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Why 'Occupy Wall Street' Is Intensely Pro-Capitalist and Pro-American

Over the last several days, there has been a lot of talk about OWS being socialist, un-American and about 're-distribution of wealth'. Nothing could be further from the truth.

In a capitalist system, if you make a product or service the world finds of value, you are rewarded. Sometimes, you are rewarded with an obscene amount of money. As you should be: this is what God intended when he invented capitalism and opened the stock market on the 8th day. If you are Steve Jobs and you make insanely great products, everyone runs out and buys every newer, smaller more awesome version.

However.

If you suck, or you operate your business like a fool, or you're just plain unlucky timing-wise, you are rewarded with going out of business. Every single Internet entrepreneur knows this. In fact, we all know people who've lost companies or sold them for crappy valuations: I lost a company myself back in the crash of 2000.

Again, God looked down and lo, even this was good. All Internet entrepreneurs would also (eventually) say this is a good thing: you get your head snapped back, you learn about business and yourself. You come back twice as smart. The market benefits eventually with renewed strength: everyone actually prospers in the end.

But in 2008, when the banks failed, this did not happen.

The banks -- who either ran their businesses like fools, or who intentionally created a bubble (and if this is true, I would go so far as to suggest this may be labelled Financial Treason, since they hurt America on an epic scale with full knowledge of what they were doing -- and didn't care) -- the banks should have gone down in bankruptcy. Their assets should have been sold in auction, and a thousand new creative business opportunities would have been created. Startup people from the Internet world would have descended on the carcass of Wall Street with insanely amazing ideas.

In a proper capitalist system, this is what would have happened. And we all would have benefitted! Even the idiots at Goldman Sachs, etc. who got us here: some self-reflection would have done them good.

However.

The state stepped in. The state funded the banks with our money, yours and mine. A full 20% of the valuation of the United States of America was annihilated by these morons, and we simply funded them back up from the Treasury (actually worse: from the non-federal Federal Reserve -- which I won't even get into here).

You know what that's called?

Socialism. The fusion of the state and corporation is called Socialism. And this is what OWS objects to. That's what they are angry about.

(One of the best comments I read on this is 'Capitalism without the possible consequence of bankruptcy is like Christianity without Hell.')

Some argue that the banks were 'too big to fail'. I say that's bullshit, but let's let that stand for now. When an Internet company is on its last legs, and is almost dead, they do generally have at least some options. They can raise additional capital, but usually at egregious terms: the new investors want to wipe out the old investors percentage-wise, they want 2-5x liquidation preferences, they want control of the Board, etc.

And the almost-dead company has to accept these terms: they have their hat in their hand and have no choice.

This is where the banks were in 2008. Except: we never forced terms like this on them. We should have. That's what you do in Capitalism.

As American Citizens, and bailers-out-of-the-banks, you and I should have had pro rata stock shares in every bailed out bank. You and I should have pro rata dividends that come to us quarterly, it should not go into the pockets of the bankers as immense bonuses. And you and I should have pro rata voting rights on Board issues.

You want to be too big too fail? Fine. Here's the term sheet from the American People, who are now forced to be venture capitalists and should at least reap the rewards of investment. Yes, our terms are egregious, but We, The People are saving you from bankruptcy.

This is called Capitalism. We didn't see that happen with the banks. Instead: we saw socialism happen, we saw redistribution of wealth alright: we saw the bankers get our money! (And for those of you who argue the banks paid it all back you're wrong; and even if they did, the Fed printing more money in massive quantities creates inflation which effectively robs us as well).

The State did not do its job. The State did not protect We, The People. Instead, it protected the corporations at the expense of the people.

And we know it happened, and we're pissed off. And we don't believe that anything has actually changed, and we seem to be powerless through our existing political system to do anything about it: both Democrats and Republicans are on their side, not ours, so even voting doesn't matter like it should in a real democracy. We can't vote on who runs the Federal Reserve (hint: he's ex Goldman Sachs, so who do you think he sides with?)

That is what OWS is really all about. It's about true democracy, true capitalism, and America.
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25 comments
 
"The fusion of the state and corporation is called Socialism." Really?
 
The pain of allowing the banks to collapse would have been too great for the citizens but you're right, demanding better terms for the bailout dollar makes a heck of a lot of sense.
 
Problem is, the OWS folks apparently don't know that they are pro-capitalism. Their mantra is institute a different economic system where everyone gets their equal share, not their fair share, their equal share. Equal share regardless of what their contribution to the whole is, even if measured according to their potential (not every one has the same capabilities).
 
+Brian Clark Well said...totally agreed! And I'm glad u made some mention of the crooked illegal & unconstitutional Federal Reserve Bank (which is as federal as Federal Express).

I'm a Capitalist who believes in the free-markets etc, and I support the Wall Street Occupy movement. Just like u, I understand that the issues isn't with capitalism...the issue is with "Crony-Capitalism" (not actual Capitalism).

This country has been enslaved by a corrupt banking system since 1913 (and I worked for one of the biggest culprits in NY for over 14 years...Citigroup).

Great post, dude! :-)
 
+Michael Ingraham I'm not sure they have a mantra at all. And I'm pretty sure Kanye West is not advocating that goal.
 
While I agree with the large post, those at OWS don't have a clear message and others are trying to hijack the crowd for their own purposes.
 
I don't think this writer has a clear understanding of what would have occurred if the banks had been forced into bankruptcy. Without the bailouts, the alleged 99 percent, as well as the majority of 1 percenters would all be in much worse shape today than they are. I am always amazed at the lack of understanding regarding how the world's financial system works.
 
+Michael Ingraham --- I hear what you're saying, and I agree that a lot of the OWS protestors seem to be suggesting 'Socialism"' (which I don't agree with, since I'm a Libertarian small government Free-Market kinda' guy). But I still support the OWS protestors, because I realize that these people may not understand the true nature of the issue confronting them. They may not understand that Capitalism is not the problem (since actually a corruption of the ideal, a corruption than can occur in any political system that caused the problem). They may not understand what solution to employ...and who exactly to blame. But they understand that something is wrong with our system, but they just don't know exactly what just as yet.

I support them because at least they're waking up to something...just as I woke up ages ago. I'm glad they're protesting and trying to do right, instead of watching Jersey Shore or American Idol like sheep.

The masses are waking up and they're pissed because they realize they're being screwed...they just don't exactly know how they being screwed. :-)
 
First a disclosure, I know NOTHING about how the SYSTEM works, however from my perspective it seems No one is Too Big To Fail. They borrowed MY money they needed to have gone down the tubes like the local banks did if they overstepped the bounds.
 
If the big banks would have been allowed to go "down the tubes," we would all be in a huge world of hurt today.
 
+Brian Clark Yeah, pretty sure Kanye is there just to sell records by appearing sympathetic to the plight of the "less fortunate". He wouldn't dream of giving up anything he has for the "good".
 
+steve fleming --- Actually the US is not a democracy...and the word 'Democracy' can be found nowhere in the US Constitution, since the founding fathers didn't like it, and believed that a democracy was basically 3 wolves and 1 sheep voting on what's for dinner...lol

The US is a Constitutional Republic...one where the voting whims of the majority isn't supposed to infringe upon the opinions and voting whims of the minority.

:-)
 
You project this on them because they surely say something completely different (tax and redistribute the wealth). But I do agree with your take on the "to big to fail" banks.
 
+Kevin Cullis -- Thanks for the reminder that America is currently speeding down the Appian Way.
 
+Nancy Scott , but we CAN stop it, we just need to change course. Stop the Govt spending, cut govt, and the people of the US need to change their attitude.
 
+Che Hackett You said this perfectly. They don't yet have the language down, but understand that change is needed. Change that is not being seriously considered. There is nothing un-American about asking our government to consider "We the People" first and foremost.
 
+Kevin Cullis -- How about protecting the rights of the people by disempowering the oligarchy?
 
+Nancy Scott , that's called changing the laws (the rule of law) so that private property, anyone's, is protected, and not monopolies (read this http://www.amazon.com/Right-Earn-Living-Economic-Freedom/dp/1935308335 ). Today, socialists and the "Third Way" approach http://en.wikipedia.org/wiki/Third_Way_(centrism) are having big companies "partnering" with big govt. WRONG!! We The People need to elect those representatives that follow our Constitution. But first, we need We The People to understand what our Constitution is for because we've lost our way. So start reading and understanding our Constitution.
 
Actually the fusion of the state and corporation is capitalism. It's been like that since the start of capitalism, if you read your history. There's never been a period of capitalism when the corporations weren't massively supported by and fused with government.
 
+Leo Babauta Support versus subsidized (see the Supreme Court decision of Gibbons vs. Odgen) are two different ideas.
 
But both have always happened in capitalism.
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