How to (Almost) Sympathize with Occupy Wall Street
Has Marx's long-awaited economic determinism actually arrived? Long ago, in the time of the Bolshevik Revolution, the Comintern and Soviet "active measures" assured their followers that capitalism would fail in the West. After all this time, are the jargon and propaganda of the old left actually coming true? Say it ain't so. After all, history's supreme socialist regime in Russia collapsed in 1991. And we won, right? Free-market capitalism triumphed, and communism failed. End of conversation.
That is, until 2008. The hardy middle class of America had survived the incessant cycles of feast and famine since the founding of the Republic. After each crash, stability returned and business went on -- until the next collapse. The Great Depression was an historic low. The oil crisis, inflation, and stratospheric interest rates of the 1970s constituted the next really big blow, followed by the ups and downs of the early '80s, the savings and loan-induced mini-depression of 1988 to 1994 , the dot-com bust of the '90s, and the 9-11 downturn. Each of these trials was borne, and hope was restored in the end. But the current setback is beginning to feel permanent, which is why Occupy Wall Street is gaining momentum.
People are aware that publicly traded firms were a party to the mortgage con game, the credit default swap Ponzi scheme, and the machinations of short-sellers that conspired to bring down the economy. They are also aware that big firms are hoarding cash, awaiting events, and that the connection between Wall Street ups and downs and the "real economy" has dissolved. Used to be that the small and middle sector of businesses could look to public companies as peas in the same free-market pod, and rely on stock exchange fluctuations to estimate their own performance. Not anymore. Wall Street has become a separate fiefdom, sealed off from the fate of the non-public firms that compose 90% of the economy. In other words, the gap between the big boys and you and me has become impassable since the great heist of our assets in the first decade of the 21st century.
The old saw that the stock market historically leads the economy in and out of recessions no longer applies. No matter what the market does today, the "real economy" continues to stagnate. But even if big companies spend their hoardings, unemployment will not be reduced, since the small business sector creates virtually all new jobs in the economy. With interest rates at an historic low and public companies loaded with cash, investors buy in simply to park their money with little expectation that companies will grow in the future. The little guys are left swinging in the wind, resulting in pathetic job growth and continuing uncertainty and fear.
But there is a another over-arching factor driving the movement that expresses the feelings of the country: the failure of Congress to put on display and prosecute the criminals who brought us down. Revenge is mine, saith the Lord, but the people can't wait that long.
Instead of impaneling an investigation to expose the coat-and-tie felons, our current batch of spineless solons let the crooks off the hook. Rep. Barney Frank was in a position to name and subpoena culpable corporate and banking executives. Instead, he burnished his own reputation with outrage and onerous new legislation that did not address the separation of commercial and investment banks. Nor did it reinstate the "uptick rule" to prevent short-sellers from running companies into the ground.
Frank was reluctant lest the finger point to him and his close association with Fannie Mae and Freddie Mac. He added fuel to the mortgage conflagration by prodding the semi-private mortgage underwriters to relax qualification rules and approve more and more sketchy loans under the banner of "housing for everyone." The Securities and Exchange Commission, who collectively fell asleep at the switch during the dismantling of the U.S. economy, has undertaken to investigate certain of the culprits. And once in a while some bank or another has agreed to pay for its misdeeds -- although fines have been in the nine figure range, pocket change to our new mega-bank sector. It's way too little, way too late.
An angry finger should be pointed at former Treasury Secretary Hank Paulson, who had served previously as chief of the investment bank Goldman Sachs. Paulson engineered a rescue for his former industry colleagues when the crisis exploded. He had the chance to save us all by having the federal government purchase the toxic assets created from the scandal, which should have resulted in a faster recovery with all banks relived of their toxic assets.
As a result of what happened instead, every bank is weighed down with bad real estate loans, meaning that none of them can create leverage in the economy at large. Paulson's move to bail out Wall Street by saving the money-center investment banks and ignoring the toxic real estate problem left the vast middle- and small-sized business sector holding the proverbial bag.
Our governmental economic leaders, the Congress, and the Obama White House fumbled the recovery, either to protect their own or because their macro-economic experts do not understand the American economy. We have seen our values undermined, our trust in others defiled, and the once-great, shining future we believe in hijacked by venal and corrupt manipulators who fleeced the system and walked off with all the wool. The OWS movement is saying what most people feel: we're mad as hell, and we are not going to take it anymore.