London, England-Last weekend another bunch of Useful Idiots pitched their tents outside St Paul’s Cathedral not far from the London Stock Exchange and started hollering for capitalism to be brought down along with the banking and all other systems that keep human activity in order and functioning. The unions and other leftist groups like the Socialist Worker party are behind the food and facilities that keep the great unwashed going, seizing their chance to advance the cause, but make no mistake--this is no European Spring.
Arguably the one legitimate point the Occupy Crowd have, is that bankers and corporations are in league with government to control the economy and consequentially individual freedom. But this is corporatism, not capitalism. True capitalism relies on a free and open market, one where a bank that overleverages on bad investment decisions, will fail. Failing is an essential part of weeding out the bad apples. It is also a moral obligation, and without that premise, capitalism will fail every time. When institutions are not allowed to fail, and the taxpayer is asked to pay for other people’s mistakes, you no longer have capitalism. In a corporatist system, the grateful banks prop up the politicians, who in turn do their bidding with tax loopholes and regulations that create more moral hazard. Before you know it you’ve got a system just like Mussolini’s interwar Italy. And we all know how well that went. Italy is still suffering the effects of the corruption and black market which embedded itself into society at that time.
CNBC gave a great example of how the leftovers of this mentality clog the Italian system even today. Michelle Caruso -Cabrera cited the example of a taxi driver who knew someone who knew someone who after paying him 100,000 Euros, got a license to operate his cab. He, like other cabbies, fixes his prices to pay back the huge loan he had to take out. If licensing regulations are dropped to open the market, the cabbie is stuck with a huge loan, will have to lower his prices to stay competitive and work harder for longer. In his late middle age (and there are many others like him), this is not going down too well. Italian friends of mine tell me horror stories of needing no less than 100 permits before you can open a restaurant and that’s only if you know the right people.
It’s even worse in Greece where bureaucrats making up most of the middle class have been promised money for life. They justify their existence by devising rules that make it impossible for business to function competitively. It is more expensive to send, for example, a shipment of honey from mainland Greece to one of the outlying Greek islands, than it is to the rest of Europe. On top of this, Greeks just don’t pay taxes. They find all kinds of ways to fiddle their way out of paying taxes. One is to get your baby sitter to sit on your 26 ft yacht to make it look like you are renting it out, which is tax exempt. Plus everyone seems to know someone who knows someone in government who can’t seem to locate your paperwork when you’re on the hook for back taxes.
But the really nasty sting for Europe is the social security systems that were set up in the interwar years and which promised a safety net in old age to anyone who worked. In post war Europe industry grew and prospered due largely to the Marshall Plan and a baby boom generation that paid taxes. This tax income allowed the politicians to pay for more social programs to earn votes and remain in power. To counteract an aging population that had not reproduced itself, the immigration doors were left wide open to stop the system bankrupting itself, and with immigration came the added benefit of bought votes for leftist parties that promised benefits. However, many European countries are finding much of their immigrant populations are parasites helping to bankrupt the system, and uncontrolled immigration has created social tensions right across Western Europe.
Interference with capitalism went too far when socially misguided and vote hungry Democrat politicians in the US forced banks to lend to unqualified borrowers. Human nature always finds ways to get out of uncomfortable situations, and to survive, banks created the mortgage derivative system - the hot potato that for a while resembled a golden egg. All Western countries whose GDP has a strong financial services component are now loaded with banks at the point of going belly up if their debt isn’t forced onto the taxpayer--a global bill estimated at 40 trillion dollars and counting. If like most people you’re having trouble contemplating a trillion, start counting one dollar each second and you will get to a trillion in just over 30,000 years.
In a recent stress test, Credit Suisse reported there is a Euro 400 billion shortfall in the major European banks. Many of these like Deutsche Bank, Societie Generale, BNP Paribas, Barclays and Royal Bank of Scotland have already been bailed out by the taxpayer and it is still not enough. Plus it is the investment arms of these banks that trade on behalf of the pension funds. If the banks fail as they should do, no prizes for guessing the loser in this scenario. Immorality fails every time.
Interference in the free market continues with unions who hold corporations to ransom with collective bargaining
Interference in the free market continues with unions who hold corporations to ransom with collective bargaining. That in turn forces companies to turn to competitive labour sources like China and India and in the process, destroying the local manufacturing bases.
The West has become one giant debt bubble surrounded by sharp objects, with politicians promising even more to the growing disquiet of the middle class. Yet the leftist powers press on feeding the Occupy Crowd with food, medical care, political pamphlets, using them to try to force a system on us that will put us all back into the Soviet Era, but unfortunately this time without a free United States that the global oppressed can turn to.
With current polling in the UK showing people leaning again toward the union backed Labour party and rejecting the austerity measures of the Conservatives, we risk sliding further away from the freedom of capitalism and towards state control and the hard drug of social programs.
The gigantic moral failure of the major banks and corporations that happily got in bed with governments to control the economy and while enriching themselves is exactly what the Arab Spring protesters were fighting against in Egypt and Tunisia. With so much poverty in those countries and the complete lack of free market capitalism to enable individuals to create competitive businesses, the people are ripe to listen to anyone who will promise them a fair share of their country’s wealth. And that is currently the Muslim Brotherhood and the iron control of brutal Sharia law that they will install once in power.
The Arab Spring will be tricked into oppression, just as Westerners squeezed into less jobs and the corporatism that has blocked out free market capitalism will listen to the unions, collectivists and power mad politicians that care only about their elite survival rather than the good of the individual. For the inexperienced, indoctrinated young this may almost be excused, but for mature adults who refuse to look at history and understand that power plays just repeat themselves, it is wicked negligence.
In Europe there is a power play on for our freedom. Jean Claude Trichet, the former head of the European Central Bank has just spoken frankly to advocate imposed decisions from the central EU bureaucracy on states that are ‘straying’. If this comes to pass, there will no longer be sovereign states in Europe but a politbureau of elites controlling every minute aspect of our lives.
The Occupy Crowds are unwitting tools in this end game. If the squeezed middle class do not pressure the politicians to act morally and reform the banks and corporations back to capitalist principles, we are cooked. Get yourself a hammer and a sickle because working the field may soon be the only thing we will be able to do.
