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Top Journo Matt Taibbi Weighs in on 5 Demands to Fix Wall Street

• The Daily Bell

Matt Taibbi Lists The 5 Things The Occupy Wall Street Protesters Should Demand ... The man who called Goldman Sachs a "great vampire squid" has some advice for Occupy Wall Street. Not that he doesn't think they're doing things well. In fact, he thinks the logic behind the protester's lack of demands is ingenious. But if they were to figure out their specific demands. Here's where he, per his article in Rolling Stone, thinks they should start. –  Business Insider

Dominant Social Theme: Break up Wall Street corruption and things will start to get better.

Free-Market Analysis: Famous Rolling Stone writer Matt Taibbi has weighed in on the Occupy Wall Street movement once more with a specific set of five demands that protestors could focus on. Business Insider does a good job of summarizing them. Here they are, verbatim from Business Insider:

1. Break up the monopolies. Taibbi is talking about the 20 or so "too big to fail" companies in our country that could single-handedly take down our economy.

2. Pay for your own bailouts. "A tax of 0.1 percent on all trades of stocks and bonds and a 0.01 percent tax on all trades of derivatives would generate enough revenue to pay us back for the bailouts, and still have plenty left over to fight the deficits the banks claim to be so worried about..."

3. No public money for private lobbying. Pretty self-explanatory.

4. Tax hedge-fund gamblers. Right now, because of the carried-interest tax break, they're only paying about 15%.

5. Change the way bankers get paid. Bonuses shouldn't be paid up-front. They should be contingent upon performance.

Taibbi's prescription has gained attention. DeGraw featured his article on Amped Status and he appeared on the well known "Imus in the Morning" program to speak about them. The "I-Man" suggested he take charge of the movement, but Taibbi declined.

Taibbi is positive about Occupy Wall Street and thinks it can make a difference. He's visited the protestors twice and is impressed, but he also believes they ought to be coming up with specific demands.

So let's take the ones he came up with one at a time – and analyze them from a free-market oriented point of view.

Monopolies. Taibbi wants to break up monopolies and presumably he would use the power of the federal government to do so. In fact, this is reminiscent of Teddy Roosevelt's "trust-busting." Famously, John D. Rockefeller's great company, Standard Oil, was broken up a result.

However, Rockefeller was able to keep some kind of control behind the scenes, so the exercise wasn't ultimately very effective. He also ended up with stakes in each of the companies formed by the break-up, thus considerably expanding his wealth over time. Because of mercantilism – the behind-the-scenes influence of Money Power – trust-busting likely never works out exactly as planned.

Transaction taxes. Tabbi wants to install a tax on financial trading, which is actually a fairly radical idea. This might end up forcing everyone to reveal their trading activities, thus giving the government – actually the behind-the-scenes power elite – access to everybody else's financial activities.

It would surely be an intrusive and anti-freedom activity, targeting large and small shops alike, and probably ending up putting some small shops out of business because of the onerousness of what was demanded. This would ironically further centralize the clout of certain big trading shops, which is presumably NOT what Occupy Wall Street wants to happen.

What is this obsession with taxes? Doesn't the US federal government ALREADY take in enough taxes – some US$3 trillion, much of which goes to overseas wars and to the military industrial complex in general? Is the rest so well distributed? Why not try to fund the private sector instead of the public?

Lobbying. Taibbi doesn't want industry lobbyists paying for the activities with public money. Actually, we're all for this one. Any kind of privatization is probably a good thing. However, we are puzzled by why Taibbi doesn't call for the downsizing of the federal government itself. Take away its power and influence and lobbyists would automatically detach.

Tax hedge fund gamblers. Another tax! Why is Mr. Taibbi so positive that DC would handle these taxes any better than Washington already handles the vast sums that converge on it now? We haven't noticed the infrastructure of the US is notably better since Barack Obama and the Democrats took over.

Bonuses. Finally, Taibbi wants changes in the ways that bankers get paid. This is another suggestion that implies considerable additional intrusion on the private sector. Presumably – logically – Wall Street would have to keep records of who was being paid what and provide them on demand.

Maybe that's OK and fits in with broader goals of Occupy Wall Street. But who's to say this practice wouldn't spread to the rest of the private sector over time? And eventually, wouldn't government establish courts and other forums to debate and regulate the merits of private sector compensation? FDR wanted this sort of power for the government but didn't get it back in the 1930s. Now Taibbi's put it back on the table.


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