Sunday, October 16, 2011

Occupy Wall Street: The Silly Demands

This list of demands came from It was posted by someone who's obviously oblivious to how .... well, oblivious to how life works in general. These aren't just childish... I think it's clear that they were written by a child. I also think it's clear that the Occupiers already know how remarkably unrealistic these demands are, as they're no longer on the site, but just for posterity I thought I'd post them here with a little comment. There's a second batch of 'demands' that I'll comment on in a follow-up post.
Demand one: Restoration of the living wage. This demand can only be met by ending "Freetrade" by re-imposing trade tariffs on all imported goods entering the American market to level the playing field for domestic family farming and domestic manufacturing as most nations that are dumping cheap products onto the American market have radical wage and environmental regulation advantages. Another policy that must be instituted is raise the minimum wage to twenty dollars an hr. 
The "most nations" that are "dumping cheap products onto the American market" can do so because they're not demanding twenty dollars an hour. They're not even demanding $7.25 an hour. Taken as a whole, this 'demand' means that your tariffs would have to be greater than the actual profit margin of the goods themselves.

So let's think about how that will affect our economy. Faced with fees greater than any potential for profit, the Chinese decide not to sell to the US at all. They will not sell at a loss, even to sustain a token presence in the market. Almost all of our electronics, lightbulbs, textiles are now made outside of this country, as are almost all rare-earth metals used in the manufacture of alternative energy sources and batteries.

I live in a former mill town, so let's just take textiles as an example. To make a cotton shirt, you need cotton. I drive through the former cotton fields every day... they're now forest. (for real, it's the Sumter National Forest). The mills that formerly processed that cotton into yarn, thread, and fabric have been torn down. Even if we wanted to re-commission them, they no longer exist, and would have to be re-built. The experienced workers who ran them have been retired for a generation. So we would be roughly five years removed from any new clothes if we adopted this 'demand'.

The same is true for electronics. We have out-sourced our expertise AND manufacturing. They do not need us to produce these products, and we absolutely DO need them to do the same. So while we will be unable to buy electronics that we want, they'll be available everywhere else. We'll want to export our goods, but we'll have priced ourselves out of every market in the world.

Would the Chinese suffer? Slightly, in the very short term. But they would reduce prices somewhat and open markets to what is currently the Third World, and re-raise those prices as those economies strengthened. Meanwhile we would exchange places with that Third World. 
Demand two: Institute a universal single payer healthcare system. To do this all private insurers must be banned from the healthcare market as their only effect on the health of patients is to take money away from doctors, nurses and hospitals preventing them from doing their jobs and hand that money to wall st. investors. 
This person has no idea how insurance works. For the record. Here's how it works, in terms that anybody can understand:

People buy insurance. Insurance is sort of a bet. When you buy health insurance, you're betting that you'll get sick. The insurance company is betting that you won't.

Every month, if you don't get sick, you lose the bet, and you make another bet. This is called paying your premium. You need to pay your premiums even if you don't get sick, because this is how the insurance company collects enough money to pay off on their bets. But be assured that this is NOT like paying into an account. Insurance is NOT pre-payment. The company has no obligation to return your stakes just because you lost the bet. A bet is a bet. 

If you do get sick, you win the bet, and the insurance company pays off on the terms of the bet. Of course, you have to keep up your end of the agreement, too. So if the bet says that they'll pay for your doctor's visit minus a $20 "co-pay", it means you're going to pay the first $20 of the bill, and the insurance company pays the rest to the doctor, the nurse, and/or the hospital.

The insurance company pays off the bet with premiums from other bettors who didn't get sick, as well as with reserves that it has set aside for such a purpose. An insurance company with lots of reserves is able to pay out, even if a lot of people get sick at the same time, so large reserves are not because of greed... it's a sign of a stable company... one you want to insure with. The last thing you want is to buy insurance with a company with slim reserves.

Like any bet, there are odds. You don't get all the money you want if you bet on a horse race and your horse comes in first. The track couldn't stay in business if you did, because they can't give everybody "all the money". Likewise, insurance pays up to a certain amount for the very same reason. If you're a bad risk and make unhealthy choices (like smoking), then they'll change the odds. In racing, this means that the more likely a horse is to win, the less difference there is between the amount of your bet and the amount of the payout.  In insurance it's exactly the same, except because they can't do much about the payout they have to raise your premium.

Notice something about this system? The insurance doesn't "take" money from anyone at all. They sell you something you want; healthcare coverage. You make the bet; you give them money. They pay out to the very people the author of this 'demand' thinks they're taking from. And limits on coverage are NOT because they're evil and greedy, but so they can continue to cover the most number of people. These other insured people are just as important as you.

Actually, they're probably more important than you. Here's why I say that: insurance (any insurance) is a funny business, in that it only pays out if something bad happens to you. Sure, you win the bet, and that's good, but you got sick, and that's bad. The same is true with auto insurance: have an accident and they'll fix your car, but oh snap... you had an accident. You're betting on losing, so if you have any sense whatsoever, you'll do what you can to avoid winning the bet. You'll live right, you watch what you eat, exercise, and just in case all of that's not enough, you'll buy insurance. You do all of this because it's your body, nobody else's, and nobody else is responsible for it... just you. And if you can't be bothered to recognize all of that as true, omitting not one solitary piece of it, then the guy who does recognize it for himself is more worthy of society's attention.
Demand three: Guaranteed living wage income regardless of employment. 
Paid for by whom? And if you have a guaranteed living wage without even trying to seek employment, where's the incentive for seeking employment at all? Who's going to make anything for you to buy? Who would work in a box factory if he can get a living wage for just sitting on his butt playing Nintendo? The very first answer that most people give when asked what they'd do if they won the lottery is, "quit my job". What you're proposing here is identical to having everyone, everywhere, win the lottery jackpot.

There will be no workers.
Demand four: Free college education. 
I have a completely different soapbox for this issue. First, you seem to believe that a college education is necessary, and that's a lie. It is a lie told to you by people who's business it is to sell college educations; and while they themselves are well-educated, they're also human, and have committed the grave error of thinking that everyone needs what they want. Some of the very highest paid jobs need no college education, and many, many people are not suited by temperment, ability, or desire to continue in academia. To be a plumber and earn $60 an hour does not require a diploma; you need a wrench and a desire to work. To put off actually working toward having your own plumbing business (or electrician, or carpenter, etc) while racking up many many thousands of dollars in student loan debt is  quite simply destructive. A trade school and/or apprenticeship, for many, is the superior choice. It doesn't take a college education to do the math and see the truth for what it is.

College, if you're so inclined, should be done for a purpose. If it is valuable to you, then there are several roads to success: 1. your parents might have saved for you. But no one anywhere is guaranteed rich parents. 2. You work your way through college. 3. You take out a student loan, paid back from your future (presumably higher) earnings. In each of these scenarios, you (or your parents, if you're lucky) make the investment. If your having an education is valuable to others, then it is paid for through scholarships. The way to attain a scholarship is to work hard so that you can convince others that your education does have value to them. But if your education is of value to neither yourself nor others, quit your bitchin' and get a job.

I'm serious.
Demand five: Begin a fast track process to bring the fossil fuel economy to an end while at the same bringing the alternative energy economy up to energy demand. 
We're not done with this one. Wait for Demand seven.
Demand six: One trillion dollars in infrastructure (Water, Sewer, Rail, Roads and Bridges and Electrical Grid) spending now. 
Why one trillion? Only because it's a big-sounding number that people have heard a lot lately. Sadly, we wouldn't have the trillion because we're giving it away already in free education and paying for your healthcare, living wages for doing nothing, and $20/hour wages.
Demand seven: One trillion dollars in ecological restoration planting forests, reestablishing wetlands and the natural flow of river systems and decommissioning of all of America's nuclear power plants. 
Remember Demand five? Forget it. We really just meant, "shut off all the lights, permanently". When talking about "alternative energy sources" we can forget all about hydroelectric power. We can forget about nuclear power. Wind energy is feeble, and where it can be used we can hamstring it by requiring ecological impact studies. The same for industrial solar. So what's basically left is small-scale solar, and we'd better throw on some regulation of the solar cells, since the materials might need to be mined and might have ecological impact if released into the environment. Since our storage batteries and solar cells use materials from China, then we can slap some hefty tariffs on those as well.

It's OK, though. The almost complete inability to generate power won't matter, because we won't be able to buy electronics or light bulbs from the Far East thanks to Demand one.

Ah, the Amish life... it's not retro, it's prophetic.
Demand eight: Racial and gender equal rights amendment. 
That's actually a great idea. It's called the 14th Amendment, section 1 of which reads as follows:
Section 1. All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside. No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.
I jumped in my time machine (it's powered by unicorn farts, which are environmentally friendly and smell like daisies), went back to 1868 to have it enacted and ratified. Of course, you might remember it as having always been there, but I assure you, I just put it there in response to this 'demand'.

The alternative to my far-fetched story is that the author of this 'demand' has never read the Constitution and has no idea what's in it. BTW, this particular clause is why an ERA has never passed... it's simply already there. A new amendment would not change anything that can't be changed with simple enforcement of the one we have -- it states everything it needs to state, simply and clearly.

(Actually, I made one little error here. Given a second chance, I'd change the word 'born' to 'born to a United States citizen'. That would eliminate the 'anchor baby' loophole for immigration)
Demand nine: Open borders migration. anyone can travel anywhere to work and live. 
We'll need that so we can have illegal immigrants to do the jobs we can't afford to pay $20/hour to do. There will be as many of those jobs as there are today, but we'll be prohibited by law from filling them with Americans due to Demand one.

Of course, it works both ways, too. Due to the high cost of labor in the US, factories will scatter like roaches in the light to Mexico and Canada. After Demand three sucks the Treasury dry, we'll need an open border policy to allow our workers to go there to work for whatever they can get. By then, having benefited from the migration of business, rich Mexicans can afford to hire wetback gringos to clean their pools. Sadly, this assumes the Mexicans will be as lax with their immigration as we have been. A rude awakening will follow.
Demand ten: Bring American elections up to international standards of a paper ballot precinct counted and recounted in front of an independent and party observers system. 
Yes. Because we know how well Iranian elections work. Actually, we did that in Florida, paper ballots, recounts, observers and all. I actually lived in Broward County, Florida, the very source of the 'hanging chad' jokes. I used those ballots. I now live in South Carolina, where we use electronic ballots, and they are superior to paper in every conceivable way. All it takes to invalidate the infamous paper 'butterfly ballot' is to surreptitiously poke another hole in it while counting. That's it.  The electronic ballot is clear, easily readable even if you have moderately impaired vision, and very easy to use. After voting, it re-displays your votes to you and asks for confirmation. It offers you a chance to make corrections. It keeps an audit. It automatically counts.

Of course, the author of these 'demands' doesn't remember that these electronic ballots replaced paper ballots for a reason because the author is a child.
Demand eleven: Immediate across the board debt forgiveness for all. Debt forgiveness of sovereign debt, commercial loans, home mortgages, home equity loans, credit card debt, student loans and personal loans now! All debt must be stricken from the "Books." World Bank Loans to all Nations, Bank to Bank Debt and all Bonds and Margin Call Debt in the stock market including all Derivatives or Credit Default Swaps, all 65 trillion dollars of them must also be stricken from the "Books." And I don't mean debt that is in default, I mean all debt on the entire planet period. 
More evidence that the author is a child. Let's very quickly explain how banking works.

Perhaps you have an understanding of banking that imagines your money to be sitting in great piles of cash on shelves in bank vaults. This is completely wrong. Most money doesn't even exist in physical form. Even if it did, you wouldn't want to forgive all debts because you're currently loaning your money out.

When you put money in an account that earns interest, have you never wondered why it earns interest? Why would a bank pay you to keep your money for you? After all, they're providing security and storage; they have to pay for their employees and building and utilities, just like everybody else. What's in it for them?

Well, what's in it for them is that when you opened your account you gave them permission to invest your money on your behalf. They take that money that you deposited, and that's what they use to make loans. Where else did you think they got it? The interest you receive is your portion of the profits of the loans that were made. To summarize, they take your money, put it with the money from other depositors, loan it out, and pay you back some of the interest of the resulting loan payments. And do you know what this means?

It means that your money is not there. 

Oh, if went to the bank and withdrew all of your money, they'd give it to you. But they couldn't give everyone all their money if everyone went to the bank at the same time. In fact, this is called 'a run on the bank', and there are laws that require them to shut down if such a thing were to happen. If such a thing were allowed to happen, then the bank would have to default on payment (meaning you wouldn't get paid at all, ever), and it would become 'bankrupt' (the bank ruptures... and now you know the origin of that term).

What is being proposed here is that all banks go bankrupt at the same time. You are then left with whatever money and property you have in your possession at the time. If you just bought a house... hey! Free house! If you just sold a house... sucks to be you! Your credit card is immediately paid off, but it's also immediately worthless, because no one will ever loan you money again, ever. Even if they wanted to, they couldn't, because you just gave all of their money away to people who will never, ever pay them back.

Now imagine you just sold me a new car (or house, or anything). I suddenly tell you, "Thanks for the car, I'm keeping it! You're out a car, and you're out the money for the car, because I think you should forgive all your debts, and you have no say in it. So there." If the least you did was bang up the car with a baseball bat I'd count myself as having gotten off scott-free. If all you did was break my kneecaps with that same bat I'd count myself lucky you didn't do more damage.

This is a stupid, stupid demand.  It is guaranteed anarchy and revolution, and not in the way you want. The people who would suffer most would be the ones who called for forgiveness, and you can be certain they would never be in a position of public policy making within generations of the sad event.


They're demanding this for the planet. Like Doctor Evil, with a pinky in the corner of their collective mouth, make their demand... and when the laughter dies down and the foreign investors realize they're not getting paid, the US will be cut off from all foreign trade, and the dollar will be discarded in favor of the Euro in international transactions. No dollar will be worth the paper it's printed on when doing business outside the US.

But hey, we'll have some spiffy roads, even if we don't have money for gas.

Demand twelve: Outlaw all credit reporting agencies. 
Credit reporting agencies are there to keep you from going from one place to another, racking up more debt than you can possibly repay. Failure to pay your debts can land you in jail. Credit reporting agencies protect not just the lenders, but you as well, because it's better to be poor than in prison.

Of course, the author of this 'demand' has already found out that he's not allowed to simply take money that he can never repay, and that's his motivation for making the 'demand'... he wants your money, that you earned, and he's not giving it back, and says so flatly in Demand eleven, and because you won't just roll over and give him what he wants, hasn't earned, and has no intention of repaying, then you are greedy.
Demand thirteen: Allow all workers to sign a ballot at any time during a union organizing campaign or at any time that represents their yeah or nay to having a union represent them in collective bargaining or to form a union. 
Let's give them baseball bats, too, so they can bust in the knees of people who want to work, but don't want to join the Union. After all, it's worked in the past.

The basic idea of a union is that it only works if every single worker stands united. That way the union can withhold labor until its demands are met. It is therefore never in the best interest of the union to allow anyone to work who is not a member. If a company were allowed to just hire other workers without the veto of the union, then strikes would be busted simply by hiring other workers to replace them. With unemployment at 9.5 percent, that's not exactly difficult. So the very first goal of a union is 100% membership. With that in hand, they can negotiate a deal with the company that allows the union to approve or veto all workers, and require mandatory union membership for employment. We see this in principle and in practice.

In the short term that works. The company continues to do business and the labor union members are very happy that they have bigger paychecks and more benefits. For a while everything seems fine.

But the union very quickly gets very, very greedy, all the while pointing the finger and claiming that it's others who are the greedy ones. The cost of labor skyrockets, because nothing at all can get done if the union demands aren't met. Lazy employees can't be fired because they're union members, and their jobs are protected. Even if wages remain fairly constant, as employees retire, the cost of doing business increases dramatically as the company has to maintain exhorbitant retirement plans for an increasing number of retirees,  at ever-earlier retirement ages. Eventually the company simply can't compete in the marketplace.

So what happens? Plants shut down, manufacturing moves to other countries and to places with lower cost of employment, and most especially, non-union plants are opened. I live in South Carolina. We don't like unions for ourselves, because we've found that factories generally pay us pretty well without them. It's in their best interest to do so, since otherwise we'd unionize, and they've already had that sad experience. We love unions in other places, though, because they drive business into our sunny and friendly state.

Our solution is to be competitive, which is a damned sight better than this silly 'demand'.
These demands will create so many jobs it will be completely impossible to fill them without an open borders policy.
I earlier stated that the author was a child. I'm now beginning to think he's an Underwear Gnome.
Step 3: PROFIT.
Now let me make this clear. I want you to get the healthcare treatment you need. I want you to have a decent standard of living. But I don't necessarily want to make this easy for you. More specifically, I don't want to go easy on you. Because that's the sort of thing that gets us in to financial messes. You have to be made to take responsibility for your life and to work for what you have so that you value it. Valuing what you have enables you to be sympathetic and charitable toward others so that they can have what they need. But no one owes you a living wage. You must do your best.

Coming up...

There are some other demands elsewhere on the web. Next up, I'll have a word or two to say about them.


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