Dissecting the 'We Are Wall Street' Letter: the most fun you can have in reading glasses

New York Stock Exchange - iconic Wall Street ready to fight back.

 Some of you will have seen this letter. It's been circulating around Facebook for a few days now, proudly touted by those who still buy into the whacky premise of supply side economics as a beautiful rejoinder to the Occupy Wall Street movement. Let's analyze it piece by piece, and see just how beautiful it is. (Original text in blue. My comments in black.)

• We are Wall Street. It's our job to make money. Whether it's a commodity, stock, bond, or some hypothetical piece of fake paper, it doesn't matter. We would trade baseball cards if it were profitable. This much at least is not problematic. Given the timbre of the rest of the letter, the writer is certainly arrogant enough to represent the excesses of Wall Street that we've all grown to despise.
• I didn't hear America complaining when the market was roaring to 14,000 and everyone's 401k doubled every 3 years. Just like gambling, its [sic] not a problem until you lose. I've never heard of anyone going to Gamblers Anonymous because they won too much in Vegas. Also quite true. No one complains when they are winning. The problem here is, of course, that it was just like gambling, except it wasn't supposed to be. No one in their right mind takes their pension fund to Las Vegas. They put it in nice safe diversified mutual funds and money market funds. All the unmitigated risk came from Wall Street. Wall Street took our money to Las Vegas and lost it. Not their money, our money. We didn't give them permission to do it. They didn't ask. But even though they lost our money, they still expected to get their commissions and their fat bonuses. And it gets worse because they didn't just lose our money, they set us up to lose our money and then bet against us. They sold securitized mortgage paper that they knew was crap to our pension funds, lied about how crappy it was, and then invested themselves in short positions on the same crap so that the more money we lost, the more money they made. The biggest and most respected Wall Street firms were found guilty of this kind of fraud. They paid substantial fines and penalties for it—not so substantial that it has slowed them down any, but hundreds of millions of dollars. No one went to jail though. A lot of us Joe Mainstreets think someone should have gone to jail. God knows we would have had we sunk to this level of criminality.
• Well now the market crapped out, and even though it has come back somewhat, the government and the average Joes are still looking for a scapegoat. God knows there has to be one for everything. Well, here we are. Scapegoat, my ass. If the shoe fits, bud.
• Go ahead and continue to take us down, but you're only going to hurt yourselves. What's going to happen when we can't find jobs on the Street anymore? Guess what: We're going to take yours. We get up at 5am & work till 10pm or later. We're used to not getting up to pee when we have a position. We don't take an hour or more for a lunch break. We don't demand a union. We don't retire at 50 with a pension. We eat what we kill, and when the only thing left to eat is on your dinner plates, we'll eat that. Most of us in the 99% work long hours too—at least those of us who still have jobs. Good luck taking jobs away from the 14 million of us who don't have one to take, or the 11 million additional displaced workers who have been forced into early retirement, have fallen off the unemployment rolls, or are underemployed. We don't retire at 50 with a pension either. In fact many of us will be lucky to be able to retire at all after what you bozos have done to our savings. You don't eat what you kill. You kill for sport. You work until 10 at night because your whole life is about racking up points. You don't have friends except at work. Your family plays second fiddle to your job. You come after my plate and you're not going to find the filet steaks and coquilles St. Jacques that you are used to. You are going to find rice and beans. If you try to take it away from me, you are going to end up eating broth and jello at the hospital.
• For years teachers and other unionized labor have had us fooled. We were too busy working to notice. Do you really think that we are incapable of teaching 3^rd graders and doing landscaping? Well, yes I do think you are incapable of teaching 3^rd graders and landscaping. I've done both and I've also been a CPA and worked as an accounting executive. I'd rather do accounting. It's easier. It's not as easy as trading hypothetical pieces of fake paper, but it's not nearly so hard as managing a classroom full of eight-year-olds or trying to get rid of a spider mite infestation on a variegated dracaena marginata without killing the plant...or yourself.
  
  

  

  Trading floor of the NYSE where Wall Street is busy saving America from its elementary school teachers.

  
  
• We're going to take your cushy jobs with tenure and 4 months off a year and whine just like you that we are so-o-o-o underpaid for building the youth of America. Say goodbye to your overtime and double time and a half. I'll be hitting grounders to the high school baseball team for $5k extra a summer, thank you very much. Wait...what? Cushy? 4 months off? Double time and a half? $5,000 for running a baseball practice? What planet do you live on?
• So now that we're going to be making $85k a year without upside, Joe Mainstreet is going to have his revenge, right? Wrong! Guess what: we're going to stop buying the new 80k car, we aren't going to leave the 35 percent tip at our business dinners anymore. No more free rides on our backs. We're going to landscape our own back yards, wash our cars with a garden hose in our driveways. Our money was your money. You spent it. When our money dries up, so does yours. Wait...what...again? $85k? Same question with respect to your planet of residence. I drive a 2003 PT Cruiser, which I wash in the driveway with a garden hose. I tip 20-25% when I eat out because that's as much as I can afford. I didn't stop tipping or cut my tipping down when I lost my job because, unlike you, I am not a prick. And here's another thing. Since you make your money off of mine, when my money dries up, so does yours. It doesn't actually work the other way, much as you might wish us to believe that it does.
• The difference is, you lived off of it, we rejoiced in it. The Obama administration and the Democratic National Committee might get their way and knock us off the top of the pyramid, but it's really going to hurt like hell for them when our fat a**es land directly on the middle class of America and knock them to the bottom. We lived off the money we worked for. You rejoiced in the money you scammed us out of. What's more the Obama administration and the Democratic National Committee are not going to knock you off the top of the pyramid. You guys paid to put them in office. They are probably going to leave things as they are unless the Occupy Wall Street movement gains so much momentum that they have to sit up and take notice. Where do you think the $2 trillion in bailout and economic stimulus money went? It went to Wall Street. It paid your fat bonus. Conservative pundits are clamoring about Obama's spending spree, but most of the money went right to the top of the pyramid where it stayed. It didn't go to hiring teachers back or putting America back to work. It went into the coffers of asshats and pirates who used some of it to lobby against financial reform and the kind of common sense regulations that would prevent another bubble, bust, and bailout cycle. Obama is your friend. He may not be as good a friend as, say, Rick Perry, but he's done everything you required to maintain the status quo.
• We aren't dinosaurs. We are smarter and more vicious than that, and we are going to survive. The question is, now that Obama & his administration are making Joe Mainstreet our food supply...will he? And will they? Honestly, I don't even know what this means. I think possibly your last hit of cocaine kicked in somewhere in the middle of the paragraph above this one. In fact this whole missive is so disjointed and misinformed that I have decided, arrogant or not, you are not Wall Street at all. You don't know enough about how finance and economics actually work to have ever done time selling securities, vetting market analysis, or timing trends. You are an ignoramus, and you are not taking anything away from me. Besides, someone way smarter than you has already got most of it. 

A Steaming Pile by Any Other Name: Horse and Sparrow Economics

For several weeks now, I have been Tweeting and Facebooking the hell out of something called 'horse and sparrow economic theory' because it is at once so evocative and so descriptive of the bill of goods that has been supply side policy since the Reagan administration. 'Supply side economics' was a term adopted to replace what was, at the time, the more pejorative term, 'trickle down economics'. In either case, the theory was that if you cut taxes for the wealthy they would have more money to save, and part of that savings would be invested in new technology and new productive capacity, which would create new jobs and lift the economy as a whole. In other words a little governmental largess for the wealthiest Americans would eventually trickle down to benefit everyone.

For a while it seemed to work that way. Reagan had inherited an economy that wasn't just stagnant, it was also inflationary. They called it 'stagflation', and while there were lots of theories as to what caused it at the time, it was doggedly resistant to any measures adopted to get out of it. Reagan's solution was across-the-board income tax cuts coupled with a massive increase in defense spending. The math didn't work of course, and Reagan's budget director, David Stockton, got into trouble for saying as much in an interview with Vanity Fair at the time.

Reaganomics, as it came to be called in the press, relied on something called the Laffer Curve to sell the plan. What the Laffer Curve purported to show was that if you lowered tax rates, total tax revenue would actually go up because the taxes saved by individuals and businesses would lead to higher income through investments and thus higher absolute taxes although at a lower rate. This turned out not to be true, and Reagan suddenly had a revenue problem. His spending was going through the roof even though he touted spending cuts, and his tax receipts were taking a nose dive. Turns out you can't arm a nation to the teeth without spending money, and arms to protect us from Soviet missiles that didn't fly straight cost a lot more than food for the poor.

Alan Greenspan, tapped by Reagan to chair a bipartisan commission to fix Social Security, instead fixed Reagan's revenue problem with subterfuge. Purporting to put Social Security back on sound financial footing, he raised Social Security taxes. The additional tax revenues filled federal coffers by effectively reversing Reagan's income tax cuts for middle and lower income wage earners. This was a huge regressive shift in the total tax burden—lightening the load for the rich and increasing the burden for the poor.

Reagan was happy to borrow the Social Security receipts to fund the arms race. He got the Soviets to spend themselves into the poor house, but the apparently serendipitous collapse of the Soviet Union may have created as many problems as it solved. Reagan once famously called the accounting sleight of hand 'revenue enhancement'. For the middle class taxpayers upon whom the burden fell, Reagan's use of the term 'enhanced' is the moral equivalent of using 'enhanced interrogation techniques' to describe torture.

Eventually stagflation went away. Supply side advocates like to point to Reagan's apparent success to sell 'enhanced' trickle down policies today. I would argue that since Reagan actually raised taxes, increased spending, and more than doubled the deficit, supply side philosophy had little to do with the improved economy. A much better case could be made for increased spending as the best way to kick-start a stalled economy.

This is just too Keynesian to be embraced by conservatives though. They are all still firm believers in the supply side formula, even though it has never really worked...not even for Ronald Reagan who is its patron saint. After thirty years, the legacy of supply side policy-making is clearly bubbles, busts, and bailouts. It is time to go back to calling supply side theory by the name it started with—' Horse and Sparrow'. It goes like this: if you feed the horse enough oats, some will pass through to the road for the sparrows.

When the sparrows get tired of the steady diet of the horse's leavings, we will finally see what 'Angry Birds' really look like.

Flatline the Flat Tax

Rick Perry is coming to town with a tired old idea - the flat tax - only it's voluntary. That's right, in an effort to simplify 3 million lines of tax code, Perry has proposed adding another layer of tax rate that you can elect to pay if your taxes computed under the old system add up to more than 20%. How is this simplification? This is an unvarnished tax reduction for the highest bracket taxpayers. 


It's just another way to lessen taxes for those who can most afford to pay, and stick it, yet again, to the middle class.


Just say 'no' to more of the same old trickle down doodoo with a bumper sticker from Aimless Arts.

flatline the flat tax bumper sticker by JonahGibson
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