"Irony in the 'Occupy Wall Street' Protests"

Sydney M. Williams

Thought of the Day

“Irony in the ‘Occupy Wall Street’ Protests”

October 25, 2011

There is among Washington Democrats a sense of desperation when it comes to defending the odd mixture of jobless, youth, anti-Semites; druggies; union workers; professional protest types, and rich Hollywood people like Michael Moore, all who have come to inhabit Zucotti Park – a partially privately owned park – in lower Manhattan. The protesters chant simple slogans, like ‘Down with Capitalism’, ‘We are the 99’, ‘End the Fed’, ‘Jobs, not Wars’ and ‘Tax the Rich.’ Democrats envision their response to the Tea Party, the people they (the Democrats) blame for their defeat in 2010. But there is a significant difference. The Tea Party stands for empowering the people; the “Occupiers” want to empower the state.

It is true that over the past couple of decades, wealth has accrued to a minority. But that has always been the case. In every society it is always a small number of people who combine talent with drive and initiative. It is they who reap the bulk of the nation’s wealth. Democracy is different than other forms in that it promises equality of opportunity, not equality of outcomes. “Progressive” politicians use the disenchantment of people to divide them between the “haves” and “have-nots,” to seduce them down the path toward Socialism, a trail that too often terminates in Totalitarianism. For the young people in Zucotti Park it becomes a case of being careful what you wish for.

This is not to argue that capitalism or even the system is pristine. There are always abusers, some of whom are greedy or crooked. But abuse also stems from unintended consequences of government interference. For example, in early 1993, the Clinton administration, wanting to rein in corporate excess decided to limit the deductibility of executive compensation to a million dollars. Corporations could pay their executives more, but amounts exceeding a million dollars would not be tax deductible. The consequence was an enormous rise in the use of options, which were excluded from the restrictions; pay packages thus soared to multiples of what they had been under the old rules. The blatant use of options reached its peak in the 1990s and, as usage has declined, the gap between CEO compensation and average worker pay has narrowed – from 525X in 2000 to 411 times in 2005 and 369 times in 2007 – but remains substantially above where it was in 1960, when it stood closer to 50 times.

In 2008, it was critical that banks be saved. Commerce relies on banks and the credit they offer. Had the banking system collapsed in 2008, the world would have experienced a global depression of harrowing proportions. The Occupy Wall Street crowd would not have been able to gather in Zucotti Park. It would already have been filled with the homeless and destitute. Banks weren’t saved because the Bush administration loved bankers. (Keep in mind that Barack Obama received two times the amount of money from Wall Street than did John McCain.) The banking system was preserved so that commerce could continue. Were there bankers who took advantage of the bailouts? Absolutely! Larceny is certainly not unknown in the financial world, and the perpetrators should be punished. The principal of failure is necessary to the success of capitalism, but the failure of the system would be disastrous.

What is frightening to those who believe in traditional liberal principles of individual freedom is the encouraging of and then the succumbing to mob rule. The excesses in our economy that have led to this state stem from the overuse of leverage, mostly by individuals for homes. Bankers are certainly not free of fault, but the real blame lies with a system that encouraged consumption, that gave no encouragement to savings or investment. As consumers, we were at fault. We live for today, the Hell with tomorrow. If there is one institution to blame, it is government which encouraged such behavior. The unwinding of that debt definitionally means a slow economic recovery. To hide from that truth in vitriolic rhetoric, as the President has been doing with his divisive attacks on the “1 percent,” is highly risky and potentially dangerous. Remember, this is a man who three years ago promised to unify and heal what he told us was a troubled nation. From trashing bankers, to bashing the Chinese we risk a ride down a slope too slippery to easily evacuate.

The irony comes from a failure of the protesters either deliberately, or, more likely, through ignorance to understand that capitalism and democracy are inextricably linked – one is not possible without the other. The very fact that the protesters have been able to assemble and to vent their frustration is due to the success of our democratic-capitalist system. Those who would suppress capitalism also rein in democracy, for when rights are denied individuals they are assumed by the state. The fact of the matter is that individual rights are better protected when government retreats to its traditional role. When a state deems it important to secure additional powers, to cause people to become dependent on the benignity of the state, or when the state decides equality of outcome justifies a re-distribution of wealth, power shifts away from the people and toward those who run the state. The ‘99’ would remain; the one percent would become the government leaders who would dictate terms.

In my opinion, the basic problem that led to this mess has its origins in a cultural shift abetted by government that encouraged people to live for today, for tomorrow would take care of itself. In the 1990s, the Clinton administration, with HUD Secretary Andrew Cuomo at the helm, encouraged banks to lend to low-income families with poor credit histories. The Bush administration continued the process, bragging in early 2005 that home ownership had reached a record 69.2 percent. (As of the second quarter of 2011, home ownership had fallen to 65.9 percent, the lowest since 1998.

Democracy is being challenged and no one should underestimate what that means. Congressman Jesse Jackson recently suggested that the President suspend the campaign and the election. I have listened to people who should know better that democracy is no longer up to the task at hand, that we would be better with some sort of benevolent dictator. There are those who suggest we emulate the more efficient and supposedly better managed Chinese economy. Certainly, democracy suffers from a lack of efficiency, but that is also its strength, for that implies it is the people who wield power. Mussolini was noted for making the trains run on time, but that only meant that Jews could be more quickly expedited to concentration camps.

A problem we do have is that fewer people have an axe in our system. Almost half of all workers pay no federal income tax. To them, Washington is a source of income, not a government to which they contribute. Two suggestions, in my opinion, would improve our country and would benefit those young unemployed who are hanging out smoking dope and defecating on doorsteps in and around Wall Street. One would be the reinstitution of the draft, or some form of national service. Giving something back to the country while learning a skill would benefit both themselves and the rest of us. The second recommendation is to broaden the tax code, so that everyone pays something. It is not the amount paid that is important; it is the principal.

In the meantime, this movement does have legs, with offshoots showing up in Asia, Europe and Australia. Their messages too often reflect ignorance and hate. From what I can see it is largely comprised of youths with no unified message or complaint. And there is also irony in that they are being used by those who purport to side with them – politicians and Hollywood who have adopted them for their own, selfish purposes.