Saturday, October 22, 2011

Occupy Wall Street commentary

The Left and what Occupy Wall Street is all about

It looks like the Occupy Wall Street movement has gone global. Like most shows of mass activism, it indicates that the masses have reached the threshold of their tolerance for the police state. The protests are motivated by instinct; it has little to do with a definite aim to establish democracy or anything that the Left sensationalizes this movement to be. The people are simply fed up with increasing food and gas prices and high unemployment rates, even if they don’t have the remotest idea of the root cause. The role of the Left in this picture is in brewing buckets of envy and resentment towards a vague concept of the “greedy capitalist class” or as they like to call it, the “1%”, as is their standard strategy. Class warfare, though, provides the best conditions for a dictatorship to rise. To quote Walter Williams,

For politicians, it's another story: Demonize people whose power you want to usurp. That's the typical way totalitarians gain power. They give the masses someone to hate. In 18th-century France, it was Maximilien Robespierre's promoting hatred of the aristocracy that was the key to his acquiring more dictatorial power than the aristocracy had ever had. In the 20th century, the communists gained power by promoting public hatred of the czars and capitalists. In Germany, Adolf Hitler gained power by promoting hatred of Jews and Bolsheviks. In each case, the power gained led to greater misery and bloodshed than anything the old regime could have done.

Here’s something I found in a Youtube video to characterize the far leftists in OWS crowd,

They're practically begging for a new Hitler.

These protests and these demands carry with them an implication that is deeply horrifying. That being, that the most populous ideological base opposed to the entrenched fascism of the West, is radical fascism.

Let that sink in. The most widespread objection against the most profoundly interventionist economy since the Blat, is that it isn't statist enough.

Let's just all go down to the Treasury, donate what's left of our savings, children and vital organs, and get this all over with.

Peter Schiff speaks with Occupy Wall Street protesters

I saw this video of Peter Schiff discussing with OWS protesters and found common intellectual errors among the protesters.

Problem is structural, not personal

- Protesting ‘corporate greed’ implies that the problem is one of personal moral values. It’s not. I don’t care what motivates entrepreneurs to get up in the morning; all I know is that if they didn’t, I couldn’t buy any groceries. Blaming the problem on ‘greed’ is like blaming airplane crashes on gravity. Inequality is the biggest red herring in socio-political discussions. Egalitarian sentiments are really residual elements from our tribal past when wealth was more or less collectively produced and distributed. The emotion of envy regulated the amounts that each individual consumed for fear of retribution from the tribe. Today, folk/tribal economics doesn’t apply.

- The market economy, insofar as it is unhampered, has made it possible for individuals to earn income without having to personally associate with others. Trade results in win-win situations even though the participants may have incompatible personalities and never be friends. Also, by expanding our social commercial networks, the market economy provides the opportunity to expand our personal connections as well.

- The problem is structural. There’s a saying that goes “blame the game, not the players”.

Incidental versus essential features of economic depressions

There has been a lot of coverage about ‘derivatives’ in the news. These take the form of mortgage backed securities, credit default swaps, collateralized debt obligations, among others. “Derivatives” are a part of the standard narrative of “deregulation” and “lassiez faire capitalism in the United States” that we receive from the mainstream media on culpability for the current depression. The Left, of course, gullibly accepts the standard narrative presented by the same corporate-state media they claim to oppose. In that sense, they perfectly fit the description of useful idiots.

Financial derivatives, though, are only incidental features of the depression. The current depression is the inevitable result of the fractional reserve banking system which is propped up by the Federal Reserve. Artificially low interest rates cause mal-investment and overconsumption, manifested in the boom, which ends in a bust. The damage (mal-investment) is done in the boom phase and the bust is the painful, albeit necessary, adjustment phase. But the government re-inflates the bubble by printing more money and bailing out the banks.

Where do derivatives fit into this? Derivatives are just the vessels that concentrate all the artificial credit that the Federal Reserve created. If derivatives were prohibited by government decree (unenforceable but let’s just assume for argument’s sake), the artificial credit would still be there and hence the mal-investment would still occur. The current depression would have still occurred insofar as borrowing and lending of money is practiced, that is, fiat money which is continuously printed by the central bank.

This also means that the partial repeal of Glass Steagall had nothing to do with the depression. Anyone blaming the depression on the partial repeal of Glass Steagall is committing a red herring fallacy.


A causal understanding of the problem is important. Protesting the symptoms of the problem will get you nowhere. You need to eliminate the cause of the problem. For that, you need to learn economics and the nature of the power of the State in relation to money.

Lastly, belief that the State can somehow be reformed so it can be controlled by "We the People" must be shunned. A concept of "society" or "the people" that is independent of each individual that consists it is a false concept. To quote Ayn Rand,

"This meant that “society” may do anything it pleases, since “the good” is whatever it chooses to do because it chooses to do it. And—since there is no such entity as “society,” since society is only a number of individual men—this meant that some men (the majority or any gang that claims to be its spokesman) are ethically entitled to pursue any whims (or any atrocities) they desire to pursue, while other men are ethically obliged to spend their lives in the service of that gang’s desires."

Hyenas cannot be changed into lambs and politicians who worked their whole lives in attaining power will not suddenly give up that power.

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