The Myth of the 1% and Other Occupy Wall Street Crumbs


I just stumbled across this great article from the Cato Institute, which was posted on my Facebook feed, of all places.  It’s a commentary on Occupy Wall Street and how things aren’t always as they initially appear.

I have a lot of university friends who have been involved in the protests in San Francisco and Denver.  I want to be clear that I think it’s great that young people are politically active at all.  I think that’s a great step in the right direction, in some respects.  However, I think that people also need to get it clear in their minds exactly what they’re protesting against.  Although I know that my friends who are involved have it in their minds politically what they want – which, believe me, is a far cry from what I’m after – I maintain that most of the people involved, while well intentioned , are somewhat (okay, a lot) misguided.

The Cato article, written by Michael Tanner, makes some incredibly compelling points about the wealthy in America today.  Eighty percent of all millionaires in America are the first in their families to be wealthy.  The wealthy also work longer hours than lower wage earners.  You can check out the article for a break-down of the makeup of some of this slice of society, but the majority seems to be made up of professionals and entrepreneurs.  That’s not exactly what we’re being led to believe, is it?

Also interesting to note is that since 2007, there has been a sharp decline – by 39%, in fact – in the number of millionaires making over $10 million per year.  The super-rich have been hit even harder with a 55% decline.  Also interesting to note is the short but sweet expose on the likes of Warren Buffett, who made the claim that his secretary gets taxed more than he does.  That probably has to do with the fact that most of earnings come from capital gains, and therefore the money is taken out in corporate taxes.  Most damning of all is the fact that the rich earn 16% of the total American income, and they pay 36% of all the income taxes.  Suddenly, it doesn’t quite seem as though the rich aren’t paying their share.

Ultimately, what these Occupy Wall Street protestors fail to see and/or comprehend is that the government doesn’t create jobs – the private sector does.  And the rich are in a far better position to hire these down-and-out folks than other poor people or our bankrupt government.  So many of these protestors see the government as the center of everything.  They have no idea how economics in the real world work.  They think that if we raise the taxes of the middle class and the rich and put that money into the hands of government, regulate the heck out of what’s left of the private sector, and demand more workers’ rights, it’s somehow going to fix the problem.  People have got to wake up and realize that government IS the problem.

For every dollar that goes into government hands, it’s a dollar taken away from the private sector.  It’s a dollar taken out of the hands of private citizens who may spend that money however they like.  The only way a government can create jobs is by expanding its own already enormous girth, and that ultimately kills more jobs than it creates.

Look at the other things that the government spends its money on: air conditioning in Iraq, missiles to chuck at Libya, maintaining Camp Humphrey outside of Seoul, paying appallingly high salaries, pensions, and benefits to Congressmen, and paying for programs that purport to life people out of poverty but are, in reality, doing anything but.  We have lost the war on drugs, the war on poverty, and now we are losing the war to maintain what little freedom we have left.

So what’s the solution, you ask?  It starts with education.  Get down to those protests and try to educate people on what we should really be protesting – the Federal Reserve, the endless wars, the expanding government, the war on drugs, low interest rates, and endless government bailouts.  Let’s talk about the government regulating us to the point where we can’t drink raw milk, if that’s what we want.  We can turn the tide, but we’ve got to get the word out.  It’s up to us to help people understand that true freedom isn’t something given to you by a government authority – it’s something with which we are all born and, unless we are careful, are very liable to find ourselves without, and we won’t even know how we lost it or why.

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About The Lady Libertarian
I am American, currently expatriated but hopeful about getting back home one of these days. Besides reading and writing about politics, I enjoy camping, sailing, canoeing, making pie, and traveling. I hope you'll enjoy this blog and find it informative and accessible.

6 Responses to The Myth of the 16 and Other Occupy Wall Street Crumbs

  1. Beth says:

    I totally agree with this. I completely believe that I know better what to do with my money than the government does. Why should I pay the government to make laws that tell me what I can do? And people need to quit hating on the people who have money- it’s likely they worked hard for it and took risks that those people did not. So how are they entitled to that money in any way, shape, or form?! If you take the money from the rich and give it to people whining about being poor, you take away the motivation to work hard. Why should the rich make risky investments and work their asses off if the government is just going to swoop in and take your hard earned money and give it to some bum who thinks they are too good for the jobs that they can get (brings certain people who I won’t name to mind. lol). And people like my dad already pay a LOT of taxes. And yet he’s spent his life working 50-80+ hour weeks, weekends when it demands, and taking risks investing in businesses that employ a lot of people (including myself). It’s rarely the case that people were just born into wealth, but even in that case, if someone works hard and wants to give that money to their children, then they are taxed on that too, even though they were taxed when they made the money- but it should be at their discretion what they choose to do with that money.

    Seriously though, whenever I read about issues like that, if I want to get annoyed all I have to do is go to the comment section and read all the whiny comments about how the “rich” people are the “bad guys”. It annoys me to no end, people thinking the government should be the one to just “hand them a job”. -__-“

  2. I agree 100%. When my family’s business was still going, taxes and government mandates were killing us. It actually made it impossible to keep the doors open. On top of that, my folks were paying high taxes on their personal income. It was never just a 9-5 job for my grandpa and my uncle. There were no extended vacations, because the business had to be taken care of year-round.

    I really want to get behind Occupy Wall Street, but I just can’t. All I see is a bunch of entitled, jealous people who don’t understand how economics and government work. They think that making more laws is going to improve everything. It’s not that I don’t understand why people are frustrated, because I do. This is a trying time. I’m scared to death that I’m not going to be able to find work in the States. That said, I don’t think anyone owes me a job, and I’m certainly not deluded enough to think that the government can provide it for me. The government is/was the main perpetrator in this whole mess.

    I do think there are rogue traders on Wall Street, and I do think certain large corporations get preferential treatment by the government. That being the case, it makes no sense to increase the scope of government. That spells out a crackdown in individual liberty and greater opportunities for corporate America to exert its influence over our lives. Like it or not, the government shows who it prefers based on where it puts our tax dollars and who or what the gobs of new laws favor.

  3. Beth says:

    Yes, exactly. I understand it’s a hard time and I get frustrated at times too. It’s tough. But I agree, people don’t really understand. My job is to deal with all the regulations and red-tape- so I see firsthand what kind of burden it puts on businesses. So thinking that this bloated and wasteful government is going to “fix” all these problems, when they are in fact the source of many of these problems, just isn’t the answer.

  4. Holly says:

    You’re right (kind of) in saying that the government doesn’t create jobs, the private sector does. But part of the problem is that the private sector isn’t “about” creating jobs; it’s about creating a profit. So most of these companies, when they expand, ARE creating jobs, but these jobs are created in lesser developed countries with cheaper labor. They’re not doing Americans ANY GOOD.

    In fact, I would argue, that a totally free market, left unregulated by the government, would result in fewer and fewer small, locally owned business who actually are employing locals, and more and more corporate giants who are creating far more jobs abroad than here and who get away with human rights violations left and right.

    I don’t think the 99% is really in favor of MORE government, and in that sense, I think you may have set up a straw man. What they are in favor of is an efficient and effective government that, rather than being in the pocket of big business, is actually doing their job of making our country better. I’m NOT saying that I believe our government always (ever?) accomplishes this goal, but when they’re doing a poor job, I am glad that people are willing to get out into the streets and say so.

    I have to say, I’m a little sad to be abroad during what I hope will turn into some kind of substantial revolution, perhaps akin to the Arab spring. Love you babe, but I completely support OWS and think it’s right on target. Wish I could be there.

  5. I understand where you’re coming from, and honestly, I’m all in favor of taking to the streets. That’s not the issue. I think it’s great that people are pissed off enough that they want to hold someone accountable, which is a nice change in America, frankly.

    Perhaps you’re right about the entire 99% not being in favor of more government; it’s very difficult to make a blanket statement about a group that big. However, if you look on the OWS website, it very clearly states what the initial movement was about, and it was about increasing government. That can neither be argued against nor denied. The people I know who are involved with it are, by and large, in favor of a stronger government. I just find it incredibly ironic that they’re calling for more government as the government throws them in jail.

    I agree that most of the government is in the pocket of their handlers, and that needs to change. However, giving more power over to the government creates crony capitalism. In a sense, a decentralized, inefficient government keeps big corporations at bay. Personally, I’m in favor of all corporations having to renew their charter every so often, as that used to be the case. They had to prove that they were doing good for the public in order to remain in business. Rockefeller changed all that with Standard Oil.

    Yes, you’re right. Businesses are about making profit. Otherwise, they can’t stay in business. However, I will disagree with any blanket statement made about business owners, saying that they don’t care about their employees. This would be more likely to be true in a large corporation, but it is not the case in small to mid-sized firms. They do care about keeping their employees. Unfortunately, between the federal and state corporate taxation systems, the USA has some of the highest taxation rates in the world, around 40%. Compare that to even Europe, which averages around 25%, and it’s not hard to see why a company might consider fleeing to a “tax haven.” At that point, it becomes more about survival.

    What really needs to happen is that we end corporate welfare, and I do think that lots of OWS people are in favor of that. We need to do several things: end programs that provide direct grants to businesses; eliminate programs that provide research and other services for industries; end loan and insurance subsidy programs; eliminate protectionist trade barriers that maintain artificially high prices (the sugar industry, weirdly, is a great example of this costing the economy every year); base defense contracts on the actual need of the project rather than the number of jobs created in a Congress member’s home district; eliminate tax loopholes that are specifically created for certain industries and companies, and; lower the overall income tax rate so that there is no net revenue increase.

    The fact of the matter is this: American businesses are over-subsidized, but they are also overtaxed and over-regulated to the detriment of the consumers and the workers.

    In a non-confrontational light, I agree with you: I’d like to be home partaking of the revolutionary aura in the air right now. As I said, I agree wholeheartedly with the sentiment, but not with the official, original line of OWS. See, I’m far more in favor of going and Occupying the Fed. Now THAT would really throw a chink into the armor of the real villains in this whole power game! Sound money and preventing perpetual monetization of the debt is an issue that is at the heart of this whole matter, for sure.

  6. P.S. Thanks for looking, Hollis! I’m surprised to see you here!

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