I’ve been asked what I think of the Occupy Wall Street Movements. I say it’s about d*** time. The anger and discontentment that the movement has tapped into is real and has been building for a long time. The mass numbers of people – like say the 99% - have good reasons to be angry. The U.S. economy is very sick and it’s not really recovering. For at least three decades now the rules in the economy have gradually been changed. The overwhelming net effect of all these institutional and structural changes has been to transfer income and wealth from the bottom 80% of the income scale (odds are that means you!) to the upper 1%. What about the other 19%, the ones in the top 20% but not the top 1%? They haven’t really lost in number terms but they’ve struggled to hold on. Their security is greatly reduced. And now, the politicians that have been bought by the top 1% are coming for everybody’s Social Security and Medicare.
The American poor, working, and middle classes have been like the proverbial frog put into tepid water and then heated to boiling (note, yes, I know there’s evidence that frogs don’t behave that way in real life – it’s a metaphor, folks). Gradually the rules were changed. The banking and finance industries were deregulated – not all at once, but in a series of steps. Despite massive (for that time) bailouts and bank rescues in the 1980′s savings and loan crash, we continued. Union power was reduced. Antitrust enforcement languished under a philosophy of “markets will self-enforce”. The tax codes were changed to favor hedge fund managers and bankers. Median household incomes began to stagnate while incomes at the top continued to grow and even accelerate. A loud chorus of anti-”liberal” media, politicians, and think tanks constantly pounded an anti-government theme. Meanwhile economic growth gradually slowed. We lowered our expectations. Instead of demanding the growth rates of the 1950′s, 1960′s, and even much of the 1970′s, we began to settle for less but pretended it was more. We shifted more and more of the cost of a college education away from government and to students in the form of student loans. For a long time, the working and middle classes were distracted from what was really happening. The leaders blamed the people themselves. It was getting harder and harder to keep up, let alone get ahead economically. We were distracted for a while by dreams of riches in an Internet dot-com bubble (“just pick the right start up and get rich”) or later in a housing bubble (“your house will make you rich ‘cuz home prices never drop”) or by endless wars and obsessions with terrrorism.
Then the crunch came in 2008. The economy collapsed. But it wasn’t workers that crashed the economy – it was largely the banking and finance sector. But the fall out hit just about everybody. For 5-6 months we were on a trajectory to repeat the Great Crash and Great Depression of the 1930′s. The same depression that conservative ideologue economists like Robert Lucas had claimed in 2003 was permanently “solved for all practical purposes” . President Obama promised change and entered office in the midst of the collapse. He wasn’t really prepared for this situation. The change Obama had originally envisioned was a more conservative, polite cutting back of social programs like Social Security. The change we needed wasn’t the change that originally motivated him to run.
In response to the crisis and collapsing economy, the government responded – both the Bush and Obama administrations. And they both pursued rather similar policies: bailout the banks without even requiring sacrifice by the bank managers or the bank share and bond holders, and meanwhile offering some mild (relative to the problem) stimulus with much of the stimulus being in the form of tax cuts. It hasn’t worked. Well, I should be more precise. It worked for the top 1% – the really, really wealthy and for Wall Street and the banks. For the rest of us, it’s grim. The economy stopped it’s free fall. That was good. But it has never substantially begun a real recovery. Unemployment is stuck at over 9%. The reality is worse than that number, though since large numbers have dropped out of the labor force and simply abandoned the hope of finding a job for now. It’s been over 3 years since the crunch on Wall Street and there’s no recovery. Instead, politicians, both Democrat and Republican, have been spent the past year trying to cut spending, cut social programs, and make things worse for the 99% while cutting taxes further for the 1%. It makes for anger and confusion. We are now in a workers depression.
The Tea Party movement of the last couple years had initially tapped into some of that populist anger. But the Tea Party wasn’t/isn’t really a broad-based populist grass-roots movement. It’s more of an Astroturf, faux populist movement with a lot of funding from very, very rich sources like the Koch brothers. What’s more, it has become clear in the last year in Congress that the Tea Party doesn’t really have any solutions. Last summer it was clear that some Tea Party people in Congress would rather have the U.S. default reach any kind of do-able compromises. The vast majority of the 99% do not think a default by the U.S. government is a good thing. The anger and frustration remains.
To make things worse, recent years have seen an increase in the power of large corporations. The Supreme Court has ruled that corporations are “people” and that we the people cannot put any limit on political speech or spending by corporations. Campaigns have become extraordinarily expensive. The result is that politicians, even more so than ever, basically listen to and do the bidding of people on Wall Street and large corporations. The average American has been frozen out of their own political processes.
I observed last winter during the uprisings in Tunisia and Eqypt that two ingredients of revolution are an educated population that learns or knows that a better condition is possible, and a political economy where there is no prospect for improved living standards. Hopelessness turns to frustration which turns to anger. That produces protest and demands for change. As John F. Kennedy famously said, “Those who make peaceful revolution impossible will make violent revolution inevitable.” I also observed last winter that the inequality in income is worse in the U.S. than it was in Tunisia, Eqypt, or the other Arab spring nations. I also noted that for now demography was keeping the U.S. from breaking out in mass protest. Basically the U.S. population is older and revolutionary protest is usually a young people’s phenomenon. But there are limits. The U.S. also has a very extensive history of protest-driven social and political change. It’s really the last few decades of quiet between the civil rights & Vietnam protests of the 1960′s-70′s until recently that have been the unusual phenomenon. The longer the U.S. persists in pursuing austerity policies that keep the economy from growing and transfer more wealth and power to the top 1%, the more the nation is playing with fire.
As it stands now, I stand with the Occupy Wall Street movement. The lack of clear “leaders” and “demands” is a good thing. I will contribute my help in the coming weeks by trying to further illuminate the issues involved.
Sources: Economic Report of the President to Congress (G.D.P.); Census Bureau (income)
Today’s jobs report shows that in August, cuts by states and local governments — especially school districts — wiped out private-sector job gains.
Some 14,000 of the state and local jobs lost in August were in local school districts, bringing to 293,000 the total decline in school-district employment since August 2008 (see second graph).
