It seems right now as if everyone has an opinion on the Occupy Wall Street (OWS) movement, which has gone nationwide in America and spread to many cities worldwide. OWS has incited praise, rage, donations, police crackdowns, hilarity and kickstarted a new round of American political conversation. There have been many attempts in the media to understand the motivations behind the movement, and most of them, like this New York Times article, center on the perceived "anger" of the demonstrators. But what is the driving force behind OWS?
Changing Demographics & Circumstances
As you have undoubtedly heard, America is undergoing a massive demographic redistribution of wealth. The middle class seems to be shrinking for the first time in many decades. American industry and the prosperity that came with it had built a large and robust middle class by the end of World War II, a condition testifying to the reality of the American Dream. This, combined with the social entitlements of the Roosevelt era such as Social Security, ensured that the majority of Americans lived comfortable lives. By the 1960s, then, the expectations of average Americans had drastically expanded. Most people expected their children go to college, own homes and have a much better quality of life than they themselves had had. As credit became increasingly more available to the public in the 1970s, 80s, and 90s, many Americans thought that it could help push them to upper-middle-class status even more quickly. Everyone seemed to get wealthier, at least until the bottom fell out of the credit bubble, and we all realized that we had been playing at prosperity.
Endowment Effect
And this is where the psychology gets interesting. In 1980, American economist Richard Thaler theorized that people value something more when they own it than when they do not. We think our stuff is worth more simply because it is ours. In Thaler's classic experiment, researchers randomly divided participants into buyers and sellers. Sellers were given a coffee mug, and buyers were asked how much they would be willing to pay for the mug. The highest price offered was $2.87. The sellers, however, asked $7.12 for the mug. The mere ownership of the mug had magically doubled its perceived value to the owner. Thaler proposed that this difference was due to loss aversion: the fact that humans strongly prefer to avoid losing something they already have to acquiring something new. Just watch any episode of "Hoarders."
The endowment effect means is that it is much easier to not give somebody something in the first place than to take it away from them later. People find it relatively easy to accept the status quo, but after their lives have gotten much better, its upsetting to have those gains scaled back or taken away.
Exit Dreams, Pursued by a Bear
We are now in the third year of the largest economic downturn since the Great Depression. In September of this year, unemployment was at 9.1 percent, down a bit from its high of 10.1 percent in October of 2009. Last week the "misery index" -- a combination of unemployment and inflation scores -- hit its highest level in 28 years. People who want work cannot find it, many are living with their parents and unemployment benefits are getting slashed. This is not what we have been lead to expect for the past 50 years. The Millennials (just to take the most recent example) were raised with a tremendous sense of entitlement, equal parts MTV Cribs and participation trophies, and expected that upon graduation the world would present to them their very own oyster. Getting rich without much effort, a la Zuckerberg, was the aspiration: an embodiment of Millennial optimism.
And then there came the global economic meltdown, the country on course for bankruptcy and a loss of jobs. People lost the homes they had bought during the boom, people lost the jobs (such as construction) that had increased their standard of living, and the Millennials lost the golden future they had been promised. College grads living in their parents' basements, groaning under the weight of unpayable school loans have become the norm.
Regardless of your personal views on the OWS movement -- which you may see as populated by anything from "heroes" to "demonic loons" -- or the validity of its political basis, it is easy to understand the source of the emotion underlying the movement. These are people who are not enjoying the lives they were told they were going to have. It doesn't matter that those dreams were an illusion based on easy credit, the real estate bubble and student loans, only that they seemed real. The deep hardwired parts of our brains don't know the difference; we just hate to lose something we feel we have already gained.
Bruce Judson: Restoring Capitalism: Unequal Justice -- Banker Arrests O; Protester Arrests 2,511
Robert Scheer: Thirty Years of Unleashed Greed
Lyle Denniston: A Constitutional Agenda for Occupy Wall Street
Anthony Amore: Google Data Shows Occupy Movement Is Losing Steam
That's not what happened.
"These are people who are not enjoying the lives they were told they were going to have."
So... it's not about an awakening, then? The invisible hand of the market was, and is, simply miss-understood?
Or is that enough were dumbed down, sufficiently... so as to not see the writing on the wall; the "Tea Party" had no idea how many times people such as themselves have been trotted out, nurtured without care, used for ends not their own and then subsequently disposed of, for instance.
every article on this health page needs to mention one more thing : meditation ;meditation for consciousness, meditation for motivation to live healthier habits; transcendental meditation (TM) for perfect health , problem-free prevention orientated living
and opportunity
about OWS we need to make it easier for peopel to move around th eworld rather than for stuff to move around th eworld stuff which means imbalance
i would bring 1 000 000poor [ not wealthy] people from India to canada we have enough space but need intensive us eof it by people rather than big business waste also 1 000 000 poor chinese 1 000 000 poor africans and 100 000 poor germans 100 000 poor english 100 000 poor french....to Canada
USA needs to do the opposite send 1 000 000 young people overseas maybe the BRIC countries
But otherwise a good post.
Of the things taken away, retirement security and funds and health care deserve mentioning.
OWS and it's generations that expected better have the skills to work themselves out of this, but they need to work. And perhaps not be reimbursed what they believed they would be. But if they roll up their sleeves and put some sweat equity into their lives, they may not only learn a long and hard lesson about expectations, but one about not believing everything you hear.
How about, not enjoying our lives because we are owned by our employers and constantly screwed by our government!
You make it sound like some kind of passive thing that we were waiting for.
What a crock!
The life that you see on MTV and the future (you are special!) that mom and dad promised do not exist. The only future you have is the one you make yourself. That usually requires some work and you usually start from the bottom up.
Now there are those who buy a winning lottery ticket, have a rich uncle hidden away somewhere or "marry up" but for most of us, that is far from reality.
Stop whining about what you want life to be and start living it. You maybe pleasantly surprised by what you can do. Without mommy and daddy.
I don't know what the mug is worth. Suppose I take an unbiased guess, and act on it as though I knew. If I guess low as a seller, I'll sell the mug for less than it's worth. If I guess high as a buyer, I'll buy the mug for more than it's worth. If I guess high as a seller or low as a buyer, I lose nothing and can just try again later. Either way, the rational response is to offer to buy or sell only at a price I'm confident is advantageous: maybe get a windfall but probably wind up waiting for better information.
If I were manufacturing the mugs, I might offer the first few at an introductory-special price I expected would find a buyer, and take a loss to find what price the market will bear.
"People find it relatively easy to accept the status quo, but after their lives have gotten much better, its upsetting to have those gains scaled back or taken away."
Information again. If the best anyone like me has ever done is $X, that provides some evidence that $X is pretty close to optimal use of my abilities. If people like me have been making much more, and now our incomes are suddenly cut back to $X, it suggests that someone's skimming off the rest.
What a good is worth at a particular time in a particular market is the equilibrium price: the price at which quantity supplied equals quantity demanded. What a good is worth as an input to production is its marginal product: how much additional stuff can be made with it. What a good is worth as a consumer good is its marginal rate of substitution: how much other stuff is just enough to make the next consumer indifferent between the other stuff and one more unit of the consumer good. What a good costs in a given use is its opportunity cost: the value of its next-best use.
Individual buyers or sellers can make mistakes, selling things for less than they're worth or buying things for more than they're worth.
Those houses were dollhouses? Those college educations never happened, and people were actually toiling in sweatshops while the schools' records listed them as students?
An individual can live beyond their means, by borrowing from others. A whole economy cannot: everything that's consumed has already been produced, not borrowed. The total amount of debt is always zero, in that every debt is both a liability for the person who owes it and an equal-and-opposite asset for the person it's owed to.
When the financial system suddenly crashes, and millions of people suddenly lose their jobs, it doesn't mean that the stuff they were producing and consuming before was somehow imaginary.
___ No, it means the relative VALUE of the stuff they were producing and consuming was imaginary. Value does not remain constant (never has, never will). That includes the value of commodities and labor.
We had a VALUE bubble. The value bubble burst because bubbles are not infinitely sustainalbe. They always burst at some point.
We had an economic system that at its core was unsustainable.
And so, it wasn't sustained.
So there is no moving out on your own, buying a home and starting a family. Forget about saving for retirement, saving for your children, or one day being able to take nice vacations.
Too many young people are looking into a black abyss.
At the same time, they constantly read about Wall Street barrons making salaries and bonuses in the tens of millions. And what do these people do to deserve so much compensation, they come up with stuff like credit default swaps, collateralized debt obligations, teaser rate mortgages, etc.
And we wonder why they are pissed.
Imagine being a nontraditional student and having to decide that you cannot go back, because you are unwilling to put a second mortgage on your house while you raise your children.
The panacea of college is a lie. This country does everything it can to track us out of that chance to go to school and then price it out of our grasp when we grow up and go to work for a living. And then tell us that you can never have success without that diploma.
That doesn't even address the predatory lending in our housing sector, or the credit card sector.
This whole thing is about wealth extraction of the blue collar and middle class. Well party's over--we are sick of it.
If you are willing to work an honest job, and pay your taxes and uphold the law, then you should be able to make a decent life for yourself. with or without a college degree. And seeing that someone is poor is no excuse to rob them of what little they have and then humiliate them for being robbed.
You don't want that.You want the home of the CEO. The salary of the actress or sports figure. You want a cute child in Armani and a designer stroller. No Disney for you. A summer home in the Hamptons, maybe?
You are living by another person's yardstick just as you lived by the one mom and dad told you would, with absolutely nothing to back it up. Now you are alone with the debt you agreed to take on and the world won't play along.
You WILL grow up. It will just take you more time.
I now owe $80k in student loans. Maybe after my kids finish college, I will be able to save some money and finish my degree.
Think maybe anger factors into this?
There are contracts and regulations. Read the contracts. Know the regulations.
You have rights and you always did. But somewhere along the line, someone decided it was too much work to take the responsibility themselves. So, they believe the spin that business, politics and entertainment puts on EVERYTHING.
The bankers did nothing illegal. They followed the loose regulations of government for YEARS and still are (Hello Dodd/Frank). That you are not aware shows your own ignorance and belief in the very illusion alluded to in the article. Life is NOT a bowl of cherries for anyone. And it will not get better by blaming the "other guy" whoever that guy is at the moment.
with all due respect mr. taft, that view can only arise from ignorance, personal prejudice, and generalizations warranted only by the rhetorical needs of your argument.
There's a term out there. "Helicopter mom". That's a parent who "swoops in and takes care of their little one. But the little one isn't so little. We live in an era where when an adult child gets fired, mom calls the boss to complain. The very fact that you jump to yell at the author says much to the fact that you didn't consider what was said. You simply proclaim him wrong. Mommy would be proud.
There are no guarantees. There are no "rights". You make yourself what you are, even in bad times. And that is what is missing today both in the park and out. Personal responsibility.
these personal issues are your responsibility. they are caused by no one else.
I am very disappointed and angry, because my work ethic is not valued, only the theoretical ability I might have to lie, cheat or steal for someone else's profit, or the ability I have to take it on the chin while they rob me blind at the bank. And Core Values? Well they are clearly the opposite of what I was taught. See statement on work ethic.
Me expecting others to honor the social contract between citizens isn't a toxic sense of entitlement. Quit trying to equate that with the desire for some stupid piece of electronic gadgetry or new shoes.
Because that's a lie.
The youth flooded the ballots in 2008 to "out" the old man. Be careful what you ask for. Politics is politics. And politicians regulate Wall St, the demon you love to hate. Dodd/Frank is the latest of those regulations and they both are (were, Dodd went to Hollywood to rate motion pictures) Democrats who had this president's blessing. But you might not know the details of all that and how the CEO bonuses were ADDED to those regulations at midnight while you were partying, maybe?
Sit in the park if you must and stab a popular enemy. The rich. But at least know what you are stabbing, first. Then and only then will you be taken seriously. As for now, you are scene as having a collective temper tantrum eerily like the behavior described in the article above.
More like the other way 'round, and that's a big part of the problem.