Like everyone, I've been watching the Occupy Wall Street protests across the nation. I can definitely sympathize with some aspects of the movement but, in a lot of ways, I find the protestors to be naive, misguided, and more than a little confused.
On the positive side, for example, I wrote this about the unholy alliance between the banking industry and Washington two and a half years ago:
The banks have more clout in Washington than everyone else combined. Our current economic crisis is proof of that. It's always been that way. The foxes are guarding the hen house.
Bubbles grow and burst, crises come and go, fraud happens, everybody points fingers, and nothing changes. That's how the system works, and it's a very big system, so its inertia is considerable. The only thing that can change it is an outside force. And the only one I can think of is the American people.
So, the so-called 99% finally woke up. Good for them. It would have been better if they woke up before the government racked up trillions in debt, but c'est la vie. As for the naive, misguided, and confused aspects of the movement, here are:
10 Things Wrong With Occupy Wall Street
The whole we're the 99% thing. This, to me, is the biggest thing wrong with the movement. The OWS protestors do not in any way shape or form represent the middle class, small business America, or people employed by corporate America. To me, that's the 99%. Not the OWS protestors.
Confusing targets. Who or what exactly are they protesting? The rich, inequality, CEO pay, Wall Street firms, the greedy banks, the bank bailouts, corporate America, the Federal Government, not enough legislation and regulation, no jobs to pay off student loans, the decline of unions, the screwed up health care system? It's all over the map.
We need more legislation and regulation. According to one protestor,"We have to put a lot of policies in place to support middle-class families." Um, the Community Reinvestment Act of 1977 and a long string of misguided and politically-motivated amendments, revisions, and related legislation over the next 25 years is what got us into this mess to begin with. That was the actual root cause of the sub-prime mortgage crisis and the subsequent bank meltdown, as we discussed in The Financial Crisis For Dummies. And the Dodd-Frank Act is just more of the same.
Who's to blame? Sure, the banks played a roll in the financial meltdown, but so did Congress, HUD, Fannie and Freddie, Fed chairman Alan Greenspan, treasury secretary Robert Rubin, rating agencies like S&P and Moody's, and chairmen of the Senate Banking and House Financial Services Committees Phil Gramm, Barney Frank, and Chris Dodd. And those last two are still running the show, i.e. the foxes guarding the hen house.
We don't want to flip burgers. Don't get me wrong; the unemployment situation is real and intolerable, but this isn't the first generation to have trouble finding jobs. I heard one protestor say he was 26 with a college degree and wasn't about to flip burgers. Well, when I graduated with a BS in physics, there were no jobs, so I worked as a bank vault attendant for $2.65 an hour. My wife - also degreed, and with straight 'A's - waitressed and is now a veterinary technician making just over minimum wage. Green Bay Packers head coach Mike McCarthy worked nights at a Pennsylvania Tunrpike toll booth with a masters degree. I can go on and on.
Corporate America and CEO pay. When the media reports on CEO pay being out of control, they're only reporting on the S&P 500, i.e. 500 CEOs. Last time I checked, there are 9,000 public companies in America and countless private companies that employ the vast majority of the nation's people. The compensation of the CEOs and executives of those firms is far more reasonable and certainly not huge multiples above the next level down. I can personally attest to that, having spent a good part of my career as a corporate executive.
The rich don't pay their fair share. If I hear one more person talk about millionaires and billionaires and Warren Buffet's secretary I'm going to puke. The truth is this: the top 0.1% of income earners in America ($2 million plus per year) paid 50% more taxes than the bottom 80% of income earners in 2010. In 2008, the top 1% of income earners paid 38% of all federal income tax, the top 10% paid 70%, and the bottom 50% paid 3%. And, according to the U.S. Congressional Budget Office, the share of income earned has tracked the share of federal taxes paid by the top 1% relatively consistently over the past 25 years. I've heard enough BS about this to last a lifetime.
President Obama using the movement to promote his reelection campaign. "I think people are frustrated and the protesters are giving voice to a more broad-based frustration about how our financial system works," said Obama. "The American people understand that not everybody has been following the rules, that Wall Street is an example of that ... and that's going to express itself politically in 2012 and beyond." Like I said, the federal government had far more to do with our financial crisis than Wall Street, and the president knows that, but why waste an opportunity to campaign?
The big banks aren't actually on Wall Street. Okay, so this is a nit, but still, I had to say it. They're sort of distributed now, but all the Manhattan-based banks moved uptown ages ago. The NASDAQ and New York Stock Exchanges are headquartered there, but that's just where most American's investments are traded, so I don't know what the beef is there.
We're disgusted with both political parties. All I can say about this to the OWS movement is join the party; you're late. Probably half the nation - including me and the Tea Party - got there way ahead of you.
One more thing. With all the rhetoric about CEOs and corporate America, at least they - along with small business owners - employee the nation. By comparison, has anyone ever thought to calculate how many professional athletes and entertainers earn millions and how many people they employ? That would be some revealing data I'd like to see.
Also check out:
- Is There a Leadership Crisis in America?
- The Financial Crisis For Dummies
- Who's Responsible For the Financial Crisis?
Image _PaulS_ via Flickr