Friday, November 18, 2011

Tea Party and Occupy Wall Street

The "Occupy" movement is the offspring of the "Tea Party" movement and is now a better representative if its principles than the Tea Party itself.

I do not have enough room in this blog to give this hypothesis justice, but I will throw out some reasons to consider it true.

The question asked in the "Tea Party" originally movement was, "Why is the government spending all of this money to reward those people whose poor decisions caused this mess, and putting the burden on those of us who have lived responsible lives?"

Consider the rant by Rick Santelli that is considered a key point in the Tea Party movement.

You know, the new administration’s big on computers and technology– How about this, President and new administration? Why don’t you put up a website to have people vote on the Internet as a referendum to see if we really want to subsidize the losers’ mortgages; or would we like to at least buy cars and buy houses in foreclosure and give them to people that might have a chance to actually prosper down the road, and reward people that could carry the water instead of drink the water? . . . How many of you people want to pay for your neighbor’s mortgage that has an extra bathroom and can’t pay their bills? Raise their hand.

He is not complaining about the level of government spending. He is talking about taking the money from the responsible people and giving it to the irresponsible people.

And it is not just the irresponsible middle class - but the irresponsible rich. The broader issue in the rant concerns "moral hazard". Economists use this term to talk about government action to bail-out rich people who make unwise decisions and end up in financial hot water. It is mostly used when talking about the government putting huge amounts of money on the table to rescue rich people who made mistakes while leading organizations that are "too big to fail".

So, this was the start of the Tea Party movement.

But what happened?

Well, it started off as a disjointed group if angry voters with no clear message or objective. However, it became news. Some Tea Party members got access to microphones - meaning, that they and their message made it into the press and in front of the public. Others were ignored - and their message faded into the background. Some members of the movement got funding and got volunteers to help them organize. Others got nothing.

Which portion of the Tea Party got these benefits?

Well, those people with the message that the microphone holders wanted people to see got the microphone. Those with the message that the people with money wanted to fund got the funding. Those that certain political organizations thought would be best for helping their candidates or special interest groups got the organizational help.

This is not a conspiracy theory. This is just the invisible hand of people pursuing their own individual best interests to the degree that they are able - and the people with the money and control of the media being more able than others.

Through the action of purely natural forces, the Tea Party movement became a "Protect The Pocketbooks Of The Rich" movement.

This became obvious during the budget debates in July 2011. The one thing that the Tea Party legislators absolutely refused to compromise on was not holding people responsible for their choices and actions - that never even entered the discussion. Instead, the only thing they cared about was protecting the pocketbooks of the top 1%.

The multi-millionaires who drove their companies into the ground should be greeters at Wall-Mart by now. Instead, they sit in huge homes with huge bank accounts filled with the money that responsible people earned and paid. The Tea Party candidates did not even discuss the issue of how to get back some of the wealth that they pocketed - that makes up a substantial portion of our current debt. Instead, ironically, the Tea Party is interested in only one thing - making sure that they get to keep the money they have already taken.

Ultimately, the idea is that if the government adopts the principle of rewarding the irresponsible and punishing the responsible, we will end up with nothing but irresponsible people. I do ask myself at times if I am stupid for living a responsible life when, if I were to be as reckless as others, i could enjoy the pleasures of that recklessness and then have the government rescue me in the end.

In more general terms, they are not working on solving the moral hazard problem. They are working on compounding it by making sure that the recipients of these government rescues keep their wealth. We do not even hear the original reason for the Tea Party any more - the government rewarding (bailing out) irresponsible and incompetent people at the expense of the rest of us. Instead, the only message coming from the Tea Party concerns protecting the pocketbooks of the top 1%.

The effect of this (even though it is not the intent) is that the top 1% have raided the treasury and walked away with trillions of dollars of benefits. Now that we are looking at that deficit and talking about paying the debt, the top 1% - speaking through the Tea Party and using them as its defensive shield - is saying, "Don't talk to me. Give the bill to the middle class."

Well, a lot of the people in the top 1% are doing this. It would be wrong and totally unfair to claim that this statement is true of all in the top 1%.

This now brings us to the movement to Occupy Wall Street.

Why Wall Street?

Because these are the "moral hazard" people - the people who were allowed to keep their million-dollar homes and million -dollar jobs as a direct benefit of running up the government deficit. And who now refuse to pay any taxes that would go to relieving or paying off that debt.

"Hey, top 1%. You took spent the money - putting your bailout on the national credit card. You pay the bill." Here, again, let us not lose track of the fact that a substantial portion of the problem rests with $15 trillion already spent. This is not about future spending. This is about past spending. $15 trillion has been put on the national credit card. The wealthiest Americans have pocketed virtually all of the benefits from that spending. So, the wealthiest Americans ought to contribute to paying off the debt. Even balancing the budget does not answer the question that needs to be answered: Who is going to pay back the $15 trillion already spent?

During the past 30 years of deficit spending, the wealthy significantly increased their personal income and wealth. The middle class has treaded water for 30 years, harvesting no overall benefit, while the poor has become worse off. If that $15 trillion - and the benefits that came from it - all settled in the pockets of the wealthiest Americans, but the middle class are forced to pay the bill, then we truly have a situation in which the main role of government for 30 years has been to transfer money from the middle class to the rich.

This suggests a potential rallying cry for the Occupy movement. "You - the financial companies of America - you hoarded the wealth that came from the deficit. You pay the bill."


Kristopher said...

i think they agree on what the problems are but they disagree about how to solve the problems and the causes of the problems.

i am not sure how much they were truly co-opted by money and microphones. if the tea party was not behind the people with the microphones they wouldnt have voted in a wave of obstructionists into the house. and cheered the philibusters of the senate. i think they saw a real problem (the same problem that the ocuppy movement wants to fix) and they tried to apply their republican fix-all to it. (lower taxes and get rid of regulations) while the occupy movement wants to solve the same problem by raising taxes and stronger regulations of wall street. they both want to solve the same problem but they both see the other as the cause of the problem and have diametrically opposed solutions.

the tea party rose to prominence, elected a bunch of officials that seemed to make everything worse. now it is occupy's turn to see if they can do a better job... the bar is set pretty low. all they have to do if vote people in that don't make the situation worse...

(reminds me bush and then obama, a president adept at making things worse followed by a president that merely doesnt make things worse) is it too much to hope for a president that makes things better?

Alonzo Fyfe said...

I really don't see what another President could have done differently to make things better.

The power rests in the House of Representatives and the Senate. They have to pass the legislation. The President can talk - that's it. In that, he has the same power as the rest of us . . . except he has a flock of microphones following him around.

What do you think the President could have done to make things better?

Kristopher said...

on the economy: industries needed to be bailed out but not companies.

when one company fails that leaves their market share up for grabs and all the other companies in the same industry start doing a hell of alot better. if there is a lack of demand in a certain area letting one company fail and the other companies feed on the left over demand, it would be a large boost to the competant companies that are left in the field. while the one company would have huge lay-offs the other companies would be forced to hire new people to manage the new demand flow.

on the contrary when you bail out a company you keep a competitor in place in an industry with a demand shortage. forcing every company in that industry to suffer and lay-off employees. and you force the entire industry into an unstable untenable non-hiring state.

we needed to facilitate the fall of the large company so that they fall as smoothly as possible. instead of using resources to keep the failed company afloat we use those recourses to invest in competitors, boost unemployment and create training programs to help those employees transition in to new areas or get jobs with the now expanding companies in the same industry. and we use the bailout money to give incentives to the competitor companies in the same industry to expand their operations in such a way that they hire as many of the defunct companie's employees as possible.

making laws and bailouts is congress' job and he shouldn't be blamed for what they do (or don't do) but he does have alot of microphone time that he could be using to advance non-idiotic strategies.

we don't have enough demand, is the same as, we have too much supply. we bail out failing companies and are left with a supply surplus forces the whole industry into the duldrums

i think this is a message that would have resonated with the tea party (the ones that weren't blinded by demo-hate) and the ocupy movement. and perhaps could have kept the occupy movement from needing to happen.

Iwas an Obama supporter until he started (or i noticed that he was) murdering people (killing them without due process of law (and not on a battlefield)). in general i liked his domestic policies and his tendency to respect multilateral orginizations but I would vote for somone who's domestic policies were complete crap if they would promise not to use murder, torture, and to not continue the practice of rendition(guantanamo... give them a trial or let them go). (i think that describes Huntsman... not sure though, he hasn't had enough air time for me to make a decent opinion about him. though i almost just want to vote full democrat to punish the republicans for the way they have acted over the last 3-11 years. but maybe a liberal republican would heal the divide...)

anyway... he could have done alot better. If he tried to do the above style bail out and failed i would blamed congress but he didnt even give it any mic time.