Sunday, October 16, 2011

Quote of the Week - Occupy Wall Street

Nicolas Kristof, writing in the New York Times today, eloquently defines the common and legitimate complaint that both the Occupy Wall Street and tea party movement share.

More broadly, there’s a growing sense that lopsided outcomes are a result of tycoons’ manipulating the system, lobbying for loopholes and getting away with murder. Of the 100 highest-paid chief executives in the United States in 2010, 25 took home more pay than their company paid in federal corporate income taxes, according to the Institute for Policy Studies.

Living under Communism in China made me a fervent enthusiast of capitalism. I believe that over the last couple of centuries banks have enormously raised living standards in the West by allocating capital to more efficient uses. But anyone who believes in markets should be outraged that banks rig the system so that they enjoy profits in good years and bailouts in bad years.

The banks have gotten away with privatizing profits and socializing risks, and that’s just another form of bank robbery.

To steal a phrase, its the crony not the capitalism. And what enables the banks to manipulate the system to their advantage? In my opinion, the fiat money system, whereby the dollar is valued at whatever the Federal Reserve says it is. The more I think into these issues, the more I am convinced that a gold standard is necessary to prevent banking shenanigans. Some banks need to fail and bankers need to lose their jobs, before we are going to get a system that justly serves the interests of the all of these United States.

Further, when one looks at the tax code and regulatory landscape, its very complexity enables the bankers manipulation of the system. Better to have simple regulatory schemes, scrap the current tax code and start over with a simple system, in order to end the odious outcome that we currently suffer through. No extra-legal seizure of assets, as some in the occupy movement propose, but certainly we need to shut down the source of ill gotten wealth in the financial sector, when it accrues to the use of loopholes, bailouts and secret Federal Reserve funding.


  1. I love that you are getting on board the sound money train!

    The Weekly Standard says all Republicans should too!

  2. Thanks, it took me a while, but I started to learn about all the secret dealings of the fed, like bailing out European banks and bailing out non-bank firms in the U.S. I prefer solutions that are simple to implement, and prevent shenanigans, hence a gold standard, so the Fed can't manipulate the currency to do its dirty work.