Sorry, But I Don’t Support The Occupy Wall Street Protestors.
On September 17th of 2011, a group of protesters decided to occupy the financial hub of the United States. Calling themselves the 99%, their goals were quite far spread and watching interviews with them it seems that there isn’t one true defining idea that holds them all together. The crux of the issue seems to be the corruption and collusion between government and industry in the western world.
Don’t get me wrong. I am not a heartless person and I don’t think that social and economic inequality is a desirable state of affairs. Quite the opposite, I believe that everyone is entitled to reap the rewards from the seeds they have sown and watered with their own blood, sweat and tears. I firmly support the idea that if you study hard, work hard and live by a decent moral code then you deserve to be compensated handsomely.
I will concede that the world is full of unfairness. Financial institutions wield horrendous amounts of power within the walls of the executive and judiciary, with little to no regard for those that get in their way. They continue to line their pockets with money that honest hard working people rightfully earned. I have no intention of debating the fact that nothing close to a satisfactory level of change has come after the GFC. Nor will I argue against the fact that the bailouts, whilst (most likely) saved the economy from implosion, only reinforced the idea that ‘too-big-to-fail’ was carte blanche for corporations and banks to act with immunity to basic market laws (in an economic sense).
What I do disagree with is this new Western Spring. I was raised hearing stories from my parents about the homeland and the horrors of Russian occupation and Communist blood thirst for power that seemed almost unquenchable. It wasn’t until my mid-teens that I actually learned what Communism was began to develop my own set of values and opinions as to how I viewed the struggle between capitalist competition and redistribution of wealth.
To it’s very core, the idea of far left wing socialism is misguided and just plain wrong. Ensuring that every person is satiated to the level that only abstains death so that everyone is equal is ridiculous. If a doctor and an engineer have the same pay and benefits as a factory line worker or a cleaner then there is no real extrinsic motivation for anyone to pursue innovation or excellence. I am not trying to insult the cleaner or the factory line worker, as I genuinely believe that every job is an honourable one and everyone should be proud of their contribution to society and the economy. There is absolutely no shame in any job done as long as you operate within the confines of the law.
When people begin to gather outside financial districts and corporate headquarters and claim that they are part of the 99% of the population who are unfairly dealt their cards by the other 1%, I begin to shudder. When intelligent and eloquent individuals begin to make rational and well thought out arguments for what I consider to be anarchistic causes I honestly get scared (http://youtu.be/tFz1VVXsWRU). I begin to see hammers and sickles flying from flagpoles along our streets. I begin to see teachers and analysts and scientists hanging from trees or slaving in ‘re-education’ camps. The Chinese Revolution, the Russian Revolution, the rise of the Viet Cong, all of these began with a core of individuals who firmly believed that redistributing wealth and land according to demographics instead of achievements was a sound social and financial policy.
ok, sometimes communism can be sexy...
I realise I sound heartless. There is no doubt that people are reading this and shaking their heads and muttering that I don’t understand what it feels like to be oppressed. That I don’t know what it feels like to be gouged at every turn. That I am arrogant because I haven’t known the pain of unemployment or bankruptcy. That we as a species need to move forward from social and economic Darwinism and find a way to ensure that every person on the planet is taken care of.
My response? If you can find a way to ensure that every person on the planet is equitable and taken care of without the use of firearms or terrorism or anarchism please tell me. The glue that holds together our economy is the strict enforcement of contract law and property rights. The individual has every right to keep what they earn and protect what they own. I believe in charity and helping others. I believe that a community that looks after each other is a strong community that will succeed. I think no person can succeed as an island unto themselves, especially in today’s day and age.
But as I said earlier tonight to my father, I find it a waste of time to make lists of your hates in this world and not to provide a suggested solution. So whilst I agree that there are things that need changing, I firmly deny that these protests are the solution to our problems. Here is (my opinion) of what we need to do:
1. Education. No I don’t mean that everyone has to go to University and get their bachelor degrees to be considered intelligent enough to be included in any sort of important conversation. What I am talking about is self education. Too often (and I am not immune from this), people start to spout random statistics and facts that counter or support an issue that they know nothing about. When people begin talking about interest rates and start to blame the government for it, as if they do it by decree, I weep. They give me strange looks when I tell them that it’s actually controlled by the RBA who do it to counter inflation so that the money in your wallet retains it’s value. Whatever your opinion is, ensure that it is based on a solid framework of wide readings on the topic. Never take one persons word at their face value. Investigate, research and analyse until you are satisfied that you have all the facts.
2. Community. Do you know what I love about capitalism? Above all else it is the opportunity that it presents all of us. When I was asked what I thought of the Occupy Wall Street movement, I perhaps in haste commented that these people should go and get jobs and stop complaining about things the majority of them do not understand. Whilst I don’t retract that statement fully, I should probably postscript it with this: If there are enough people that are unhappy with the banks in the United States and they have enough time to sit in the middle of Wall Street and stay there for weeks on end then you obviously have enough time on your hands to go start your own bank. Obviously there is a segment of the market that is upset with the way financial institutions are being run, so why don’t you take advantage of that fact and fill that void that exists in the economy. If your idea and planning is sound and your actions are within the scope of realistic economics, then there is no reason you can’t succeed and spread equality through empowerment. Getting together as a group and tearing down the walls of government and industry is no more democratic than the back room bargaining that goes on between the federal reserve and the banks. Economic freedom comes from economic empowerment, and nobody is more equipped to empower you than yourself because you know exactly what you need and you know exactly what you want.
I am probably way out of my depth here but since the beginning of time, behavioural economics and market forces have always controlled the way humans coexist. Exert any undue force in one direction or the other and eventually the market will be forced to correct itself. This works both ways and typically the initially undue forces and the eventual corrections result in bloodshed. I don’t think the Occupy Wall Street protesters should be silenced. Even though I live in a country that does not have freedom of speech I still think it is an import right for the masses to retain. I simply think their time could be better spent actually making an effort to change the world instead of complaining how bad it is.
Out
[EDIT] Here is a link to an excellent article that takes the counterpoint to mine in the way of economic reasoning:
Who are the 1% and What Do They Do for a Living? http://su.pr/1KMZlY
[EDIT2] When I receive a comment on something I have written that is quite long and wordy I like to include it in my original post, especially since in this circumstance I would like to address several points in reference to particular things said about my post that I feel are false or misguided. So here I go. (I have not edited the comment in any way, shape or form but for reference sake it is approved below.)
I was originally thinking just another Republican, then the utterance about not living in a country with freedom of speed/ Where is that?
Australia. Judging by the fact that you signed off the comment with ‘Tom Edgar from Down Under‘, I take it you are from Australia as well (unless there is another ‘down under’ that I don’t know about. Either way it may pay to take a look at the laws you live under.
http://en.wikipedia.org/wiki/Freedom_of_speech_by_country#Australia
Apart from that, whilst there are some truisms, in the main it is a diatribe of right wing apologist nonsense.
For a start the R B A (American) is NOT a government instrumentality with the sole purpose of managing the economy, it is a totally private enterprise run by the very same people who manipulate the finances on Wall St, for the advantage of the Capitalist elite.
When you say ‘R B A (American)’ I assume you are referring to the Federal Reserve because no such thing as the Reserve Bank of Australia exists in the United States. Perhaps the example of the conversation I gave was a bit vague so I will give the benefit of the doubt and explain myself. I was referring to an actual conversation that I had where another person had no idea that the reserve bank was in charge of controlling monetary policy and they also had no idea that the reserve bank was not part of the government. So I suppose we are on the same side of the fence there.
Application of Corporate laws and Property rights? When this is applied with any degree of equality, and not just in those two areas, in the U S A and just about any other country then I will see validity in those remarks.
I don’t really understand what you are trying to say here. I was using contract law and property rights as an example of reasons why we cannot simply redistribute wealth as we see fit because then the whole economic and judicial system breaks down. Change is good, loss of law and order is not. If the laws are wrong, get them changed, we can’t just pick and choose the ones that suit our mood.
Then that specious observation,straight out of the mouths of Tea Party Republicans and any other extremist right wingers. “Start your own Bank.” This peurile juvenile statement should really be treated with the contempt it deserves. It equates with if you don’t like the service on Amtrak start your own Railroad. In the first instance you would need a lot of money, and the only place to get that is from the usurious Bankers.
I hate to break it to you but the idea of starting a bank is in no way similar to starting your own railroad. At it’s very heart starting a bank is simply pooling together money and lending it to people. This is not difficult. Does not require a significant ‘bricks and mortar’ investment and is done all the time. I will continue to operate under the assumption that you are an Australian and will use examples from there. Credit unions, building societies and friendly societies are all examples of members coming together, pooling money and using it as capital. Take for example CUA:
http://www.cua.com.au/wps/wcm/connect/website/home/sitetools/aboutcua/history/
CUA started with 180 members in the early 20th century. By its definition each member is also an owner. This means that a small group of like minded individuals got together and started a bank. It is not easy, and does require a capital investment but it is not impossible.
I have returned from a visit traversing the U S A in the past month, and I saw, at close hand, the affluence of the people in the social economic bracket of the upper middle classes but did notice, whilst travelling, that the wealth was very unevenly distributed.
So you are telling me that in one whole month, in a country of upwards of 300 million people you saw exactly how that the wealth was unevenly distributed? Did I ever at any point in my article state that wealth was evenly distributed? Or was I in fact stating that this is a fact and one which I do not deride?
I am not an advocate either of the extremes of the countries that in the guise of State Dictatorship claimed to be Communists. Communism has never been tried anywhere.
In a true Communist State the people would have a say in the running of their countries.
In a true Democratic State the people would have a say in the running of their countries.
Correction. Communism has been tried and failed miserably. In my post I said that I don’t agree with communism even it’s most ideal state because it stifles excellence and provides no incentives for working hard.
Is it not strange that in both of the forgoing the people have only input at times of elections, in which the processes have varying degrees of Democratic principles.
Both systems claim to be ” Government of the people, For the people,BY the people.”
Coincidentally the people in both seems to mean the “Elite” especially the For and BY.
Am I the only one who sees the suppression of freedom and expressions by the Police
in protecting the over wealthy, now and the same brutality pursuing the same ends during the “Depression” years and for the same reasons. Maintain the status quo and protest the wealthy.
In closing i will quote a line from Felonius Munk. “How do I tell my kids that Capitalism is better than Communism when we have to borrow money from them to keep us going.?”
This whole last bit just stumps me. I am going to sound facetious here but did you actually read what I wrote or did you just skim over it looking for buzz words? The whole point of my post was this: I know the system is broken. I know the government is corrupt and that corporations are in collusion with one another to strip the average person of their wealth. In fact, it’s the third paragraph in that I state that, feel free to scroll back up and read it.
What I don’t agree with is the methodology the ’99%’ is using to try and enact change. There are only three outcomes to this situation that I see possible. The first, and most likely, is that it will fizzle into nothingness. Just like so much anger about this tax or that policy, people get bored or realise that their protesting is stopping them from seeing the latest episode of X-Factor. If this happens then all the screaming and yelling and complaining was for nothing and it was just a massive waste of time and resources.
Another possible scenario is that the protests actually take hold and suddenly there is an ‘Arab Spring’ situation. Judging by how desperately those in power would like to keep the status quo, the crack down by police could be viciously brutal and innocent people would get hurt.
And the third (least likely but nonetheless horrifying) possibility is that a revolution takes hold. That the people rise up and take back what is theirs. The streets will flow red with the blood of the elite and paradise will ensue. Just like in Russia in 1917.
None of these scenarios appeal to me and that is exactly what the whole article was about. I never said that I supported the banks or the politicians and I certainly never said that I thought the average person was being treated fairly. What I said was that their methods were inherently flawed. I even listed the ways I thought that the situation could be changed. I still stand by the fact that the only way to beat those sort of people is to play their game. They wrote the rules so playing outside them is about as dangerous as walking off the beaten path in Laos.
I want change but I don’t want it through bloodshed.
It’s hell being a Skeptic.
Tom Edgar from Down Under.
As a final note, please take note of the fact that my article was quite moderate compared to a lot of the diatribe on the internet. As such I take offence to having my words refereed to as puerile and juvenile. When arguing, the moral or logical high ground is always lost when attacks become personal.
Why Criminals Are Walking The Streets Of Melbourne
What follows is an explanation of why I believe that there are too many violent criminals walking the streets of Melbourne. Please keep in mind that this is just a collection of my inferences from experiences and conversations with people involved in the justice system. It’s actually a response to a question I received from twitter.com/quadhome who asked me why people who are arrested aren’t put on remand at the request of prosecutors.
Where violent offenders should be.
Basically it goes like this. A police officer arrests someone and holds them for questioning for a crime. It’s the police officers choice whether they want to hold them in remand or let them off on bail. If they want to remand them they need to get a bail justice (called a BJ) to come down and decide. BJ’s are one step below a judge and most of them are waiting to be promoted to magistrate. Problem is that there are way more BJ’s then there are promotion spots.
If a BJ remands someone and they end up being innocent then they get a black mark against their record which lessens their chances of getting promoted. So now there exists a mentality of letting almost everyone off on bail out of fear of getting in trouble for remanding someone who may end up being innocent (or more accurately someone who manages to get off for a crime).
If it’s a serious crime, the defendant has to go to court and a magistrate ends up deciding whether they get bail or not. As magistrates were once solicitors, there is a 50/50 divide between those who were prosecutors and those that were defence lawyers. So the magistrates who used to be defence attorney’s end up being quite left wing and tend to have a personal vendetta against police and public prosecutors and grant bail to crooks just out of spite.
Like I said, this is information I have garnered from people within the system (and specifically those on the blue side) and therefore my information may be quite skewed so please feel free to correct any of my assumptions if you know more about it than I do.
Ideally I envisage a system where those that are arrested for violent crimes (rape, murder, assault etc) are subject to mandatory remand as the media is rife with stories of horrific crimes being committed by individuals on bail specifically an article I read today that disgusted me:
Please keep in mind that mandatory remand and mandatory sentencing are two different matters, the latter of which I do not support as it removes scope for judicial discretion and reduces the chance of rehabilitation. I know that mandatory remand is not a perfect situation either but I feel that violent crimes are spiraling out of control in Australia and criminals are beginning to get the impression that they are immune to the justice system.
An alternative could possibly be the introduction of a specific court stream for violent crimes which expedites court hearings for violent offenders so there is less of a backlog of those waiting to have the judgment on their freedom heard.
What do you think?
Out
[EDIT] Sexual assault statistics are sketchy at best. Homicide is flat because it’s hard (or maybe just not easy) to kill people in Australia because we have (thankfully) quite stringent gun control. Assaults (bashings, glassings etc) are on the rise:
Courtesy of http://www.aic.gov.au/statistics/violent%20crime/assault.aspx
(PS What keeps happening in June of every year that makes assaults significantly increase?)
8000 assaults per month in 1995 compared to 16,000 per month in 2007 is a statistically significant rise. The Australian population did not double in those 13 years. In fact it only increased by 21.04%
[EDIT2] Well I just got schooled. See below with a post from my brother who is a police officer. I just want to reiterate that I prefaced this post by saying it was a collection of information that I had received from people in the justice system. Obviously there is some disagreement or I took what they said in the wrong way. Please read the comment for corrections to what I said. If I have time later I will apply the corrections to the original text. Cheers
The Insurance Herd Effect
Generally most of my thinking happens in class. Supposedly this should be a good thing, but I’m not always following the same train of thought as the lecturer or those around me. It was actually during a tutorial that my lecturer, Michael D’Rosario mentioned herd mentality and behaviour within the stock market.
This in turn sent me back to my days of completing a BSc, and the topic of herd immunity in regards to immunisations. I don’t want to get bogged down in semantics but seeing as this is the Internet I will digress for a moment. According to the European Journal of Epidemiology, herd immunity refers to:
“The proportion of subjects with immunity in a given population.”
Whereas the herd effect is proposed to be defined as:
“The reduction of infection or disease in the unimmunised segment as a result of immunising a proportion of the population.”
Basically, as a higher and higher percentage of the population is inoculated against a certain disease, the likelihood that a contagious individual is given the chance to infect an unvaccinated person is lowered. Once a certain proportion is protected, those without the resistance to the contagion are as safe as those with it.
Now stay with me here and try to follow my convoluted train of thought. According to the China Ministry of Health,
“In 2003, almost 45% of the urban population and 79% of the rural population had to pay for medical services out of-pocket.”
In my mind, insurance has always been a form of inoculation. You make an investment today, by paying a premium, and if something negative were to happen in the future, you already have your bases covered. Now whether it is preparing your body for fighting a disease, or preparing your bank account to pay a doctor to help you fight a disease, the idea is still pretty much the same.
Now in a lot of countries, in order to get access to proper health care, it is necessary to have health insurance or a fairly sizable income. Have neither of these, and you won’t be able to afford access to the medical professionals and pharmaceuticals that your body will need to fix itself in the event of disease, accident or injury. But getting sick, breaking a bone or falling into a diabetes induced coma does not only affect you. Your illness can be spread to others, your broken bone means loss of income for your family and falling into a coma can mean default on your debts.
Simply, I assume that those that burden themselves by not preparing for the inevitable event of health problems (especially in developing countries), also place a burden on those around them.
The question I raise is whether, much like the herd effect, there is a certain percentage of the population that can be covered by insurance, and successfully cover those that have not invested in it themselves.
So if I get the flu, will the person who I infect on the tram be statistically more likely to have access to a doctor to prescribe them medication to fight it? If I default on my debts due to loss of income after an injury, will my creditor have insurance to ensure that his cash flows are protected?
Knowing that roughly 60-80% of people need to be immunised against disease for the herd effect to be observed, could the financial markets assume the same tactic? Further to that why stop at a human population? What about the population of your portfolio? With significant diversifaction to eliminate systemic risk, could you hypothetically only counter the risk on 60-80% of your investments and still be considered a risk adverse investor?
Comments are very very welcome because I find this problem clawing at my mind late at night while I sit up in bed writing this. Guess I’ll need to attack my Risk Management notes from last semester to get a better answer. I will edit this post with any relevant information I find.
Out
[LINKS]
Michael D’Rosario http://www.deakin.edu.au/alumni/profiles/articles/michael-drosario.php
European Journal of Epidemiology http://www.springerlink.com/content/g65222662v6w5h34/
China Ministry of Health http://www-935.ibm.com/services/us/imc/pdf/g510-6268-healthcare-china.pdf
Ultimate Answer to the Ultimate Question of Life, The Universe, and Everything
So I was making use of my perennial time waster StumbleUpon, and happened upon this comic:
courtesy of jeremy vinar and mike fahmie <http://www.virtualshackles.com/212>
The joke, if you don’t know, is from Douglas Adams’ Hitchhiker’s Guide To The Galaxy series. A computer is created to answer the question of life, the universe and everything. It takes 7.5 million years to calculate the answer which ends up being: 42. I could go on to the rest of the story around this number but I’m not going to ruin a perfectly good book for you.
The comic strip itself however posed an interested question in itself, and I did actually wonder how long it would take to answer this question if the computational power of the computer were to double every 22 months.
Since I was bored in my Financial Markets class, that is exactly what I did.
Imagining that we start off with a notional ‘processing power’ of 1 and double it every 22 months, it won’t even be close to 42 years until we will have an almost instantaneous answer. That is, given that the growth in technology is constant.
This also assumes that a doubling in processor power will exactly half the time taken to complete a task. I’m not from an IT background but this should be a valid assumption.
So in roughly 17 years the answer to the famous unknown question that Douglas Adams asked could be answered almost instantaneously. Furthermore, HHGTTG was published in 1978 and as such, we can assume that given the processing speed then, Windows 95 could have completed the task. But don’t hold me to that.
Just to geek it up one more notch, suppose that the current processing speed of ’1′ was taken to be applicable to today (22 April 2011). If we began the computation now, and upgraded the CPU every 22 months, would there be a signifcant time saving as compared to waiting 17 years and then performing the calculation in an instant?
Sadly no.
Since the increase in processing power is exponential, a fair chunk of the first few years would only eat into a small percentage of the time, before an explosive increase in or around June 2024 would result in the completion of half the task in the 22 months timeframe.
I don’t know why I felt that was blog worthy but I’m already working on my next post entitled ‘Herd Insurance’. Hopefully it’s marginally interesting.
[EDIT] Thanks to www.alexsah.com for informing me that the law of increasing processor power is called Moore’s Law. More information about it can be found at http://en.wikipedia.org/wiki/Moore%27s_law
