I might as well just mirror market-ticker.org

I have never read anything Denninger said that didn't make sense.

Take Off Your Blinders Folks

This is the Ticker I've been holding for roughly the last week, editing it as the days go by.

Please go pull an espresso, grab a beer, or (if you're easily disturbed) a shot of whiskey might be appropriate.

I've taken a boatload of heat for my alleged “support” of the “Occupy Everything” meme that is taking off across the country. There are a lot of people commenting on my positions that have displayed everything that is wrong with our education system, chief among them being its utter lack of teaching people to read for content rather than generating spittle-laced knee-jerk invective.

No matter. Since 2007 I have written what I believe on The Market Ticker and if you read Musings going back to 2004 you can see my commentary there too. A very few remember the rather-acerbic interviews and debates that I had with the ACLU and other organizations during the 1990s, including some tame appearances on Chicago Tonight and some much-more-lively ones on Usenet. If you think I can't take the heat that gets dished out you are rather naive; I believe there were entirely-new curses named for me back in the 1990s. In comparison the screeching of people on other blogs and media outlets today is the sort of thing that annoys with the intensity of a dog that occasionally barks next door.

OWS, whether you like it or not or whether you accept it or not, is displaying all of the hallmarks of a nascent political apparatus. In this nation we're free to organize with others, irrespective of our beliefs, into political parties. We usually remember only Democrats or Republicans, but in fact there are a whole bunch of actual parties; the Libertarians are one such example of a third party that has some prominence. The modern Democrat and Republican parties date to the 1800s; prior to them we had The Federalists, the Anti-Federalists, the Democratic-Republicans, the Toleration Party, The Anti-Masonic (really!) party, and of course the Whigs, among others.

Through our nation's history, however, we have more-or-less always had a two-party system. Sure, there have been times (like when Ross Perot ran for President) that this has been threatened, but it has never been a stable situation unlike many other nations that have several political parties active at any given time and revolve around coalitions between them to build consensus in their legislatures.

Whether this is good or bad from your point of view doesn't matter; it simply is.

Now add to your perception of OWS the following: They have and are explicitly disavowing any sort of “spokesperson” support from MoveOn, as just one example. In short they're refusing to “ally” with others – they see themselves as an independent group and are acting like it. That doesn't stop other organizations to claiming that they “stand with” or “in solidarity with” the protests, but that's no more valid of OWS' interest in the claiming organization than if I were to say I stand “in solidarity” with Harry Reid (trust me, I'm quite sure he wouldn't stand “in solidarity” with me!)

As I see it “OWS” (in all of its branches across the country) will go one of two routes:
Someone will do something stupid. Specifically, the “movement” will turn toward violence. Public opinion will instantly shift against them and that will be the end of it. The people generally support the First Amendment but they will not stand for looting and burning cars, nor should they. I will leave the position I will immediately adopt if that happens “in my pocket” for the present time as I don't expect to have to show that set of cards, but trust me on this: I have pocket rockets and my position is founded in the Constitution as currently written.

The group will maintain a peaceful organization, even if “in your face”, long enough to actually coalesce around a core set of ideas. If that happens a formal political apparatus will almost-certainly arise.

Now you can dislike this but there is no legal means available to you to prevent it from happening nor should there be. Political activism is what we all be both supporting and engaging in ourselves. After all, if you're not politically active you have little room to bitch if you don't like the political outcome.

I believe the second is their goal; the people I've talked with, the videos I've seen, the emails that I've read on the various mailing lists lead me to believe that while there are some “bomb throwers” in the group there are in all groups and that the vast majority of those involved in OWS recognize that #2 is imperative if anything is to be accomplished (other than getting their head cracked, that is.) Indeed, if you watched any of the livestream coming from Times Square last weekend you saw this in action – the camerapeople were warning the protesters that the police were showing up with lots of plastic handcuffs intending to bust heads and that they had to keep their cool. They did.

This doesn't mean that the bomb-throwing nuts are all done and won't take their best shot. They might. I don't know what sort of goal doing that has in any kind of cogent movement, because there's only way that ever can “win”: You have to incite a revolution and doing so requires at least high-single-digit percentages of the general population willing to die for what you believe in. If not you're simply going to go to prison – and in my view you should as you're a rioter, not a “freedom fighter.”

Now add another nasty historical fact to the mix: Revolutions are odds-on things to produce dictatorships, not freedom. For every 1 George Washington you get 10 Hitlers. Oh, and by the way, if you think you'll be the dictator's new best friend if you “help” incite such a thing? You're wrong – you'll be one of the first shot since you could do it again and overthrow him! Don't be stupid: The first act of a dictator is to cement his power and he does that by killing anyone that could threaten him. Duh.

So let's not play the romantic eh? It doesn't work like that and anyone who has bothered to pass history class in High School (say much less do any independent reading) knows it. I'm going to assume anyone reading this blog is well-aware of these facts and is too intelligent to fall for the sort of tripe that the agitators might run.

Back to the practical: If a new political party comes from this one of the existing ones will almost-certainly splinter and die.

The salient question: Which one will it be?

Did that deep chill go down your spine?

If not, you're not paying attention. And don't be smug either — let's remember the facts, shall we? There are a lot of people who got screwed. The OWS folks have the “who did it” right. The Republicans and Democrats have both rewarded (and participated in!) the scammers games, but who takes the hit?

I honestly don't know, but my handicapping says that if you think the Republicans are “safe” on this you're playing with fire.

IF the Republican Party goes down then you have the Democrats and….. what, exactly?

I don't know, but I'm not at all sure I like it!

Do I like it if the Democrats go down? Not necessarily much better if the more-radical and mathematically stupid views prevail.

They don't have to. If you've been reading this blog for a good long while and listening to Blogtalk you know my position on this going back to before Obama's election, when people were calling him the “Marixist in Chief” and suggesting that he would never leave office (just as they did with Bush, incidentally): I have no fear of Obama. The guy who follows him, or worse, someone down the road later on in the throes of a real economic ****storm is an entirely different matter.

History, if you recall, is replete with these examples: An economy goes “overcenter” due to exponential games that cannot be maintained. Rather than address it and get in front of it, accepting that which has to happen partisanship increases and the people become more and more restive. They recognize that the politicians and those in “private business” have conspired together to rip them off but they have no effective voice. Economic deterioration continues right up until someone stands and says “I can fix all this….. but there will be a few compromises.”

He wins in a landslide.

I think you know what comes next – the last time six million gassed people came next, along with a global conflict that killed millions more. Today such conflicts come with body counts that can be in the tens of thousands or more per weapon used, which makes avoidance of such an outcome much more important than it was before (not that ignoring the risk then was very smart!)

So yeah, folks, I think you should all engage these people. Logic wins, if you can manage to get people to think. The anger on the street is properly placed in terms of who did it, by and large, although they're not (yet) directing the proper proportion of it toward the elected and appointed officials that glad-handled the situation and “backstopped” their stupidity (and worse) by ripping you off.

The fact of the matter is that these problems are not new and cannot be solved without serious efforts by everyone involved, along with a lot of pain. But there are two principles we must adhere to if we're going to actually fix things:
Those who took on or have leverage on at present cannot be protected from what happens to them when the supports are removed – and they must be removed. That is, the entire problem, boiled down, is the amount of debt in the system. You can't reduce it without the people on both sides (who borrowed and who lent) foolishly taking the hit. If you shift it from one person to another to provide “relief” you have not reduced the amount outstanding, and what you're doing won't work. It's called a balance sheet for a reason – it balances.

The enabling policies in trade, taxation, immigration and on the monetary side must be fixed and then safety-wired closed so they can't be abused again. One of the big problems is that there are many regulations that prevent the sort of abuses we've seen (and we continue to see) in the laws governing acts by various government and quasi-government actors but there is no “or else” in those laws of materiality. That has to change.

These are the two keys folks. Everything else is open to debate – the exact how, the what and similar, but we cannot avoid these two realities if we intend to actually fix things.

Economic adjustment cannot be avoided. But we can stop propping up those who did evil, even illegal things. We can allow the market to work. We cannot avoid the pain but we can mitigate it, and we must.

As just one example we can restore the right of bankruptcy to all citizens irrespective of how their debt was acquired. This immediately collapses the college debt and college cost bubbles and neither gives students who did foolish things a free ride nor their lenders. A one-sentence law reversing decades of intentional gate-barring that our government has engaged in for the purpose of enslaving our youth. We can demand this today, and we should both demand it and enforce that demand. This is a demand that I suspect virtually everyone involved in OWS would support.

There is much more and I'm sure that readers have their own ideas. The key point is this: You can either engage or go hide in a cave – but you can't, through lawful means, stop what is going on. If we refuse collectively to engage then we own whatever comes out of this, and we owe it to ourselves and our children to each attempt to make this a constructive process before believing what someone else tells you – including me.

The “professional right” has gone into a tizzy over this movement, just as the left did with the Tea Party (remember calling the Tea Party “teabaggers”, referencing an obscene act performed with a man's testicles?) The “Tea Party” in the professional sense was effectively marginalized (anyone who doubts this simply needs to look at how Bachmann is polling as the Tea Party “standard bearer” in the Presidential race; she's running at roughly “dog catcher” in terms of popularity) but don't be so sure that this will work with OWS. Remember that as of right now all you have from them for a platform is discussion points, which means they're deliberating – you're not being asked to support or not as written, you're being asked for input!

So give them input, and educate people – or, if you refuse, I hope you intend to shut up if what comes of this doesn't meet with your approval.

Karl Denninger