There Is No 1%

In a recent interview, the New York Times sat down with businessman Edward Conrad to discuss the merits of the American economic system. Conrad, a former employee at Bain Capital, friend of Mitt Romney, and author of the upcoming book "Unintended Consequences: Why Everything You’ve Been Told About the Economy Is Wrong," came out swinging with a powerful defense of the United States' capitalist economy and the so-called 1%.

Conrad must be given credit for both a sound economic defense of the American system and for unabashedly standing up to the onslaught against the core economic principles that have defined the United States for generations. In a financial and economic discussion that is defended as "genuinely fantastic" even by prestigious leftist economists, Conrad outlines how the accumulation of wealth allows investment that proportionally helps everyone.

Conard understands that many believe that the U.S. economy currently serves the rich at the expense of everyone else. He contends that this is largely because most Americans don’t know how the economy really works — that the superrich spend only a small portion of their wealth on personal comforts; most of their money is invested in productive businesses that make life better for everyone....Conard concludes that for every dollar an investor gets, the public reaps up to $20 in value. This is crucial to his argument: he thinks it proves that we should all appreciate the vast wealth of others more, because we’re benefiting, proportionally, from it.

Essentially, he argues that, despite much opposing popular sentiment, there is not anything wrong with the perceived wealth gap in the United States. In fact, it seems he argues the opposite.

A central problem with the U.S. economy, he [argues], is finding a way to get more people to look for solutions despite these terrible odds of success. Conard’s solution is simple. Society benefits if the successful risk takers get a lot of money.

While to the interviewer's chagrin, Conrad does not delve into some serious counterarguments, such as rent-seeking, his economic arguments are sound and convincing. If one buys his logic, as is hard not to do, the Occupy Wall Street crowd are simply fools who are naively injuring themselves.

Nevertheless, Conrad's argument implicitly accepts leftist (socialistic) assumptions through his defense of the so-called 1% by highlighting their provision of a social good. He attempts to refute the charge that the high income and wealth of the rich is somehow denying the poor of what they are due. However, despite the clearness of this analysis, he is making the wrong argument. He is battling the left (and the populist right) on their battleground—generally a woeful proposition—by accepting two significant, albeit it wrong, assumptions.

First, his argument accepts that the divide between the 99% and 1% is real, that there is some fundamental gap that separates the two groups. But such a contention is insupportable. What separates, for instance, the 2% from the 1%? Is everyone in the 99% in the same position? How about the 1%? The truth is that this divide is arbitrary, as any sensible person would acknowledge. It ignores myriad nuances—costs-of-living, family-size, personal goals, type of career, and others.

But the divide has powerful political ramifications, which is precisely why promoters of class warfare have seized upon it. It mobilizes people into an us versus them mentality, attempting to create an artificial camaraderie between the vast majority of Americans—an in-group—against some undeserving out-group. Worst of all, it ignores one of the founding principles of this country that all Americans are equal under the law. There is no 1% or 99%, but simply 100%, each trying to live their own life according to their own abilities, goals, and luck.

Second, by expounding these economic benefits Conrad is accepting the argument that in order for certain members of society to be able to justify high incomes or accumulated wealth, they need to be providing a social benefit. In other words, Conrad's formulation is identical to that of the far-left—individual success, at least for the wealthy, is only justified if the rest of society gains from their behavior. The flip-side implies that if high-income earners cannot convincingly highlight a social good, then their income is somehow illegitimate and possibly forfeit. Conrad only differs from the OWS thugs insofar as he believes that high-income provides such a social good, while those in Zuccotti Park do not.

But this argument is untrue and unjust. Individuals are entitled to the rewards of their work simply because they have been deemed valuable enough by the efforts and their employers to be compensated accordingly. No one, whether wealthy, poor, or middle-class, has to justify their compensation in any social context. Society seems to accept this logic for all but the rich. Very few people feel the need to justify their salary by citing a greater social good. Most feel entitled (and rightly so) to their income based on the hard work they put into their jobs. However, at some arbitrary point a sort of jealousy kicks in creating a scenario where certain Americans have to justify their incomes according to different standards.

This is profoundly un-American. A banker has no greater moral responsibility to justify a social benefit of his salary than a shopkeeper or mechanic. Every American is entitled to reap the rewards that come his way, in whatever form he desires. No one else has a claim to his income and no one else should arbitrarily define criteria to judge whether such wealth is deserved or not. To do otherwise opens a dangerous arena for improper abuse by the majority against the minority.

A Tyranny of Language

Republican Congresswoman, and presidential candidate, Michele Bachmann was heckled off of the stage at a recent foreign policy speech aboard the USS Yorktown, by a group of Occupy Wall Street protesters. The protesters interrupted her speech by reading in unison their own prepared words. Bachmann, who was visibly shocked and perturbed, was briefly escorted off of the stage. Upon returning she commented, "Don't you love the First Amendment?" She later went on to criticize the protesters as "ignorant" and "disrespectful."

While Bachmann is certainly right on the latter point and is justifiably annoyed at this abominable behavior, she gives the protesters far too much credit by calling what they did an exercise in free speech. Free speech is an essential right that prevents the silencing of other perspectives and ideas because one (particularly the government) disagrees with them. It primarily exists to allow opposition to freely challenge the ideas of those who have power.

However, it is not a shield behind which individuals or groups can hide to silence other's speech. This is precisely what the protesters did. They made noise to prevent Bachmann from voicing her perspectives and robbed her of the right to speak. This is the same tyranny that occurs when a speaker (or protester) is thrown in jail or punished in order to be silenced.

Free speech is not about words or sounds which emanate from one's mouth. It is about prohibiting coercive force from being used to silence one's ideas; regardless of how smart, crackpot, or weird these ideas are and certainly regardless of whether one agrees or disagrees with them. The coercive use of the weapon of language to prohibit another from speaking is as tyrannous as using any other coercive method to silence different opinions.

It does not matter who one is, whether a Tea Partier shouting down a Democrat or an OWSer shouting down a Republican, these techniques are abhorrent. They are a direct affront to and violation of free speech, despite trying to hide behind the banner of this right. Free speech is needed to preserve the dialogue that underpins democracy. If we allow anyone to silence others, we will destroy the fabric of our system.

@ FutureChallenges: An Artificial Protest: Occupy Wall Street

A discussion and analysis of Occupy Wall Street has been published at Bertelsmann Foundations FutureChallenges.org, that argues that OWS has severe structural issues and is thus far from a real protest movement. Not only does it lack a coherent message (although that is slowly changing), most of its constituent members are motivated by factors that are not conducive to a successful political force. OWS is driven by an obsession with the David-and-Goliath complex, a romanticization of protest, and a large amount of cognitive dissonance. While economic grievances may be real, OWS is far from a potent political force.

The American media has been awash with jubilant exaltations of Occupy Wall Street (OWS). However, despite many claims, the movement is not a transformative revolutionary force. While indubitably there is a small core that is committed to dramatic, even revolutionary, change, they are not representative of most Americans, or even, arguably, of most protestors in the streets. Accordingly, OWS will not have the dramatic impact championed by the chattering class.

Is the Mainstream Losing Interest in OWS?

Here's an excerpt from a poignant critique of OWS from the Washington Post's Michael Gerson. The whole article is worth a read.

At what point does a protest movement become an excuse for camping? At what point is utopianism discredited by the seedy, dangerous, derelict fun fair it creates? At what point do the excesses of a movement become so prevalent that they can reasonably be called its essence? At what point do Democratic politicians need to repudiate a form of idealism that makes use of Molotov cocktails?

The emergence of Occupy Wall Street raised Democratic hopes for the emergence of a leftist equivalent to the Tea Party movement. The comparison is now laughable. Set aside, for a moment, the reports of sexual assault in Zuccotti Park and the penchant for public urination. Tea Party activists may hate politicians, but they venerate American political institutions. Veneration does not always involve understanding. But the Tea Party’s goal is democratic influence.
...
And we are beginning to see what direct action means. Occupy DC protesters recently assaulted a conservative gathering, then took over a public intersection to prevent the passage of luxury cars. Blocking the path of one driver and his 2-year-old son, an activist shouted, “Sorry, but you have no power right now.” That is the opposite of participatory democracy — the use of power to intimidate a fellow citizen on a public street. It is the method of British soccer thugs.
...
Defenders of OWS dismiss this as the work of a few bad apples. But the transgressors would call themselves the vanguard. And they express, not betray, a significant ideological strain within the movement. Since the 1960s, some on the political left have sought liberal reform through the democratic process and nonviolent protest. Others have sought to hasten the crisis and collapse of fundamentally illegitimate social and economic systems. Both groups can be found within OWS, but the latter is ascendant.

As ANR has argued before and has been written elsewhere, Occupy Wall Street is fundamentally a flawed, if simply a "fake," protest movement. While there are certainly real grievances throughout America, OWS is not a viable movement that can address them. This isn't an argument about OWS's ideology (if it has one), which is certainly open to criticism on its face, but a structural criticism. It seems that the mainstream is starting to recognize this too.

The Economic Harm of OWS

For a movement that professes to be protesting the dismissal state of the economy, including the lack of jobs, Occupy Wall Street (OWS) appears to believe that hampering the mechanisms of capitalism is a smart move. Yesterday, members of Occupy Portland shut down the Port of Portland, preventing any trade from proceeding. The Port of Portland is the fifth largest port (by tonnage) in the United States and is thus responsible for an enormous amount of trade and jobs, both at the port and in markets that rely upon the trade.

Why the Occupy movement thinks that stopping economic flows is an intelligent tactic is beyond comprehension. Not only would it seemingly undermine any potential support they could garner from those who do not sit on the far-left of American politics, but such strategies undermine attempts to improve the economy. It is nonsensical to prevent people from working and interrupt economic activity in this economic climate.

OWS has had pernicious effects on small businesses, particularly those located in the vicinity of the protests. Shops, for instance, have been forced to close as protesters have driven away paying customers. Other businesses have had to lay-off employees in order to stay afloat. And many banks have been forced to close their doors for fears of potential violence. None of this helps the economy or the newly minted unemployed.

But the follies of OWS do end there. There have been reports, admittedly isolated for the time being, of Occupy protesters attacking banks, stores, and other institutions of "capitalism." While not yet the mainstream of the movement, which has largely been peaceful, such violent trends are worrisome. The last thing this country needs is to descend into further turmoil.

The Hypocrisy of OWS

NRO's Jim Geraghty points out just a touch of irony that exists in Occupy Wall Street (OWS). OWS cannot seem to avoid the fact that the very things it is supposedly protesting against, are essential aspects of human nature and society—characteristics even OWS cannot escape from demonstrating.

[The full text is not available online since it is an email newsletter, NRO's Morning Jolt. I have included the it below.]

---

I'm just fed up with the greed of the rich and powerful, man, like those Occupy Wall Street organizers. The New York Post offers us a great belly laugh: "Even in Zuccotti Park, greed is good. Occupy Wall Street's Finance Committee has nearly $500,000 in the bank, and donations continue to pour in -- but its reluctance to share the wealth with other protesters is fraying tempers. Some drummers -- incensed they got no money to replace or safeguard their drums after a midnight vandal destroyed their instruments Wednesday -- are threatening to splinter off."

One occupier laments, "The other day, I took in $2,000. I kept $650 for my group, and gave the rest to Finance. Then I went to them with a request -- so many people need things, and they should not be going without basic comfort items -- and I was told to fill out paperwork. Paperwork! Are they the government now?"

You can hear the laughter at UrbanGrounds:

The obnoxious drummers are upset that their vandalized drums won't be replaced from the $500,000 in the general fund nor will they be getting funds for infrastructure (a shed) to keep them safe. The money collected is actually sitting in a bank, that's right a BANK! Isn't this motley crew opposed to banks AND capitalism? What bank and what is the name on the account? Is it an individual account or is it a corporate account? Is the person or group that the account belongs to registered and is making required filings? The Schadenfreude is strong in this one!

When the "Parasites On Parade" finally ends, and it will, some one or some small group is going to have a lot of "walking around" money, while the smelly masses who panhandled for it will be in the same sorry condition they were in before, blaming unknown individuals and corporations for all their troubles.

The Post also shares:

Filth-ridden Zuccotti Park is a breeding ground for bacterial infection loaded with potential health-code violations that pose a major risk to the public, an expert who inspected the area warned.

"It's like Walmart for rats,'' Wayne Yon, an expert on city health regulations, said yesterday.

"There's a lack of sanitation, a lack of controls for hot and cold water," Yon said. He saw at least 15 violations of the city's health code -- the type that would easily shut down a food establishment.

He noted the lack of lavatory facilities, as neighbors repeatedly complain about protesters defecating in the area and the stench of urine.

A.J. Strata wonders if the Occupy Wall Street crowd understands that they are inadvertent advertisements for why their vision of the world can't work:

So when I watch a tent city culture play government and cry for equality I see [it] for what it really is. Look at these people living in tents, calling one a kitchen and one a counsel center, fighting law enforcement while crime runs rampant amongst them. It's a sad joke!

What, am I supposed to trade in my upper middle class home I worked a life time to obtain, turn in my cars and motorcycle, give up all I have to go play communist commune in a park somewhere?

Are they nuts? Herman Cain wants to change the tax code and is getting nervous ninnies taking shots at him from all sides. These silly people in these occupy zones want to replace our entire society!

Good luck with that one.

Occupy Wall Street: An Inflated Movement

Occupy Wall Street (OWS) is "inept, incoherent and hopelessly quixotic"—and this is from their gushing supporter Eugene Robinson, who goes on to offer effusive and saccharine praise. The media has been awash with such puerile punditry—half-baked attempts to turn this rabble into a meaningful cause. But the truth is that these characteristics—the disorganization, lack of coherence, lack of mission and purpose—that Robinson and his compatriots are trying to turn into redeeming qualities are precisely why OWS is asinine.

The basic problem with OWS is that they do not know what they are criticizing nor do they know what they want. Instead they just want to make some noise. They have descended on the streets to join a protest-cum-fiesta, with no agenda in mind. In other words, they are pointlessly trying to create turmoil (or just trying to be part of the "crowd").

There are two underlying tenets of leftist philosophy that are implicitly driving this movement to the streets. The first is the so-called "problem of the underdog" (alternatively the "David and Goliath complex"), where the underdog is automatically granted moral superiority while the "overdog" is castigated as evil, corrupt, abusive, and the like. In cases where there is no clear underdog, a battle of words and propaganda usually ensues to claim the mantle of the oppressed. This conceptualization of the world is generally a driving theme on America's left. The underdog is to be reflexively defended against the oppression of the overdog, without any consultation with facts, history, logic, or other essential inputs that often underlie rational behavior. Whether the powerful is white, male, American, Israeli, rich, or a business owner, they are rubber-stamped with moral opprobrium.

The incorrectness of this knee-jerk damnation should be self-evident. Certainly while those in power can be in the wrong, their identity does not automatically imply that such is the case. However, this unfortunately has become a guiding principle of the left and a motivator of OWS. The unwashed have flocked to Zuccotti Park, the "headquarters" of OWS in NYC, because of an innate bias against the supposed overdog. Wall Street, CEOs, and bankers have been pilloried simply because of their identity and their perceived positions of power. And while there was indisputable wrong-doing by some on Wall Street (just as there is indisputable wrong-doing by those in Washington and on Main Street, the latter unfortunately far too often ignored), the attack on the system shows a lack of understanding of Wall Street's purpose and how basic things, like economics and finance, work. Instead it shows the deeply rooted bias, endemic to leftist ideology, of anyone who is perceived as being "top dog."

Secondly, OWS is motivated by the romantic aura that the left drapes around social revolution and protest. Acts of civil disobedience are lauded simply because they are performed, generally regardless of the cause. Protest has become an end unto itself, the mission and message are secondary, if existent at all. In a sense, a segment of the left wants to "recapture" the spirit of the 1960s, a time when protest was successful, partially because there were causes to protest about (some justified, others less so). "The Occupy Wall Street movement is an exercise in nostalgia. It’s an attempt to recreate the excitement of 1968, when the world’s youth took to the barricades," says a blogger at The Telegraph. The hippie mentality is evident in the drum circles, tie-dye, and other throwbacks filling Zuccotti Park. OWS is not really protesting—they have nothing to protest about—they are throwing a party, living in a revolutionary dreamworld, and trying to recreate some romantic notion that never existed.

The movement, if it can be called that, has tried to link itself not only to the 1960s, but to the Arab Spring and even the Tea Party. But the truth is, it shares little in common with any of these movements. The key lacking feature is that OWS has no agenda. They have no demands nor do they offer any alternatives to the status quo. There is, in fact, nothing political about them. The Arab Spring has a clear agenda of removing the tyranny and dictatorship that has lorded over the various Arab nations for decades. They have a goal and can clearly define when part or all of that goal has been achieved. For all their problems, (and ANR has been critical of the Tea Party), the Tea Party has a clear platform and agenda. They propose and can judge legislation according to a set of principles.

OWS possesses none of this. Their vague discussion about "economic justice" is meaningless. They are grossly out of touch with any sort of philosophical underpinnings of their beliefs. There is no social or political argument to be found.

Charles Krauthammer has decisively described the condition of OWS.

To the villainy-of-the-rich theme emanating from Washington, a child is born: Occupy Wall Street. Starbucks-sipping, Levi’s-clad, iPhone-clutching protesters denounce corporate America even as they weep for Steve Jobs, corporate titan, billionaire eight times over.

These indignant indolents saddled with their $50,000 student loans and English degrees have decided that their lack of gainful employment is rooted in the malice of the millionaires on whose homes they are now marching — to the applause of Democrats suffering acute Tea Party envy and now salivating at the energy these big-government anarchists will presumably give their cause.

Except that the real Tea Party actually had a program — less government, less regulation, less taxation, less debt. What’s the Occupy Wall Street program? Eat the rich.

The sad thing is how much some circles want to turn OWS into something consequential. Whether for nostalgia, a romantic notion, political expediency (look at the unions and many Democratic politicians), or simply because anyone in a suit must be a bad guy, many are beating their drum-circle drums to create meaning out of this "protest." But OWS cannot go anywhere, certainly not in its current state. Instead it just disrupts and distracts, removing focus from the very real problems many Americans are facing. At worst, it may lead to wholesale violence and division, precisely what America does not need. America's economic woes are all of our faults—we should be coming together to find solutions, not playing rounds of "point the finger."