Straight talk about the Occupy Wall Street protests

Apologies in advance for those I may offend here. It’s not my intent to stir the pot and create animosity, but rather to take a hard look at the protests which are spreading globally, and offer a few humble suggestions. Unfortunately, today there exists a need for substantial change if we, as a society, are going to be able to maintain our standard of living. If that change is going to get done a few sacred cows need to be sacrificed.

If you’ve been following the occupy Wall Street protests, you’ll know that there is a real sense of “giving up” that is prevalent on the street. If it were just a bunch of lazy teenagers with little ambition, or even the usual professional agitators that show up to every protest – just because there’s a protest, it would be one thing. This is not the case. Today on Wall Street and in over 100 cities throughout North America (including Canada and some 45 countries around the world) there are a whole lot of really regular people who have worked their whole lives to build something – and they feel they’ve failed and have simply lost faith. And while there is a real lack of cohesion amongst the demands, there is a definitive and pervasive lack of hope among the protesters that the government and it’s citizens are willing to do what is necessary to be able to set things on the right course again.

There is no question that people should be justifyably angry if they’d lost their home or substantial home equity to a mortgage scam. Whether or not they really could have afforded it in the first place is not in question here, nor is the highly questionable morality of some of those in the financial industry who turned a blind eye or openly propogated the housing fraud that led to the melt down. I want to talk of constructive things however. So let’s take a few minutes to talk about what needs to be done to try and add to the solution rather than just complain about the problem.

It doesn’t take a genius to figure out that there is a real commodification going on in Western society today. A commodity by definition falls to the lowest price that someone is willing to supply it to the market at as commodities are readily available everywhere. Because of this, unless you are the biggest player in the industry, it’s really difficult to make any money if you’re playing in a commodity marketplace. Today, thanks to the Internet, that is happening with just about everything. Accordingly, there is less and less profit being made by smaller players while the major corporations of the world continue to get fat. This becomes a real problem when your tax base is made up largely of small businesses that employ a handful of people. As the businesses wither away so goes the tax base and the economic confidence so desperately needed to mount a real recovery goes also. While it is not yet hit us here significantly in Canada, the trend globally couldn’t be clearer and we need real strategies to recover quickly.

So here’s where I get taken to task:

We need changes to our personal habbits. Life has always been an uphill struggle and will always remain so. People need to get a grip on this and act accordingly. Chances are that if the world is changing faster than it ever has before, you will be made redundant if you do not change with it. Don’t take it personally. Instead, figure out what you’re going to do to make sure that you don’t become road kill. Somewhere along the line it became okay to waste time putting on weight by sitting on the couch all night eating junk food watching The Simpsons. People rationalized that this was actually okay – no wonder there’s a crisis with healthcare budgets spiralling out of control.

We need to change our governmental approach to one of help rather than punishment. As society has tightened up through a combination of excessive personal and government debt, the government’s approach to replace the missing tax revenue has been to punish rather than help its citizens. This is evident everywhere through both government policy and practice. It shows up with the cop on the corner giving you a ticket for doing 55 in a 50 km zone. It shows up in the parking tickets that are now being issued on Sundays. You can see it in the increased fines and legislation that are put in place under the guise of dissuading bad behavior but are really nothing but a tax grab. They have the effect of dissuading participation and just really annoying the hell out of people. Take this too far and you have no one left to tax, because regular people simply stop doing things – which is really what the Wall Street demonstrators are saying… “I’m bowing out of society.”

We need to change our labor organizations to benefit the whole of society rather than just the few they represent. Somewhere along the line, the union movement went from a good idea of protecting workers rights to becoming a place where it was okay to coast as you had a job for life. Particularly in unionized organizations that are funded by public tax dollars, there is an enormous need to make sure that change becomes the norm rather than the exception. This means that we need a formula for retaining people according to their merit versus their seniority. As harsh as that sounds, it makes no sense to have the majority of the tax base (people who work for or own private corporations) funding solutions government solutions through taxes which really didn’t work that well 20 years ago and are today sometimes more part of the problem and the solution. We need radical new solutions and the deployment of technology by the best- not the most senior.

Does all of this mean that we have to raise taxes? Well if you think of it realistically, it is somewhat unfair for someone like Warren Buffett to pay less tax on a percentage basis than his secretary does. That is not the focus of this blog however and merely jacking up taxes on those who have been prudent enough to invest in themselves (and thus gain some wealth and security through it) to spend on more of the same is not the answer. Changing how the public budget is spent, however, while shedding the entitlement of those in publicly funded positions, is a move in the right direction.

Money does not grow on trees. When push comes to shove it has to make more sense spending money helping individuals become more capable so they can fend for themselves more easily so they do not become a burden on society. That’s a much better idea than simply maintaining a status quo which only barely suffices. Want a few more? Why not try some novel solutions like the following:

As people with obese children are the least likely to know that drinking pop and eating chips is the leading cause of obesity, target people with unhealthy habbits to attend training that should help them understand what to do and give them supervision after the fact?

As approximately 75% of the tax base is generated by or through small businesses, but 90% of those businesses fail, why not make running a business conditional on attending free courses which teach business skills instead of letting 9 out of 10 of our entrepreneurs struggle for years until they fail? Take the cost of those courses from the existing fat budget while changing those programs with new technology.

As a large percentage of people on welfare do not have the social skills needed to hold a job, why not put them into full or part time distance education classes rather than just sending spending more and more money to them every month?

As we are continually in need of more doctors for smaller communities, why not graduate more of them by dramatically lowering the costs of a medical education by training students remotely over the internet?

I could go on, but I think you get the point. Change threatens public interest groups. There are a lot of people on welfare that actually don’t want to work. Just like there are a lot of doctors making $750,000 a year that don’t want 3 times as many around, but maintaining the status quo is not helping the situation.

The truth is that there are a lot of sacred cows in today’s society that need to put out to pasture for everyone’s sake or things are just not going to change – at least for the better that is. Doing so is painful for the interest group at hand and to a certain extent this requires breaking up a monopoly or forcing people to do things they may not want to do. That’s unfortunate, but as the Occupy Wall Street “I quit” mentality continues to grow, we are coming to a point in society where this type of approach is becoming increasingly needed.

When push comes to shove, we do what we have to as a society to make sure the lights stay on and things move forward. I for one am suggesting that the signs are pointing to the fact that it would be beneficial if we took a bit more of a proactive approach sooner rather than later in making these changes. Disinfranchised people in the streets do little to help anyone.

E.O. & E.

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About The Author

Mark Schneider
Mark Schneider is one of Canada's leading Chartered Financial Planners. For over 30 years he has helped hundreds of regular Canadian families grow small fortunes through consistent planning and wise advice. He holds the following designations: CFP, CLU, CHFC, CFSB