Occupy Wall Street: Not Here To Destroy Capitalism, But To Remind Us Who Saved It
Over at The New York Times, Nicholas Kristof has enunciated an excellent defense of the Occupy Wall Street demonstrators, aimed at dispelling the notion that the Occupiers are some single-minded mass movement targeting the capitalist system for destruction. In fact, Kristof says, "while alarmists seem to think that the movement is a 'mob' trying to overthrow capitalism, one can make a case that, on the contrary, it highlights the need to restore basic capitalist principles like accountability."
Kristof says that what Occupy Wall Street represents is "a chance to save capitalism from crony capitalists" and an entrenched system of "government-backed featherbed[ding]" that amounts to "socialism for tycoons and capitalism for the rest of us." As Kristof notes, he's seen this before: Years of covering the '90s-era Asian financial crisis brought Kristof face-to-face with the same critique. It's now unspooling in the United States and having its own deleterious effects, such as the near-intractable income inequality that was, at long last, reported on fully this week (perhaps thanks to the presence of the Occupiers themselves).
Kristof's right to suggest that the Occupiers aren't "half-naked Communists aiming to bring down the American economic system." This isn't the "Project Mayhem" of Chuck Palahniuk novels -- we're talking about a movement that's spurring people to move their money from "too big to fail" banks into credit unions. That's not exactly "smash the system." That's more like a group of people seeking out a means to maximize their power within the system, or using consumer choice to preserve, enhance and improve the best parts of the system. As Matt Taibbi notes in a fitting companion piece to Kristof's, "These people aren't protesting money. They're not protesting banking. They're protesting corruption on Wall Street."
Taibbi calls them "cheaters," Kristof calls them "cronies," but the concept of "corruption" is intrinsic to both critiques. In fact, one could well argue that the truest evidence of Wall Street corruption is the fact that prior to the economic collapse, what Wall Street was practicing wasn't really "capitalism" at all.
And here, Kristof absolutely nails it:
Capitalism is so successful an economic system partly because of an internal discipline that allows for loss and even bankruptcy. It's the possibility of failure that creates the opportunity for triumph. Yet many of America's major banks are too big to fail, so they can privatize profits while socializing risk.
Way back when Julie Satow and I were attempting to explain the role the credit derivatives and AIG played in destroying our future, there was one question that resonated with me: What happened to that elementary ingredient of capitalism known as risk? If you want to tell the story of what was going on prior to September of 2008 in one sentence, here you go: Wall Street came to believe that they had finally figured out how to rid themselves of risk -- that "possibility of failure" -- entirely, and thus outsmart capitalism. (Calvin Trillin puts this more artfully than I ever could, here.) Firm in that belief, they bet and they hedged and they overleveraged themselves to the point of pure abuse.
But as we all saw in the fall of 2008, the risk never went away. Rather, it was lying in wait to provide us with a dramatic demonstration of the folly of forgetting about risk. It was very quickly revealed that the pure product of Wall Street's easy-money casino game was actually a coiled-up cock-up cobra ready to bite the global economy in the face, and when it bit, it plunged the global economic system to the brink of calamity.
There are a lot of ways to tell the story about how the world was saved, but the Occupy Wall Street is starting to remind the world of one narrative in particular. When everything seemed ready to collapse, there was one group of people left in this world who had enough cred on the street to save the day -- the American taxpayers. They were the only people left in whom anyone would put their full faith and credit as a sure thing. And it's easy to see why, seeing as they had built the greatest nation on earth out of their combined blood, sweat and tears.
It was the American taxpayers who went to war, on everyone's behalf, with that dread cobra, and they sacrificed $4.7 trillion of their own money to bring everyone back from the brink. That's $4.7 trillion that the American taxpayer willingly parted with, money that could have been put to any other priority. There's still about a trillion and half that hasn't even been returned -- but that's not where our focus should be. Our focus should be on the other scars left by that sacrifice. A massive unemployment crisis, people being kicked out of their homes, college graduates leaving their institutions of higher learning without a clear grasp on a future and saddled with debt (because that's what they were told to do to get ahead in this world) -- that's where our focus should have been, but wasn't, until those folks started gathering in the streets.
Three years later, if you even allude to that sacrifice, you still elicit from all sides the cry of "class warfare." And I'll admit, it's a pretty seductive metaphor. Not long ago, my counter to that charge was to point out that the Occupiers were an encampment of casualties and refugees from the last class war. But I've since realized that while this is a good, glib line, the politics are too convenient. In reality, the people of Occupy Wall Street are the people who fought the last war on everyone's behalf. They are a neglected band of veterans from the Battle To Save The Global Economy. They're attempting to remind America that we all fought on the same side.
And, yes, as Kristof suggests, they are asking for accountability. From cronies, from cheaters -- if you really want to know who owes us accountability, go ahead and read this "Cheat Sheet" from ProPublica. All the devils are there.
Naturally, the Wall Street gentry want to get back to the old way of doing business, and they're calling for further deregulation and less oversight of their activities. They scoff at the notion that our bailout of their failure requires them to return to making productive investments in their saviors' futures. And they flaunt the fact that they've reneged on the social contract, using our bailout money to procure an army of lobbyists to return things to the status quo ante.
Three years on, Wall Street still believes they're smart enough to beat capitalism. But they should really stroll down to Zuccotti Park and take stock of the weakened and demoralized army that won't be strong enough to rescue them when they fuck up again.
READ THE WHOLE THING:
Crony Capitalism Comes Home [Nick Kristof @ New York Times]
Wall Street Isn't Winning -- It's Cheating [Taibblog]
Cheat Sheet: What's Happened to the Big Players in the Financial Crisis [ProPublica]