Occupy Wall Street’s message: more than a sound bite

By David Callahan
October 5, 2011

By David Callahan
The opinions expressed are his own.

Pop quiz: What’s so bad about the financialization of the U.S. economy over recent decades?

If you’re like most people who are uneasy with the outsized power of finance, chances are you can’t boil down your concerns to a pithy sound bite. So why is there such ridicule of the protesters “occupying” Wall Street for lacking a coherent message?

Three years after the 2008 financial crisis, it is still hard to neatly encapsulate the problem with letting bankers and traders dominate American economic life. Once Congress passed the Dodd-Frank reform law last year, most political leaders and commentators moved on to other issues, leaving behind an unfinished debate about Wall Street’s influence.

Now, thanks to protests in New York and a growing list of other cities, this debate is percolating once more. And guess what: the supposedly incoherent protesters actually have a pretty strong critique of what is wrong with America’s financialized economy.

Angus Johnson, one of the most astute bloggers following the protests, wrote recently that if you think that the protesters have “no message, you’re not paying attention.” They clearly believe that there is “something seriously broken” in America’s economy and politics and that “an accelerating concentration of wealth and power in the hands of a small minority” is to blame.

That reading jives with my own visits to Zuccotti Park – aka, “Liberty Square” – just blocks from the New York Stock Exchange. The clear thread linking a mish-mash of grievances – on everything from education to healthcare to corporate campaign cash – is that the wealthy are running America at the expense of ordinary people.

If this sounds radical, the hyperbolic blathering of dreadlocked twentysomethings, consider that a slew of top political scientists have been saying the same thing for nearly a decade. For example, one of the most authoritative recent studies of democracy and inequality, by the Princeton political scientist Larry Bartels, found that “the preferences of people at the bottom third of the income distribution appear to have no apparent impact on the behavior of their elected officials.”

The protesters are not just on the right track with their sweeping critique of inequality, they are also in the right place. The financialization of the U.S. economy is closely linked to America’s drift toward plutocracy. The triumph of “shareholder value” over all other goals for the modern corporation was brought to us, starting in the 1980s, by Wall Street’s leveraged buyout kings and private equity sharks, as well as by bonus hungry traders obsessed with near-term gains. In turn, a narrow focus on the bottom line has undermined American workers – and the middle class writ large – by justifying any and all cost-cutting measures that can boost quarterly earnings, from foreign outsourcing to slashing benefits to busting unions. Nearly all the forces typically blamed for rising inequality – globalization, new technologies, declining unionization – have had a more devastating impact on U.S. living standards thanks to Wall Street greed.

Meanwhile, as one of the biggest sources of campaign money for both parties, and a major bankroller of the U.S. Chamber of Commerce, the financial industry has sought to both block restraints on its own risky behavior and kill policies that could redress rising inequality – such as tax hikes on high earners. A 2009 study estimated that the finance and insurance industries spent $5 billion between 1998 and 2008 on political donations and lobbying.

Wall Street’s unchecked power explains why it was free to blow up the economy with over-leveraged bets on shady mortgage-backed securities. And its enduring power helps explain why not a single top banker or trader has faced criminal charges for this catastrophe. Instead, unionized school teachers and lazy food stamp recipients have somehow become the main problem facing America.

What the protesters understand – more than the commentators ridiculing them – is that the United States is still on the path to plutocracy. Dodd-Frank may curb some of Wall Street’s worst excesses, but the greedheads who took down the U.S. economy remain all-powerful and inequality is actually getting worse amid soaring corporate profits, near-record unemployment rates, and deep cuts to government spending.

One seemingly weird thing about these protests, among many, is that the bid to “shut down” Wall Street is coming three years after the financial crisis. But this, too, actually makes sense: people turn to protest when the political system fails to deliver change or accountability. That is certainly the case here, with Obama’s presidency in tatters and all signs pointing to a return to business as usual.

Just maybe, though, the protests will open up a new debate on how to reform – or better yet, replace – an economic system that is failing so many ordinary Americans.

David Callahan is a Senior Fellow at Demos and editor of Policyshop.net, the Demos blog.

Photo: A protest sign lays beside a sleeping Occupy Wall Street protester in Zuccotti Park in New York October 1, 2011. REUTERS/Jessica Rinaldi

9 comments

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This is an excellent examination! Now to get more people thinking like you and our friends sitting it out in OccupyWallStreet. Makes me glad to see this sort of verbalization actually making an appearance on a major news source. Thanks Mr. Callahan!

Posted by christianr | Report as abusive

Besides the growing financialization, focusing on Wall Street’s excess (e.g., bonus payouts) is appropriate: the last two years saw the largest NYC bonus totals, outside of the record breaking 3-year stretch from 2005-2007. See charts below for details:

http://www.verisi.com/resources/wall-st- bonuses.htm

The government made the banks whole, they need to provide relief to homeowners caught in the worst economic crisis since the 1930′s.

Posted by datascientist | Report as abusive

Of course people are upset. The Robber Barron’s) have taken over, AGAIN. This time it’s Wall Street instead of the railroads but it’s the same old dance. We did this in the late 1800′s and early 1900′s and the result was the public reaction that led to the unions, FDA, the New Deal and a whole bunch of worker protections.

Everyone who’s upset that the government is too big better read some history books or their going to be really surprised when the public finally blows up and makes the government even bigger. That’s what happens in a democracy when the rich get disconnected, feel entitled, and start blaming the poor stupid people that aren’t good enough to be rich for all of society’s problems

Funny when GenX screamed about this in the 90′s everyone laughed. Now that GenY is doing it the Boomers have their own children there and it’s suddenly serious.

History keeps repeating itself because we can’t be bothered to remember it.

Posted by samuel_c | Report as abusive

Great op-ed, David. What you state here bears repeating over and over again until it sinks in and something is done about what is not just economic inequality, but power inequality as well.

Our Founding Fathers designed our government so that we could address these kinds of failures in our system, but there has been so much tampering with that original design that the 1% have found ways to circumvent our democracy, rendering the US an undemocratic state; a plutocracy.

The Occupy Wall Street protest is the first hopeful sign in many, many years. I had hoped Obama was going to usher in a period of change, but now he’s just another victim of the system, he has succumbed to the fear and the heavy-handed elites who actually do control our nation. Obama has put ambition above principle.

I’m afraid in the upcoming presidential election 99% of Americans will not have an option to vote for someone who represents them. That pretty much says it all.

Posted by doggydaddy | Report as abusive

Good post.

I hope some good actually comes of this movement. It’s high time that the citizens of this country (ALL of them) have an equal seat at the table.

Unfortunately, the majority of our Congressional memebership is still composed of the same people that were in office while the legislation that allowed this to happen was being written. So, imo, many of them are nearly as culpable as the robber-barons in the financial industry. It should be obvious to any reasonably intelligent person that we need MORE regulation of the bankers…yet we still have very little, since our elected “representatives” are so beholden to the corporate crowd (the folks who pay them their “bonuses”).

Posted by NedStark | Report as abusive

Do you understand why lies are the core of the movement in America called Occupy Wall Street? This MOVEMENT by the millions that have been impacted is going to revolutionize the world! My enterprise GROUBAL wants to lend our full support to help spread the word.
Pigs and Politicians…share one very frightening common thread!
Most would agree that swine on most large scale Pig Farms pretty much all feed from the same trough. The feed they eat comes to them directly from the Pig Farm owner with one single purpose in mind; nourish them for eventual slaughter, period. The Value Proposition is simple to understand. Farm Owner invests money in raising Pigs knowing that when they are slaughtered, the remains will bring a financial profit greater than the financial investment to FEED them, period.
Now (most) Politicians pretty much all fuel (their crusades for political office) from campaign contributions (investments) financed by Corporations, Industry Associations and Interest Groups; be it Republican, Democrat or Independent Party candidate, they all receive (significant) funding from a mixed-cocktail of the same channels. The aforementioned ‘Investors’ (like the Pig Farm owner) have one single purpose in mind; nourish (to some degree) the campaign coffers of (as many) candidates as possible because 1 will eventually be elected to office. And those that ultimately win, will be indebted (in some way) to those that ‘Fed’ them the fuel to become victorious. The Value Proposition here is also simple to understand. ‘Investor’ provides money to Candidates knowing that when 1 is elected he/she will (likely) support the ‘Investor’s’ profit agenda by drafting, voting for or otherwise supporting legislation that benefits (their) Investor. These forms of support are the equivalent of the Farm Owner’s (slaughter) and the legislation that is passed is the equivalent of (the remains) that will bring a financial profit greater than the financial investment to FEED them, period. Believe this or not, trust it or not, accept it or not…you choose. The fact is that, this is how it really is! Elected politicians are (for the most part) put into office based upon the size of their war-chests, period. The fact that they throw their support to those that (fed) them is clearly understandable. What is actually stupid is; remaining in denial that this is not how the game is played.
Government will not and cannot fix the people’s problems. They cannot ever spend enough money to sustain long term job growth. They cannot fix the health care crisis because the real problem is the entire health care system in itself. And they cannot ever (truly) change the systemic greedy financial behavior because there will never be enough resources to guarantee ENFORCEMENT of any (new) financial regulations that become law. I myself gave up trying to put the blame on elected officials long ago simply because they are as an
I am passionately determined and dedicated to help save Our Country from total economic disaster. This journey has become my life’s work and I am proud and honored to have an opportunity to make a difference during my second chance at life. Join the journey everyone, being a spectator in life is no longer excusable.
Robert Doner
Groubal
http://www.groubal.com/pigs-and-politici ans-share-one-very-frightening-common-th read/

Posted by Groubal | Report as abusive

It appears, at the very least, the OWS movement is keeping the conversation alive. If nothing else, that is important. Many folks who had a hand in building the financial engine that drove a derivatives market to the brink of economic collapse would love to have the whole thing just go away. We have to use our civil rights to keep the issue alive!

Posted by MhD | Report as abusive

“the preferences of people at the bottom third of the income distribution appear to have no apparent impact on the behavior of their elected officials.”

Oh really? then why is it that the bottom 47% pay no taxes, and the bottom third get payments from the IRS in the form of ‘refunds’.

There are more opportunities in this country than anywhere else on the planet. Take a look at what other people around the world do to be successful, or just survive, and quit blaming some all street guy because you are directionless and full of spite.

Posted by paintwagon | Report as abusive

Great Article David, I have written my congressmen, I have called, I have submitted ideas to the Super Committee and my voice has not been heard. It is easy for members of Congress to delete my emails and throw my letters in the trash. It is not as easy to ignore me when I join the thousands of others on Wall Street. There are so many issues to be resolved and this group is in its infancy. Issues will come forth, demands will come with solutions that are feasible, then a leader will emerge. This is a force to be reckoned with. It represents a cross section of the majority of Americans who are feeling the effects of unregulated Banks and financial institutions who were left to do as they wished with no oversight. Corporations have made record profits along with their CEO’s while the american workers have seen reduced salaries, job cuts, and benefits taken away. This is a revolution that will address the lobbyists who are buying our politicans favors and we will demand reform. The two party system has been reduced to nothing but political pandering with the Republican party using financial sabotage to take down the President at the expense of the health of the American economy. The majority of the people have wised up and realize this movement is necessary to put pressure on tax reform for Corporations and institute tax hikes on goods made overseas. Bring jobs back to America, and make those CEO’s who have reaped the largest profits on the backs of the Ameican workers bring their salaries back in line, so the workers can have living wages. I have a whole list of issues I want addressed. I will not stop working for solutions…I believe one voice can make a difference and thousands can and will change the course of American politics!

Maria Madero

Posted by maderom | Report as abusive