OWS: Right Movement, Wrong Street


It was bound to happen.  It’s been coming for decades.  It began with a trickle – a few jobs here and a few jobs there – sacrificed in the name of free trade.  Employers steadily nibbled away at benefits.  Raises got smaller.  And, though the unemployment data said otherwise, there was a growing suspicion that decent-paying jobs were getting harder to find. 

However, between debt-fueled safety net programs, tax cuts to make us feel richer, irrational exuberance and, finally, the financial deceipt that fueled the housing boom, the government was able to keep a lid on the discontent and forestall the day of reckoning.  Until the whole house of cards collapsed in 2008. 

Now anger is boiling over and its abundantly clear that throwing more debt at the problem is an unsustainable dead end.  We’ve reached the end of the line.  There’s no more hiding the fact that America is in decline; the American dream is over. 

The anger has coalesced into a critical mass.  You can’t expect tens of millions of unemployed and underemployed to sit silent any longer.  Civil unrest was bound to start.  All it needed was some catalyst – some little protest to get it started, and a little media attention to get it rolling.  Under normal circumstances, it might not last.  But these aren’t normal times.  The “Arab spring” protests have demonstrated what’s possible if downtrodden people get angry, get organized and persist.  Thus, the “Occupy Wall Street” (OWS) movement was born. 

The following quote from the OWS web site (link provided above) does a good job of summarizing what they’re about:

Occupy Wall Street is leaderless resistance movement with people of many colors, genders and political persuasions. The one thing we all have in common is that We Are The 99% that will no longer tolerate the greed and corruption of the 1%. We are using the revolutionary Arab Spring tactic to achieve our ends and encourage the use of nonviolence to maximize the safety of all participants.

This is a movement in its infancy.  It’s naive and confused.  The 99% of the population that they claim to represent has every reason to be angry at the disparity between their plight and that of the top 1% of wage earners.  But their anger is misdirected.  Most of those 99% rely upon their investments in Wall Street as a source of retirement income and a refuge from the other economic forces that are eroding their quality of life.  Our economy is based upon capitalism.  We want it and our corporations to succeed.

But what we don’t want is a system that’s rigged in favor of the handful of people at the top of those corporations.  We don’t want a system that’s rigged in favor of other nations at the expense of our own.  The leaders of our corporations aren’t doing anything illegal.  Everything they’ve done has, if you will, been authorized by our political leaders.  Wall Street will never change its ways until our political leaders redraw the boundaries within which our capitalistic system operates.  They have every right to be angry and demand change, but they’re on the wrong street.  They need to be camped out not on Wall Street but on Pennsylvania and Constitution Avenues in Washington, DC.

But maybe there are other streets that need to be targeted as well.  Our political leaders don’t dream up economic policy.  They’re too busy with campaigning and schmoozing.  They take their economic policy advice from economists.  Some lean slightly left; some lean slightly right.  But there’s little difference among them, which is why nothing ever seems to really change regardless of which party is in power.  All favor free trade and all favor growing the population, because they refuse to open their eyes to the consequences. 

So maybe the movement should be renamed “Occupy Garden Street” for the street in Cambridge, Massachusetts where Harvard University is located.  Maybe they should be demanding that Harvard and all of our universities abolish their economics departments, since the economists they’ve produced have proven to be abject failures.  The only way to tilt the economy back in favor of the 99% is to restore some balance to the supply and demand equation for labor.  That’s going to require people who understand how it got out of balance in the first place. 

And when it comes to demands, OWS has better include a demand for a new constitutional convention because, without it, money will continue to corrupt our political system and the influence of the 1% will continue to drown out the voice of the other 99%. 

And while OWS might like to think of themselves as a leaderless, amorphous movement, that’s not going to get them anywhere.  Think that the Libyans and Syrians are having a hard time changing their leadership?  That’s nothing compared to what the OWS is taking on.  They’re going to need leadership and strategy to make any real headway and, ultimately, they need to consider becoming the foundation of a new political party.  Otherwise, they can demonstrate all they want but, in the end, each of us, including each one of them, will have the choice of voting for either a Democrat or a Republican, funded by the same special interests and advised by the same economists, and nothing will ever change.

9 Responses to OWS: Right Movement, Wrong Street

  1. Old Jules says:

    Tough call. For the moment they’re broad-spectrum, which gives them numbers they need to be taken seriously and the means of avoiding anything specific to be attacked by the powers-that-be. But once they begin fragmenting into smaller interest groups and specific stated goals they’ll inevitably lose groups of supporters not interested in this or that specific stated goal, maybe even opposed to it.

    Interesting times we live in.

  2. authorbear says:

    Very interesting and well thought through analysis.

  3. Ken Hoop says:


    Sharp post from Denninger yesterday on China/trade.
    If you care to research the past few days, Kurt has posts on the good and bad of OWS and reccomendations
    on strategy.

  4. Ken Hoop says:

    “The leaders of our corporations aren’t doing anything illegal. Everything they’ve done has, if you will, been authorized by our political leaders.”

    Yes, but since this is the result of regulatory capture, i.e. Congress being bought off by the corporate/Wall Street crowd, one can argue that
    Occupy is at least partly targeting resources correctly at this time.

    • Pete Murphy says:

      Perhaps, but this movement isn’t going to shame corporations into ending their lobbying efforts. The only way to end that is through legislation, and such legislation is consistently deemed an unconstitutional violation of free speech. It’s the vague wording of our constitution and its amendments that need fixing, so that global corporations aren’t construed to be “the people” and advertising that’s sold to the highest bidder isn’t interpreted to be “free speech.”

  5. Ross says:

    Like Ken, I’m skeptical that protesting in front of the offices of the bought and paid for politicians will change anything. Protests happen in Washington happen all the time, and both the politicians and the public are jaded to even huge crowds making noise there.

    By calling out those who are writing the bribery checks and writing the laws that are passed by captured politicians, the OWS protesters are focusing their efforts at the source of the cancer and seem to have hit some gigantic nerves in the process. I wouldn’t mind seeing a companion protest in Washington where the message made clear the corruption connection, but leaving Wall Street and other centers of the power elite would be a massive strategic mistake.

    I think the Occupy X protests are doing a great job so far. What they really need is a more coherent narrative that isn’t co-opted by the political left. If they pull it off, they can avoid the trap that the Tea Party seems to find itself in.

    • Pete Murphy says:

      Agree wholeheartedly with the last paragraph. But I disagree that occupying Wall Street and targeting the “power elite” will have any impact whatsoever. It wouldn’t matter if all 310 million Americans camped out on Wall Street. As long as they keep buying their products, corporations and their leaders couldn’t care less about the protests. As long as shareholders are happy, they’re happy. Now if those protesters were successful in boycotting the products of those companies, that would be a different matter. But for that to work, they’d have to boycott the products of every company, and that’s impossible. For example, if they boycotted one bank, it would simply be a bonanza for the other banks.

      The real question is this: what is it that the Occupy people want? If they want corporate money out of politics, that’s going to require a change to the constitution, since any law that tries to limit such contributions is consistently ruled unconstitutional. If they want jobs, then they need to start demanding a change to trade policy and a halt to the importation of more labor. And it’s my contention that none of this will happen until the field of economics understands the role of trade and population growth in wrecking our economy.

      • Ross says:

        It’s not just boycotting their products or services. Very few of the non-powerful have anything to do with investment bankers. It’s saying, “I see what you did there.” and making it less acceptable for politicians to accept their money. I do agree that the recent SCOTUS seems intent on equating money and speech and the only real fix might be a Constitutional amendment.

        On to your observations about economics, I wonder how familiar you are with the Triffin dilemma, which observes that any country that wants its currency to be a global reserve currency must run and maintain a significant trade deficit so that the currency demands of other sovereigns are satisfied. This alone is sufficient to explain the ongoing trade/manufacturing disaster we observe in this country.

      • Pete Murphy says:

        I used banks (not just investment banks) as an example. Consider auto manufacturers as another example. If protesters boycotted General Motors, it might harm GM but would be a bonanza to every other auto company. GM might then have less money for lobbying, but all the others would have more and their influence with lawmakers would grow instead of diminish.

        No, I hadn’t heard of the Triffin dilemma before but, from what I can gather, I don’t put much stock in it. First of all, although the dollar is the world’s largest reserve currency, it’s not the only one. The second largest is the Euro, and the European Union actually has a large trade surplus of about $600 billion per year. Secondly, China has blamed this “Triffin dilemma” for the global trade imbalances that caused the global financial collapse in 2008. So China would like for its currency, or a basket of currencies, to replace the dollar. They’re not advocating this because they want to give up their trade surplus. They’re doing it to deflect attention from the only real solution to trade imbalances – tariffs.

        There are many nations who run trade deficits whose currencies are not reserve currnecies. However, there is an almost perfect correlation between population density and balance of trade in manufactured products. Very densely populated nations are either export dependent or their people live in abject poverty. Less densely populated nations who attempt to trade freely with them almost universally experience a trade deficit.

        You might be interested in the study I did that found no correlation between currency valuation and balance of trade. Check it out: https://petemurphy.wordpress.com/2010/11/17/study-finds-no-relationship-between-currency-exchange-rate-and-trade-imbalance/

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