A new economic reality will arise
I am not sure exactly what this term means yet as the OWSers define it. This is not because I disagree with them. In fact, I don’t on many issues. But for every articulate individual I’ve encountered who is part of the movement, I have also run across a variety of foul-mouthed cretins who have no concept of how economics work and whose antics diminish the OWS movement. Still, living within our means seems to be the overarching theme.
I am not yet sure how this will manifest itself in the future, but it seems to me that the concept of liberty is the undercurrent here, and fiscal responsibility is the driver. People are enamored with the American dream and the right to succeed. What they forget is that liberty also includes the right to fail. It is not yet clear to me if the OWS movement has really internalized this. Nor is it clear that the OWS movement has collectively thought through the principles of liberty that put us in control of making our own decisions — for better or for worse. Socialism is not the answer, but neither is the few ruining the lives of the many.
Milton Freedman reportedly quipped there is no such thing as a free lunch. Perhaps we are coming to the end of a free lunch society. I have to wonder.
Banking will be boring
Many OWSers have focused on corporate greed without really identifying the elements needed to rein it in. To me, this is part of the greater social justice narrative. It’s also indirectly a political process because the bankers who got us into this mess are tied to the K-Streeters who, in turn, are tied to the special interest dollars used to “buy” our entire political system. If anything, the anger being directed at our bankers is a spectacular glimpse into the very roots of democracy and equality because it could come full circle come election time.
Movements often start with noble ideas that are commonly accepted and often very hard to argue with. But if OWS fails to come into its own, I see self-aggrandizing politicians jumping into the void with draconian proposals that actually make things worse.
Social investing will go mainstream
We’ve had social investing funds and social investing mandates for years. There are “sin”-free portfolios — portfolios that comply with the spiritual values of the world’s major religions, energy-free investments and more. I can easily envision additional social investing categories based on the many divergent causes now wrapped up in OWS. Sadly though, I can also envision Washington riding to the “rescue” with mandated investments designed to control what’s left of our personal wealth as a result of the OWS movement. The biggest target is the wealth already accumulated in our 401k plans — more than $14 trillion at last count. Social security, mandatory healthcare, infrastructure — these are all thinly disguised taxes. If OWS truly represents the 99% as it claims, perhaps it’s time to engage the big issues rather than let politicians dictate our choices — regardless of which side of the aisle they sit on.
That’s the real key here. If OWS gets traction, it will carry the debate away from traditional politicians. Therefore, the real objective should be to change the agenda. The question is, can OWS get enough momentum to make the politicians yield to its will?
This is about as good an argument as any I’ve heard for continued investment overseas. The combination of overzealous politicians, punitive tax policies and the involuntary redistribution of wealth that will inevitably hit us all — from the very highest earners to the very lowest — signal weaker financial markets ahead. The best choices will be companies doing the bulk of their business in foreign countries where their money (and their investment) is treated better. Until politicians understand that stretching the recovery does nothing to eliminate the excess, nothing is going to change.
Hard assets will back a new global currency basket
I’m not hearing any talk of this from OWSers; perhaps they haven’t put two and two together yet. If there is to be equality and the gap between the haves and have-nots is to be closed, there has to be a reduction in debt and a corresponding increase in real assets. This will take a concerted, worldwide effort that may ultimately need to include a common currency, or at least a common currency trade basket. In that sense, OWS may prompt the “new world order” long feared by conspiracy theorists.
I believe this game is already underway and has been for some time now. The United States fancies itself a player, but it is actually being played. The dollar, which it tries to use as a weapon, is seen as a liability by a growing percentage of the world. This speaks to investing in creditor nations backed by real reserves, rather than debtors with mountains of funny-money they cannot possibly pay back. Hard currencies will be backed by countries with hard economies — right now, that’s the Asian countries, led by China. After the euro debacle, I doubt very seriously there is a nation on earth that will subordinate their currency to a pool of countries ever again.