Much has been written comparing and contrasting the Occupy Wall Street (OWS) protestors and the “Tea Party”. Both groups evidence great dissatisfaction with our current state of affairs, and each has chosen a different path to express that dissatisfaction. The “Tea Party” leaders pay for the necessary permits to assemble, have organized effectively to influence elections, pay the costs of their own clean up and for the most part have become a formidable political force focused on shrinking a bloated and inefficient government. The OWS leaders, where they can be identified, engage in civil disobedience, illegally squat on public land (yes, you can picture the whole graphic) and don’t shoulder the costs of their demonstrations; they are an eclectic fusion of discontent and fringe causes focused on an incoherent ideology. At best, they are what Jonah Goldberg calls “dreamy anarchists”.
OWS embraces the full circus of the politics of alienation from militant vegans to Black (and Gray) Panthers to the deranged homeless. Their sites in NYC and Oakland have many criminal complaints ranging from assault and theft to sexual misconduct and rape. The leaders discourage reporting to police any crime in their makeshift tent community because they spurn the legitimacy of all authority.
However, the OWS protestors are not without some rationale for their discontent. Like their forbears of the sixties, who had some valid grievances of racism, sexism, government corruption and bellicosity, the current banner wavers find justification for their disassociation in some genuine evils. If there is a constant in their chanting, the bogeyman is “corporate greed”. Every day seems to expose another scandal on Wall Street or in the business community.
- Citibank agreed to a $285 million settlement with the Security and Exchange Commission for selling risky mortgage derivatives with hefty fees to investors, then going short on the same CDOs they sold. i.e.: They bet successfully against their own investors on financial instruments from which they benefitted greatly selling. Goldman Sachs and JP Morgan Chase settled similar suits last year.
- Until two weeks ago, Rajat Gupta was one of America’s most respected Wall Street directors for Goldman Sachs and Proctor & Gamble after working his way up to become the managing director of the well-regarded McKinsey & Co. consulting firm. He was arrested and accused of passing inside information to his friend, former hedge fund king, Raj Rajaratam – information from which Rajaratam made or saved millions. Mr. Rajaratam is currently serving an 11 year prison sentence for other offenses.
- Solyndra took hundreds of millions in government guaranteed loans through the Department of Energy, dissipated it all and filed for bankruptcy. One of the founding investors of the company was former Dept. of Energy official, Stephan Spinner, who is a significant bundler for Obama campaign fund raising. Congress is attempting to subpoena Valerie Jarrett and Larry Summers, current and former administration officials, who had a hand in pushing for the loans.
- Another major bundler of funds for the campaign is Jon Corzine, the ex Democrat Governor of New Jersey. A former Goldman Sachs director, as Chairman and CEO, he took MF Global recently into the sixth largest bankruptcy in American history. He resigned last week amidst charges of a misplaced $600 million, falsifying financial statements by hiding debt and misappropriating client’s money. They destroyed the investments of many by making bad, risky bets on European bonds.
OWS has plenty of grist for their mill; the problem is that they seem more intent on getting someone else to pay their student loans, beating drums, breaking windows and defecating on police cars than driving substantive reform. This is all quite entertaining; however the causes of our discontent cannot be remedied by protests or for that matter political action in the short term. The bleak facts are these:
- The Federal Reserve projects that unemployment won’t drop below 8 until 2014 and real GDP growth won’t exceed 3% until at least 2013. We ain’t out of the woods.
- The bottom 40% of American households earns less in inflation adjusted dollars than they did in 1989. The next 20% are about even. The top two tiers have improved 6.4% and 17% in twenty years. Yes, the rich are getting richer, but at less than 1% a year.
- The concern is systemic: a prospering middle class, which was the buoyancy of the mid twentieth century economy, was secured in well paying, blue collar jobs that for the most part no longer exist.
- Globalization means that workers in Michigan aren’t competing for good jobs with workers in Pennsylvania or Ohio any longer; their competition is in Malaysia, Mumbai and Shenzhen. And nothing is going to change that. Tariffs, trade wars, higher taxes and xenophobic rants will not modify the certainty that our economy has changed, and it will never be 1950 again.
Wall Street greed should be prosecuted when it crosses the line, but if we taxed them all to penury and spent it all on government make work, what ails us will not be fixed, only made worse. So, OWS, please call us to dream of a better world, but don’t rail against the tide and wind until the winds no longer blow and the tide doesn’t come in. What is needed is hard work, sober judgment and the creative spirit that made America great. We need dreamers, and even more we need doers.
Quote from a letter to George Will from William F. Buckley on conservatism:
“We must do what we can to bring hammer blows against the bell jar that protects the dreamers from reality. The ideal scenario is that pounding from without we can effect resonances, which will one day crack through to the latent impulses of those who dream within bringing to life a circuit that will spare the republic.”