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The Moral Compass Issue

By the Numbers

It was perhaps unsurprising that when we asked our global network of contributors to weigh in on the Occupy Wall Street movement and its international franchises, most expressed broad support of their mission of punishing bankers.

It was perhaps unsurprising that when we asked our global network of contributors to weigh in on the Occupy Wall Street movement and its international franchises, most expressed broad support of their mission of punishing bankers and spending lots of time sleeping outdoors. Who could possibly oppose these idealistic representatives agitating, according to their chants, on behalf of the “99 percent”? A whole lot of people, it turns out. With recent polls suggesting that a large percentage of Americans are skeptical of calls to uproot capitalism and switch to a banker-free barter economy, we wondered who would be the voice of the 45 percent (according to a recent survey by Public Policy Polling) with an unfavorable opinion of the movement. We knew that if we asked Richard A. Epstein, professor at NYU Law School, fellow at Stanford University’s Hoover Institution, and rock-ribbed libertarian, we could anoint the Kalle Lasn (the Adbusters guy) of the countermovement. Epstein’s most recent book is Design for Liberty: Private Property, Public Administration, and the Rule of Law (Harvard University Press). Buy it, lazy hippies. It is very easy to see what angers the Occupy Wall Street movement and its many supporters. It is the declining standard of living in the United States, the high rates of unemployment, and the perception that somehow the top 1 percent have received a dispensation from the discharge of their real obligations, allowing them to weather the economic storm without real damage. What is wrong with the movement is that it confuses perception of what ails this nation with an understanding of the sources of its decline. It is hard to “see” the social and economic causes for social prosperity and, equally, for social decline. It takes a theory to give some insight to what is wrong. The OWS is bereft of theory, which when rightly understood points in the opposite direction. The American economy suffers from a one-two punch from which it cannot easily escape. At the bottom lies the extensive government regulation of primary economic activity, chiefly in labor and real estate markets. The extensive, and ever-rising, levels of government interaction have squeezed the life out of both these markets, and further regulation will lead to only higher rates of unemployment and consistent decline in housing values. To increase productivity requires repeal, not tougher enforcement of current regulatory regimes. Labor rules on unions, discrimination, and minimum wage have to be scaled back, if not eliminated. The refusal to allow foreclosures to proceed in ordinary fashion will place an enormous overhang on real estate markets for new and used housing. At the macro end, it is not possible to finance an entitlement system by exacting ever-larger contributions from the rich. Taxes are already progressive. Capital-gains income dries up with a stagnant stock market. Wages at the top fall with a slowdown in the economy. Incentives to invest are dulled by high taxes. The pools of available venture capital wealth are diminished by high levies.  OWS thinks that it is possible to have massive programs of redistribution over a shrunken productive base. That is not possible.