Gay Patriot Header Image

Occupy Washington!

A few days ago, Kurt posted on this speech by Daniel Hannan. I agree that it’s brilliant, in how much it packs into a short space.

Kurt’s angle was, Who are our Hannans? But I would like to get into the substance of what Hannan said.

You may disagree, but I find that any of Hannan’s major points (summarized below) could be expanded into a worthy discussion.

  • The 2008-9 bailouts, and the money-printing which continues today (another form of bailout), are an ethical crime. In effect, they transfer wealth from the poor and middle class to the largest banks.
  • They are a breakdown of democracy: politicians serving themselves and the largest banks, rather than the People.
  • Occupy Wall Street is directed at the wrong target. Occupy the national legislatures and central banks!
  • Being pro-business (i.e., corporatist) is not being pro-market (i.e., capitalist). So, it’s not fair to say that we have been living through a failure of capitalism. Why is that?
    • Subsidies, bailouts, and business nationalizations are the opposite of capitalism.
    • Under capitalism, banks would have been allowed to fail. Bank shareholders, bondholders, and even some depositors would have lost money. But taxpayers and wage-earners would not have had to subsidize them.
    • Capitalism achieves efficiency precisely when businesses fail (must be reorganized or sold). Business failures are not a sign of capitalism failing; they are a sign of capitalism working.
  • The 2008-9 crisis was not caused by inadequate regulation. Why is that?
    • No industry, except maybe nuclear power, is more regulated than the financial industry.
    • Regulation imposes heavy ‘compliance’ costs on businesses, sooner or later. Those costs effectively protect the largest players (who can afford them), driving out newer and smaller players (who can’t).
    • Thus, it was financial regulation precisely which created the “Too Big To Fail” (TBTF) banks; banks so large that their failure panics everybody into doing those bailouts.
    • We should aim for a system where bank failure is normal and easy, as is bank creation (new, small and unconventional players).
  • As for the alleged ‘greed’ of capitalism:
    • The desire for material goods and higher living standards is universal in all human beings and all economic systems.
    • Capitalism harnesses that desire uniquely for social good. Under capitalism, you ‘fulfill your greed’ by providing others with a service that they value.
    • Whereas, under all of the other systems, you ‘fulfill your greed’ “not by being productive to your neighbors, but by crawling to those who are in a position of power.”

I wish Romney and Ryan had given speeches like Hannan’s! This is the kind of narrative – forcefully presented, anti-bailout, clear and true – that lovers of freedom must put before the American people.



  1. Capitalism harnesses that desire uniquely for social good. Under capitalism, you ‘fulfill your greed’ by providing others with a service that they value.

    (Lets say service or product.)

    “Value” is the key. People measure value by the sense that they are getting more than they expected. In service, that is often accomplished by personal contact and concern. In a product it is usually a combination of quality and price.

    When businesses “fail” it is often because they have spread themselves so thin that they really don’t know where their profit centers are. When they get themselves into that situation, they confuse themselves about how to offer value without hurting the bottom line.

    Angie’s List is a great concept for weeding out the clunkers in the service industry. In a large sense, Angie’s list measures the sense that individuals have formed concerning value.

    One of the great beauties of the internet is the consumer’s ability to “discover” where to go for value.

    Comment by heliotrope — January 28, 2013 @ 10:31 pm - January 28, 2013

  2. I would go even farther that wise and value-centered use of your resources does not qualify as “greed”.

    You don’t get rich by being greedy. Indeed, greed is antithetical to getting rich, inasmuch as it prevents you from using your resources — you’re too busy hanging on to them.

    Comment by North Dallas Thirty — January 28, 2013 @ 11:19 pm - January 28, 2013

  3. None of these things make sense and I have things to say about them!

    Comment by puppyman — January 29, 2013 @ 7:32 am - January 29, 2013

  4. This is juuuuuuuust great.

    Comment by oldjoe — January 29, 2013 @ 7:34 am - January 29, 2013

  5. Part of the problem is not that the financial-markets are over-regulated….but that those very regulations skew the inherent balancing-factors of markets in-favor of the financial institutions. The Game is their favor. Just as the Federal Tax Code is rigged in favor of those who lobbied for their loopholes and special tax treatments.

    It’s not Capitalism that’s the problem, it’s “Casino Capitalism” of Wall Street and the “Crony Capitalism” practiced by those within the Beltway.

    Comment by Ted B. (Charging Rhino) — January 29, 2013 @ 9:38 am - January 29, 2013

  6. Yeah Ted. I’m still struggling to find the right term for that kind of non-capitalism.

    – Calling it “crony” or “casino” capitalism still implies that it’s somehow capitalism.
    – Calling it “corporatism” implies that corporations rule the roost (they don’t; Big Government does). And may also imply that I’m anti-corporation (I’m not).
    – “Fascism” is technically accurate, but freighted with baggage (many people won’t be able to hear the point).
    – Hannan’s speech talks about the difference in being “pro-business” (as in, Big Government should ‘help’ business) vs. “pro-market” (as in, Big Government should not; should stay out). In that case, I would be “pro-market”. But that doesn’t mean I’m anti-business.

    So I still haven’t found a satisfactory term, for this un-free system that we’re living under. “Venture socialism” might be OK. Or here’s one that I have just thought of: “Unfree enterprise”.

    greed is antithetical to getting rich, inasmuch as it prevents you from using your resources — you’re too busy hanging on to them

    Very interesting.

    Comment by ILoveCapitalism — January 29, 2013 @ 12:38 pm - January 29, 2013

  7. Wow, I don’t know puppyman, every point ILC listed makes sense to me, but hell what do I know?

    As for greed, it is best defined by the actions of a government that takes 40% – 50% of all the money I earn under the guise that it “is for the children.” Then, that government squanders my hard earned money on a host of nefarious exspenditures, comes back to me for MORE of my hard earned capital and tries to shame me into paying more because I am not paying “my fair share,” or that “I didn’t build that business” over the past 30 years.

    Value is defined as that man or woman who has a great idea and starts to build a business around that idea. Struggles for years, hires 2-3 people, and continues to grow that idea (a good or service). Over time the business employs many hundreds if not thousands, generates millions if not billions in revenue, and the business and the employees pay millions in taxes to that very same government “for the childre!!”

    It really is that simple. That is capitalism – not the shit we practice today that is over run with liberalism, regulations and democrat party control.

    Comment by mixitup — January 29, 2013 @ 12:43 pm - January 29, 2013

  8. The philosphical-split really is between the “small buinesses” who are at the mercy of te Government…and the “big businesses” who have co-opted the Government to defend their entrenched postions.

    In yesterday’s WSJ;

    In 1999, economist Milton Friedman issued a warning to technology executives at a Cato Institute conference: “Is it really in the self-interest of Silicon Valley to set the government on Microsoft? Your industry, the computer industry, moves so much more rapidly than the legal process that by the time this suit is over, who knows what the shape of the industry will be? Never mind the fact that the human energy and the money that will be spent in hiring my fellow economists, as well as in other ways, would be much more productively employed in improving your products. It’s a waste!”

    He predicted: “You will rue the day when you called in the government. From now on, the computer industry, which has been very fortunate in that it has been relatively free of government intrusion, will experience a continuous increase in government regulation. Antitrust very quickly becomes regulation. Here again is a case that seems to me to illustrate the suicide impulse of the business community.”

    And they all do it….
    – The Banks and Financial Institutions.
    – Heavy Industries like the Auto Companies and Defense/Aerospace.
    – Almost any Fortune 500 company….and most of the S&P 1500.
    And when that happens the Corporate Nomenklatura aligns wit the Democrats to protect their vested interests…even the Trade Unions.

    Comment by Ted B. (Charging Rhino) — January 29, 2013 @ 1:43 pm - January 29, 2013

  9. Hey, remember how Obama and the Obama Party screamed and shrieked that the financial crisis and the resulting bailouts were due to fat executive pay packages and that these people should be punished?

    Yeah, they were kidding about that too.

    I now eagerly await the parade of leftist concern trolls to explain to me how all of this is a) Bush’s fault, b) due to Republican obstructionism, and c) the result of Tea Party racism.

    Comment by North Dallas Thirty — January 29, 2013 @ 3:09 pm - January 29, 2013

  10. Jon Corzine hasn’t even been indicted yet. What more proof is needed?

    Comment by Ted B. (Charging Rhino) — January 29, 2013 @ 3:13 pm - January 29, 2013

  11. “The suicide impulse of the business community” – were truer words ever written?

    Comment by ILoveCapitalism — January 29, 2013 @ 3:27 pm - January 29, 2013

  12. I don’t agree that bank failure should be made ‘easy’. It sounds nice in the purely capitalist (i.e. unreal) abstract but it’s not ultimately beneficial to depositors, those with lines of credit, investment accounts, etc. — real people whose lives depend upon institutions to exist and for their money to be available. (The word ‘bankruptcy’ has literal meaning here.) I do agree that regulations that create huge, unaccountable banks and policies that encourage risky lending are harmful, obviously, as are subsidies, bailouts, laws that protect and reward failure, etc. A market economy is essentially populist in the sense that the little guy has a shot. I too wish Hannan’s populist appeal (one that appeals to common sense, crosses political boundaries, and counters smears of vulture capitalism) had been part of Romney’s campaign. But Romney is no Hannan.

    Comment by Ignatius — January 29, 2013 @ 4:10 pm - January 29, 2013

  13. ‘Easy’ was my interpretation or description of Hannan’s point. But on the issue, let me put it this way: Either banks are public utilities, or they are for-profit enterprises. Which is it?

    You make them sound more like public utilities. I’m not objecting to that, here: I’m only saying that if they are, then they should be run and controlled like utilities. The alternative is for them to be for-profit enterprises. If they are, then they should be subject to the risk/pain of failure. If their depositors lose money, then so be it. There was a time when depositors were expected to know something about the bank, and to exert various pressures (market, and moral) upon the bank to make sure it stayed safe. That wasn’t a bad system.

    What we have now is a miserable hybrid system: banks are sort of like utilities, but able to gamble depositors’ money for profit. Also known as “socializing the losses, privatizing the profits”… or venture socialism.

    Comment by ILoveCapitalism — January 29, 2013 @ 4:23 pm - January 29, 2013

  14. Of course banks should be private, for-profit enterprises. That wasn’t my point (and you know that). You blogged that bank failure should be easy and in the abstract, even laudable. I disagree.

    Comment by Ignatius — January 29, 2013 @ 4:40 pm - January 29, 2013

  15. Disagreement is great. But it could be a little shaky to assume what I “know”, without asking it as a question 😉

    Comment by Jeff (ILoveCapitalism) — January 29, 2013 @ 4:47 pm - January 29, 2013

  16. Ted B makes a great point when he writes: “The philosphical-split really is between the “small buinesses” who are at the mercy of the Government…and the “big businesses” who have co-opted the Government to defend their entrenched postions.”

    Part of what that also explains is why big money folks like Soros back the Democrats. They favor a government which they can direct (insofar as it doesn’t come after their wealth), plus someone like Soros figures he’s beyond the reach of any one government because he does so much with currency manipulation and he invests so widely abroad anyway.

    Comment by Kurt — January 29, 2013 @ 5:00 pm - January 29, 2013

  17. Confiscatory legislation is hardly ever directed at the very wealthy. There aren’t enough of them to finance a politician’s goals and they’ve already made their money. I’m not sure that the Main Street vs. Wall Street divide is really so stark anymore; many of the small business people I’ve met would love government intervention on their behalf, even if it’s only in response to the favoritism given to larger, better connected business.

    Comment by Ignatius — January 29, 2013 @ 5:15 pm - January 29, 2013

  18. I’ve been a fan of Hannan for several years and enjoyed the conversation here. I do have one issue with how Corporatism has been defined by ILoveCaptalism. It is not about the corporation being in charge or having greater power than the state. Instead it is the collusion of government, corporation and sometimes unions. The purpose is to synthesize the needs of competing interests to reach a harmonious outcome for the greater good… in theory. In actual practice it seldom works out well for anyone and creates an drag on the market in general.

    I know that in popular dialogues corporatism is used to describe powerful businesses running roughshod over governments and people and being evil bastards in general. However, corporatism in its proper definition includes the governments not as pawns of corporations but as active and willing partners with companies for a mutually beneficial resolution to problems.

    I think the economic system we now have has definite corporatist elements as pointed out so eloquently by several commentators above. It is not as entrenched as we see in Austria or some of the Scandinavian states, but there are definite aspects or corporatism in the US system that have grown more entrenched over time.

    Comment by Lloyd — January 31, 2013 @ 2:55 pm - January 31, 2013

  19. The purpose is to synthesize the needs of competing interests to reach a harmonious outcome for the greater good… in theory. In actual practice it seldom works out well for anyone and creates an drag on the market in general.

    Well stated. This is pure Keynes, specifically triangulation of Big Business, Government, and Labor. Corporations today are a mixed group of enthusiastic collusion (favorable regulation, government contracts, tax law), reluctant self-preservation in a rigged game, and even a few idealists.

    Comment by Ignatius — January 31, 2013 @ 4:04 pm - January 31, 2013

  20. Lloyd, fair enough! Point taken.

    Comment by ILoveCapitalism — January 31, 2013 @ 6:09 pm - January 31, 2013

RSS feed for comments on this post.

Sorry, the comment form is closed at this time.