Occupy Wall Street Can Now Turn From Identifying the Problems, to Tractable, Easily Understood First-Iteration Solutions
Reality is broken. Our financial and compensation system is busted. I don’t want to see the Occupy Wall Street movement, which I feel is essentially a beautiful and powerful activator, crumble illogically into class warfare. Being an entrepreneur, I believe in a capitalist meritocracy—I believe it is the right of every entrepreneur to make a boatload of dough—and I’m quite certain I’d make a great billionaire. That entrepreneurism part exists—an innovator creating a new product that lots of people want and use can strike it rich. But these people account for a very small percentage of the folks who make up the so-called 1%.
The financial industry and corporate compensation games are rigged to “tip” in favor of those with the most money. Most of the folks that have earned the bulk of the last 30 years of gains are the super-rich. Look at the “Winner Takes All” graph compiled by Mother Jones here (http://d.pr/tRBH). Productivity has surged in the last three decades.
The income of the top 1% has *outpaced* it by triple, but the median household income has underperformed by triple. That’s hardly fair. If the average household income—I’m not talking about the wanton jobless, or welfare recipients—the average, family woman and/or man working their ass off to make it work *should* be making over $90,000 per year if one projected economic growth from 1979 till now, but they’re not. Their average household income is $50,000. Entrepreneurs and top executives can’t make it to the top (or stay at the top) without these hardworking folks. The gap is too wide. Entrepreneurs know it, and regularly give those working under or beside them a meaningful piece of the pie.
We live in an age of diva capitalism. Top execs in established industries and companies make nearly 200 times their average worker. People with high net worth make higher interest rates off their money, or get access to invented “financial instruments” to maximize capital gains returns, making money off their money (not products or services they create). The financial industries are skewed to punish the lower income strata (know anyone who’s tried to get a bank to loan money lately, or re-fi their house?) and reward those with big money. Banks have dreamt up all manner of obscure and ridiculous ways to “make money off of money”, far removed from actually making a tangible product or service rooted in providing value to the world—that is, more than just providing monetary value to those who’ve attained elite levels of net worth. I wouldn’t care about this, and let these bankers living in rarefied social and commercial atmospheres do their deeds, if what they were doing wasn’t endemic to the overall economy. I’d be happy to let these creative financiers come up with any scheme they want, but the downside to all this gambling affects *everyone*, and effects the less fortunate substantially more profoundly than those with very high net worth.
It’s not like if it were creative finance in, say, the furniture industry or consumer electronics industry or the entertainment industry. The financial industry pervades *everything* and these people simply shouldn’t be allowed to invent ways to create profit for themselves and their clients, create risk for everyone else, nor privatize gains and socialize losses like they’ve done three times over the last several decades, claiming they’re *so* important that taxpayers need to keep them solvent. That ain’t capitalism, unless one defines it as doing any disingenuous, subversive and self-serving thing to preserve your phoney-baloney job and grotesque bonuses. Remember folks: we can collectively survive and flourish *without* the banking industry, they cannot do so without us.
I’ll go further: I don’t believe in “making money off of money” unless it is:
(1) simple-interest,
(2) direct investment in companies or people—venture or operating capital betting on the “success” of companies, not their failure, or
(3) a simple stock market—simple, first-degree derivatives where again one can only invest in the success of a company… not leaps, shorts, credit swaps, and all the other gobbledee-gook invented by superficially-creative quant-brains with a cool algorithm and too much time on their hands.
Why do we as a society *need* any more than this?
If we abolished the more exotic financial instruments, perhaps those with big capital would be more inclined to seek out more innovative investments in products and services focused on creating a more equitable and sustainable society and planet.









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