October 14, 2011

I have heard a lot of different views regarding the protests originating on Wall Street and now spreading across the country—but I think most of them miss the point. In my view the protesters are a direct manifestation of the class warfare rhetoric coming out of Washington. When Obama attacks Wall Street greed, accuses the bankers of insensitivity, and advocates taking money from the successful, is it any wonder thousands take to the streets echoing his sentiment?

One sign held up by a protester—Human Need over Human Greed—pretty much sums up the political message coming from liberal democrats. From Obama to Reid to Pelosi and on down the line, there is no longer any question of who is being blamed for the world’s problems.  It is the capitalists and the system of capitalism.

But the left aren’t the only ones blaming the financial giants; the extreme right has jumped on the bandwagon too. Anarchists and libertarians hate who they deem “banksters.” Having accepted the propaganda of pseudo-intellectuals who label bankers as crooks and government conspirators, many of them believe the bank executives should be jailed. Along with picket signs saying, End Wall St. Greed, are placards demanding, End the Fed! Ask protesters who the most evil “banksters” are, the ones who should be tarred, feathered, and sent to prison, and my guess is half will point at Alan Greenspan while the other half scream for Ben Bernanke’s head. Finally, something the extreme right and the extreme left agrees on…that it is the “powers that be,” which usually means capitalists, that are to blame.

An interesting question is whether the extreme right will hijack this protest movement from the extreme left?  What their movement stands for is still undefined by the left.  Their demands are many and jumbled, and they have offered no concrete policy changes they want to see made.  The only thing they have made clear is their anger.

I receive no less than a dozen emails a week containing articles that vilify bankers as the so called greedy "cabal" of Wall Street. As many of these articles indict capitalism as make a “defense” for it. But the themes and the cast of characters in these pieces are always the same. The theme is that the world is manipulated by a secret society of evil men, made up of the Fed, the Treasury, the top bankers in America, with a few rich industrialists egging them on. There is never any proof given for this conspiracy that can stand the test of daylight, but many are in the streets today because this is absolutely what they believe is true.

Worse, this mishmash of muddled thinking is easily swallowed by those ignorant of the underlying philosophy and history of this country. Many have no real education of American history, economics or present history. They don’t even pretend too.  They offer their anger as the one and only reason for their actions.  Masses of very uneducated people, along with some who are very educated, make up this occupying force that is attempting to rewrite history.

But both the ignorant and the intelligent factions of the street mobs have been unwittingly incited by the Administration to attack the rich. The fact that the extremes on the left and the right both agree on the implicit guilt of an entire segment of our society further fuels the masses. Both sides claim injustice, and this is what unites them. This collective thinking on class is our new "racism.”  The movers and shakers of this country are now “criminals."

If you are a banker, a successful investor, or the head of a business or corporation (especially one that has anything to do with oil), you are the enemy. If you are one of the 49% who receives benefits from the government and pay zero income taxes, you are the poor victim of a system run by the elite. This is what class warfare is all about.  Remember, it’s “need over greed.” And it is “the powers that be VS the common man.”  This whole concept was packaged and sold by bloggers of the extreme left and right and given voice by the present Administration, and now we can see its poisonous product in our streets.

It has been claimed in recent polls that 66% of the population want to tax the rich. I have never voted for any tax on any group in my life, despite having always been on the lower end of the income scale which means I would benefit from doing so. To me it is a matter of principle. I don't believe it is right to steal, or that getting enough people on my side somehow gives us the right to take other people’s money.

The mob mentality being waged today in the streets of our great cities is the result of the legitimizing of class warfare. The President of the United States condones it when he calls it a symptom of "frustration.” That is his tacit approval for those “in need” to take from the successful and punish them for being so.

Some are trying to equate this movement with the Tea Party. Yet, there have been no arrests at any Tea Party demonstration while so far there have been 1,200 arrests at the Occupy Wall Street demonstrations, and these demonstrations have just begun. Wall Street demonstrators tried to break into the Air and Science Museum in Washington DC.  They were thwarted, but one has to wonder what the seizing and vandalizing of the museum would have done to improve our society?

One of the most profound ways the Wall Street protesters do not resemble the Tea Party is in the implicit advocacy of the use of force. Their motto is Occupy Wall Street. Just as they tried to occupy the museum, they are launching an ever growing number of occupations in an attempt to get their demands met. The Tea Party movement is not for occupying anything.  In fact they are against the use of force, just as they do not want force used against them as individuals and business people. Their unofficial motto is almost the exact opposite, “don't tread on me.”

This is an extremely important difference: those who want to occupy versus those that do not want to be occupied.  And it is more than just the haves against the have-nots. It is the takers against the makers.

The takers are heavily backed by the propagandists and their disciples. Joined now by the labor unions, confused students, and even Nobel Prize winning economists, and university professors who add prestige to this mindless movement by basking in its limelight; this is just the beginning. Hollywood celebrities will be next. Activists are lining up and choosing sides. What once was just a catch-phrase is now becoming reality. The intellectual battle has now turned physical.

What we are witnessing is the birth of real class warfare.

-Paul Nathan 

A free peek at this weeks Market Update...

It's hard to believe that it was only nine trading days ago when the Dow was sitting at about 11,380 that I wrote:

I just...committed most of the 30% I had waiting on the sidelines for a buying opportunity. As stocks are being thrown away, and forced selling has caused even more selling, I noticed that even some of the most seasoned pros on CNBC were looking a little green around the gills and that I too was moving a little closer to the trash can. As my nausea increased (one of my most reliable leading market indicators) with each hundred points of decline in the Dow and falling gold and plunging resource stocks--I pulled the trigger. I repurchased CDE which I sold at 37 in April, at 19.68. And picked up TNA at 29.83...

In the larger scheme of things, the Dow did what I have been expecting, (trading a thousand points either side of 11200) falling to the 10380 area, down almost a thousand points from my 11200 par. It's possible we could run up toward a Dow 12200 from here. Major influences on markets in the near term will continue to be fears of recession, the Euro banking crisis, and a slowing China. If these concerns eventually fade, the prospect of resource stocks will brighten.

Today we sit about 1200 points higher on the Dow than a week from last Tuesday. A remarkable rally. Just the hints of the possibility that we will avoid a recession and that the Euro Zone will fix their financial system, has led to a huge snap back rally. So, where do we go from here?

I think we still have room to run…

Continued for subscribers only.

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