“Welcome to the occupation. Here we stand and here we fight, all your fallen heroes. Held and dyed and skinned alive, listen to the Congress fire,” sang REM back in 1987 in words that probably resonate more today than then.
Perhaps it simply boils down to the Mr. Smith-driven mantra of “I’m mad as hell and I’m not going to take it anymore.”
Wall Street is perhaps as good a place to start as any. To me I think it is as much about disempowerment, anger and frustration.
As one blogger noted on the Washington Post, “Pundits splutter about the movement’s lack of ‘demands’ and coherent messaging, but sound bites and 10-point programs arise from central committees and top-down hierarchies. The Occupy movement demonstrates a very different model of organizing: emergent, decentralized, without a command and control structure.”
Perhaps true, perhaps just a justification for a movement that is more about anger and emotion than purpose.
As the writer puts it, the message of the Occupations is simply this: “Here in the face of power we will sit and create a new society, in which you do count. Your voice carries weight, your contributions have value, whoever you may be. We care for one another, and we say that love and care are the true foundations for the society we want to live in. We’ll stand with the poor and sleep with the homeless if that’s what it takes to get justice. We’ll build a new world.”
I will quickly disabuse people of any romanticism on my part, we are not going to build a new world this year any more than the anti-war protestors and civil rights activists built a new one in the 1960s.
All they managed to do was pave the way for a Nixon Administration that sunk this nation further into the abyss with his unfettered paranoia and insecurity that eventually consumed him and devoured him alive in Watergate.
A friend of mine put it best when he noted that he is responsible for creating the Nixon Administration and therefore Watergate.
Although my father once justified his working for Eugene McCarthy, saying that it was supposed to be Bobby Kennedy who emerged, not Nixon. That dream was wiped out, along with Martin Luther King’s, in a hail of gunfire.
There is no Bobby Kennedy to save us now. Only Barack Obama, financed and tied in with the same Wall Street profiteers who nearly caused the collapse of western civilization back in 2008.
As you can tell, I’m not a big fan of the Occupy movement, nor I am not fan of the status quo. My problem is that, while my romantic side likes the idea of the people rising up, for the most part the history of popular movements end in Robespierre’s reign of terror or the Bolsheviks co-opting the Russian Revolution to set up their own brutal tyrant.
It is rather remarkable that a year that saw the collapse of the Egyptian Government, the death of Osama Bin Laden, and the overthrow and death of Gadhafi, sees a sense of bitterness in America that will not be so easily quelled.
As much as I might mock the naivety of the Tea Party movement and shake my head at the Occupy Movement, I think they all have a point that has driven me for five years.
I simply do not trust government to operate in the best interests of the people. I see basically good people in Mariko Yamada and John Garamendi get caught up with utterly corrupt figures like Bobby Weist, who, along with the influence of the Wall Street crowd, are in fact part of the problem, not the solution.
We are all disgusted with the corruption and the ineffectiveness of government to work together to solve our most basic problems, without the constant fear that they will drive us into oblivion.
We take it for granted in this country that we are on solid foundations. Reading the history of September 2008, we ought to at least admit to ourselves how close we came to the brink.
We came close to the brink again this year, for no apparent good reason when partisan lunacy almost drove us over the debt limit and caused us to default on our loans.
And yet, despite it all, I am not without faith. Democracy may be messy and frustrating. People have different viewpoints and backgrounds and experiences to draw on for their opinions and world views.
But when push comes to shove, I still believe that kernels of decency hover in humanity. We push on and try to make things better in our little worlds.
I think we had just gone too long in this nation without true struggle. Frankly, we should have seen the signs coming for the last two decades. It was time.
So, keep banging your drums, signing petitions, speaking out, and maybe at some point, someone will listen and cooler heads will prevail.
As the Washington Post blogger writes, “None of these are easy problems to solve. I’ve sat through interminable and frustrating meetings. But I’ve also had moments of profound inspiration and grace.”
She continues, “I hug the smiling man at Occupy Oakland who tells me, ‘There’s a whole lot of healing going on here.’ I tear up as a young woman with a beautiful voice sings, ‘We shall not be moved’ to honor an earlier struggle for Civil Rights. I beam at the calm, shy drifter who steps up to facilitate a big meeting and lets his innate intelligence shine.”
Maybe, just maybe, this will all end for the best.
—David M. Greenwald reporting
Occupy Davis looks like a homeless camp, not a bunch of people with a cause. I think all the homeless in Davis are using the Occupy movement as an excuse to camp in Central Park. It’s time for the city to move them out. It’s an eyesore that needs to go away. Our police need to do their job and give them the boot.
[quote]That dream wiped out along with Martin Luther King’s in a hail of gunfire.[/quote]A bit overly dramatic… 2, maybe 3 shots fired… two men who had/could make a great positive difference in the world, gone. Except both have lived on in many hearts and minds.
Rusty: That’s what the protesters want – a scene. The city is doing the right thing by ignoring it.
To say that the French and Russian revolutions and the Civil Rights movement only made matters worse is a stunning historical claim…
“All they managed to do was pave the way for a Nixon Administration that sunk this nation further into the abyss”
…however we may want to be a little more gracious and acknowledge some of the social benefits that they created–the Civil Rights Act, say, or welfare and other social safety net provisions, or the modern democratic state.
In the same regard, a more gracious account of Occupy Davis might say that…
“what the protesters want” is not “a scene”
..but instead simply democracy. While some may feel that the massive redistribution of wealth and power from the poor and middle class to the wealthy over the last 30 years is simply the way of the world, most would disagree. As such, many of us are thankful to the Occupy Davis group (and all the others in Occupy encampments around the world) for taking action on our behalf. The outcome is uncertain, of course, but if it achieves even a sliver of the human gains realized by the social movements dismissed in Mr. Greenwald’s commentary then it will surely be a blessing.
[quote]As much as I might mock the naivety of the Tea Party movement and shake my head at the Occupy Movement, I think they all have a point that has driven me for five years.[/quote]
Let us observe (within “our little worlds”) the impact of the occupiers, over the next season of time, then a comparison to The Tea Party may be within a scintilla of merit.
Just a minor note — “I’m mad as hell, and I’m not going to take it anymore” is Howard Beale from “Network,” not Mr. Smith. 😉
Interested to learn more about the Occupy Movement and the 15 Core Issues singled out to date for discussion? Go to http://october2011.org/issues, or also go to the Alliance for Democracy http://www.alliancefordemocracy.org Took It for Organizing or MovetoAmend.org
[i]”Just a minor note — ‘I’m mad as hell, and I’m not going to take it anymore’ is Howard Beale from ‘Network,’ not Mr. Smith. ;-)”[/i]
Just a major note — Sidney Aaron “Paddy” Chayefsky wrote those words. Cheyefsky won the Academy Award for his screenplay for “Network.” It was the third time he had been so honored. He earlier had won for “Marty” and for a movie which I think is mostly forgotten these days, named “The Hospital.” The Hospital is not a great movie, but it is good. And it has a great performance in it by the always great George C. Scott. Scott lost the Academy Award for Best Actor that year (1971) to Gene Hackman* in The French Connection. Peter Finch, who played Howard Beale in Network, was also nominated for Best Actor in 1971 for his role as a weird doctor involved in a bi-sexual love triangle in a strange movie called “Sunday Bloody Sunday.”
*1971 was the first (and probably only) year in which the majority of actors nominated for Best Actor were Jews. One of them, Walter Matthau, was awesomely brilliant in a great movie called Kotch. But Kotch was not Matthau’s best performance on film. His best was two years later in an even better movie called “Charley Varrick.” I think Matthau should have been nominated for that, but I guess the voters didn’t think it was as difficult a role as some others. Matthau’s best friend, Jack Lemmon, won in 1973 for a film called “Save the Tiger.” Lemmon is good, but that movie does not hold up. The guy who should have won in 1973 was Al Pacino as “Serpico.”
I agree we need to get rid of the infestation on the lawn, but don’t want to create a scene in doing so, it would give them some sort of cause if a Davis PD gives one of them with a love tap to the dome. Better solution; does someone have the keys to the timer on the sprinklers? I think the lawn is looking kinda dry…
We all enjoy a little Schadenfreude now and then, and, as we all know from our schoolyard days, those who are younger or more vulnerable or different or bolder are the most common targets. But in this case, my question is why? Beyond the easy ego bump from lunging at the “infestation,” why? It could be that this commentator is a members of what the protestors call “the 1%” or those who have benefited many, many fold over the rest of us from changes in tax laws, the deregulation of the finance industry, the defunding of institutions of social mobility like public education, etc. If so, I’m afraid that protecting such an unfair advantage by referring to one’s neighbors as an “infestation” is unethical in my estimation. If the commentator is part of what the protestors call “the 99%” then it would seem the old adage applies: “a fool and his money will soon be parted.”
[i]” It could be that this commentator … benefited (sic) many, many fold over the rest of us from … the deregulation of the finance industry … “[/i]
Yes, there are a handful of left-wing economists — led by Joe Stiglitz, who won the Nobel Prize in large part due to his theory of moral hazard — who believe the moral hazard created by the Clinton Administration’s partial deregulation of the financial markets (Gramm-Leach) [i]permitted[/i] the economic meltdown of 2008-09. But that is a minority viewpoint, and it has not been well defended by academic papers.
A much more mainstream view (probably held by 99% of economists) is that Gramm-Leach (which allowed mergers in banking, investment banking and insurance and hence allowed firms which became “too big to fail”) made a bad situation a little bit worse, but was [i]not causative[/i] of the crisis.
Yet because so much of the noise — over the last few months, especially — is from left-wing activists, the vast majority of whom have no economics training, it sounds like this theory has been substantiated by rigorous analysis. It has not.
Mostly, what I hear from the marchers living in tents is just anti-science ideology*. It is the same crowd which spread the anti-vaccine theories. It is the same crowd which believes in “alternative medicine,” no matter how little evidence there is for it. It is the anti-GMO group. It is, to borrow a phrase, the world of woo.
In reality, the core problem with regard to the financial meltdown had to do with the combination of A) policy changes in the early 1990s that encouraged high-risk borrowers to take on high-risk mortgages, B) policy changes which forced lenders to make high-risk home loans to high-risk, lowly capitalized borrowers and C) the policy changes at Freddie Mac and Fannie Mae which forced those government run (though partially privately owned) mortgage insurers to purchase high-risk mortgages, even though Fannie Mae and Freddie Mac would go bankrupt because they bought them.
All three, A, B, and C, were not deregulatory at all. They were anti-market policies of MORE regulation, not less. That is an inconvenient truth for the extremists in tents.
It is true that some (publicly traded) investment banks, which bought mortgage instruments in the secondary markets made extremely high risk purchases, often not even understanding the risks. And it is true that some bankers were playing both sides of investments: selling these high risk instruments to their clients and selling insurance policies which would pay off to them if their clients lost money on those subprime mortgages**. But none of that business caused the meltdown. The meltdown was a crisis that derived from A, B and C over 15 years.
It should also be said that a part of the problem was from the home buyers themselves. They deserve blame for buying houses that had been appreciating at unsustainable levels. They were speculating. They were choosing to take on serious risks. They should have known better, too.
*The right-wingers, who reject global warming and other bits of science, have their own version of anti-science ideology. The key on both sides is they start with an ideology, and reject all science which inconveniently does not fit their preconceived notions.
**Those who acted “shocked” that bankers would be selling one instrument and betting that it would fail at the same time are either ignorant or dishonest. That “playing both sides” investment strategy has been going on for more than 400 years. Bnakers do that not because they believe in one side or the other. They do it because they profit from the volume of transactions. They are very much like the house in a gambling outfit. The house does not care which team wins or loses. They just want the vig from each side of the bet. It may not be moral in a church sense. But it is normal behavior in a financial market and it always has been. They go into business to make money. They sell both sides of transactions because the transactions make them money. No one is ever forced to buy or sell.
withconcern: “[i]It could be that this commentator … benefited (sic) many, many fold over the rest of us from … the deregulation of the finance industry … ”
[/i]
Rich: [i]”Yes, there are a handful of left-wing economists — led by Joe Stiglitz, who won the Nobel Prize in large part due to his theory of moral hazard — who believe the moral hazard created by the Clinton Administration’s partial deregulation of the financial markets (Gramm-Leach) permitted the economic meltdown…”[/i]
withconcern didn’t say anything about what caused the economic meltdown. withconcern merely addressed the income gap that increased after deregulation.
[url]http://www.economist.com/blogs/dailychart/2011/10/income-inequality-america[/url]
“”””Only Barack Obama, financed and tied in with the same Wall Street profiteers who nearly caused the collapse of western civilization back in 2008.””””
AAAHHHHHH , so it was wall street ! , Not the hard working state , city , county , teachers , nurses , everyday 99 % ers that collapsed the retirement system .
Thank you Don Shor. Yes, Rifkin, would you accept the recent CBO report’s findings as science? If not what about any of the many other studies that have shown a massive redistribution of wealth in the last 30 years from, as the protestors put it, the 99% to the 1%? If so I’d be happy to blame whomever you’d like just so long as we can agree that it needs to be fixed. 😉
Interesting choice of places to “camp”… Why Wall Street when it is DC policies that made them rich? I think their obscene profits sickens everyone, but the hand on the money spigot is in DC, not NY… While I know that they feel the need to express themselves, they have become tiresome and someone needs to turn the sprinklers on and send them packing. Next time they can work on figuring out causes, policies and suggested changes. Oh yeah, and next time they should really coordinate their activities with the rest of the Tea Party.
I understand that it has been popular to blame politicians for making bankers obscenely rich at our expense rather than blaming the bankers themselves ever since Ronald Reagan said that “government is the problem not the solution.” However, the old-school, common-sense approach of following the money may still be the best path to the truth.
“We came close to the brink again this year, for no apparent good reason when partisan lunacy almost drove us over the debt limit and caused us to default on our loans.”
This shows a misunderstanding of what a debt ceiling means. If the debt ceiling was not raised, payments on loans would still have priority over other federal spending. It is defense, medicare, social security and other spending that would be starved for funds and cut. Unlike federal loans, these obligations do not carry the full faith and credit of the USA.
It seems that the era of big growth in government and the era of big growth in the concentration of wealth coincide. Perhaps the former and the cronyism and corruption it encourages is one cause of the latter?
I think if you look at historically the opposite is true. Considerable government growth occurred from the 1930s through the 1960s. This was also the period when there was a significant middle class. Periods in which the distribution of wealth shifted dramatically to the top were during the Gilded Age at the end of the 19th century and our own period beginning around 1980.
[i]”Yes, Rifkin, would you accept the recent CBO report’s findings as science?”[/i]
Please provide a link to these CBO studies. I am not sure what you are referring to.
[i]”If not what about any of the many other studies that have shown a massive redistribution of wealth in the last 30 years from, as the protestors put it, the 99% to the 1%?”[/i]
There has been a shift in wealth in the United States which has favored the top 5% over the last 20 years. That is true. It has been due largely to technological changes — that is, computer technologies, especially software — which have benefitted those whose skills allow them to sell their goods and services on a global platform–in other words, they have far more customers now than they did back in 1991 — while at the very same time those technological changes have harmed the interests of low-skilled workers in advanced countries like the United States, because that subset of our population has far more competitors to compete against when selling their labor.
Yet if you look at these technological changes on a global scale, most of the beneficiaries have been the poor and the direly extremely poor. China, which has something like 1/5th of the world’s popuation (or maybe now it is 1/6th) had 25 years ago something like 750 million people out of 1 billion living in poverty. China’s population has since grown to 1.3 billion people, but they now have less than 70 million living below the poverty line. Thus over the last 25 years almost 700 million Chinese have come up from below the poverty line to at least a reasonable standard of living. A great percentage of Chinese (compared with the past) are now middle class or above.
There are many other countries over the same period (notably Hong Kong, Taiwan, S. Korea, Singapore, Israel, Chile) which have gone from poor or lower-middle to rich countries. They have mostly followed the same path: international trade and investment and much higher standards of scholastic achievement. And there are other countries (like Brazil, China, Malaysia, Thailand) which due to the technological changes have seen great improvements.
We could have reacted to the technological changes in the U.S. by shutting down global trade. That would have harmed the interests of our richest 5% and may have saved some jobs of those in the bottom 20%. But history tells us quite a lot about what would result from trade protectionism. It makes everyone worse off pretty quickly. We tried that in 1930 with Smoot-Hawley. That led to 10 years of lower living standards all over the world, including in the U.S.
Another factor unique to our country over the last 20 years has been a tremendous increase of the immigration of people with low to low-middle job skills. Those immigrants, most of whom have great drive, have benefitted our country as a whole. However, on a class basis, they have made it even harder for our bottom 20%, who have to compete with the immigrants for jobs. I don’t think immigration effects are quite as bad for the poor in the U.S. as having to compete with tailors in Sri Lanka and Cambodia. But it is true that low-skilled Americans who could be working as janitors or roofers or dishwashers or forklift operators but are unemployed are clearly harmed by immigrants who outcompete them for those same jobs. (Farm labor is, in my opinion, a different animal. Americans would not take those jobs, largely because they lack the skills and tools it takes to live itinerantly.)
@ Rich: The link to the story about the CBO report is in my reply above.
As you know, some economists believe that the Bush tax cuts increased the wealth of the wealthy, and that allowing them to expire would reduce the long-term deficit. But as you also have probably read, the supercommittee is already likely deadlocked on anything that would be perceived by the Republican members as a tax increase.
Courtesy of Don Shor above: http://www.economist.com/blogs/dailychart/2011/10/income-inequality-america
While the technology narrative is appealing to our gadget-loving age, its not true. Here is a more accurate characterization of the historical changes in the economy: http://www.mybudget360.com/wp-content/uploads/2011/02/fire-economy.jpg
To withconcern
As can be seen at governmentspending.com, [url]http://www.usgovernmentspending.com/spending_chart_1930_2011USp_13s1li011lcn_F0t[/url]
total government spending, (state and federal) as a percent of gdp has steadily risen from about 20% in the 1930’s to about 40% today.
The main exception was during WW II, when there was a massive run up to finance the war, to over 50% of GDP.
Following the war, a Republican congress forced a massive downsizing on Truman, down to the 25% level (Truman called them the do-nothing congress. Obama is trying a similar strategy today. Maybe it will work again.) This downsizing of the Federal budget led to a booming economy that lasted twenty years, finally undoing the disastrous big government policies of Hoover and Roosevelt that led to the great depression.
Don
The graph in your link shows that the after-tax income of the 81st to 99th percentile rose much more than did that of the 21st to 80th percentile.
Thus it seems that the very rich and the very ppor are doing well and middle 60 percent are losing relative ground.
Maybe those signs should say “We are the 60% in the middle”
.
The basic point I was trying to make is that if you remove the two world wars you see an increase in government spending during the depression that caries through until Reagan is elected in 1980. This is a little bit more visible in this graphic: http://www.belligerati.com/wp-content/uploads/2011/04/usgs_line.png. Prior to this increase you had the Gilded Age distribution between rich and poor and after Reagan begins cutting back on government and taxes we get a return to the same kind of distribution that we had prior to the 1930s. In between these two gilded ages, we had a period with a significant middle class. The middle class’s heyday also corresponds with the history of the top tax rate: http://forbestadvice.com/Money/Taxes/Federal-Tax-Rates/Historical_Federal_Top_Marginal_Tax_Rates_History_Graph.html
withconcern
Your links don’t work.
But in any case, it is meaningless to point to high top tax rates that nobody actually paid. The rich had numerous loopholes and deductions that let them escape paying anywhere near the top rate. A much fairer measure of how much the rich paid is their total payments as a share of GDP. And this does not support your argument.
I fixed the second link.
In the meantime we have a homeless slum smack dab in the middle of town on one of the most traveled streets. I really don’t believe that Occupy Davis really has anything to do with the Occupy movement, it may have started out that way but the homeless and drug/alcohol addicts have taken it over and are using it as a crux in order to camp in our beautiful park. It’s time for these children to get out, the charade is over.
[quote]In reality, the core problem with regard to the financial meltdown had to do with the combination of A) policy changes in the early 1990s that encouraged high-risk borrowers to take on high-risk mortgages, B) policy changes which forced lenders to make high-risk home loans to high-risk, lowly capitalized borrowers and C) the policy changes at Freddie Mac and Fannie Mae which forced those government run (though partially privately owned) mortgage insurers to purchase high-risk mortgages, even though Fannie Mae and Freddie Mac would go bankrupt because they bought them. [/quote]
Add to your list D) Wall Street allowed sub-prime mortgages to be packaged with prime mortgages, then bundled, then sliced and diced as investments for hedge funds to buy up. Ultimately the originator of the sub-prime loans, when the sub-prime loanas were defaulted on, is not held responsible. This nonsense is still be allowed…
[i]”This downsizing of the Federal budget led to a booming economy that lasted twenty years, finally undoing the disastrous big government policies of Hoover and Roosevelt that led to the great depression.”[/i]
In my opinion, this is a misread on what “led to the great depression.”
o The first thing, which is uncontroversial, that led to the great depression was a rather expected end of the business cycle in 1929. We had a very severe recession in 1920*. We then started growing again in 1921. The growth from 1921-29 was very strong and fast. It was a time of unprecendented American prosperity. But in a number of key sectors at that time–principally in industrial tools and consumer durables–we had a great overabundance of inventory. When important inventories build up too much, too fast, that inevitably leads to a recession. But not necessarily to a Depression.
o The second factor to look at was the policies of the Federal reserve. The understanding of monetary economics was not all that great in the late 1920s or 1930s. What monetary economists will now tell you–there is 100% agreement on this–is that you need a looser money supply policy when you are in a recession. But Hoover’s Fed did just the opposite. As the economy grinded down to a halt, the Fed was calling in its loans to banks and thereby running those banks out of business–literally bankrupting them–and thus was effectively starving the economy of cash. But there is a backstory as to why the Fed was doing this: anti-Semitism. The board of governors of the Fed was full of Jew-haters, and they specifically denied credit extensions to banks owned or run by Jews**. The worst example of this was when they killed off a huge New York mercantile bank known as the Bank of the United States. When it was bankrupted, that led to the closure of more than 100 large manufacturing companies which held their money in that one bank. It was not until 1935 that the Fed changed course. And they changed course too slowly. It was not until 1940 that the money supply was sufficient for a growing economy.
o The third factor was the shut-down of international trade. This was caused by the protectionist policies of Smoot-Hawley in 1930. Already the sickiness in the United States had negatively affected economic prospects in the rest of the world, because the U.S. was the world’s leading economy in the 1920s. But after Smoot-Hawley everything everywhere got much worse. Trade virtually stopped, save the transactions between colonial powers and their colonies. That shut down in trade brought on what we think of as the global Great Depression, where you see bread lines in every major country.
o What J.R. refers to as “disastrous big government policies of Hoover and Roosevelt” had no real effect on causing the Great Depression or stopping it. All of the New Deal policies that Roosevelt tried failed. Most of them had already been tried and failed under Hoover. They were very similar to the failed policies of Barack Obama’s stimulus package. The evidence that using deficit fiscal policies to grow an economy out of a recession don’t work is abundantly clear. Setting aside extremist ideologues like a Paul Krugman, there is no support among mainstream economists which suggests “jobs programs” can ever make any substantial difference in ending a recession. They may help a handful of people, but they don’t benefit the economy. Insofar as they compound debt, they make the future a bit worse. The real problem of following the stimulus route is you end up ignoring what really got us in trouble–the massive overabundance of housing inventory–and hence you don’t come up with a good policy to fix that problem, and so you extend the period of weak growth.
*As it happens, that recession of 1920 was what killed off Harry Truman’s haberdashery. He owned it in partnership with a friend of his named Eddie Jacobson, who worked under Truman in WW2. Jacobson, who was Jewish, later played a big role in the establishment and recognition of the state of Israel, by working as an intermediary between his friend Truman and major Jewish/Zionist leaders who wanted the United Nations to approve the Jewish State.
**Milton Friedman wrote a few chapters on the anti-Semitic policies of the Fed in a couple of his books.
Correction: …defaulted on, WERE not held responsible. This nonsense is still BEING allowed…
[i]”**Milton Friedman wrote a few chapters on the anti-Semitic policies of the Fed in a couple of his books.”[/i]
Friedman also discussed this in his PBS program, based on his book, Free to Choose. You can see that episode here ([url]http://video.google.com/videoplay?docid=-5329526746115377061#[/url]). One thing I forgot to note about the collapse of the Bank of the United States was the role of J.P. Morgan, who was himself an anti-Semite, much like his father.
“Perhaps it simply boils down to the Mr. Smith-driven mantra of “I’m mad as hell and I’m not going to take it anymore.”
I had to read that twice to get the Frank Capra/Paddy Chayefsky mashup. In “Mr. Smith Goes To Washington,” James Stewart plays a deeply ingenuous character who awakens the better natures of hard-bitten, cynical Washington pols by filibustering Congress. He doesn’t read the phone book, but rather the Declaration of Independence, the Constitution and other pertinent documents. That was in the early 1930s. Forty years later, in the movie “Network,” Peter Finch played Howard Beale, a network news presenter who finally snapped because the cynicism prevailing in the media drove him nuts. He told his viewers, assuming they too were about to snap after exposure to too many media lies, to “Open your windows and shout out, ‘I’m mad as hell and I’m not going to take it anymore!'”
I am amazed on a daily basis at the sheer amount of verbiage generated on this blog, but you should slow down just a little…enough to get the (fictional) facts right. 🙂
[quote]there are a handful of left-wing economists — led by Joe Stiglitz, who won the Nobel Prize[/quote]
[quote]Setting aside extremist ideologues like a Paul Krugman, there is no support among mainstream economists[/quote]
While it is not uncommon to discredit Nobel laureates in our age of casual dismissals of the merits of climate science, the theory of evolution, the medical value of stem-cell research, the role of government in checking the greed of bankers and others, etc, those concerned about the current economy and their place in it may want to be a little more even-handed when it comes to such traditional measures of scientific, intellectual, and moral authority.
I completely agree with Rich’s explanation of the causes for the financial meltdown. To his list I would add residential realtors that started selling investments instead of places to live. When did realtors start talking up property appreciation over the design and location of that home you dreamed about?
However, I think the real root cause goes back a bit further… it was the shift in this country that began with FDR. It was a shift from a mindset of thrift, individual responsibility and earned outcomes, to one that government can and should take care of everyone and control outcomes, and that everyone can spend tomorrow’s production on today’s wants.
[quote]”The government has no source of revenue, except the taxes paid by the producers. To free itself—for a while—from the limits set by reality, the government initiates a credit con game on a scale which the private manipulator could not dream of. It borrows money from you today, which is to be repaid with money it will borrow from you tomorrow, which is to be repaid with money it will borrow from you… day after tomorrow, and so on. This is known as “deficit financing.” It is made possible by the fact that the government cuts the connection between goods and money. It issues paper money, which is used as a claim check on actually existing goods—but that money is not backed by any goods, it is not backed by gold, it is backed by nothing. It is a promissory note issued to you in exchange for your goods, to be paid by you (in the form of taxes) out of your future production.”[/quote]
Note also the little trick of those that hope to gain politically by firing-up populist anger over the “wealth gap”… the one that Rich so aptly points as being derived primarily by technology and global markets and not a function of some capitalist world conspiracy. It is ironic that these “looters” fail to account for the very thing desperately want to expand.
[b]Non-Cash Government Payments to Poor.[/b] This is a big missing piece as 48% of Americans do not pay any federal income tax, but our entitlements to them continue to grow. The census statistics do not include the noncash resources received by lower-income households—resources transferred to the households—and the tax payments made by wealthier households to fund these transfers. Lower-income households annually receive tens of billions of dollars in subsidies for housing, food and medical care. None of these are considered income by the Census Bureau. Thus the resources available to lower income households are actually greater than is suggested by the income of those households as reported in the census data.
[b]Transfer Payments from Rich.[/b] The Census Bureau also does not subtract the higher taxes paid by higher earners. The noncash payments to lower-income households are funded with taxpayer dollars—mostly from wealthier households, since they pay a majority of overall taxes. One research report estimates that the share of total income earned by the lowest income quintile increases roughly 50 percent—whereas the share of total income earned by the highest income quintile drops roughly 7 percent—when transfer payments and taxes are considered.
Pretty cool huh?… if taxes are increased and we distribute more producers’ wealth to the “poor”, the wealth gap still exists… and will likely grow because the producers will have to work harder and longer hours to pay all of the taxes levied against them… until they give up and join the rest of the population seeking other people’s money.
The other piece missing from the looter template of unfair wealth gap is [b]income mobility[/b].
Like Herman Cain says, “he was po, before he was poor, before he was well off”. The U.S. Treasury released a study in November 2007 that examined income mobility in the U.S. from 1996 to 2005. Using data from individual tax returns, the study documented the movement of households along the distribution of real income over the 10-year period. The study found that nearly 58 percent of the households that were in the lowest income quintile (the lowest 20 percent) in 1996 moved to a higher income quintile by 2005. Similarly, nearly 50 percent of the households in the second-lowest quintile in 1996 moved to a higher income quintile by 2005. Even a significant number of households in the third- and fourth-lowest income quintiles in 1996 moved to a higher quintile in 2005. The Treasury study also documented falls in household income between 1996 and 2005. This is most interesting when considering the richest households. More than 57 percent of the richest 1 percent of households in 1996 fell out of that category by 2005. Similarly, more than 45 percent of the households that ranked in the top 5 percent of income in 1996 fell out of that category by 2005.
Lastly, there is also a little problem with the lack of population leveling. The Census Bureau does not report the numbers of people in each percentile. It is differences in income across people, rather than differences in income by household, that provide a clearer measure of inequality. Lower-income households tend to consist of single people with low earnings, whereas higher income households tend to include married couples with multiple earners. The fact that lower-income households have fewer people than higher-income households skews the income distribution by person. When considering household size along with transfers received and taxes paid, the income share of the lowest quintile nearly triples and the income share of the highest quintile falls by 25 percent.
While I am NOT optimistic about our federal or state government getting their fiscal act together (Note, since the Great Depression, 8 out 10 years where deficit years for the Federal government), I am optimistic about US enterprise, entrepreneurship, creativity and economic drive eventually putting us back to stronger growth. That is unless the government continues to bleed the private sector to feed its unsustainable and dysfunctional commitments and obligations. I think, along with all the other controllable economic mistakes and damaging uncontrollable economic variables, we Americans have been experiencing a global wage leveling. I have read recently that the furniture industry previously lost to China has been returning to the US. Rising wages in China coupled with higher transportation costs and lower wage expectations for US labor are causing more US furniture production to pencil out. Other industries will follow.
The challenge for us going forward will be not the lack of jobs, but the lack of a capable and motivated workforce. That will be our biggest economic risk after having funded the rise of the global middle class by deflating our working-class wages… not being able to capture our share of business from increased global consumption as global wages level. What we need is a vision and strategy looking forward, not backwards.
That is why I am so adamant that we need to completely reform our entire education system. Again, my guess here is that government will fail us and private industry will step forward to create the new faster, better, cheaper education model. I think the current higher education model will be the first to go. The hyper-inflated costs of college are not sustainable. Companies will start their own technical and industrial schools, or contract with other private providers, just because they have no choice. Parents, already desperate for alternatives, will jump at new affordable models that hold greater promise for their kids’ future. The teachers unions will desperately try to hold on, but will fail… and the profession of education will be saved once and for all.
In a confirmation of the arbitrary censorship that Dr Wu describes my post confirming his remarks was taken down for no reason other than they were critical of the censor’s failings.
Previoulsy a few of us were involved in a discussion about Argentina being a good example and lesson for us. Here is a great article from the June issue of Inc. Magazine that paints a complete picture of the Argentinian situation.
[url]http://www.inc.com/magazine/201106/doing-business-in-argentina.html[/url]