Writers by the dozen have lamented the influence that Wall Street exercised over Washington throughout the 1990s, leading up to the great collapse of 2008. A multi-billion dollar lobbying campaign, tied to hundreds of millions in campaign contributions, got Washington to erase its regulations and withdraw its regulators. One statistic summarizes it all: in 1980, close to 100 percent of the financial instruments traded in the market were subject to New Deal exchange-based regulations; by 2008, 90 percent were exempted from those regulations, effectively free of any regulatory oversight.
But there is nothing at all surprising in that story. The spirit of the times was deregulation. The ideology of Democrats and Republicans alike was regulatory retreat. No one should be surprised, however much we should lament, that politicians did what the zeitgeist said: go home -- especially when they were given first class tickets for the ride.
What is surprising -- indeed, terrifying, given what it says about this democracy -- is what happened after the collapse. That even after the worst financial crises in 80 years, and even after the lions share of responsibility for that crisis had been linked to finance laissez faire, and even after the dean of finance laissez faire, the great Alan Greenspan, expressly confessed that it was wrong, and that he "made a mistake," nothing changed. A president elected with the spirit of Louis Brandeis ("[We have to stop] Wall Street from taking enormous risks with 'other people's money'"), who promised to "take up that fight" "to change the way Washington works," ("for far too long, through both Democratic and Republican administrations, Washington has allowed Wall Street to use lobbyists and campaign contributions to rig the system and get its way, no matter what it costs ordinary Americans"), and who was handed a crisis (read: opportunity) and a supermajority in Congress to make real change, did nothing about this root to our financial collapse. The "financial reform bill" is the reason the English language invented the scare quote: As every financial analyst not dependent upon the corruption that is Wall Street has screamed since the bill was passed, financial reform changed nothing. We are more at risk of a major financial collapse today than we were a decade ago. And the absolutely obscene bonuses of an industry that pays twice its pretax profits in salaries are even more secure today.
How could this possibly be? Never in the history of this nation have the agents of financial collapse so effectively avoided a regulatory response to that collapse. How is it that now they have not only avoided reform, but have effectively cemented their Ponzi scheme into the core of American law?
The protesters #occupy(ing)WallSt are looking for answers to that question. They should look no further than the dollar bills that they are taping to their mouths. The root to this pathology is not hard to see. The cure is not hard to imagine. The difficult task -- and at times, it seems, impossibly difficult task -- is to imagine how that cure might be brought about.
The arrest of hundreds of tired and unwashed kids, denied the freedom of a bullhorn, and the right to protest on public streets, may well be the first real green-shoots of this, the American spring. And if nurtured right, it could well begin real change.
In my book, Republic, Lost: How Money Corrupts Congress--and a Plan to Stop It
-- published today by Twelve, I spend hundreds of pages trying to make clear what should be obvious to every single protester shivering in a Wall Street doorway. But the whole point of the book could be captured in the single quote that I stole from Thoreau right at a start: "there are a thousand hacking at the branches of evil, to one who is striking at the root." These protesters should see that they are that one striking at the root. They should understand that our system has been corrupted by money -- even if the Supreme Court refuses to call it "corruption," and even if political scientists are unsure about whether their regressions can show it. And they should recognize that until this root is hacked, the weeds of this corruption will continue to destroy this democracy, and this nation.
Now conservatives are eager to insist that our framers didn't give us a "democracy." They gave us, they say, "a Republic." And so they did. A Republic -- by which the framers meant, as Federalist 10 makes clear, a "representative democracy." By which the framers expected, as Federalist 52 makes clear, a Congress "dependent upon the People alone."
But ours is not a Congress "dependent upon the People alone" -- or even mainly. It has instead allowed a different dependency to grow within its midst: a dependency upon the Funders of its campaigns. And so great is that different and conflicting dependency that even the worst financial crisis in three generations can't break their obsession with the fix. Neither party dares to cross Wall Street, since both parties know they could not win control of Congress or the White House without Wall Street's money. So they feed the addiction, and ignore the real work that they should be doing.
#OccupyWallSt needs to teach America this lesson. It needs to speak to the wide range of citizens who believe it. You don't have to be a Marxist to rally against the corruption that is our Congress. You don't have to be Dr. Pangloss to believe that people who don't share common ends might nonetheless have a common enemy.
This corruption is our common enemy. So let this protest first #OccupyWallSt, and then #OccupyKSt. And then let the anger and outrage that it has made clear lead many more Americans to #OccupyMainSt, and reclaim this republic.
For if done right, this movement just may have that potential. What the protesters are saying is true: Wall Street's money has corrupted this democracy. What they are demanding is right: An end to that corruption. And as Flickr feeds and tweets awaken a slumbering giant, the People, the justice in this, yet another American revolution, could well become overwhelming, and finally have an effect.
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