So back in September I clearly had enough wine to pen one of my raving missives, as I woke up the next morning and discovered this post over my signature: Reasons Why I Sympathize With Occupy Wall Street

I'm pretty sure it was me, because I remember collecting the photos, but that's not important right now.  What is important, at least to me, is trying to find a reasonable answer to the question:

What the fuck are these people doing?

As I pointed out in my last time-waster on "Occupy" there never was much hope of any real political "victory", out of the movement.  That would pre-suppose a defined goal.  Or a defined leader.  Or a defined… well… anything.  But it surprises me the degree to which Occupy [This] has turned into a frightening, dangerous defeat for just about everyone concerned.  When you add it all up there's more than enough Fail to fill everyone's quota for the next decade and a half (or one Obama term).  And in this I mean even beyond the obvious observation that many Occupys have turned violent.  As of this writing I think we were on three fatalities at various Occupys nationwide.  Two of which were from gunshot wounds, one of which seems to have been the result of a fight over a bag of drugs.

So as a finance dork, I spent some time thinking about what Occupy means.  If the United States is in for a full blown Marxist revolution, I should probably try to see that coming a little earlier than, say, Czar Nicholas II.  Right?

So, for what it is worth, I pondered things for a while and came up with some trite and useless observations.  Given that no one else will listen to me anymore, not even "The Girl," I am doing the natural thing: sharing them with ARFCOM.

So shut the door.  Sit back.  Get some hard liquor.  Turn on the text-to-speech feature (I sound best with the Victoria personality on OS X) while I present:

Austrian's Guide to Understanding Occupy [Catchy Noun Here]

The first step in understanding the causes behind the slit trench that is the Occupy movement is to understand that while everyone is busy making the analysis complicated, there is a single insidious factor that runs though the entire sordid mess:

Envy.

This is both simpler and not as simplistic as it sounds.  Critically, I did not say "jealousy," as the two are often confused.  A treatment of their distinctions could consume an Austrian-sized post in itself, so for now let us just distinguish envy (the resentful emotion involving the desire to possess or to deny to others what one does not, have) from jealousy (the fearful emotion involving the desire not to lose what one does already have).

This is a critical component of the so-called "anti-elitism" that has been bubbling up in Western culture for a couple of decades, and now seems to be boiling over in Zuccotti Park.

But it's easy to pick a tag line and use it over a wide swath of degenerate behavior.  One has to back this claim up and explain why it is helpful to the analysis.  In this case, we have to go back quite a ways.  Not quite to the Johnson Administration, but close.

Having run our way-back-machine through sufficient prior years we find that the individual most responsible for Occupy Your Street is one Gale Cincotta.



Gale Cincotta was a mother of six and one of the first "community organizers."   She hailed from Austin and Oak Park, Illinois, just outside of Chicago, and was an unlikely political activist until, in the 1960s, she cut her political teeth fighting school overcrowding.  But the straight-from-the-bottle vodka drinking, profanity slinging housewife (she was often called "a star pupil of the Saul Alinsky hell-raising school of community organizing") quickly scouted bigger game: banks and mortgage lenders.

Her New York Times obituary called her "plain spoken," which in Grey Lady Speak apparently translates to "the woman who once nailed a rat to a Cook County Alderman's door and pioneered the tactic of dumping dozens of protestors on the front lawn of bank CEOs suburban homes Sunday morning at 8am."

Today we marvel at the pure insidious evil of the EPA giving grants and other funding to groups that then turn around and sue the EPA and settle out "consent decrees" for regulations and rulings that never would see the light of day in a transparent political process.  But this particular tactic is not new.  Cincotta shamelessly used regional offices of the Department of Housing and Urban Development to attack its sister department the Federal Housing Administration as far back as the 1970s.

The lobby group she founded in 1972, the National People's Action group, proceeded to push for various pieces of lending legislation.  They are still active today, a decade after Cincotta's death.  See if any of their goals sound familiar to you:



Right on, man!

Whatever they sound like today, they sounded good to both Gerald Ford and then Jimmy Carter in the 70s.  Ford signed the Home Mortgage Disclosure Act (which required banks to publish zip-code and geographic statistics on their lending) in 1975 mostly as a result of the NPAs in-your-facism.  Carter signed the Community Reinvestment Act in 1977 with a lot less resistance, and Gale Cincotta was standing right next to him for the photo op when the ink hit the parchment.

As you might expect, today the NPA seems to mirror a lot of the mainstream media coverage of Occupys.  At the moment their website includes a "Wins for the 99%" section and a blurb for their "Make Wall Street Pay" campaign.  But I digress.

The Community Reinvestment Act takes a lot of flack from conservatives and provokes aggressive knee-jerk defenses from progressives when critiqued.  Most people you hear mention the Act, however, have no idea what it says or does.  Let's fix that for you:

The Home Mortgage Disclosure Act isn't particularly offensive.  Even libertarians may grudgingly agree that one of government's uses is as a clearing house for data so that consumers or voters or citizens can make informed choices.  True, requiring banks to make line-by-line disclosures that tend to expose their strategies to competitors is a bit heavy handed, but the basic premise of sunshine as a disinfectant was a good one.  This is particularly true when one wants to enforce socially unpopular norms that fall short of illegal conduct.  The natural response to anti-social behavior that falls short of outright illegality is generally ridicule and social banishment.  Don't like a bank's policies?  Take out your deposits.  Don't like the membership rules of a private club?  Don't join.  But unlike the Home Mortgage Disclosure Act, the Community Reinvestment Act went much further.

As is the habit of Congress in passing legislation, a finding as to the need for the law is defined.  The Home Mortgage Disclosure Act outlined this one:



One must remember that urban decay of the time was severe.  One must also remember the source of that urban decay:  Government housing policy which amounted to an absurd price-discrimination regulation.  Specifically, at the time the maximum amount anyone could pay in rent for public housing (at the time all projects were government built and run) was 25% of his or her income.  This, of course, meant that anyone in the growing middle class would be better off using the same rent for more expensive private housing.  Housing that was increasingly in the suburbs as "white flight" took hold.  In addition, because projects were government developed, built and run, it was generally already poor and blighted areas that were selected for public housing sites.  Our good friend "eminent domain" became to see renewed use in this period and eventually became an entrenched bit of government policy.  Finally, increasingly progressive local housing authorities stopped screening applicants.  At all.  For anything.

Let's just stop for a moment and think about that.  So regulators and legislators enact policies that concentrate low-income housing in already blighted areas.  Then they mandate a sliding pay-scale that assures that no one of even moderate means will have any cause to live in these areas once they rise even a little in income.  This is because the law causes rent payments to rise for tenants who see income improvements.  Then they cease screening applicants in any fashion.  And after applying all these screws they turn around and claim:



Of course, what was being attacked here was the practice of "redlining," or blocking out entire neighborhoods and reducing or halting all lending in that area.

Redlining sounds a bit harsh doesn't it?  Sure, a bank should be able to pick its clients, but mortgage-nuking an entire Zip Code is pretty extreme, no?  Well, even if you don't quite think so, you can see why it would send progressives absolutely screaming into the darkness with rage.  Here's the thing:

Redlining was invented by the Government in the first place.

Yep.

And no, not by Nixon's FHA.  (Good guess).  It was a New Deal agency that came up with the idea.  Yeah, you heard me.  The progressive hero FDR.

The Home Owners' Loan Corporation (an FDR invention) started by publishing "residential security maps" which were later used by the Federal Housing Administration and picked up by private lenders.



At this point, lots of progressives make noise about rampant discrimination that was already an endemic part of the private lending market.  And, of course, this was true.  An unmarried couple was probably shit out of luck in 1968.  So was a single mother.  So was a black man.  But when your regulator or the agency most responsible for your policy burden publishes, updates and promotes such a document, how do you ignore it?  I mean, what are you going to tell the shareholders when you lose your shirt lending to a neighborhood the FHA tells you is dangerous for collateral recovery?  How do you not get sued?  Let me show you how:

Cincotta up and rams the Community Reinvestment Act down everyone's throat which says:

"Hey banks! See these areas that government policies have assured will have awful property values for decades?  And which are subject to policies that push out anyone who starts to make a little money, assuring that gentrification will probably never lift the area out of slum status?  And which concentrates tenants in an environment where the government is the undiscerning landlord of last resort?  And which your own regulator has warned you comprises a dangerous security / collateral risk?  Yeah well, fuck you, you're lending here.  What?  Higher interest rates?  Nope.  Congress sez: 'provide adequate home financing to qualified applicants on reasonable terms and conditions,' and that's part of your 'chartering responsibilities' you know.  Look, says so right here.  What's 'reasonable'?  Who's 'qualified'?  What is 'adequate home financing'?  Oh, believe me, you'll find out.  About 60 seconds after we dump 75 people on your front lawn."

(Everyone should read: The Death and Life of Great American Cities by Jane Jacobs at this point.  I'll wait).

Done?  Great.  (Good read eh?)

It may seem that we've come quite a bit afield of Occupy, but, in fact, we're smack dab in the middle of it.  You see, the Cincotta and the Community Reinvestment Act (and a host of legislation that followed) began the wholesale "Drunken Relative" trend of social justice in the Untied States.  Allow me to explain:

Certainly, everyone has that one relative, a Father, an Uncle, a crazy Aunt (since this is ARFCOM you probably ARE that one relative), seen most often on family holiday get togethers… Thanksgiving, Christmas, the anniversary of the passing of a particularly hated Mother-in-Law... whatever.  They start with the egg nog and before you know it, they have transformed into one of those belligerent, loud and angry drunks, irritated that Cousin Cindy won't give them "just one little kiss."  And it takes until they've careened around the table twice, groped Cousin Cindy four times, knocked over a pair of chairs and one centerpiece, spilled three drinks, including one on the new carpet for everyone to act to stop the madness by... just looking away with an embarrassed grimace and hoping the problem will just go away on its own once it gets cold enough outside.

You wimps.

Don't think the belligerent drunks don't know it either.  Sure, perhaps not in a form they can articulate into words (or slurs), but they know it.  They depend on it.  Your acquiescence.  Your indulgence.  They are manipulating your inability to act.  They are using your fear of being the asshole who finally says something.  You, my friends, are enablers.

And behind the blackouts, the explosions of profanity and rage (and vomit), underneath the broken dishes, appliances, windows and the frayed nerves, is our old friend:

Envy.

Envy that "everything comes so easy to you."  Envy that you "have a beautiful home."  That you "are so lucky."  That you "have everything a woman could want."  That "you have a REAL job." And, since that's not enough, Uncle Bob "Jack Daniels" Smith is seething with the desire to fuck it all up for you, screaming metaphorically with every visit:

"You might have a nice house, a beautiful wife, and polite kids, boy-o, but one night a year, I'm going to inflict pain on you and there's nothing you can do about it, and your kids will see that life's not so fucking easy, and your wife will know you're really powerless, because if you don't invite me, or if you kick me out, or call the police like last year, the guilt will haunt you for months, and everyone will see you for the callous, greedy republican you really are Mr. civilized family man!"

But there's a difference we haven't yet accounted for.  In this case, we were the ones who introduced Bob to his bookie and the pleasures of Tequila in the first place.

Let's face it, the Baby Boomers completely hosed the rest of us.  Literally.  No, not you, random Baby Boomer who is reading this.  Not you personally.  You, Baby Boomers.  You the collective and aging electorate.  Again, not you, Boomer.  Them.  The Boomers.  They have spent every dime of their own money and now, like some sort of Jurassic parasite, they've spent everything the X generation has, and are in the process of pillaging what's left of the savings bonds grandpa left to the Millennials and using the coupons as collateral for payday loans.  No one has the courage to stand up to them because they vote, damn it.  Like hotcakes.

Seriously.  Even while the United States conducts two rather serious foreign adventures, entitlement spending is twice military spending today.  Paying for the mortgage on the Miami condo along with all the diabetes supplies, hip replacement surgeries, Depends, Rascal scooters, bath tubs with doors, LifeCall and Centrum Silver Boomers are going to be scarfing down in a few years time will consume all tax revenue, every single dime, by 2049 (and that's the bullshit figure from the CBO too).  That's just to keep treading water (assuming the rest of the planet doesn't get tired of lending to those old farts any time soon).

It's actually even worse than that.

If you calculate the present value of unfunded liabilities just in Social Security, Medicare and Medicaid, you come up with over $100 trillion.  That's not a typo.  That's the figure you would need to contribute to pay all this stuff off and it is in ADDITION to the payroll tax.

At the same time realize that the sum of all private wealth in the United States is something like $59 trillion in 2011 (sez the Fed anyhow) and you realize that some asshole (and it was a boomer, I can tell you for sure) promised the boomers all your payroll tax until you die (but in the next 15 years), AND the total sum of all the wealth in the country.  TWICE.

But here's the thing.  All the while that it has been sucking down every thin dime and borrowing 3 pennies besides, society has been telling the nimrods now searching for lice combs "You better study hard and get into college, or you are going to end up serving french fries to your friends.  Try this: 'Would you like that in a pump?  Or a loafer?'"  Of course, what society MEANT was: "Better get productive soon because you already owe me $2 for every dollar you will ever earn and, damn it, how am I going to play golf with the guys if I can't get my titanium hip replacement surgery and pay for my 30something girlfriend's tits when Viagra has gotten so damn expensive?"

But even that's not all.

Somewhere along the line someone decided that, even though they needed these kids to slave away like some Dickensian version of Dr. Douglas "Doogie" Howser, M.D., (oh, and by the way, did we tell you we are moving in to your place?) they would instead encourage them to pursue a Women's Studies degree in graduate school and join the Peace Corps.  Seriously?



It's the sort of insane hypocrisy that prompts Michelle Obama (who graduated from Princeton and Harvard Law School to go immediately on to Sidley Austin, one of the preeminent law firms in the country) to tell the graduating class of George Washington University:



Go be an idealist honey.  And then come home and start cracking to pay pay pay me.

And really, hasn't society completely defrauded the X generation and the Millennials in other ways?

I don't know about the rest of you, but I was promised flying cars, damnit.  Seriously.  Chitty Chitty Bang Bang?  What was that, 1923?  The Man With the Golden Gun had a fucking AMC PACER that sprouted wings and flew away for the love of all things innovative!  (Ok, I think it was actually a Matador, but one pile of rusty excrement looks pretty much the same to me as another nowadays).  Hello?  Blade Runner?  That takes place in 2019, people.  Better get cracking on that! (We're looking at YOU, General Motors.  NASA is government subsidized too but I actually see them put stuff in SPACE every once in a while.  Ok, well, not recently, but you get the idea).  And Space 1999?  Want to guess what year that took place in?  They had a base on the MOON for crying out loud.  With whooshing cylinder subway transports.  Vertical take off and landing space eagles.  SPACE EAGLES people.

What a rip off.

But here's the thing.  Just because you got gypped, doesn't necessarily lead to Envy, and doesn't necessarily mean you act on that by fucking up dinner for everyone else.  And this is where we have Cincotta to thank.  See, because even though the West is filled with representative democracies, where the means to express yourself is though free and fair elections or putting your capital somewhere else, it's now ok for a small minority with a idea to legislate "fairness" to "promote awareness" by disrupting the lives of everyone around, stopping traffic, banging a paint bucket for 12 hours a day and conducting probing activist attacks on every productive establishment you can march to until you find one that causes more grief than the rest and eventually it is easier to just buy you off than to keep earplugs in all day shouting "WHAT? WHAT?" at your girlfriend like you are the parents of a 3 year old again.

I would love to meet the spineless sea cucumbers posing as bank executives at First National Bank of Chicago, Harris Bank and Northern Trust that first settled with Cincotta and her extortioners for $185 million back in 1970whateveritwas.  That was it.  The first negotiation with the terrorists.  We're all still paying for it.

But still, what no one seems to be talking about is that the authorities (and that word sounds sort of like a joke in this context now doesn't it really?) have quite literally ceded public order to these people, ceded their very municipal sovereignty to enable Uncle Bob "Jack Daniels" Smith to shit on the family station wagon. And all to avoid causing "a scene."

The real irony is if the Occupiers tried this anywhere but in the middle of the most developed, advanced societal infrastructure in the modern world they would all have been dead of dysentery weeks ago.  It's precisely the great success of capitalism (and the free riding they are doing on the local police department) that keeps them alive and (mostly) healthy.  Lice, TB, Zuccotti Lung?  That's small change for the kind of squalor and mano-a-mano predation a tent city of this kind in Mexico would result in.  And Mexico is in the damn G20!  In a way its pathetic.  With all that infrastructure their ideal society is still are slowly devolving into a third world rape camp.  Too many "Social Justice" majors running the railroad, I guess.  The kind that think requiring a 90% supermajority is giving a voice to "everyone."

Duh.

But there's no end in sight.  When you subsidize something, you get more of it.  For years the West has told everyone they are special, that all the children are above average, that everyone is entitled to 8% equity returns.  Always.  (Sue if you don't get them).  That asset values will always go up (except for oil, power, and insulin and food... but maybe we'll make an exception for Sugar, because ADM asked so nicely, and corn cause you know... well... Iowa).  That it is your cosmic right to build on a Florida shoreline, and to pay no more in Hurricane insurance than customers in Alaska.  In short, that you are owed, and that you respond to Envy by making it impossible for anyone else to enjoy life until you are granted your "fair share" by the justice fairy.

Occupy is a pack of envious children.  This is why their target is the 1% (hey, folks, that guy you once heard about who is $1 below the "poverty line" in the United States?  He's in the top 8% for global income.  You THINK you want fair, but trust me, you don't.  The average annual income for a person on the planet earth is $850 a year.  You want unfair.  Seriously.  "Fair" will make Zuccotti Park look like a Trump Hotel.  Ok, bad example).

But, like Uncle Bob, so long as no one does anything before he collapses on the new oriental rug in a pool of his own vomit and urine, he'll keep coming back every year.

My advice to Bloomberg is: stop enabling the drunk.  Send him home and don't invite him back.

My advice to Occupy is: Refuse to pay the Boomers $100 trillion.  You do this by shutting the fuck up, going home, getting to work and electing a fiscally responsible legislature with the stones to tell everyone that the entitlement party is over.  (Good luck with that after all the Blue you've stuffed in the ballot boxes- no rehab center will even take you anymore, Bob, but that's not really my problem, is it?)

But I doubt anyone will take my advice.  At least not until Uncle Bob starts stealing the family silver, or accidentally kills the family golden retriever.  Short a dead Natalee Holloway, or some other pretty, white co-ed, it's just not worth the scene to clean things up.  But that means you're asking for trouble.

It pays to remember that one of Cincotta's biggest crowd pleasers was always the line "They've got it. Let's go get it."  The mob always loves the taste of meat once it gets hungry enough.

Entertaining and a good read.

Damn good read.

I'm not one to encourage drinking but if this is how you clear the baffles, cheers.

"Justice fairy"

Good read, Austrian. Thanks for the book recommendation.

Can you shoot me an IM when you post these?

Your guides are fucking gold.

An interesting read. Thanks for taking time out of your life to write it.

A top quality post.   Thanks!

No drinking on this particular occasion, but I don't blame you for wondering.

Loved it.

Damn good post.

Great article.  I believe Sarah Palin has the nuts to tell Uncle Bob to get the fuck out of the house and do not come back until you are clean.

Outstanding, another excellent read. Feel free to add my name to a list of subscribers when your newsletter becomes available.

tag

Good read.


GM

Great. I'm torn, because now I really feel even more fucked than before.



But, on the other hand, thanks Austrian. Good read. Learned a lot. Gonna go cry now.

Solid.

That post is a cubic meter of forged steel, flawless of any internal inclusions or voids, and perfectly square to a precision of +/- one picometer.

That's how solid it is.

Great post!


Another great Austrian thread.


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Tagscribe for later reading.

tag

And now a new book to go read.

Great post, Austrian!

{golf clap} Bravo....

Entertaining and informative as always. Bravo sir!

This guy always posts good stuff.  

Bravo sir!!

Excellent read and very entertaining.



Envy pretty much sums up the entire political arena these days.

Thoughtful post.   I like it.



Bob

Outstanding, sir.
 

Wow. interesting read. Disturbing in ways, but a good read

you should write a book

And now for something totally rational and well thought out in the GD, we bring you Austrian.

Excellent post.

Informative and entertaining. Keep up the good work.

Awesome! This is the answer to all our problems, right here:

My advice to Occupy is: Refuse to pay the Boomers $100 trillion. You do this by shutting the fuck up, going home, getting to work and electing a fiscally responsible legislature with the stones to tell everyone that the entitlement party is over.

I didn't claim they'd take the advice....

Good read.

I guess Bloomberg was listening.

nice post op

read later tag....

Good read.



Like most of our problems this was the work of those who preceeded the boomers.