Tag Archives: #OWS

Wealth With Manners and Without, or: Our Mugging Immune Elite

I preface the following by saying – I despise the bile at a distance which is so common on the internet, an anger at a man or woman unknown except by their ideas, and that I think it is a lessening of whoever acts in such a way, yet I feel such bile now that I can’t feel any regret of what is said in response to anyone below.

A while back, a post by Mr. Kenneth Anderson,

The problem the New Class faces at this point is the psychological and social self-perceptions of a status group that is alienated (as we marxists say) from traditional labor by its semi-privileged upbringing. It is, for the moment, insistent not just on white-collar work as its birthright and unable to conceive of much else.

The OWS protestors are a revolt — a shrill, cri-de-coeur wail at the betrayal of class solidarity — of the lower tier New Class against the upper tier New Class. It was, after all, the upper tier New Class, the private-public finance consortium, that created the student loan business and inflated the bubble in which these lower tier would-be professionals borrowed the money. It’s a securitization machine, not so very different from the subprime mortgage machine. The asset bubble pops, but the upper tier New Class, having insulated itself and, as with subprime, having taken its cut upfront and passed the risk along, is still doing pretty well. It’s not populism versus the bankers so much as internecine warfare between two tiers of elites.

etc.

triggered a post by Ms. Megan McArdle on the various markers of the upper and lower tiers of the middle class. That what is seen now is not, a genuine populism, or a reaction to a political system held captive to the interests of a financial class, but a reaction of one section of the overentitled upper middle class upset not just over wealth itself, but the loss of the sense of status that accompany wealth, or the possibility of future wealth.

A relevant portion of Orwell’s Road to Wigan Pier, is quoted, then we move to how british and american status anxiety are related:

Obviously, the cultural markers do not map perfectly onto the divide between elite and semi-elite in the US, especially today. We have no hereditary aristocracy; all fortunes originated, fairly recently, in “trade”. Except for a small and peculiar class of people in relatively old coastal cities, we don’t celebrate people who “don’t have to work”–and don’t. And though I have been surprisingly often consulted by panicked people worried about “using the wrong fork”, the class markers are mostly different. But there are still all sorts of hidden cultural signifiers that tell us, yes, we’re still in the elite, we know that Formula One is cool and NASCAR isn’t (unless you’re watching it ironically.)

But the anxiety does. And Orwell’s next passage points out that it is the lower-upper-middle-class who have the most venom towards those below them–precisely because to preserve their status, they have to keep themselves sharply apart from the workers and tradesmen. And I think that that does apply here as well, at least to some extent. One of the interesting things about going back to my business school reunion earlier in the month was simply the absence of the sort of cutting remarks about flyover country that I have grown used to hearing in any large gathering of people. I didn’t notice it until after the events were over, because it was a slow accumulation of all the jokes and rants I hadn’t heard about NASCAR, McMansions, megachurches, reality television, and all the other cultural signifiers that make up a small but steady undercurrent of my current social milieu, the way Polish jokes did when I was in sixth grade.

So why does that same culture war seem so important to so many of the people that I know in New York and DC?

It’s not entirely crazy to suspect, as Orwell did, that this has something to do with money. Specifically, you sneer at the customs of the people you might be mistaken for. For aside from a few very stuffy conservatives, no white people I know sneer at hip-hop music, telenovelas, Tyler Perry films, or any of the other things often consumed by people of modest incomes who don’t look like them. They save it for Thomas Kinkade paintings, “Cozy cottage” style home decoration, collectibles, child beauty pageants, large pickup trucks, and so forth.

In part, obviously, this is a reaction to the politics of it, since uneducated white people of modest means vote (and attend church) very differently from the hyper-educated but modestly remunerated people in New York or DC. A group of people who are quite empathetic, even tender, in writing about the financial difficulties of lower-middle class whites as workers, can also be quite vicious about them as voters and consumers.

And they’re worse when it comes to the tastes of people in successful-but-not-intellectual people like sales(wo)men. The vehemence makes it seem, at least in part, like a way to say “I may have their incomes, but I’m not like them. I’m better.”

Ms. McArdle contrasts this attitude with those she worked with at an earlier time.

In the 1990s, when I worked with a lot of mostly blue-collar and first-generation college grads (with a fair sprinkling of Ivy Leaguers, to be sure), I didn’t hear nearly so much about the rich and how greedy they were–even though in the late 1990s, income inequality was almost certainly worse than it is right now.

The people I worked with didn’t feel entitled to be very rich, and so it didn’t bother them. I don’t mean to say that they didn’t want more money–everyone very much did, as far as I know. Or that they were content to occupy their place below the great and mighty bankers; maybe people really did feel like that in Victorian England, but my colleagues would have given that idea short shrift. We just weren’t comparing ourselves to the bankers. We were comparing ourselves to the people on our blocks, and the people in our industry. We were far more keenly sensitive to differences in the pay and perks that our colleagues received, than to the weekend homes and luxury automobiles of the financiers.

And if Orwell (and I) are right, then it is I who should have had the most resentment. I did all the same things they did–went to the right schools, got good test scores–and they ended up in banking, while I ended up making a small fraction of what they did.

But of course here’s the difference between me and the outraged lower-upper-middle-class: I chose it. I decided to have terrible grades and major in English, and then job hop in New York before settling down as an IT consultant. After business school, I picked a job at the Economist instead of searching for something that might have enabled me to move up the food chain from ramen. And at each step I understood perfectly the risks I was taking, the things I was giving up–if anything, I was too pessimistic.

The people at the We Are the 99% blog didn’t choose this; they expected something different.

I quote the post at length, because I do wish to be seen as a respectful and fair assessment. Ms. McArdle includes many, many biographical details. For some reason, a few she leaves out are included in this rather vitriolic piece – that her father and her family has a great deal of wealth, that she grew up on the Upper West Side, went to private school, had the life of privilege of someone born on the Upper West Side etc. This piece may well be wrong – but I believe it is correct in identifying her father as a man of power, wealth, and status in New York City, and all that corresponds with that.

I don’t think there’s anything wrong with anyone of wealth writing about those of another class. I do, however, think it’s an issue of good faith to identify your own background, especially if you are forthcoming about details which imply that you come from the class you write about – one that doesn’t necessarily have access to luxury apartments, private schools, or university, ivy or non-ivy, without a scholarship and back breaking work to pay for it. An issue of good faith, but also respect. If I read a piece on the social varieties of black communities in a city (or jewish, arabic, etc.), it’s a principle of simple honesty to the reader, and respect to those portrayed, to say, if you do not belong to that community: by the way, I write as an observer of this group, rather than of it.

Because if Ms. McArdle’s piece is read knowing this perspective, it reads somewhat differently, and we may notice a few stand-out details. For instance,

But there are still all sorts of hidden cultural signifiers that tell us, yes, we’re still in the elite, we know that Formula One is cool and NASCAR isn’t (unless you’re watching it ironically.)

I didn’t notice it until after the events were over, because it was a slow accumulation of all the jokes and rants I hadn’t heard about NASCAR, McMansions, megachurches, reality television, and all the other cultural signifiers that make up a small but steady undercurrent of my current social milieu, the way Polish jokes did when I was in sixth grade.

I believe the first tip-off is the repeated mention of NASCAR as a cultural marker. It made me think of this excellent piece by Sasha Issenberg, who visited the same two counties that David Brooks identified as carrying markers of a red state (Franklin) and a blue state (Montgomery), and found an utter lack of the identified markers. Here’s Issenberg on NASCAR:

“Very few of us,” Brooks wrote of his fellow Blue Americans, “could name even five NASCAR drivers, although stock-car races are the best-attended sporting events in the country.” He might want to take his name-recognition test to the streets of the 2002 NASCAR Winston Cup Series’s highest-rated television markets — three of the top five were in Blue states. (Philadelphia was fifth nationally.)

Later in the piece by Ms. McArdle,

Specifically, you sneer at the customs of the people you might be mistaken for. For aside from a few very stuffy conservatives, no white people I know sneer at hip-hop music, telenovelas, Tyler Perry films, or any of the other things often consumed by people of modest incomes who don’t look like them.

I believe all of these cited markers are very, very wrong. Hip-hop music is listened to all varieties of race and economic state. To identify someone who does not “look like” a fan of hip-hop music, would be an impossible task, unless the person has in mind the vile stereotype that the hip-hop music fan looks like a black man who recently left prison. Telenovelas are watched by all economic levels of people who speak spanish. Should Ms. McArdle ever visit rottentomatoes.com, she will find plenty of white people making hearty fun of Tyler Perry’s movies.

They save it for Thomas Kinkade paintings, “Cozy cottage” style home decoration, collectibles, child beauty pageants, large pickup trucks, and so forth.

Back to Issenberg for a general rebuttal to how Brooks (and McArdle) perceive red states:

“We in the coastal metro Blue areas read more books,” Brooks asserted. A 2003 University of Wisconsin-Whitewater study of America’s most literate cities doesn’t necessarily agree. Among the study’s criteria was the presence of bookstores and libraries; 20 of the 30 most literate cities were in Red states.

There are salient cultural divides in the United States — and, in fact, different values and practices among residents of Montgomery and Franklin counties — but consumer life is the place where they are most rapidly converging. In this regard, Brooks would have been better off relying on the newest generation of elitist truism — tongue-in-cheek laments about the proliferation of ubiquitous chain espresso bars and bookstores. Last fall, Pottery Barn opened stores in Huntsville, Alabama, and Franklin, Tennessee, and the New York Times has introduced home delivery in Colorado Springs. It likely won’t be long before Franklin County gets both; yoga classes have already arrived.

And, as a sidenote: Thomas Kinkade went bankrupt years ago.

So, we have the strange spectacle of someone talking about cultural markers of a class in ways that are misguided, if not utterly wrong, as if this information were second or third hand. There is one very strong possibility for this – Ms. McArdle does not belong to the class she talks about, so she can’t speak of these things first-hand, so she resorts to tropes not found in actual life, but in the theories and studies of this class.

We might then return to several very relevant points in the article.

I decided to have terrible grades and major in English, and then job hop in New York before settling down as an IT consultant. After business school, I picked a job at the Economist instead of searching for something that might have enabled me to move up the food chain from ramen

Of course, you might think my outlook was jaundiced because I identified with the bankers; I did go to an Ivy League school, and I eventually went to business school and spent a summer with Merrill Lynch. But I didn’t know I was going to business school until shortly before I applied; it was what I did when I realized that I was never going to care as much about the inner workings of a computer as most of the guys I worked with.

Since OWS started, I’ve occasionally wondered: does this explain why there seem to be so many more educated white kids than long-haul truckers or home health care aides occupying Wall Street?

I think we see here something very different than what is intended to be revealed. This is someone very unfamiliar with the fact that money is not just manners and status. Money means freedom. Money means choices. Money means possibilities. Money means mobility. When you are middle class, you don’t have the luxury of terrible grades, because you must somehow find good work, since it’ll soon fall to you to somehow pay the bills of those around you. You don’t have the choice between a job at the Economist, or high paying work; you often have only choices between several low paying jobs, and you must take one or more, because your family has bills to pay, not bills for frivolous consumption, but simple basic bills for medicine, food, amenities.

That Ms. McArdle writes without knowing this appears to re-iterate an essential truth: the only people who think money does not matter are the rich. There are many who will take the money of Ms. McArdle’s family, with or without the manners, for the choices it’ll give them – and if it is a fraction of the choices Ms. McArdle had, it’ll be more than they possess now.

This shows through in the comment about truckers and health care aides – that Ms. McArdle seems to have no familiarity with either profession, anyone who works in them, anyone who has family that works in anything like them. That they are utterly exhausting. That often people who work as health care aides have a second or third job beside. That they may well very much support the protests but they _have_ to make money. To feed their families and hope against hope that their children are able to get into a good school, and no one gets sick, because that would destroy them financially. That they barely have enough energy for their work, and nothing else. That they may not be at a protest is not because they chose not to actively show support, but because they have far fewer choices than Ms. McArdle appears able to imagine.

So, perhaps this piece is about status anxiety, but not that of a section of the middle class, but that of the writer herself. When reading this piece, I can’t help but think of a white writer scribbling down the mores of black men and women, who says that she finds most discomforting those who are the most intellectually ambitious, the most sarcastic, the most energetic, who happily make fun of all those who abide their lot. If this writer spoke of the “status anxiety” of these black men and women, I would wonder: are you most concerned for the position of the lower tier of this group, or your own? That if things were more equal, if these men and women had the same opportunities and choices you had, would they not be further ascendant than you, someone who by their own admission, who was a mediocre, undiligent student and worker?

Finally, to return to this section,

In the 1990s, when I worked with a lot of mostly blue-collar and first-generation college grads (with a fair sprinkling of Ivy Leaguers, to be sure), I didn’t hear nearly so much about the rich and how greedy they were–even though in the late 1990s, income inequality was almost certainly worse than it is right now.

The people I worked with didn’t feel entitled to be very rich, and so it didn’t bother them. I don’t mean to say that they didn’t want more money–everyone very much did, as far as I know. Or that they were content to occupy their place below the great and mighty bankers; maybe people really did feel like that in Victorian England, but my colleagues would have given that idea short shrift. We just weren’t comparing ourselves to the bankers. We just weren’t comparing ourselves to the bankers. We were comparing ourselves to the people on our blocks, and the people in our industry. We were far more keenly sensitive to differences in the pay and perks that our colleagues received, than to the weekend homes and luxury automobiles of the financiers.

I won’t touch the point on income inequality being better ten years ago – Mr. Timothy Noah already ably destroyed that. I’ll only mention that it appears that Ms. McArdle seems to think there’s nothing strange that there are those who fought hard to reach an economic and professional level that she appears to have dogpaddled towards, that there might be a slight discrepancy between the houses on their blocks, and hers, a difference that had nothing to do with Kinkaid paintings or pick-up trucks.

That those who worked alongside her might have been happy with the possibilities they had, because those were the only choice available, not the more brilliant ones available to her. That she praises their gratitude for what they had, and nothing more, again calls to my mind another kind of cultural anthropologist. Someone who might say of men and women of a racial group, that she is outside, and of a social status lower than her own – “strangely, I prefer those who are grateful with what they’re given and the way things are now”. Yes: strangely.

I end this post by circling back to the initial genesis of all this, a post by Mr. Kenneth Anderson.

Glenn Reynolds is correct in his weekend post to point to the social theory of the New Class as key to understanding the convulsions in the middle and upper middle class.

It is, for the moment, insistent not just on white-collar work as its birthright and
unable to conceive of much else. It does not celebrate the dignity of labor; it conceived of itself as
existing to regulate labor.

The result is theft, violence, sexual assault, and levels of filth that, absent the infrastructure of the world’s richest large
society, would mean what it means in Haiti — dysentery, cholera, epidemic disease.

As Above the Law points out, here is “John,” who got out of undergrad, spent a year unemployed and living at home, and is now apparently at University of Vermont law school, with its top ranked environmental law program — John wants to work at a “nonprofit.”

Even more frightening is the young woman who graduated from UC Berkeley, wanting to work in
“sustainable conservation.”

The downward mobility is real, however, in both income and status. The Cal graduate started out
wanting to do “sustainable conservation.” She is now engaged in something closer to subsistence
farming.

Mr. Anderson has happily chosen the usual hippie rabble as his proxies for these protests. I’ll choose mine: Scott Olsen of the Oakland protests, who suffered injury during a police action (a Guardian article on what took place):

Scott Olsen is in a “critical condition” in Highland hospital in Oakland, a hospital spokesman confirmed.

Olsen, 24, suffered the head injury during protests in Oakland on Tuesday evening. More than 15 people were arrested after a crowd gathered to demonstrate against the police operation to clear two Occupy Oakland camps in the early hours of Tuesday morning.

Jay Finneburgh, a photographer who was covering the protest, published pictures of Olsen lying on the ground.

“This poor guy was right behind me when he was hit in the head with a police projectile. He went down hard and did not get up,” Finneburgh wrote.

The Guardian spoke to people with Olsen at the hospital. Adele Carpenter, who knows Olsen through his involvement with anti-war groups, said she arrived at the hospital at 11pm on Tuesday night.

Carpenter said she was told by a doctor at the hospital that Olsen had a skull fracture and was in a “serious but stable” condition. She said he had been sedated and was unconscious.

“I’m just absolutely devastated that someone who did two tours of Iraq and came home safely is now lying in a US hospital because of the domestic police force,” Carpenter said.

Mr. Anderson made a little joke about a young woman’s poverty; I’m sure he’ll be able come up with a funny line, or at least one that he‘ll find funny, about Mr. Olsen’s plight.

Mr. Anderson’s post links to an old Glenn Reynolds post (on a past site of James Glassman, who a little while prior to the tech bubble collapse had been predicting a Dow that would break 36 0000 points, as he wrote in Dow 36,000: The New Strategy for Profiting From the Coming Rise in the Stock Market), which criticizes this same New Class because of their anti-capitalist, anti-american, anti-semitic attitudes.

I can’t help but notice that anti-Americanism, and the various manifestations of what some have called Transnational Progressivism, are most common among people who, well, have state-supported managerial or intellectual jobs, the people who made up what Milovan Djilas and others called the “New Class” of bureaucrats and managers in the old Communist world. Not surprisingly, the New Class was deeply concerned with matters of status and position, and deeply opposed to things that might have led to competition on merit. There’s nothing new about such a view, which predated communism: As David Levy and Sandra Peart note, it’s an attitude that even in the nineteenth century was characteristic of anti-capitalists and anti-semites – and, nowadays, there’s a lot of overlap between anti-capitalists, anti-semites, and anti-Americans.

The evidence of their viles crimes is that they watch the BBC, which at that time, was taking the hateful position, according to Mr. Reynolds, of criticizing progress in the war in Iraq, a war which Mr. Anderson, Mr. Reynolds, Ms. McArdle all enthusiastically supported.

Mr. Olsen, I suppose, is part of this meddlesome New Class, which, despite Ed Koch’s support of the movement, is still charged as anti-semitic, as well as anti-american, though it appears Mr. Olsen has done two more tours of duty in Iraq than Anderson, Reynolds, or McArdle. Before, he might have been the spartan ideal that Mr. Reynolds could compare in favorable contrast to the liberal mob; now he’s just another member of the lice riven rabble that Mr. Anderson can happily spit on.

There is an old line that goes, “A conservative is a liberal who’s been mugged”, to which was added, “by reality”. It appears, however, that Anderson, Reynolds, McArdle all appear to remain immune from the possibility of such mugging, snug and comfortable in their happy ether world, fantasizing their fantasies, while Mr. Olsen and others, will get mugged by reality, again and again and again.

Mr. Scott Olsen, who I think deserves the dignity of being first and foremost considered as a man, not as the inconvenient tumescence of a movement or a class, I can only hope returns to the dignity and life he has fought so hard for. He has been victim often enough of the gossamer dreams of Anderson et al.

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Five Reasons Why #OWS Will Work

In news from a past age, a week and a half ago, Daniel Indiviglio of The Atlantic provided helpful prescient advice, “Five Reasons Why Occupy Wall Street Won’t Work”.

We have a straw man opening.

It’s easy to hate Wall Street. In movies, bankers are portrayed as heartless, greed-driven jerks. Some people blame the recent financial crisis and the recession that followed on Wall Street duping Americans into signing up for predatory mortgages. Others say that these rich bankers, traders, and investors don’t pay enough money in taxes. These and other anti-Wall Street attitudes have led to a protest in Lower Manhattan that continues to grow.

The assumption is that those who engage in these protests are a dumb animal herd, a crowd unable to assess or think, but possess dumb simple hates, because a character in a movie with slicked back hair and suspenders tried to corner the market in silver and held Jessica Biel hostage.

Let us take two simple, very legitimate reasons for why the protesters may be there.

That financial institutions have an outsize influence on the american political system, described acutely by Simon Johnson in Thirteen Bankers:

Between 1974 and 1990, the cost of a seat in the House of Representatives—the average expenses of an election winner—grew from $56,500 to $410,000; from 1990 to 2006, it tripled to $1,250,000 (more than doubling even after accounting for inflation).

The financial sector was a central player in this evolution. The sector was the leading contributor to political campaigns throughout the past two decades. But campaign contributions from the financial sector (including finance, insurance, and real estate) grew much faster than contributions overall, more than quadrupling, from $61 million in 1990 to $260 million in 2006. (After excluding insurance and real estate, the sector still contributed over $150 million in 2006; the second-ranking industry group, health care, contributed only $100 million in 2006.) Over the same time period, contributions from the securities and investment industry sextupled from $12 million to $72 million, and that $72 million omits the millions of dollars in contributions from the law firms that served the securities industry. (According to one analysis, from 1998 to 2008, the financial sector spent $1.7 billion on campaign contributions and $3.4 billion on lobbying expenses; the securities industry alone spent $500 million on campaign contributions and $600 million on lobbying.) The largest commercial and investment banks, which stood to gain the most from deregulation and consolidation, were also the largest sources of campaign cash. In 1990, the companies in the banking sector that contributed the most money were Goldman Sachs, Salomon Brothers, Barnett Banks (the largest bank in Florida, bought by NationsBank in 1997), Citibank, J.P. Morgan, and Morgan Stanley; in 2006, they were Goldman, Citigroup, Bank of America, UBS, JPMorgan Chase, and Morgan Stanley.

That the majority of revenues of these banks does not involve anything that would bring about jobs, capital investment, or anything else of public good. It is simple gambling, and when that gambling goes horribly awry, the public is asked to handle these losses, while the bettor, whatever his losses may be (and it is almost always a he), gets a multimillion compensation for his leave-taking, a sort of failure bonus.

This was best expressed by John Cassidy in “What Good is Wall Street?”

When the banking system behaves the way it is supposed to…it is akin to a power utility, distributing money (power) to where it is needed and keeping an account of how it is used. Just like power utilities, the big banks have a commanding position in the market, which they can use for the benefit of their customers and the economy at large. But when banks seek to exploit their position and make a quick killing, they can cause enormous damage.

The other important role of the banking industry, historically, has been to finance the growth of vital industries, including railroads, pharmaceuticals, automobiles, and entertainment.

Yet Wall Street’s role in financing new businesses is a small portion of what it does. The market for initial public offerings (I.P.O.s) of stock by U.S. companies never fully recovered from the tech bust. During the third quarter of 2010, just thirty-three U.S. companies went public, and they raised a paltry five billion dollars. Most people on Wall Street aren’t finding the next Apple or promoting a green rival to Exxon. They are buying and selling securities that are tied to existing firms and capital projects, or to something less concrete, such as the price of a stock or the level of an exchange rate. During the past two decades, trading volumes have risen exponentially across many markets: stocks, bonds, currencies, commodities, and all manner of derivative securities. In the first nine months of this year, sales and trading accounted for thirty-six per cent of Morgan Stanley’s revenues and a much higher proportion of profits. Traditional investment banking—the business of raising money for companies and advising them on deals—contributed less than fifteen per cent of the firm’s revenue. Goldman Sachs is even more reliant on trading. Between July and September of this year, trading accounted for sixty-three per cent of its revenue, and corporate finance just thirteen per cent.

In effect, many of the big banks have turned themselves from businesses whose profits rose and fell with the capital-raising needs of their clients into immense trading houses whose fortunes depend on their ability to exploit day-to-day movements in the markets. Because trading has become so central to their business, the big banks are forever trying to invent new financial products that they can sell but that their competitors, at least for the moment, cannot. Some recent innovations, such as tradable pollution rights and catastrophe bonds, have provided a public benefit. But it’s easy to point to other innovations that serve little purpose or that blew up and caused a lot of collateral damage, such as auction-rate securities and collateralized debt obligations.

Then Mr. Indiviglio gives his reasons for the looming failure.

Its Goals Are Unclear

Any protest that hopes to accomplish some goal needs, well, a goal. If a demonstration like this lacks concrete objectives, then its purpose will be limited at best and nonexistent at worst. At this time, all the protest really appears to stand for is a general dislike of Wall Street. But what does that mean?

#OWS has two possible sound, specific objectives that I’ve already mentioned. That many #OWS complaints can be grouped under these two does not make them vague.

Wall Street Doesn’t Care

There’s a key difference between the Occupy Wall Street movement and the Tea Party movement. The Tea Partiers’ anger is directed squarely at the U.S. government. It began due to dismay at the bailouts and the massive Obama stimulus package. The Tea Party wanted less government interference in the economy.

But the Occupy Wall Street movement’s anger is directed at bankers. Here’s the problem: they really don’t care. These protesters are not Wall Street’s customers. In many cases they aren’t even their customers’ customers.

I do think there is an interesting contradiction here. The #OWS is somehow, cursed by vagueness. It cannot work because it is aimed vaguely at “Wall Street”, and one of its goals, less influence in government by financial institutions, is too vague. On the other hand, the Tea Party was effective, because its protest was aimed “squarely” at the vast behemoth of government, and they wanted the precise, not vague at all goal, of less government.

Mr. Indiviglio then makes the error that somehow the institution protested against is the one that must “care”. When the embassy of a particularly despicable regime is protested, there’s no expectation that the regime of Burma, Libya, South Africa, Syria, Yemen will “care”. The purpose is to force attention on the infamies of that regime and to pressure their own government to either cut ties with those regimes or force them to reform. In the past, money from Libya or South Africa to a congressman would be considered tainted, and he would be shamed into returning it. Given the absense of any attempt at financial reform in the political or media class, perhaps this will be the first step by which financial institutions will lose the influence which dwarfs that of any citizen: their election funds will now be a scarlet letter.

The Protesters Can’t Sway Congress

The Tea Party accomplished something very key: it helped to significantly alter the makeup of Congress through the 2010 election. It had a goal — to put out of power the big government candidates — and it accomplished that goal. The Occupy Wall Street cannot hope for any result as significant.

As mentioned, it doesn’t have a clear set of objectives. But let’s say, for argument’s sake, that it has some general fringe-left goals. Some that have been suggested include new taxes on Wall Street and much stronger financial regulation. The problem is that these views aren’t likely to catch on in Congress: even when the mix was much further to the left in 2009 through 2010, a relatively mild financial regulation bill was passed and even the Bush tax cuts remained intact.

The reality is that the U.S. is a center-right nation, and Congress reflects that. While some cities are farther to the left than others, they already have very progressive representatives. Meanwhile, the message of Occupy Wall Street isn’t likely to catch on and affect any change in more center-right regions like the Tea Party did.

Mr. Indiviglio, a past enemy of vagueness, writes rather vaguely here. The american people are “center right”, the Congress reflects this center rightness, and therefore, this revolt is quixotic. He writes, naively, that financial reform was mild because of the country’s “center rightness”, as if the collective will of the people were a magnetic field that bent legislation one way or another.

Congresspeople are now almost always constantly fund-raising. They require vast amounts of campaign cash. Again, using Mr. Johnson’s figures, the financial industry spent over five billion dollars in lobbying from 1998 to 2008. Does Mr. Indiviglio believe that such funds had no influence whatsoever on the political process, that it was entirely the people’s will that guided legislation?

Their Timing Is Off

Even if the U.S. were to embrace the message of these protests, Congress would not act. The bailouts were hugely unpopular with voters, but they occurred anyway. That’s because there are times when Washington just needs to be practical. When unemployment is stuck above 9% is such a time. (my emphasis)

I believe this part gives the game away. Earlier in this piece, it has been stressed that the protests cannot work because they are too vague, unlike the vague messages of the Tea Party. They cannot work, because they go against the immutable “center right” will of the american people. Whatever the american people feel is irrelevant. There are times when Congress must act practically, when unemployment is at 9%, but also when unemployment is below 9%, banks have grievously wounded themselves, and need help. A question a feeble minded man like myself asks is: practical for whom?

Mr. Indiviglio has straight up admitted it. The will of the american people is irrelevant in the face of what banks and their client politicos want and will do.

Enacting new financial transaction taxes or even more burdensome regulation will not be good for the economy in the short-run. Even many Democrats are worried that such aggressive actions threaten the recovery. That’s the main reason why the Bush tax cuts were extended.

A small note: these would be the same Bush tax cuts which were cited in S&P’s report downgrading US securities. The Bush tax cuts must be preserved because aggressive actions would threaten the economy, even through aggressive actions that threaten the economy.

Banking is a Vital Institution — Especially to the U.S.

Hating banks is counterproductive. You simply can’t live without banks in a modern, sophisticated economy. Wall Street investment firms are equally essential. Capital markets and debt markets allow businesses to function smoothly. Without them, growth and progress would be much slower.

But the U.S., in particular, needs to maintain its healthy, vibrant banking system. During the financial regulation battle least year, a lawyer I know who works with banks and investors lamented the effort. He worried that Congress would go to far. Banking is one of the few industries the U.S. has left where we’re a global leader, he said. He is absolutely right.

It seems we are in all or nothing land. I may either have financial institutions that engage in large-scale dangerous financial gambling, or I may buy my food with shiny beads.

A small short effective counterpoint to Mr. Indiviglio’s rosy vision is found here (“How Lobbyists Are Undermining Dodd-Frank: A Case Study”), which describes the ways in which Dodd-Frank is being altered by lobbyists to allow for oil speculation.

On October 18 the Commodity Futures Trading Commission (CFTC) will vote on a proposed rule to limit the percentage of contracts in a given commodity that any individual trader can own.

Proponents of tight position limits argue that excessive speculation in a market means prices will generally be both higher and more volatile. The consequences of higher prices are easy to understand—for example, a Goldman Sachs report in April estimated that the speculative premium on a barrel of oil was then between $21.40 and $26.75 a barrel, roughly a sixth of the total price at that time.As Marcus Stanley of Americans for Financial Reform told me, all sorts of people rely on predictable commodity markets for their business: gas stations, businesses that supply heating oil, enterprises that order food in bulk such as confectioners, and so on. Higher volatility often ends up being passed on to businesses as a higher cost on their balance sheet, with predictable consequences.

Moreover, even if the rule passes, it faces serious questions about whether a very active lobbying process will have rendered it effectively meaningless. The position-limits rule, in particular, has been subjected to a fierce lobbying effort, especially by big financial institutions. The Sunlight Foundation, a nonprofit organization that advocates for transparency in government, counted over 13,000 comment letters to the CFTC concerning the rule, with groups from airlines to investors pressing their case. Gary Gensler, the chair of the CFTC, has stated that “large institutions” have an “outsized interest” in the rules and that there’s a “little imbalance” in how much access they’ve gotten to the commission. Gensler has estimated the CFTC has held 1,000 meetings to hear comments relating to the rule, and that the “vast majority are from large financial institutions.”

My simple brain is curious how an economy is made more modern, more sophisticated, more smoothly functioning through more expensive oil.

For all of these reasons, we aren’t likely to see the Occupy Wall Street effort accomplish much. It doesn’t have a clear focus, and practical realities will prevent it from achieving any vague objectives it might have. Those angry with Wall Street should seek more effective means of affecting change than this.

Whatever takes place next, the passions shown so far will not simply dissipate.

Again, this was written a week and a half ago, an age in our modern times. I am not familiar with all of Mr. Indiviglio’s work. Perhaps two weeks ago he wrote that Libya would be ruled by Muammar Qaddafi forever.

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