Opinion: Occupy Protests Misguided

Occupy Protests are Misguided

In many of my other posts, I have tried to provoke thought and give my side of the story on large issues from a small perspective.  This one will be a little different in that the entire post is my opinion.  I want anyone who reads this to feel free to give me their opinion, because a free exchange of ideas is possible now, but may not be if the occupy people get their way.  I will delve further into this as the post goes on.  So before anyone tunes out and decides that I am just another right wing nut job.  I beg of you to read with an open mind, and I will do the same for your reply's.  I think that is a fair deal.

Recently there has been the "Occupy (insert city here)" events popping up all over the US and Europe.  The demands are simple.  They feel that they do not have enough wealth and power so they want the government to intervene on their behalf and force those that do, to share.  Seem like a simple enough want.  They want a better life for themselves and for their children.  They want education, heath care, good paying jobs and the American Dream.   I do not fault anyone for wanting this.  But before you label me as "One of the Fat Cats", I would like to tell you that I would be considered Middle Class.  I work, my wife works, I have two children, a house with a mortgage, two cars, and looming college tuition for the children.  My retirement is slim to none.
So, there you have the economic basis of my background.

Now these "Occupy" people come from varied background.  Initially it appeared that these original protesters were young people, either in college, working or seeking work.  Many of this group have a reasonable complaint that the "Baby Boomers" have left them nothing.  I blame that on the 60's and 70's mentality of "me first".  These are the people who took to the streets complaining how the system didn't work for them.  They changed the system and now it does not work for the rest of us.  However the organized labor unions have appeared to be using these people for further their causes.  And finally add the hippies of the 60's and 70's who did not get what they wanted, and you have a majority of those in the "Occupy" movement.   I could be wrong, but I am basing this on new coverage by local, national and print media.  Some liberal some conservative.

I fear that this movement could come back to haunt all of us in a way that will change anything that has happened in the last 200+ years of the existence of the United States.  Pretty big claim, but let me explain.

I believe the the Tea Party and the Occupy movements have a couple of things in common.  Both believe that government has failed them.  The Tea Party believes that government has become self serving and has created a class of dependent citizens.  The Occupy movement believes that government has become self serving an only serves the needs of the rich.  Somewhere in the middle lies the truth and the solution.

The economy has driven both movements.  In a democracy with capitalism as its economic engine, jobs and economic wealth are created by private enterprise.  Over the years it has been those with an unique idea or product and the willingness to risk their fortunes to bring this to market and sell the service or good.  There have been many who failed and many who have succeeded.  But in the end, the risk and reward belonged to those who owned it.

If the idea succeeded, then there was profit.  This profit was used to purchase means of production or hire workers to make, market or sell the idea.  Investors were also rewarded by lending capital to the project by means of dividend.  These people got wealthier than those that worked for them because they took the risk.  It is by choice that much of this happens.

If the idea failed, then there was no profit.  People who worked there were fired, the owner lost his investment and his job, and those who invested lost their money.  All took a loss.

In today's economy, the government has interfered and has created a dependent business class and a dependent class of people.  I will explain how the loss and reward sharing has been strained.

In today's environment, only the investors seem to take the loss.  The company executives have contracts that guarantee them income no matter how well they run the company.  The government props them up with tax dollars by insuring their activities or loaning them money when they could not get collateral from private means.  The workers take the loss as always, but with one exception.  Now there is unemployment insurance.  Originally a stopgap measure, it now has become some sort of long term entitlement.  When that runs out, there is food stamps, and other government programs to keep them afloat. The result is that neither the worker or the executive has any "skin" in the game.  Only the investor, which in many cases is you and me in our 401K's and IRA's, takes the hit.  So why would the workers or the executives strive to do the best work that they could do?   I know that in every company there are great employees, but their are also many of the other.

A gentlemen I met last week told me that Americans do not know what poverty really is.  I asked him how so?  He replied that he has spent the better part of three years in Afghanistan first as part of the military then as part of a private company.  He said here in America, we believe the poverty means you only have one TV, one microwave and one car.  In the rest of the world, it means that you cannot eat and all that you own can be carried on a backpack.  The generosity of others allows you to get by day by day.   That got me to thinking about what we as Americans "demand" of our government and each other.

While I certainly do not want America to deteriorate into that kind of poverty, I fear that further interference into capitalism will continue to allow us to spiral down.  Lack of personal responsibility by business owners, government officials and the populous as a whole is to blame for this.

If the Occupy people get their way, here is what I see as economic consequences.

1. Higher taxes on business owners and those that have achieved wealth will cause them not in invest in their business in the US but to look to move it to areas of the world that allow them to reap the benefits from their efforts. 
2. Lack of capital as these companies and people leave the US will result in shuddered businesses, less revenue for the government, more on welfare and higher unemployment.
3. Higher unemployment, lack of income and a better way of life will lead to more demonstrations toward the government and further government control of the means of production.
4. The results of more government control will consolidate power with the politicians and make the populous dependent on government for exisitance.
5. More government dependence, will result in more unrest and finally a clash between the political class and the people.  Revolution.
6. The result of the revolution will be strong solialism.  The Chavez type of socialsim.  Boarderline communism.  The type that will eventually lead to a second revolution.  This one bloody.

So to me the key to the revival of America lies in our ability to do some very basic things.

1. Realize that capitalism is not a bad thing. And that those who innovate do deserve rewards.
2. Remove the protection that some people running business has from economic ruin.  Force them to have skin the game just like the owners and workers. As stockholders in our 401K's and IRA's, we need to demand from the board of directors that the pay and benefits of executive rely on the performance of the executive; and that workers that drag down production and profit should be removed, so that all can share in the form of wage increases and benefits.
3. Workers need to realize that the health of the company that they work for is closely tied to their own.  Stop demanding and start cooperating. Be innovative, become part of the solution, not part of the problem.
4. Government needs to get out of business and let supply and demand dictate the goods and services we use and where we get them.  The only role government should have in business is in making sure everyone has an even field to compete.
5. Taxes need to be even and the same for all of us.  From the wealthy to the poor a share of your income should be paid in taxes.  If we use a percentage, then we are all committing a certain percentage of our income to the government.  Some believe that this is an unfair.  But my argument to them is that if I earn 100K and pay 10% in taxes then I pay 10K in taxes.  If I earn 10K and pay 10% in taxes then I pay 1K.  You see there is some proportion after all.  The wealthy and the poor all pay their fair share.
6. A balanced budget amendment with an income tax cap.  We all need to know with certainty that government does not have the right to borrow on our behalf without our permission, and we need to know with certainty that what we earn will not be taken from us as we succeed in a greater portion than it does now.
7. Eliminate corporate taxes.  Tax dividends as regular income. Corporate income that is not reinvested in the company or paid out in dividends is to be placed in savings and will be taxed when distributed.  That is fair tax.
8. Eliminate taxes on estates... That money was taxed when it was earned by our forefathers and relatives.  Do not tax it again, because they leave it to their loved ones.
9. Eliminate capital gains taxes.  All income will be taxed at the standard rate.
10. Eliminate deductions.  Only deductions allowed should be for those who live under the poverty line.  The rest of us will pay our fair share.
11. Shrink the size of government.  Make every department save 5% per year on their budgeted amount for the next 4 years.  The result would be a 20% savings in government spending.  This would help balance our budget.
12. To kick things off, give a tax holiday to coorporations who return money back to the US from foreign investment.  This is money that would not be in the US anyway based on current laws.  But stipulate that the money needs to either be paid out in dividends or invested in the US.

So there you have it.  My method for saving our democracy, restoring equity and furthering America's will to invent, and dream.

Your thoughts...?