Economy & Budget

MSM, seeking to frame OWS in context, brings some unfortunate editing. The hardships these kids suffered — one lost his computer cable — and comparisons to the Civil Rights movement exhibit inexperienced and youthful prose selections which poorly represent a rising generation. But there is here the feeling of a movement striving for a voice. A feeling that something is wrong; a dread, but it is not clear what the source is. It seems it has been wrong for a long time — most of these young people’s lives — and wrong at the center. In the last debate, for example, at least three Republicans announced that they willfully support the use of torture. It is not that they shouldn’t be elected. They should be sent into exile.

First many conservatives rallied around the former bankrupt Donald Trump and his birther presidential campaign. Then they rallied around Rick Perry, the pay-for-play politico who couldn't remember what government agencies he will close. While they shortchange Ron Paul and forsake Michele Bachmann, they cheer Herman Cain, who embarrasses some leading conservative women who should have given the various women raising charges against Cain a fair hearing but were reduced to lame talk about high-tech lynching, Clarence Thomas and Anita Hill.

There are still options for the Occupy protesters at that postage-stamp piece of private property on Wall Street known as Zuccotti Park. They could form their own free state right there in Lower Manhattan. Zuccotti Park could secede. Possibly the U.N. would grant it independent-statehood status. Probably so. The first “After America” state.

“Vermont independence supporters have played an active role in the Occupy Vermont movement,” the Second Vermont Republic, which advocates Vermont secession, reports on its website. “Indeed, Matt Cropp, co-founder of the Vermont Independence Alliance, is one of the principal organizers of Occupy Vermont.”

What would you say about a piece of legislation that allows a competitor to cut off the revenue stream to its competition based upon an unproven allegation?
 
What would you call a piece of legislation that destroys an alleged offender’s business without allowing it to first confront its accuser in a court of law?
 
What would you call a piece of legislation that allows major corporations with teams of lawyers to intimidate and drive their small competitors out of business due to a baseless claim or even an honest mistake?
 
Unfortunately, House Judiciary Committee Chairman Lamar Smith (R-Texas) calls this legislation H.R. 3261.

That Supreme Court Justice Elena Kagan emailed Harvard’s Laurence Tribe to say, “I hear they have the votes, Larry!! Simply Amazing” on the day the House passed the Patient Protection and Affordable Care Act will come as no surprise. They are all friends. Like Charlie Sheen, like Lady Gaga, like Hillary and Barack, Larry and Elena are symptoms of an endgame. The right thing to do, the noble and moral thing, is to ignore them entirely.

The “Occupy” activists are best ignored as well. They might be considered the spiritual children of Professor Rufus T. Firefly, who in that ’60s cult classic, “Duck Soup,” declared: “Whatever it is, I’m against it!” Marxist? No. Groucho Marxist, maybe.

Jon Corzine, who is considered by many one of the smartest fixed-income minds in the business, took immeasurable risk with the capital of his firm. It was revealed that the company was leveraged 40-1. In summary, the company only had 2.5 percent equity invested against risk positions.

Note: Even in the height of the sub-prime crisis, 40-1 leverage would have been considered extremely risky, where small movements in underlying positions could represent deleterious outcomes for investors.

With Newt Gingrich, Rick Perry and almost the entire Republican Party now imitating Ron Paul on the matter of Federal Reserve policy, let me suggest where I think Dr. Paul is brilliantly right, where I think he is disastrously wrong, and why I believe there is now a substantial danger of a recession that could be more severe than 2007 and 2008.

First, America and Europe are now repeating the policy mistakes of 1937 and imposing severe austerity at a time of economic slowdown that could drive Europe and the U.S. into a deep recession. I agree with Dr. Paul that the Fed should disclose far more; that there should be a significant audit of how the Fed has spent money; and that Fed policy has been radically tilted toward banks at the expense of individuals and small business. I also fear that Dr. Paul's idea of ending the Fed would guarantee a global recession and potentially a great depression.

Why do certain Republicans insist on calling those they disagree with socialist? Could this be why conservative candidates for president are becoming a weird national spectacle in 2012, and why conservatives just suffered a severe shellacking in Ohio? When Rep. Ron Paul (R-Texas) says Elizabeth Warren and public schooling are socialist, he is way out of line with mainstream USA.

Here is Ron Paul's problem. I have praised him for saying that there are valid grievances by those who believe that some wealth is unjustly earned by those who game the system. But then Paul turns around and takes libertarian ideology to such an extreme that he becomes an advocate for policies giving unjust windfall profits to those who game the system.

Seventy-five percent of our economy is built on consumer confidence, a foundation that is amorphous at best. Everything is great when going according to plan, but as soon as it gets hot in that kitchen you are left without any support whatsoever.

For our economy to be strong it has to be built on savings and investment. In addition to building up an emergency reserve, savings can enable you to invest in companies that will provide you with residual income — the foundation of building wealth.

I view Ron Paul and his supporters as a movement and a cause as much as a conventional campaign, in the same way I view Occupy Wall Street as a movement and a cause that originated far outside the conventional political system. For many months I have given a lot of thought to whether an alliance can be formed between authentic conservative populists and authentic progressive populists, and here is my thought today:

I listen carefully and respectfully to what Ron Paul says, and what Occupy Wall Street says. There are two levels of analysis. On the matter of the role of government, there will never be agreement. On the matter of private-sector solutions, there are profound and powerful opportunities for agreement.

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