http://wearethe99percent.tumblr.com/
http://news.yahoo.com/blogs/lookout/occupy-wall-street-isn-t-wall-street-191808167.html
What do you think about the recent protests? Biden likened the OWS movement to the liberal version of the Tea Party. I don't think that's really accurate, since the TP is well organized, corporate-funded, and represented by numerous politicians/interest groups. But I guess the TP believes that spendthrift, meddling gov't is stifling the economy and causing our problems, and OWS believes that Wall St. and its political agents are hoarding wealth and making life harder for the other 99%.
I haven't been following the MSM coverage of the protests, but I would surmise that it hasn't been as flattering as that of the TP. The TP are portrayed as "real Americans" and patriots trying to wrest the country back from an ever expanding, profligate gov't. But OWS may be seen as lazy, whining redistributionists who are jealous of the success of the rich. Predictably, the GOP hopefuls (who are all quite rich) said as much at the recent debate.
Congress has a TP caucus and their agenda has pretty much hijacked a lot of US fiscal and economic policy. I don't hear any leaders on the left rallying to the OWS's message and calling for change. Sure, they pay them token lip service now that the protests have survived a month, but I think the Dems see them more as a liability than an ally, or even a political opportunity. I know OWS is younger and less widespread/organized than the TP, so it's not fair to directly compare their exploits. But they claim that their aim is not to get changes through, but just to make more Americans aware of what parties are making life more unfair for them, in their opinions. That being said, even if they are really successful in spreading awareness, where do they go from there?
The TP wants to take the WH, Congress, and make major changes to US laws and society. For better or worse, it's a grand vision that inspires interest and donations (plus they have the religion lever at their disposal). What about OWS? Will there be enough middle-class outrage to oust the corporate stooges in Washington, get the Dems to start acting like Dems, and/or elect fresh faces who will actually fight for regular Americans? I'm skeptical. After all we went through in 2008 (and where was OWS then?), we just won't/can't address the 2 Americas issues, so it's more or less business-as-usual again. If the Great Recession wasn't enough to get us to wake up, what hope is there? Yes I understand that it took FDR almost a decade to enact financial reforms and jump-start the economy (mostly thanks to WWII), but in today's information age, change should be quicker. Heck, just a month after 9/11 we started to wage a world war on terror.
OWS are definitely not like the 1960's movements, and are a lot more pragmatic and bourgeois actually (not necessarily a bad thing): they have beef with soaring costs, no jobs, deregulation, and executive compensation, but they probably don't want to blow up the system. But those are Band-Aid fixes. Even if our leaders could cooperate and effectively address half of those issues, it would be a great accomplishment but gross inequalities would persist. I know we'll probably never return to the 1940s-60s when firms were less influential and the middle class controlled the highest % of US wealth in our history (global conditions are just way different now). But as long as the unfair structure persists, for every wrong we right, the elites will just find new and creative ways to keep pecking at the rest. If it's not tuition or real estate, it will be something else. It's a rigged game. So maybe blowing up the system is the only way, since clearly corporate America and its politicians aren't going to sober up on their own. Too much loot and ego are at stake. I am sure the Cubans, French, Russians, etc. didn't want to have to rise up violently, but things got so bad they didn't have a choice. Unfortunately we still have a choice in 2011, or at least we think we do.
So I commend OWS for their personal sacrifices and making a public statement for what they believe is right, even if most of their peers are too uncaring and cowardly to do the same (myself included). They have changed history, but so far just slightly. Now clever and benevolent progressive strategists must figure out how to harness their energy and turn it into some concrete good for America. Nothing wins over cynics and doubters like results that benefit them, and failing to deliver will only further undermine their credibility. At least they're honest and didn't oversell themselves like Obama (or the TP for that matter), but unless they have something to show at the end of the day, they'll soon be forgotten - and that is what the establishment is expecting. Does anyone still talk about the huge immigration marches and anti-war demonstrations during the Bush years? No, because they didn't catalyze any measurable change (or the change was for the worse). I know they meant well and gave their all, but it's a tough crowd out there. Like Plato's cave allegory, the philosopher had a hell of a time trying to educate and emancipate the prisoners.
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But I just wonder how that will convince the "silent majority" of Americans in the middle to support the people movement and oppose big banks? They probably already do to a certain extent, but they need to see something tangible before they pull their deposits out of WF. Because that is the only way to hurt a giant like WF: incite a huge run or stock dump, which may or may not be legal. Though to be honest, WF behaved rather responsibly during the housing bubble compared to their peers back east. BofA on the other hand...
The West boycotted South Africa because of Apartheid, and that eventually brought the regime down. Banks need a reason to treat us better. If OWS somehow can organize boycotts or sell-offs, then maybe Wall St. and DC will pay more attention. But a sit-in or picket line may not be that effective. It's a start, but unfortunately the public needs more. The Cal students have been bravely doing that for years, and still the Regents don't give a crap and keep raising fees.
In addition to bank boycotts, we should try to discourage people from entering banking, speculation, and finance. We have enough of those assholes already, and not enough good teachers, nurses, engineers, etc. As Krugman said, when he was in grad school, only the "losers" went into banking because it was boring and not innovative. But now banking has of course become really exciting and innovative, because of the relaxed laws. Many of America's top talent want to enter private equity and finance, partly because the compensation, sexiness, and power are so great.
We need to reverse this trend, either by changing school curricula to only teach more responsible, ethical finance, enacting laws to cap Wall St. pay (or tax their income & cap. gains more), and/or compartmentalizing the financial system the way it was supposed to be under Glass-Steagall. Let the SEC be the SEC (though I doubt that will happen). Too Big To Fail is a bigger problem now vs. 2007, and all the top economists and progressive politicians see it. Heck the conservatives at AEI and Heritage probably do too, but won't speak up. The Great Recession was just a selection process, with the survivors emerging stronger than ever (apart from BofA and Morgan Stanley recently), like abusing antibiotics and creating disease-resistant microbes. Risk-taking bankers and their firms should be socially ostracized, like pimps and ambulance-chasing lawyers. Once it's not as comfortable to work on Wall St., we may see a sea change. As usual, humans respond best to carrots and sticks.
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http://marketplace.publicradio.org/display/web/2011/10/12/pm-oped-stop-wall-street-recruitment-on-college-campuses/
2 Stanford students just wrote a great piece in the school's paper about what we've been discussing (I swear I didn't rip off their idea in my last email). They're tired of big banks recruiting top students into their fold. For all the major problems facing humanity now, do we really want bright kids with the most privileged educations joining the financial ranks to "make rich people richer"? Harvard sends 20% of students to "socially useless" fin. services (and MIT/Stf another 15% each). These rates are 3X higher than previous generations. I know that sector is probably the biggest US "growth industry", but I think most of us would agree that FS are too bloated and too large a chunk of our economy for comfort. And it got that way partly at the expense of other fields that actually earn an honest wage and make useful stuff. Maybe we have to import so many foreign scientists and engineers because FS are diverting our good ones from "real engineering" fields to design exotic securities and scams instead (and paying them 5X more in some cases).
Maybe we need to cap the # of students enrolling in business/finance each year from top schools. I know this won't happen, but we see it in other fields. For some competitive majors (computer science, vet med, etc.), schools may require separate applications and grade attrition, so only the most worthy students get a degree in the subject. Another quality control step to make sure we're not just pumping in more Madoffs and Skillings into the system. I know a lot of the evils of finance are taught on the job, so we can't do anything about that. But maybe making it harder to graduate in these fields will weed out the pack so only the most well-trained and promising (or possibly the most fanatical, connected assholes) will make it through.
It is structurally so hard to become a doctor or lawyer in America, even if you're smart and rich. Why the hell is it so easy to make six-figs as a real-estate agent, trader, or banker? A firm still has to hire you of course, but the education path to those jobs is a lot shorter than that of medicine/law. And docs/lawyers have to swear ethical oaths - what about something like that for FS?
Some campuses block military and CIA recruitment of students. Therefore schools should have the right to refuse WS recruiters too. And maybe the boards should think twice about the message they're sending by accepting WS money to build the Goldman Sachs Center, provide scholarships, or to gain access to research resources and curricula. But in these times of cash-strapped schools (partly due to WS recklessness), it seems unlikely that they would turn down private money (in fact they're sending droves of people out to solicit more donations, quid pro quo of course). Plus the top privates are so flush with WS cash already that they're already a lost cause.
...[U]niversity administrations are also responsible. At best, they have passively allowed the largest banks to dominate student recruitment; at worst, they have enthusiastically promoted these companies and encouraged students to enter finance. To this day, career development offices accept donations from the wealthiest banks in exchange for special recruitment access. For example, until recently, Stanford’s Career Development Center featured Goldman Sachs as a “Gold Partner,” despite the company being under federal investigation for criminal trading practices....
an academic community that actively supports the same financial institutions whose rampant greed caused untold national hardship is a community on the brink of moral bankruptcy. - T Norris, E Pollak
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First off, if you believe in the cause, I absolutely encourage you
guys to go down to your local "occupy" location (if even as a
spectator) to show your support. I was there on the Wednesday as a
part of the larger march, and I came away pretty impressed at the
broad appeal of the movement. Their work through social media has been
nothing short of impressive.
Success is hard to define for something like this movement. I tend to
be pretty pessimistic as to the ability to change the actions of
politicians. I was talking to one of our professors who has been in
the newspaper quite a bit in regards to these protests, and he
suggested that these protests should be seen less in the light of the
tea party, anti-war protests, or the 60s, and more like the (now
forgotten) protests in the Great Depression. Those protests helped
bring about the New Deal, and a long-term goal here would be some sort
of overarching shift in economic policy goals like the New Deal.
However, in order for that to happen, the movement will eventually
have to coalesce behind a specific set of issues (I think the breadth
of the movement is an advantage right now) and we will probably need a
sustained economic recession/depression.
I DO believe, however, that the average American has changed. I think
the recent experiences have shown the average American that the
maintenance of a "free market" requires as much government
intervention as the maintenance of a welfare state. This is something
academics have know for a long time (after all, what are all those top
flight economists doing in central banks around the world?), but
something new to the American voter. The language of "99%" references
this idea. If the government is going to intervene anyway, why
shouldn't it do so for the vast majority of Americans? The Tea Party
was frustration with the fact that the government was intervening, and
OWS is frustration with how the government is intervening. In this
way, both movements have the same root cause, although with radically
different aims and support bases. For this reason, I have argued to
colleagues that, taken together, the support and opposition of
establishment practices regarding financial markets represent an
ephemeral second dimension in American politics (in addition to the
standard left-right economic dimension).
I don't think we'll be seeing the average American marching anytime
soon, but I'm OK with that as long as the American public stays
broadly supportive, or non-committal, regarding the protesters. After
all, social change is often fought on many fronts, and we can't expect
everyone to take the activist route.
Finally, I'd like to end with an argument, perhaps optimistic, about
why OWS might have more staying power than we might all think. I
remember a trip to Niagara Falls during the dot-com boom. In order to
get there, one usually goes through Buffalo. As we stopped in Buffalo,
I was shocked at the awful state of the town, by any parameter. I
started asking people what was going on (Buffalo had the highest exit
rate of any metro area for a long time, I believe). Well, Buffalo,
like so many other cities/towns in America, was an industry town where
industry dried out. It had been that way since the late 80s/early 90s.
It wasn't just Flint, Michigan, industry towns all over the country
have suffered the same fate over the last 25 years.
We were all told that these towns were dead anyway; they had ceased to
be competitive in the global economy. But, we were OK with it, as
things were booming in the Bay Area and New York. The cold hard fact
is that politicians, Democrats and Republicans alike, chose to
explicitly disinvest in and failed to protect the average American in
these towns; instead, politicians systematically diverted funds from
people who needed them in order to invest in "the economy," and many
of us grew up as a beneficiary of this policy. I believe this kind of
protest failed to start earlier due to geographic segregation. We
never really saw the suffering, except in the occasional Michael
Moore-type film. Well, the lack of protection is starting to affect
New York and SF now too. People are angry, and they have been angry
for a long time. How does an economy grow stronger when all the people
grow weaker? What the hell is a jobless recovery? How is it that any
of that ever made any sense?
This is an extraordinarily unpredictable movement. I have no idea
what's going to happen; it could all end tomorrow. But if people want
change, it's the best we've got.
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Unfortunately, I think it was much easier for Guilded Age or Depression-era Americans to protests against the sins of corporate America than for us today (even if those populist movements have been swept under the rug of history). More than ever before, modern Americans work for corporations, invest in them (directly with 401ks, indirectly with pensions, etc.), and owe them (college, mortgage, CC debts). So to rise up against Wall St. means possibly compromising one's financial well-being and prospects for "the American dream" too. We all subconsciously hope (or are explicitly taught) that if we are team players, work hard, and go along, we'll become rich some day. I guess the middle class folks in OWS would really like to continue to believe that, but their personal struggles and the trajectory of America are forcing them to reconsider, and eventually protest.
Despite WS being a bigger part of our lives, our overall financial literacy is horrible. An average American trying to navigate modern finance and economics is like a toddler taking driving lessons. Heck most of us are college grads, but rely on others to do our taxes and manage our retirement. Yes the system is ridiculously complex (probably deliberate), but we should be doing better. This may partially explain the apathy and ignorance out there that some in WS and DC exploit. A fool and his money are soon parted. I guess it starts early with our poor record of math/finance/econ/ethics education, and our almost cultish obsession with material wealth and free market ideals. I guess this indoctrinates us to become very enterprising and entrepreneurial, but clueless on money management and prudent decision making.
Though I wonder how Western Europe and East Asia fare. They obviously score higher on math exams, but do they get exposed to practical finance/economics in secondary school? Of course some EU banks messed up worse than the US banks, but the Asian banks were more cautious (they learned after their boom-and-busts in the 1990's) and most Asian states did not need bailouts, did not see a spike in unemployment, and barely experienced a recession (what pains they felt were mostly due to fewer export orders by the West). As example, Samsung (which accounts for a whopping 13% of S Korean exports) actually posted its best performance during our recession. I guess culturally, Euros and East Asians tend to save more, borrow less, and take fewer risks than Yanks? I find that almost paradoxical because based on moral hazard, those living with strong safety nets like the French and Japanese should tend to take more financial risks than Americans living with generally inadequate labor protections, health coverage, and SocSec. But it's actually inverse, so it must be due to structural differences in the US economy/workforce/culture that change our consumer preferences and values. I dunno, what do you think?
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So goddam depressing. I guess the GOP are wrong, it's not really class warfare. That implies the peasants have a fighting chance. I really want to see how the GOP candidates (and most Dems for that matter) would respond to those data and how their views/policies are perpetuating (if not worsening) the trends. No matter how your slice it, those data are not indications of a healthy democratic society.
But at least some thinking people on the right don't approve either, albeit from a more pragmatic perspective. On APM's "Marketplace" radio show, they have a regular left-right debate between Robert Reich (former labor sec.) and David Frum (former Bush speech writer on the economy). But Frum has recently resigned, ostensibly because he no longer wants the burden of having to "speak for the right", as he disagrees with the dominant GOP stances on gov't and fiscal austerity (he'll continue to speak for himself on his blog though). Anyone with basic econ knowledge knows that harsh austerity during a recession/weak recovery is bad. Even staunch capitalists realize that it's not good for business if people are broke (or heavily in debt), desperate, and chronically unemployed. Safety nets are not just about socialist "nanny gov't"; they promote consumer confidence, productivity, and purchasing power. Again, it's about return on investment. In the next 12 months, will you get more social benefit from giving people EDD checks/food stamps, or slashing public jobs/programs just to barely reduce our deficit? Reasonable conservatives believe in small gov't and controlling spending, for the long term and in good economic times. All the extremist fiscal crap that the GOP candidates are spewing now will just exacerbate the wealth gap, weaken America, and make them look like a party of rich assholes (even more than they already are).
Under the pressure of the current crisis -- intoxicated by anti-Obama feelings and incited by talk radio and Fox -- Republicans have staked out an extreme position on the role of government... For three years, my political party has veered in a direction I cannot follow. And if the GOP insists on framing the 2012 election as a ballot question on fiscal and monetary austerity, or if they nominate somebody manifestly incompetent to do the job of president, they’re going to lose me – and a lot more people beside me. - D Frum
http://marketplace.publicradio.org/display/web/2011/10/12/pm-frum-goodbye-interview/
What sucks is... if those inequality stats applied to one's spouse or manager (sometime not so different!), a person would probably get a divorce/new job. But the US lower-middle classes are just taking it and taking it like a battered spouse. If we can't wrest our nation back from the bankers, maybe we all should just "boycott America" and move to Canada as refugees (joking of course, otherwise Canada would need at least 10 more pro hockey clubs). Then we'll see if the feudal lords can survive without their serfs to kick around. Maybe those free market libertarians would just import more Latinos to fill our void? But at least it would send a message that we are sick of this mistreatment. Why should we hang around playing their rigged game? I know we don't have it as bad as Somalia or something, but do conditions have to deteriorate that much for us to act? We have one life to live, we just want to be happy, and frankly I don't want to waste my time on earth slaving away at a pointless job, saddled by debt/worry, and looking forward to an uncertain future.
There are greener pastures out there somewhere. Maybe not in Greece or Ireland, but somewhere. Like with a bank run, a "brain drain" may be the only way to get American leaders to realize that they need to make the country a nice and fair place to live, in order to retain good people and maintain global standing. Unfortunately, we don't have that much leverage because billions of poorer, desperate people would sacrifice their first-born to take our place, even if conditions are so unjust here (because it's still better than their homelands). So is that what the US elites really want, a third world America? The middle class is fed up and has left (maybe a lucky few get promoted to the upper class), and droves of expendable immigrants have taken their place. Then they might as well dispense with the American nationalism, ideals, and such, as we would overtly be a plutocracy and corporation state.
http://www.huffingtonpost.com/arianna-huffington/third-world-america-why-i_b_706673.html
