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‘Occupy Wall Street’ — It’s Not What They’re for, But What They’re Against

October 23rd, 2011 · 2 Comments

– Robert Light

Sally Kohn has penned a fantastic column on FoxNews’ website – it should be read by everyone because it sheds real light on the Occupy movement…. as much as a “breakthrough moment” might happen in your therapist’s office.

Her basic premise is that what is fueling the Occupy folks is the incredible disparity in income between the so-called top 1% and the so-called “99%”.   Her point is that this is not “class-envy” per-se but a outcry that the very disparity in incomes is an “injustice” that needs to be rectified.  She does complain about “crony capitalism” (without defining it) and in that sentiment, I agree with her and she would find great resonance with the TEA party folks…..but what was really revealing was her statement:

“Sure, bank executives may work a lot harder than you and me or a mother of three doing checkout at a grocery store. Maybe the bankers work ten times harder. Maybe even a hundred times harder. But they’re compensated a thousand times more.  The question is not how Occupy Wall Street protesters can find that gross discrepancy immoral. The question is why every one of us isn’t protesting with them.

I will try to answer her question.

In the interest of “full disclosure”, I will begin by saying that I applaud the Occupy folks protest against corporate interests writing our legislation and controlling our politicians to the betterment of their own financial position and at the expense of the public’s.  I think in this “grievance”, the Occupy and TEA party folks are in total agreement.

What I find with Kohn’s statement is a deafening level of ignorance of what capitalism is all about.   I will illustrate this with a joke.

There was once a manager of a power plant who had a large turbine generator which was experiencing excessive vibrations.  He called a famous MIT dynamics professor to help him solve the vibration problem.  The professor came in, listened to the vibration and then stroked his beard… he called his assistant over and said “please bring me a ladder and a piece of chalk.  The assistent dutifully brought the items to the professor and the professor climed the ladder up to a single blade of this huge turbine generator.  He drew an “X” with his chalk on the blade.  The professor turned to the manager and said “weld a 5 pound piece of steel at the X”.  The professor gently climbed down and went back to MIT.    A week later, the manager of the power plant called the professor  and exclaimed – “Professor, you are a genius…it worked!!  Please send me a bill for your services!”.  The bill arrived…it said “Consulting services $1,000,000.50”   The manager was shocked – he wrote back to the professor “Could you please itemize your bill for us?”… The professor sent a new bill:  ” Chalk…..$0.50,    Knowing where to draw the “X”:  $1,000,000″

What Sally Kohn doesn’t understand is that people get paid money not for how “hard they work”…but because their work is valuable to the person paying the money.  The people paying the money find that the large sums of money they are paying to these people is really a bargain – they are making even more money than it is costing them paying these large fees.

Granted, I am not going so far as to say that fees paid as bribes, graft and corruption should be tolerated – even though those bribes are “worth it” to those paying the bribes – bribes are bribes are bribes and should be rooted out at all levels…. but to cite a ratio of “highest-to-lowest” compensation as some kind of morality-metric is simply stupid.

What the Occupy folks should be asking themselves is ‘what can they do that is more valuable to the person paying them than the compensation they get for doing a particular job”.  If what they are doing can be done by a person in India or China for 1/10th the salary – their job is in jeopardy of disappearing overseas.

The answer to that question is scary and the youth today should in fact be scared – but to sit on Wall Street and scream about and tearing down “the rich” because they do things that other people find valuable is not only unfair and imoral – it is self destructive…. for it is the “rich” who are paying the bulk of the taxes and give the bulk of the charity and employ the bulk of the population.

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2 responses so far ↓

  • 1 TheOne // Nov 17, 2011 at 1:08 am

    Actually, I believe you have missed the mark. The question here is “What has the richest percent of the wealth done that is more valuable that is more valuable to the person/people who are paying them (some people probably without even the knowledge that their money will end up in these peoples’ pockets) than what anyone else does?”

    To be fair, I am not an expert and will admittedly be incapable of writing a comprehensive answer. Also, haven’t given OWS much attention outside of watching the news, so I can’t make a statement for them.

    However, I believe that is a fair question. The answer is different for each member of this top 1%, but could include anything from “Because they knew where to place their stock”–which, often, is a great deal of luck. True, there is knowledge and skill required, but if it had been such an obvious increase in value, more than 1% of people in the stock market would have bought in.

    Also worthy of consideration, that top economic tier is able to invest such a great deal of money compared to the rest of us. Avoiding a full paragraph of math that most people should be able to figure out for themselves, the rich have the means to get richer, while the working class is doing well to maintain economic stability. if a rich man and a working-class man both invest their life savings into the same deal, the wealthy man would make millions or billions, versus the thousands that a factory worker has done.

    I must ask, then, how you justify that joke. Which really took more skill–knowing where to place the X, or creating a piece of steel weighing exactly five pounds? Is mental labor (i.e. advanced calculations) really more trying than physical labor? I don’t deny that it’s trying, and that the factory worker who created that piece of steel could do it. But I also doubt that the professor could sculpt a perfectly five-pound piece of steel, attach it, or maybe even lift it.

    To do his job, the professor requires mental capacity not possessed by most. However, to craft or weld that piece of steel, someone required precision and patience not possessed by most. Arguably, many physical jobs are easily completed by machines, but I highly doubt that professor did all of those calculations in his head. He could use a calculator–just as a factory worker could use a machine. And, just as an ignorant fool could put steel and heat into a machine to achieve a perfectly five-pound piece of steel, an ignorant, weak person could have measured and entered the dimensions into a calculator, using formulae found on Wikipedia.

    Did the professor really deserve 1,000,000 USD as opposed to the 7.25 that the factory worker made? Do you really understand what you are

    The “youth today” is indeed scared of outsourcing, but that has little to do with the rest of your arguments. OWS is largely against corporate greed, and the impossibility of redressing it. In fact, the system as it is only allows for increasing disparity.

    And you are clearly misinformed; the rich do not pay the bulk of the taxes. Please see recent news articles regarding the amount of taxes that the rich–especially businesses–avoid paying. Convince the IRS to knock off half of the taxes they impose on you, and show me proof–then I will be thoroughly impressed. The rich may “pay the bulk of the charity (sic),” but it is worthy to note that, compared to the income of a normal worker, the donation half a year’s salary–perhaps, $30,000 would be proportional to a donation of a million, or more, by a major CEO. When a waitress donates a dollar to a cause, she is donating the equivalent of a hundred in the hands of many. As if that’s not bad enough, the upper class has money to spare–that is, if they were to spontaneously lose $1000, they would probably roll their eyes. If a member of the working class lost $1000, they would live without nice foods, new things, or worse for years. If this is a particularly low-income person, they may even lose their home or car, resulting in the loss of their job.

    The system, as it is, seems to be quite the opposite of stable; the lower end has the ability to move down rather easily, as any small loss could impact every aspect of their lives, therefore possibly decreasing their income; the middle is the most stable; they don’t have the means to move up, but they have some security against falling too dramatically; and, the upper class has the capacity to move even higher more easily than anyone else.

    While the tactics and maybe even goals of OWS are questionable, and while their methods are possibly not the most effective, their goals are rather difficult to question.

    To be fair, would it hurt that top 1% to live like a normal working family? If it came down to “what they could do that is more valuable” without having a disparate amount of cash they could wave around, do you think there is ANYTHING they could do? I honestly think that the majority of such people would find themselves able to provide considerably less than any other member of society.

  • 2 light // Aug 3, 2012 at 3:08 am

    First off, I apologize for abandoning my blog… and I thank you for your thoughtful comments.

    A few thoughts… in my story about the professor and the hunk of steel… the owner of the power plant valued the professor’s expertise more than the steel workers…that’s why he was happy to pay the professor $1million and he was happy to pay the steel worker for his contribution….both skills are valued but at different levels…the professor couldn’t do the work of the steel worker nor the other way around…no matter what calculators were involved. Note also that the power plant owner looked at the $1million he paid to the professor “as a bargain”…it was cheap compared to the loss he would have suffered had the professor not helped out. It has nothing to do with “effort” or “labor” or even “time”… the professor had a skill and that skill was valued at a market rate.

    WRT to taxes…the rich use the exact same tax codes as everyone else. They take advantage of those tax codes because they are there…they are there for many reasons…ALL of those reasons are debated in Congress before the tax laws are enacted. I agree with you that some of those laws look suspicious… I write my representatives and so should you… but don’t blame “the rich people” for utilizing the tax code for their advantage…WE ALL DO.

    The bottom line for taxation…is it moral to force someone to spend more than half their working year….working for everyone else and use the other half of the year working for themselves? Should this “rich people” work for the rest of us for 3/4ths of the year? How about 90% of the year…at some point, these “rich people” start investing elsewhere where the society does not have such a voracious appetite and is willing to support themselves more.

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