Can someone brief me on what Occupy Wall Street is trying to do? I can't quite figure it out.
If they're mad about being unemployed, marching sure isn't going to fix their situation. If they're mad about government corruption, what exactly would they like done? If they're mad about the economy in general, isn't Wall Street the worst place to be protesting? I feel like the traders on Wall Street would be the first people to want an economic bounce back. Do they just hate rich people? Hmm.
I've held back on criticizing this movement, but after all this time, I still can't figure out exactly what they want. It's seeming more and more to me, as just a way to waste peoples' times, and our tax dollars.
I feel like the traders on Wall Street would be the first people to want an economic bounce back.
Hence your failure to understand OWS. Wall Street's job is to make money. Period. If it happens that it is effective to make money by repeatedly crashing and booming the stock market, then that is exactly what they will do.
Well, it turns out that it is extremely effective to make money by repeatedly crashing and booming the stock market.
If it happens that it is legal to pay government officials to pass laws covering your losses, and if it can be done for a reasonable cost, then they will do that too.
Well, it turns out that yes, this can be done for a very reasonable cost!
I find it amazing that any person on HN - HACKER news - is unable to imagine of hundreds of different ways to hack the government-economic system for fun and profit, or once having imagined them, to imagine that people with the necessary money would then not do so.
I find the most interesting part of this 'hack' is how it's next to impossible to pull off a successful protest in civilised society: The greatest trick the upper echelon have pulled, is convincing the masses that using violence to achieve your ends is uncivilised.
As a non-US-er, we sometimes look down on the US for having a gun obsession, but there's no way anything OWS does would escalate to the point of seriously grabbing everyone's attention like, say, building an army, storming a building and forcibly arresting a CEO. They say OWS is inspired by the Arab Spring[1][2], but that would be a pretty tame example compared to the revolutions in Egypt and Libya. The people in OWS are upset, but not desperate, and I'm not sure this can lead to any sort of radical change unless the 1% agree voluntarily, which is obviously unlikely. It's very hard to think of a non-violent way to actually incite some change.
"The USA should invade the USA and win the hearts and minds of the population by building roads, bridges and putting locals to work." - Paul Myers
As a postscript, the amount of copycat protests are also slightly embarrassing. It's great to show solidarity, but for instance I don't think there needs to be one for my town. It's just awkward and trivialises the situation, since our economic problems are negligible compared to the US.
"The greatest trick the upper echelon have pulled, is convincing the masses that using violence to achieve your ends is uncivilised."
Bam.
I amazes me that when 500,000 people marched in London on the 26th of March, people were dumb enough to ignore the messages being sent, and instead focus on some superficial property damage.
> If it happens that it is effective to make money by repeatedly crashing and booming the stock market, then that is exactly what they will do.
The two crashes of the past decade were painful exactly because "they" expressly failed to make money. They caused a lot of pain to a lot of 1%ers. If you think the financial sector likes, and purposefully causes, crashes, well, you're wrong.
> Our economy has been rooted.
Thing is, the box was left with numerous unpatched known vulnerabilities for the better part of half a century. Whenever it got sluggish, the sys admins eagerly added memory and processors, not bothering to consider what might be wrong. And when the box finally collapsed the sysadmins are more than happy that all the anger is directed at the hackers.
George Soros made $1bn in a day. The UK Gvt lost 3.3bn UKP.
Some people believe that Norman Lamont rose to the highest office of economics in the united kingdom without the knowledge of how currency markets work, and that he could not possibly have known that his actions would be to hand George Soros, and others, 3.3bn UKP. But let us pretend that this was incompetence so that we can answer your point.
Did George Soros purposefully crash the value of the UKP? Yes.
I use this example, rather than other more recent examples like [1], because it highlights the role of government in the transfer of wealth from the poor to the rich. In short, if the government were to say to the common man "We must give this rich person one trillion dollars and you and your children will pay for it", there would be revolution.
But if the government says "Look! The stock market has crashed! We must give one trillion dollars to the banks so that the financial system does not collapse, so that children and dogs do not roam the streets, oh dear God we must give one trillion dollars to the banks now!" And nobody complains.
Better yet, give one trillion dollars in a highly recognizable bill, lets call it TARP. Make sure that all of that money is paid back. Then, when someone says "But we gave you all that money", the rich can claim "TARP? No! We paid all that back! Look!".
But also give several trillion more in completely one-off, non publicized, totally forgettable transactions. For example, give citibanks $25bn in TARP funds - and also give them $275 in non-TARP funds. Then have them pay the $25bn back. Amazingly, if you ask the average american about citibank, they will say "Yes, they got $25bn! Bastards". "No! They gave that $25bn back! Look it up!" "Oh you are right!" And that will be the end of it. Fox News will tell you almost daily, "Look who paid back their TARP funds! TARP has made a profit!". TARP is the hand they want you to look at, while they make your future vanish with the other.
I didn't vote you down, but I'd say you were missing the point. You think OWS is exclusively left? Did every ordinary right-leaning American suddenly decide massive government spending is OK so long as it's to bail big corporations out of their own f'ups?
Whenever it got sluggish, the sys admins eagerly added memory and processors, not bothering to consider what might be wrong. And when the box finally collapsed the sysadmins are more than happy that all the anger is directed at the hackers.
This would be a reasonable analogy if the hackers (bankers) hadn't spent the last decade paying the sysadmins (congress) to remove the safeties and add vulnerabilities.
Indeed you say this as if in the computer world, the idea of hackers just paying a sysadmin for access would be unimaginable. Certainly it appears that you haven't thought of it.
And of course the analogy is flawed, as analogies tend to be.
Yes, what has happened essentially amounts to corruption. How do you usually approach corruption, by going after the corrupted officials or the people paying the bribes? Both, especially at this scale, but no-one expects corruption to go away while there are corruptible officials.
> Certainly it appears that you haven't thought of it.
It might appear so, but appearances can be deceptive. By all means, lets have a debate based on what the other side appears to think.
I stated explicitly that the bankers had bribed the politicians.
You responded with a statement that the bankers did not do so, and that in fact the politicians had caused the damage, and then blamed the bankers. A direct contradiction of my assertion.
You are now claiming that "of course the analogy is flawed". No sir. The analogy was effective. It was the logical conclusion that you made using the analogy that was wrong, and you now admit so.
I stand by my analogy. Our economic system has been rooted.
How to fix it? How can we do that, when the people writing the laws are the ones who would be jailed by them?
I stated explicitly that the bankers had bribed the politicians.
It seems to me that it was mutual, sort of a ouroboros snake swallowing its tail. Just as we could say that bankers offered promises to politicians in order to secure favorable regulations, so did the politicians offer favorable regulation in order to secure their own re-election. As far as I can see, they're two sides of the same coin.
That being the case, it doesn't make sense to demand that the politicians wield great power in order to exercise greater control over the bankers. We know that the politicians are corrupt, so why would we give them more power?
If you were a purely profit-minded trader in a situation where you have the chance to make a million with 50% chance and lose a thousand with 50%, and in the scenario where you lose a thousand, other members of society take a collective loss of hundreds of millions, what would you do? My numbers are not indicative of the historical reality but are just to illustrate the idea of socialized costs. Anyway, I think your choice is clear.
This trader is not intentionally causing crashes, but is increasing systemic risk of crashes. 'Purposefully' causing crashes is not necessary for actually causing crashes.
The problem is both the sysadms and the hackers. I don't think, though, that the anger is directed 100% at the hackers, though the location of the protest, apart from the actual message you see on the signs if you bother to examine them, may suggest otherwise.
What you're describing is so common when government embrace an industry that it is it's own field of economic research. It's called moral hazard.
I try not to draw too many conclusions from signs or any individual expression of opinion. But I do note that the protesters marched to the home of the J.P. Morgan CEO as well as the J.P. Morgan headquarters, even though J.P. Morgan didn't bet the house on sub-prime mortgages and didn't need bail-out. That's location and action indicating anger focused on Wall Street.
It's more like the hackers bribed the sysadmins to give them root access, and the users couldn't afford big enough bribes for the sysadmin to care about them.
Well, it turns out that it is extremely effective to make money by repeatedly crashing and booming the stock market.
I am not an economist[1]. Boom and bust cycles - I have read - happen as a natural result of millions of people making informed choices in their own self interest.
Simplistically: Cost of X perks up a bit. People buy in, seeing a trend. Price perks up a bit more. And so on. Rational actors see a bubble - X is valued now way above what it is actually worth. These guys are also paid to make money for their investors - fail to get in the market for X and you'll simply be fired and replaced with a guy who will.
Multiply that by millions and you get booms and busts.
How does one cause a boom and bust cycle, absent a grand cabal of Rich Guys and their cronies? How would _they_ do it?
[1] Would it be lame to say IANAE or has that kind of thing cycled back to cool, yet?
The OWS movement is certainly pretty confused and vague when it comes to demands.
It would be a mistake, IMO, to use this to dismiss the reasons why people have chosen this time to protest.
If you look at the people and signs at a #Occupy protest, you will find a familiar theme: income disparity and unemployment. People are running scared in an economy where social mobility has been utterly destroyed, unemployment runs at an all-time high, and the gap between rich and poor continues to widen unabated.
Some people have chosen to blame corporations, some people pin it on banks, some are angry at the government. In the end though, the theme is the same. OWS protesters clearly have no clue how to fix it, but they are correct that something is fundamentally broken, and it would be a mistake to sweep this all away because the protesters can't put together a solid fix.
There are, of course, also the piggy-back causes. Environmentalists, educational reformers, health care reformers, and all manners of all side-issue protesters are out in force at the #occupy protests, and that really does hurt the main message.
I agree with your assessment of why the protesters protest, and that they don't have a clue how to "fix" things. I disagree with your claim that this indicates anything "fundamentally broken", other than the mindset of the protesters in thinking someone else should step in and make their lives better in all the individual ways they consider their personal situations undesirable.
Edit: Clearly people disagree. I'd appreciate some responses to go with the downvotes; I'd enjoy some discussion, rather than silencing.
I'd venture to say that the downvotes are coming from the very broad brush with which you're painting tens of thousands of people, few of which you personally know.
I'd argue that the unprecedented unemployment rate represents a clear systemic dysfunction. These aren't temporary job losses due to the natural boom-bust cycle, a very large portion of these jobs are simply never coming back. Whose fault that is is hard to say, but I don't think it's at all cynical to doubt that the unemployment rates will abate on their own.
It's also no secret that wages have been stagnant (if not outright dropping) for the past two decades. None of the trends indicate a cyclical nature, so it's not hard to suggest that these are systemic issues that won't correct themselves.
The quality of life of the average American is dropping precipitously. In a singular case we can point to any number of causes - lack of education, lack of self-discipline, substance abuse, etc etc. When multiplied a couple hundred million times over, it suggests systemic failure.
In other words, "broken", though of course we can argue about the meaning of "brokenness" till the cows come home.
FWIW, I'm the "4%". I'm definitely not doing badly at all for myself, even in this economy. In fact, my quality of life has never been higher. Despite this, it would be a mistake for me to dismiss the problems this country faces, or to jump to conclusions about those affected. It is perpetually disappointing to me how judgmental the wealthy and successful can be, using their singular case of triumph over the system as a wide brush with which to paint all those who have failed to beat it.
Funny, I'd actually intended my comment as a complaint about the very broad brush with which the protesters paint all the world's problems, or at least the ones they personally see. I'd argue that we don't have a "fundamentally broken" system which we could simply fix and solve all the problems at once. A large number of people have a large number of individual problems, and some of those problems look superficially similar. I'm pointedly trying to not paint a huge number of people with a broad brush. :)
I think taking issue with 'fundamentally broken' is fair though.
The current recession is not as bad as the great depression, and I'm very, very glad that in the US, we pursued incremental, evolutionary fixes to the breakage then, than much of the radical transformation that happened elsewhere, and turned out to be far, far worse than the 'broken' in the US.
I mean, if something is genuinely fundamentally broken, you should throw it out and completely remake it, no? Terrible idea, as far as I'm concerned, with regards to the US economy.
Other than that, I think your original comment was as good, although I still think the whole thing ought to be flagged as a political discussion that doesn't belong here.
Maybe I'm getting crazier and more radical in my old age, but I'd say that if the 1% can afford to buy/bend the system to their ends, then it most certainly can be systemic.
The fact that I hear Obama's "$1B war chest" being trumpeted and that Tim Pawlenty drops out of the Republican race solely for lack of funding reinforces what I've felt for a very long time - that campaign finance is the elephant in the room in terms of the issues that are bringing this country down.
In this particular case, the housing and higher education bubbles required significant proportions of the population to buy into them. Bubbles that do little but draw poor investment from the already wealthy aren't as problematic.
I see what you're saying, and I agree. Those bubbles were not the systemic issue I'm specifically fired up about, though. Those are more like branches of the tree rather than the root.
The root, to me, is corporate money and influence in Washington to such a degree that it effectively shuts out democracy. I lay fault for that systemic problem at the door of "the 1%" and the politicians they influence.
The root, to me, is corporate money and influence in Washington to such a degree that it effectively shuts out democracy.
I see another layer to the onion. Inside of your problem is a deeper one, which is that so much power is concentrated in such a small place.
While we might wish for our government officials to be better, at the end of the day they're people just like us. In giving them so much power, we're also expect them to exhibit a super-human degree of self control. When the possible rewards to them for "selling out" are so high; when any one act of selling out may not have much impact; and when in many cases, the morality is fuzzy and it's not clear that what they're doing is selling out at all; I think it's too much to expect that they'll keep to the straight-and-narrow.
It seems to me that these cries about "too much corporate money" contain an unspoken assumption of a need for greater governmental oversight. But if you see my point about the danger of the concentration of power in Washington, then it should be obvious that vesting the government with greater oversight powers is just adding fuel to the fire.
The only reason campaign finance is an issue is because voters vote based on television advertising. So the real root cause is a lazy and easily manipulated electorate, which can further be pinned on things like useless public schools.
I don't think this is a good idea, but I think if you actually restricted the vote to the so-called "1%" you might even get better government. There's no conspiracy by rich people to ruin the country for everyone else.
1) No. I also don't consider said bailouts the root cause of anything except one more instance of wasteful spending.
2) "Too busy fighting over local minima/maxima to ever escape them and make core changes, but as a result at least mostly harmless except as a drag force on productivity." We could argue all day about core changes that might fix the system, but we'll never agree on precisely which core changes to make, so they'll never happen. And that still probably works better than the case where the wrong core changes occur.
(And a meta-level comment about search heuristics comes about as close to a political comment as I'd like to get.)
Both of your answers ask for more government control. Consider the government is a huge concentration of power, so many will want to corrupt it. Our goal should be to reduce the power of government, thereby reducing corruption.
The bailouts are a result of brokenness, I never said they were a property. But I think we have rather different ideas of what "fundamental" means, if you're arguing that it's not fundamentally broken, but that "core changes are necessary".
They are a result of the system. I find it hard to believe that a not-fundamentally-broken system would produce that result.
What non-fundamental properties of the system do you think should change to halt now, and prevent in the future, bailouts and related actions (e.g. corporate subsidies)?
Because democracy and equality is fundamentally superior to feudalism, therefore any system that is on an unstoppable slide toward feudalism is fundamentally broken.
How is the system in an unstoppable slide towards feudalism? Is this the same feudalism I studied in European History, with the land-holders and vassals and all? If not, why are you using that word?
OWS appears to be a concentration of several basic grievances held against the financial industry's control of the government. It attempts to raise awareness to the fact that income inequality is increasing, and that the accumulation of capital does not seem to be benefiting the large majority of society.
It complains about the fact that the mistakes of the financial industry are being paid by the whole of society.
It raises more questions than it attempts to solve, but has some basic tenets in favor of restoring the regulations of financial markets that have been lost in the last 20 years.
It seems interesting to note that, from what I've heard from people working in the media industry, there's a directive to paint the OWS as having no purpose, however many of the critiques that are being leveled towards it are just as valid, if not more, again the Tea Party movement, yet such comments were never made in mainstream media. It's also worth noting that there were some very powerful interests funding the Tea Party. Finally, many people within OWS have concrete propostitions, such as restoring the Glass-Steagall Act, changing the capital gains tax, introducing the Tobin Tax, etc. Of course, that would actually imply knowing a thing or two about political science, so most people can't be bothered to research that.
"It's also worth noting that there were some very powerful interests funding the Tea Party."
You said it. The Tea Party is/was essentially a media fabrication. There's obviously a lot of middle class dissatisfaction out there to be mobilized and the right wing tried to co-opt it for their agenda.
OWS, on the other hand, is an actual grass roots movement. Furthermore, when I listen to NPR (of all media outlets) continually doing their very best to interview every fumbling 22-year old and make the entire movement look stupid it makes me think that OWS has some very powerful people genuinely worried.
Thanksgiving with my entire Republican family is going to be a blast this year.
One of the common outcomes I've heard called for is a "separation of corporation and state," in response to what people feel is an outsized voice in the democratic process for corporations at the expense of individual citizens. The backlash against TARP is a good example of fairly broad sentiment that federal policy favors financial institutions and high-value investors over "Main Street."
Lawrence Lessig has spoken rather extensively about campaign finance reform in this vein. His latest campaign is for the Fair Elections Now Act, which would encourage small donation-powered campaigns. He's also often argued for a constitutional convention that would address these concerns without needing to stay within the current legal boundaries...that seems to have fizzled a bit, though, I assume because it's so hard to pull off.
I am convinced that that in the same vein as america pioneering the separation of church and state, the next big government evolution will be the separation of state and business.
It will be extremely hard to accomplish though because historically money and power have always been bedfellows.
The real problem is the people are complacent, most of what western governments legislate is in the interests of lobbyists, but people only care about lawmaking when they are personally poor or if it concerns foreign policy (TERRORISM).
I have always thought a jury system for legislation might be a good idea, get the sponsor of a bill to stand in front of 12 randomly picked citizens and have them explain what the bill will do, and most importantly, why they are trying to pass the bill.
That would turn legislation into marketing. We have a bad enough problem already with knee-jerk legislation passed because it sounds shiny.
Now, as a filter, introduced in addition to umpteen other ways to prevent legislation from passing, it sounds potentially helpful. Anything that makes legislation fail by default without an exceptionally good reason to pass would improve matters.
To a large extent this is the purpose of the House of Lords in UK parliament.
The selection process for its members is not at all democratic which leaves a bad taste in many people's mouths. But the general concept of an elected body whose members serve over several terms of government can be helpful to limit overtly populist or ill-thought-out legislation.
Limitless spending? Do you know anything about regular people? To suggest that the TARP banks are in any way more responsible than the average consumer is simply ignorant. 'Regular people' these days are not spending more than they used to, and they're not examples of limitless spending: http://www.yale.edu/law/leo/052005/papers/Warren.pdf
Furthermore, TARP being repaid is not an inherently good thing. Who cares whether we got the bailout money back if the system is still completely broken? We're still in a situation where those banks can do whatever they want, and when things collapse the government will have no choice but to bail them out again because the alternatives are unacceptable. Now that the banks don't owe the government TARP money it has even less leverage than it might have had before.
You can't just blame Wall Street for everything. I never suggested consumers were more responsible I just said that heaping 100% of the blame on Wall Street is ridiculous. Yes consumer debt was on the rise before the financial crisis: http://www.csa.com/discoveryguides/debt/review.pdf
You say Banks, which part of the Banks? You can't lump the whole Banking system into one group and blame it all. Also the top 1% encompasses much more than these 'greed fuelled' bankers on Wall Street.
That paper uses a 2001 data set, and things have certainly changed since the housing crisis, but it was interesting all the same.
The paper argued that certain things - like the cost of housing (due to rising prices) and health care - were the cause of middle-class debt loads, and that consumption on frivolous items was actually down from the 1970s.
This is a plausible argument. The cost of housing, health care, and education has certainly skyrocketed. What Warren doesn't mention, though, is that all of these areas are heavily regulated and subsidized by the federal government - unlike all the areas where middle-class consumption has declined.
You might be able to persuade me that people are in fact spending responsibly, but you'll have a harder time persuading me that the solution to their problems is more regulations, or that the appropriate target of these protestors is anywhere outside Washington DC.
TARP! Yes TARP has been repaid! Why are people complaining, when the money has been repaid? Who are these people who are clearly ignorant of the facts?!!?
That would be you.
We loaned citibank $25bn with TARP. They paid that back. You seem to think that thats the end of the story. Thanks for telling us what we should read.
Turns out we also guaranteed losses on $300bn of assets, added an additional $20bn, and a further credit line of $45bn.
From were I'm standing, that should mean we own citibank. If my company was in that situation, you think investors would offer me a loan? You think that's gonna be the deal you get next time your company is in trouble?
We should own it, dismantle it, break it up. Do that for every big bank down the line.
But forget the $350bn. You think that if your business needs $25bn or it goes under tomorrow, that one of these rich people will just loan you $25bn and let you pay it back when you can? LOL. In my world, $25bn bought citibank outright, and we overpaid. Instead we got 36%. Joke.
"Through the repayments announced Wednesday, as well as dividends and interest, taxpayers have recovered about $244 billion of the $245 billion in TARP funds disbursed to banks, the Treasury said. The Treasury currently estimates that bank programs within TARP will ultimately provide a lifetime profit of nearly $20 billion to taxpayers."
Blame the government for that, not Wall Street. Also how much of Apple's 70 billion or so in cash flows through to the economy?
I agree that the movement lacks a coherent message.
That being said, one of the large issues in play is that people feel slighted by rising income inequality, which they perceive to have arisen out of a sort of government-industry feedback loop. Certainly this is what the printed dollar bills seem to be about.
With regard to your comments about the utility of the protest: I don't think it's a waste in any regard. If you feel something about government (in this country), you have several options: wait for an election and vote, write to your congresspeople, protest, etc. I agree that it's frustratingly difficult to figure out what the movement wants, but (even unaligned) protest is a perfectly legitimate way to express (even general) displeasure with your (perhaps even falsely perceived) current government.
Shouldn't you have a viable alternative solution in mind, when you express displeasure? I can understand that they're angry - I just can't understand how they want the government to fix it.
It would definitely be a lot easier (and seemingly, effective) if they all just said we want X, where X is some not necessarily even specific reform.
But maybe they just want to say 'we're angry about this rising income inequality and we want someone to do something about it.' I think that's a valid stance to have, and opinion to express. It then falls on the government to either:
1. Do something about income inequality.
2. Explain why they can't or shouldn't or won't.
Failing that either of these things occur, it may inspire someone to run for office with the platform of performing (1) or (2) above. Any of these outcomes seem like a 'successful' outcome of the protest.
Shouldn't you have a viable alternative solution in mind, when you express displeasure?
Not necessarily; there are times when it's more fit to just walk out into the street, meet others who are as displeased as you are, and try to figure out what to do about it on the spot.
Another way to look at it is this: The grievances of the protesters cannot be fixed by individual action. They require a change of the rules, i.e. political action. When such grievances become large enough, you (i.e. the people) use progressively stronger methods to try to tell politicians that you're serious about it.
If the political system is flexible and effective enough to react and address the grievances, then the movement succeeds, e.g. the civil rights movement in the US in the 1960s.
If the political system is too rigid and unable or unwilling to react, and the grievances remain, then the state will ultimately fail, e.g. East Germany in the 1980s.
Yes. More precisely, they're angry about recent economic stagnation and unemployment and are scapegoating the rich.
Economic difficulties leading to mass populist movements with a defined, minority scapegoat (especially the rich, or the bankers) is a dangerous pattern. Even in this thread you see people calling for violence. The last element--a charismatic leader--is historically all that is needed for something like this to turn very ugly, very fast.
There are other good replies here. But one of the reasons you can't figure this movement is because it's a grass roots movement. There is no central body defining agendas, goals and slogans. Only thousands of people fed up by what they see going on above them.
30 years ago, you could probably see the hand of Moscow in this.
Last year, the involvement of the christian right and at least some members of the republican party was very clear when looking at the Tea Party.
Inequality has hit a level that has been seen only once in the nation's history, and unemployment has reached a level that has been seen only once since the Great Depression. And, at the same time, corporate profits are at a record high.
The meme that "the rich get richer, while the poor get poorer" means that today, the poor must have a worse situation than ever before.
So let's do a thought experiment: suppose that you can choose to go back in time. You can enjoy the 1% level of income at any point in history prior to, say, 1950. What era will you choose? Do you want to go to 1950, or some point in antiquity, or stay with your current income in the present?
Remember, even in 1950, there are no antibiotics, for practical purposes, civil rights are only slightly better than medieval levels, and so on. You won't have access to instant communications, and only through difficulty, to the greatest works of art, music, and literature. And so forth.
So, if you don't want to go back to those times -- even at the top of the economic heap -- can we really say that today's poor are finding their plight worse and worse?
Its not only about the poor its about the 99% who's wages have stagnated over the last 30 years. The current generation under 25 is the first american generation that will be worse off than their parents.
It's true that the gap between rich and poor is greater today than in recent history. But I don't think that it's entirely correct to say that wealth has been redistributed to the wealthy. In fact, to a significant extent, people have redistributed themselves away from the wealth.
These wealth numbers are presented as household income. But this increasing disparity closely tracks the rise since the 70s of single-parent households. Divorce, and more recently the trend to have children without being married at all (in certain demographics, this is now the norm), mean that people are deciding on their own to arrange themselves into units having less earning power.
Even when single-parent households aren't the explanation, the idea of "sortative mating" amplifies differences in income. People tend pair off with similar people. Thus, well-educated people (who tend to have higher income potential) marry each other; uneducated people also tend to marry. So if two people, each with income potential of 2X, marry; while two others, each with income potential of 1X, also marry, then the resulting differential across households is 2X. The sortative effect has, in this example, doubled the apparent difference between people.
Neither of these effects can be attributed to corporate behavior in any way.
Obviously, some of the difference simply reflects the difference in productivity between different people. We tend to dislike thinking of things in these terms, but people doing certain kinds of jobs are far more productive than people in other jobs. In particular, the skills we've learned in wielding technology, or medicine, etc., benefit people to a much greater degree than, say, an individual McDonald's worker or miner or the like. And the fact that one is producing more leads to being able to demand greater income.
We also err in considering people (or households) as being high-income or low-income, as if this were a static condition. In fact, at least in America, there is pretty good opportunity for income mobility. I don't have stats at my fingertips, but a really large portion of those in the top quintile have spent time near the bottom. It's a mistake to believe that someone is just "a rich person" or just "a poor person", since there's significant migration between those groups (at least relative to much of the rest of the world).
You'll note that the rise in income inequality seems correlated with the rise in the power of the federal government (as opposed to the state and local authorities). I assume you've heard Lord Acton's Dictum: "Power corrupts. Absolute power corrupts absolutely." Well, he said another interesting thing. He said (sorry that I don't have the actual text here) that democracy tends to concentrate power into the hands of an elite few, and that the only known solution is a strong federalist system, in which the central government is kept weak by power residing in the hands of the states. Thus, it seems that the rise of a strong central government that we've seen over the past, say, 3/4 century, may be related to the rise of a privileged oligopoly. If so, it's clear that looking for a solution by giving that central government additional power is the opposite of the best answer.
> You'll note that the rise in income inequality seems correlated with the rise in the power of the federal government (as opposed to the state and local authorities).
Income inequality really took off in the 80s so it is more correlated with the rise of the conservative movement ushered in by Reagan. Reagan started the trend of deficit-financed tax cuts for the wealthy that continues today.
As far as the power of the federal government, it doesn't matter, the federal government is a wholly owned subsidiary of Wall Street at this point. Both Democrats and Republicans go begging hat in hand and do the bidding of their true masters in Wall Street.
Income inequality really took off in the 80s so it is more correlated with ... the trend of deficit-financed tax cuts for the wealthy
This just doesn't make sense. The discussion is about inequality of income. Taxation doesn't change my taxable income. It takes away part of my income (and gives much of that slice to someone else).
The tax cuts you're complaining about are assessed after the income level has already been determined. That is, the salary number on my pay stub is significantly higher than many other Americans. Even if the marginal rate were cranked up to 90%, the fact remains that my taxable income is much higher than many others.
Both Democrats and Republicans go begging hat in hand and do the bidding of their true masters in Wall Street.
The bankers aren't angels, no argument from me here. But you're painting an absurdly one-sided picture. Why do you think it is that the bankers need the bureaucrats to "do their bidding"? It's because those politicians really do hold the power! It's true that the bankers are corrupting our democratic process by looking for favors. But it's equally true that the politicians are corrupting our democratic process by selling favors.
And from what I've been able to read from these Occupiers (and I grant that this is just my impression, and I may be wrong), it seems like the ire is directed at those bankers, and that they are looking for the government to help redress the problem. But the government is part of the problem. In particular, they're using their regulatory power as a weapon, hurting us by granting favors to privileged parties. Why would we want to increase the power of that weapon -- ask them to do even more regulating -- when that power is what's enabling the mischief? The only sane answer is to take away their weapon.
The tax cuts of the last 30 years have been accompanied by massive deregulation and cuts to social services. Society has taken a huge right-ward tilt, conservatives have gotten everything they wanted. But you guys can never get enough and are always claiming that we need more tax cuts, more deregulation and more cuts to social services. The deficits created by the tax cuts during Republican administrations are used to demand cuts to social services during Democrat ones. It's happening now under Obama, even though conservatives are in a panic over supposed socialism there have been huge cuts at state and local levels, Federal government has shed half a million jobs [1], and Obama has been negotiating trillions of dollars in cuts to Medicare.
We are living in your vision of the world. And it is awful. Corporations and banks have totally corrupted our democracy, so yes, Washington D.C. is useless. But the bankers are the source of the problems. They are a blood sucking squid on humanity's face.
When all the banks failed a few years ago it was a great opportunity to break them apart, too big to fail should be too big to exist. But instead we were all told, by both Democrats and Republicans, that if we didn't save them it would supposedly plunge us into the worst economy since the great depression. So tax payers gave them the free money and propped them up but we still got the worst economy since the great depression. And NOT A SINGLE BANKER WAS FIRED OR PROSECUTED, even though there has been tons of documentation of fraud. The government is in their back pocket, they do as they want.
The tax cuts of the last 30 years have been accompanied by massive deregulation and cuts to social services. Society has taken a huge right-ward tilt, conservatives have gotten everything they wanted.
Sigh. We just got the biggest increase in entitlement programs in more than two generations. The government claims it's cutting spending, but actually it won't be any smaller, they've only decelerate slightly. In the meantime, the regulatory state is thriving. I challenge you to name an industry that one could safely enter without needing to learn myriad details of what the government demands of businesses in that industry. This is not an age of deregulation, and GWB was no friend of small government nor of the free market.
NOT A SINGLE BANKER WAS FIRED OR PROSECUTED, ... The government is in their back pocket, they do as they want.
The banking meltdown was due to the banking industry taking some unconscionable risks, but it was also due to the regulators themselves pushing the banking industry to take risks. Industry is also in the back pocket of the government, as business leaders vie for the advantages that government bequeaths. Yet how many politicians and bureaucrats have been held accountable for the debacle?
We are living in your vision of the world.
You have no idea how wrong you are. You seem to be drawing a mental picture of the political world that follows the narrative told by the main stream media, but that's so gross an oversimplification as to be useless. The political spectrum is not one of Liberals versus Conservatives. So when you assume that, because I'm arguing against your Liberal stance, I must be a Conservative, is just plain wrong.
There are many ways to look at the political world. Taking the simplistic view is not going to help you solve any problems, any more than you'll be able to debug your software if you don't understand how the machine, your compiler, the network protocols, etc., work.
First, you should understand that the vast majority of the people in politics and in the business world are not evil. They are just people like you and I, responding to the problems and incentives in front of them, trying to make a life for themselves and their families. The size and complexity of the system makes it less clear where the line between right and wrong is, and easy to fudge for any particular action. While the structure of the system today makes it all too compelling to make the wrong choice.
Your insistence that so many of your neighbors are evil -- when they know that they're not, and just doing their best -- is going to make anyone you disagree with defensive. That'll prevent you from changing any minds, and instead just widen the political chasm that we suffer from today. I beg you, take a step back from the incrimination, and try to understand what's going on as the collective work of many individuals, each responding to situations put in front of them.
Do you ever stop and wonder why it is that your ideology so closely aligns exactly with everything that the big corps and banks want? You want deregulation just like the big polluters do, you want lower taxes just like the richest want, you want to remove any policing of business activities, guess who doesn't want business activities to be policed? The fantasy that the banking meltdown was caused by Fannie or some laws passed 30 years ago don't even pass the smell test. For some reason you can't imagine that it had anything to do with the banking deregulation passed in 2000. Somehow anything that might benefit the lower and middle class is a threat but we must keep the most powerful on the dole.
By the way you are distancing yourself from "conservatives" I'm guessing you are one of the self-proclaimed libertarians. But as far as the practical economical results it's the same crap, policies that end up making the powerful even more powerful than they are now.
I'm not assuming that you are evil, and I don't have some simplistic view of the world that you are attributing to me. But there are people that are taking advantage of the rest of us and we should be fighting it. We all live in a world flooded by propaganda coming at us from all sides so I always try to give people some leeway when arguing politics, and I try to stay informed on opinions opposed to mine. It is hard to break free from pre-concieved notions.
The liberal vs conservative (or libertarian) debate on economics has been about whether the bigger villain are big corps or big government. But I think what the new realization dawning on millions of people, especially those that thought Obama would fight against the plutocrats, is that they are both part of the same corrupt and broken system. You want to break apart big government, fine, but why don't you also want to break up the big banks and other monopolies?
> I feel like the traders on Wall Street would be the first people to want an economic bounce back.
This lies near the crux of the widespread belief that wealth merely lets you buy more stuff.
Currency is the formalization of power, which is intrinsically relative: you have more power when the people near you have less.
Imagine a village of 10 people, where 9 have $20k in wealth and one has $80k. This relative difference in capital allows the wealthy person to earn more than 4x more income. This means he can easily outbid everyone else for, say, the choicest cuts of meat at the deli; the best investment opportunities; the dinner with a visiting performer; the nicest house on the block; the flattering stares of the village's prettiest dame.
Let's pretend a car costs $90k, so that it's not affordable to any one person in the village. One day, a car manufacturer contacts Mr. 80k to ask him whether he thinks his village would be a good place for a marketing stunt in which everyone was given a $90k car, which they could choose to sell if they really wanted to. Since this is a small village in a big economy, it's not as though all this extra wealth will cause serious inflation. The question is, how should Mr. 80k respond?
If Mr. 80k is a homebody only interested in absolute wealth -- having more things for him to play with on his own -- then he should go for it! He'll finally have a car!
But it might be in his interest to say "no": sure, at $170k he'll still be the richest, but now the ratio of his wealth to the wealth of his friends will have gone from 4x to 1.5x. Could this have a materially negative effect on his current standard of living and his economic security?
Well for one, while he'll be able to afford better investments, there will be more people to compete with for them. If everyone has a car then Mr. 170k will no longer be able to loan out his horse and buggy in exchange for favors and status. The previously receptive dame might start to notice Mr. 170k's bald spot, and spend more time staring at a younger prospect. When the local celebrity comes to village, Mr. 170k will have to bid higher to taken them to dinner. Mr. 170k will no longer be a crucial lynchpin of local politics, so the village alderman might no longer call on him as often. And Mr $170k will no longer be treated with the same reverence while on his evening walks as he had previously received.
So while Mr. 170k could nearly double his wealth, if the marketing promotion were to happen, Mr. 80k might perceive the decline in relative status as costing him far more.
So, no: depending on the kind of rich person you are, you might prefer for other people to stay poor. Unethical and immoral? Maybe. Rational? Certainly.
In a nutshell: Corruption and fraud in the banking system causing global economy collapse, the vast disparity in wealth, rampant corruption in politics and big corporations buying politicians with money, not democratic votes.
For concrete ideas, Matt Taibbi as usual really knows what he's talking about:
However, it's important to remember that coming up with good solutions as well as figuring out what it really is the people want is really the job of the politicians. And just because they're failing miserably at that job, doesn't mean the general population suddenly has to know all the answers. I think the general message of discontent is very clear.
If you are a really good or lucky trader, you can make money in any kind of market. Some banks made up the dubious CDS from questionable house loans, making tons from selling them, and then made money again by shorting them. AIG was one of the poor fools that was left hanging the bag when the housing bubble burst. So, I wouldn't say Wall Street is the worst place to be protesting.
i think the majority of people protesting see many interconnected problems that they know deep down there's no silver bullet for. they're not knowledgeable enough to know all the ins and outs of how they're being fucked, but they know what it feels like, and they know they don't like it. that's my take on it.
i think it's important to respect the passion of this movement, whether you agree with it or not, because it's real, because it comes from real causes, and because it won't go away until it's addressed
Actually, many are angry because failure was rewarded with money. The core issue was that the financial sector took huge risks with mortgage backed securities, which weren't properly rated by firms like S&P, and when that lead to the financial meltdown, the government bailed them out. Other than Lehman, Wall Street firms weathered the meltdown fine but the people of the US - and other countries - felt the brunt of the downturn.
Since the beginning, many groups with different goals have been attracted onto the OWS movement, and the message has been scattered. My bet is that the movement will peter out due to lack of focus and won't have a lasting impact on politics or policy.
If they're mad about being unemployed, marching sure isn't going to fix their situation. If they're mad about government corruption, what exactly would they like done? If they're mad about the economy in general, isn't Wall Street the worst place to be protesting? I feel like the traders on Wall Street would be the first people to want an economic bounce back. Do they just hate rich people? Hmm.
I've held back on criticizing this movement, but after all this time, I still can't figure out exactly what they want. It's seeming more and more to me, as just a way to waste peoples' times, and our tax dollars.