorbitant salaries. I do like Warren Buffett's willingness to pay more taxes.



Nik

 

[Thomas Beyer]

[quote user=Rickson9]Self interest and the lack of desire to support an opposing viewpoint assures that history repeats forever. pretty depressing thought .. I would think that humankind has evolved .. look at today vs 600 years ago: higher living standard, longer live expectancy, less wars, no more witch burning, elected officials, 90%+ of folks can read or write, 6B people living on the same planet, far higher food production per acre of land, people living in places that are heated in winter, modern medicine, ...

 

[LondonHomes]

A couple of comments:



1. The protests in the US may have some legitamacy and serve as a counter weight to the Tea Party there. However, the protests in Canada seem more like a "Me Too" movement for professional protest class.



2. The irony of the protests is if you include the entire 7 billion population of the earth, most of the protestors are probably in the top 90% for wealth.

 

[Nir]

[quote user=LondonHomes]if you include the entire 7 billion population of the earth, most of the protestors are probably in the top 90% for wealth.



Nice one very true. A reminder Einstein was right.. it's all relative

 

[bizaro86]

[quote user=LondonHomes]The irony of the protests is if you include the entire 7 billion population of the earth, most of the protestors are probably in the top 90% for wealth.


Indeed. This source: http://www.globalrichlist.com/how.html indicates a required annual income of $25,400 to be in the world's top 10%.

 

[wgraham]

[quote user=ThomasBeyer] I would think that humankind has evolved .. look at today vs 600 years ago: higher living standard, longer live expectancy, less wars, no more witch burning, elected officials, 90%+ of folks can read or write


Maybe in Canada! But look at many other parts of the world. Witch burning still exists we just call it Genocide or even in some cases democracy!



Life expectancy in Africa is substantially below the rest of the world.



We have less wars but they are much more destructive!!



Mostly elected officials but many still puppets of loby groups and don't serve the people first.



And sadly a lot of the world still can't read!! The poorest countries still have high illiteracy rates!! http://en.wikipedia.org/wiki/List_of_countries_by_literacy_rate



In the developed world we live in a bubble and we think that the said bubble encompasses the rest of the world...sadly it does not!!

 

[stezam]

[quote user=wgraham][quote user=ThomasBeyer] I would think that humankind has evolved .. look at today vs 600 years ago: higher living standard, longer live expectancy, less wars, no more witch burning, elected officials, 90%+ of folks can read or write


Maybe in Canada! But look at many other parts of the world. Witch burning still exists we just call it Genocide or even in some cases democracy!



Life expectancy in Africa is substantially below the rest of the world.



We have less wars but they are much more destructive!!



Mostly elected officials but many still puppets of loby groups and don't serve the people first.



And sadly a lot of the world still can't read!! The poorest countries still have high illiteracy rates!! http://en.wikipedia.org/wiki/List_of_countries_by_literacy_rate



In the developed world we live in a bubble and we think that the said bubble encompasses the rest of the world...sadly it does not!!




If anything, this shows me that we should be thankful and proud that we live in a society that has such a high standard of living. We`re the exception to the rule of history. Our system is one to be aspired to. We didn`t get here by demonizing the most productive members of society, trying turn citizen against citizen. Income disparity necessarily follows in a free society simply because it`s a free society. A simple example can show this: If we were to equally distribute all the wealth in all of society right now, in a short time we would find rich, poor and people in the middle. And, if there was total equality of outcomes, we`d be living in a totalitarian state.





You can tax the rich at 70% and it won`t be enough. Government is insatiable. Politicians want to foment anger towards the rich but that is just a trick so that we accept that premise that more taxes need to be collected. If major structural changes are not made to what government tries deliver, they`ll have to come after all of us. Hostility to prosperity will simply force the super wealthy to allocate their capital in a more friendly jurisdiction. For the rest of us, as government consumes more of the private sector, and more and more regulations weigh us down, upward mobility will become harder and harder. If government gets too big, the minority on top will get even smaller.


So the frustration of the occupiers is understandable but misdirected. A burdensome tax on the rich will not improve their lives but will probably make things worse. Economic opportunity and a growing economy is the answer. Government needs to get out of the way.


I`m not directing all of this at you. I kind of responded to some of the other things mentioned in this thread as well.

 

[Rickson9]

[quote user=ThomasBeyer][quote user=Rickson9]Self interest and the lack of desire to support an opposing viewpoint assures that history repeats forever. pretty depressing thought .. I would think that humankind has evolved .. look at today vs 600 years ago: higher living standard, longer live expectancy, less wars, no more witch burning, elected officials, 90%+ of folks can read or write, 6B people living on the same planet, far higher food production per acre of land, people living in places that are heated in winter, modern medicine, ...




Depressing but, as the tiny sample size of this thread shows, true. There is no empathy on either side of the 99% v 1% discussion and without empathy there can be no solution.



This is why the history of the rise and fall of civilizations has repeated since man formed societies. It's all been done before.

 

[gwasser]

I think we see this all way too black and white. The 1% vs 99% is a bogus number in the first place.



Furthermore if you look at 'millionaire household' surveys, the bulk are 'selfmade' first generation rich. Rich is also relative. Most 'Rich' are in their mid-fifties or older. Many are self employed and the bulk of their 'wealth' is locked up in their residence.



In North America, households with a net worth of $1 million or over comprise 3% or so of the population. Thus the introduction of the term 'Deca-millionaire' households which are around 0.5% of Nort America's population.



Furthermore, when defining rich and poor, you have to look by region. A household making $20,000 per year in Canada is not exactly rich. I would call them 'poor'. But if you made $20,000 per year in Africa you would likely be considered rich.



As such I think the 'Occupy Wall Street' movement is more about people alienated from their society. They see no real means of improving their life and over the last number of years things have gotten even tougher. We are a highly competitive society and people that do not take part of this competition because they don't want to or because they are not capable are losing out. They fall farther and farther behind. We are thus creating our own 'developing economy' right next door.



It is infuriating that the U.S. banks and their executives are getting bailed out from the consequences of their own actions and arrogance. But some is also caused by ill-designed past policies regarding home ownership some from as far back as the Clinton Administration; others by a laissez fair Greenspan. Finally the homeowner who mortgaged him/herself to the hilt must carry part of the blame too.



Add that a lot has to do with people not excercising their voting priviliges,. Not only on the political platform but also shareholders (myself included) who don't feel their votes count. When you add the lost votes from people who invest in mutual funds and ETFs the corporate voting apathy is staggering. No wonder that some executives get away with murder.



So is the system rotten as the 'Occupy Wall Street' people say or is it that nobody stands up and votes according to their conscience, or are it the corrupt CEOs? I don't think that an overhaul of the system, a revolution of the 'little guy' or the 'grey masses' is they answer. I think we should start with ourselves and defeat our apathy while appreciating that there are many that are less talented and less adapted to today's society that cannot 'speak' that well for themselves and hence fall through the cracks.



Wow, this was way too long!

 

[Rickson9]

Interesting post re: entitlement, apathy. I enjoyed reading it (as I do all your posts).



The rift between the "haves" and "have nots" (regardless of how you classify/rationalize/minimize each group) will just continue to grow over time and more and more will feel "alienated" from society until a tipping point. This tipping point has been reached countless times in the past and will occur countless times in the future.



I strongly believe that the rich get richer and that there is no preventing this. I believe it so strongly that my entire investment philosophy is based on it.



I only buy stock in companies that are run by large shareholders because I know that these individuals will do whatever it takes to become even larger shareholders (and take me along for the ride as well).



Companies with fragmented minor shareholders have CEO's and Boards that rape and pillage the treasury. I don't want any part of that.



I own shares in The Buckle. The founder is Dan Hirschfeld. I think his family started the business in the 1950s; 20 years before I was born. He recently issued a "special dividend" of over $2 per share because he owns 16.5M shares and wanted a $33M tax efficient dividend payout this year. He's done this 4 years in a row. 4 "special" years. I don't own 16.5M shares, but I own quite a bit and I've enjoyed that last 4years very much. In a "normal" company the CEO would just pay themselves $33M and I'd get nothing.



Jim Jannard founded and ran sunglass-maker Oakley. He owned over 70% of the stock. When the market crashed (which it always does), Jim started buying millions of shares. Unashamed, I copied him and bought it too. 18 months later he sold out at triple his purchase price to another wealthy family (Luxottica) and bagged $2B. I bagged almost $2B less, but I'll take it.



I've made over $1m in a single stock (not including divdends along the way) by riding the coattails of the founders. Of course the founders made hundreds of millions but who's counting?



The money isn't even the most remarkable thing. The most remarkable thing is that I don't even have to lift a finger to do anything! The founders work day and night, cracking the whip over their employees to work as hard as they do and pay them virtually nothing (which keeps expenses low and profits fat, for shareholders . What happens during holidays like long weekends and Christmas? They work even harder! It's a crazy system, but thank god I was born at this time. If I was born during the hunting and foraging eras, I would have died as some animal's lunch a long time ago.



Why trek across the frozen tundra yourself when you can sit on a sled strapped to tireless huskies who love to work all day (and night) long?



For me, this fortunate event has repeated itself over and over again so I might be a little biased. But at least I'm biased and rich.



It's impossible to avoid this "equality/fairness" issue. It's a sad reflection of our society, but the rich always get richer. Always. If you can't beat 'em, join 'em.



PS: Today my only caveats are no ADRs, different class stock, tech, or any business with unionized workers.

 

[rforgiel]

[quote user=gwasser]I think we should start with ourselves and defeat our apathy while appreciating that there are many that are less talented and less adapted to today's society that cannot 'speak' that well for themselves and hence fall through the cracks.


I always enjoy your posts. I was following you up to the above quoted statement.

I am unclear as to what you feel should happen to these folks that are falling between the cracks.



Rickson drove to the heart of the issue with the statement.

"There is no empathy on either side of the 99% v 1% discussion and without empathy there can be no solution. "



We are 99% animal. What differentiates us from the animals, is humans have set up culture to protect those who can not hunt and survive for themselves and by extension those who are not adapted to today's society.



I believe societies wax and wane in wisdom and ignorance.



Instead of looking at the protestors as freeloaders perhaps they are overcoming apathy in a search for answers.



I am encouraged this debate has progressed past discussions on the dismal science with recognition of corporate and government practices harming society and a need for empathy.



I am not asking for things to change in my lifetime but if I take an eastern viewpoint and I am coming back in another life, the incremental changes we make today will make a difference.

 

[invst4profit]

I find this discussion to be very interesting based on the fact that the majority of participants are in the 3% of North Americans that have a net worth of 1 mil (or greater) or are striving to be in that demographic group.

Personally I have no empathy for the protesters. My opinion they are made up of special interest groups, for the most part, only interested in promoting there personal agendas on the coat tails of a disorganised movement lacking any concrete direction. I see the core of this being driven by a desire to protest for the sake of protesting.



I like the capitalist system regardless of the fact that CEOs may be over paid or that bailouts may be unjustified. Deep down, I admit, I feel the protest may be direct at me due to my basic desire to strive to succeed personally in our capitalist society. I may have a overinflated sense of my own wealth but even so it is my wealth and I have no intentions of giving it up to those that have not toiled as hard as I have to succeed. It is unfortunate that some fall through the cracks but that is simply Darwinism in action. Regrettably we as a society may have evolved to the point of no longer having to abide by the laws of nature. Scary thought as this could result in our ultimate demise. Destroyed by the masses artificially supported by the healthy/wealthy of the herd



My hope is that the protesters will quietly drift away and the special interests groups will go back to co-opting politicians through lobbyists as they always have.