10/14/2011 05:10 pm ET | Updated Dec 14, 2011

The Krugman/Stiglitz Army Is on the March (and It's Too Late for Michael Bloomberg to Stop It)

When the Pope criticized Stalin's treatment of Catholics, Stalin famously asked, "The Pope? How many divisions has he got?"

When Paul Krugman criticized the Obama administration for including too many tax cuts in a too-small stimulus package, Rahm Emanuel famously asked, "How many bills has he passed?"

As I write, New York's Billionaire Mayor Bloomberg has, at least for the moment, wisely backed off from a threat of a police action to remove the #Occupy Wall Street protesters from Zuccotti Park. The #Occuppy Wall Street/We Are the 99% Movement has reached a critical mass where, in the face of police repression, it's only likely to grow bigger, stronger and smarter as it spreads throughout the country and the world. (When former Egyptian President Hosni Mubarak sent police and thugs to break up to Tahrir Square protests, their numbers only swelled.)

The protesters have clearly identified the enemy as Wall Street greed and the growing concentration of wealth and political power in the richest 1%. (For those of you in the media or other readers who still don't get what the protestors are upset about, The Business Insider's Henry Blodget clearly spells it out in these graphics.) However, the protesters haven't put forth a traditional list of "demands" or policy proposals. These may or may not come in time as short-term protests evolve into long-term movements.

But the problem is not a shortage of policy ideas on how to reduce the power of the Wall Street financial sector, create jobs, strengthen the middle class, restructure the economy, and reduce the influence of money in politics.

The problem is that, until now, there's been no political force fighting for such principles to give them political traction.

In short, the likes of Nobel Prize-winning economist like Paul Krugman and Robert Stiglitz, and former Clinton Labor Secretary Robert Reich have had no "army" to take on the army of organized money and lobbyists bent on insuring their ideas get no traction with politicians who rely on big money to get elected.

With the #Occupy Wall Street protests spreading to cities around the country and the world, that may be about to change.

The Krugman/Stiglitz Army* may be starting to march.

Whether or not the somewhat anarchic, consensus-driven General Assemblies of the various occupations (which are both their strength and weakness) officially adopt the specific policy proposals of the likes of Krugman, Stiglitz, Reich, and other creative economic and political thinkers, the rapidly growing "We are the 99%" movement may provide the jet propulsion to thrust them into the world of practical politics.

Many of the people occupying Wall Street and other cities around the country or engaging in related actions rang doorbells, made phone calls and gave small contributions as part of a massive grassroots movement to elect Barack Obama. But after November, 2008, believing that Obama's election would be enough to bring the "Change they could believe in", most of them demobilized and went back to their daily lives, hoping Obama would be a new FDR and enact transformational structural change to strengthen the middle class and limit the power of Wall Street.

Once elected, Obama ditched campaign advisors like Joe Stiglitz and Paul Volker for a Wall Street- friendly economic team led by Larry Summers and Tim Geithner that did everything in its power to block structural change to the financial system of the type advocated by the likes of Stiglitz, Krugman and Reich. (See Ron Suskind's new book "Confidence Men: Washington, Wall Street and the Education of a President.")

If there was a popular counter-weight, it came entirely from the Tea Party right which fought for even less regulation of Wall Street and even lower taxes on corporations and the wealthy. With financial backing from the likes of the Koch Brothers, media support from Fox News, and organizational help from the likes of Freedomworks (headed by former Republican House Majority Dick Armey), the Tea Party has succeeded beyond its wildest dreams in substituting deficit reduction for jobs creation as the political focus not only of Republicans but also of many Democrats, including Obama (at least until Obama's rhetorical pivot to jobs creation in the past month).

At the very least, the protests of the #Occupy Wall Street Movement and the many spin-offs it's likely to generate in coming months have the power to shift the political debate back from a focus on short-term deficit reduction to job creation.

On a more profound level, the growing "We are the 99%" movement may provide the political army to thrust the policy proposals of some of America's leading public intellectuals into the political arena. In addition to Krugman, Stiglitz and Reich, they include other economists like Dean Baker, Robert Kuttner, Nouriel Roubini, James Galbraith, Simon Johnson and Jeff Madrick; public intellectuals like Naomi Klein, Cornell West, and Jacob Hacker; climate change activists like Bill McKibben, and campaigners to get money out of politics like Lawrence Lessig, Thomas Ferguson and Dylan Ratigan. (See video of Stiglitz, Madrick, Klein, West, McGibben and Ratigan speaking to the #Occupy Wall Street demonstrators by clicking on their names, indicating a burgeoning tie between the people in the streets and the people with the policy ideas. While Krugman blogs that his position as a NY Times writer restricts him from joining the protest, he also blogs that "my army may have arrived".

The policy proposals put forth by some of these creative thinkers** include:

• Enact robust public infrastructure investment (including green infrastructure) that stimulates sustained employment-generating demand.

• Restructure mortgages and other consumer and student debt including principal reduction (a version of which is supported even by Ronald Reagan's chief economic advisor Martin Feldstein).

• Break up the biggest banks so they're small enough to fail.

• Reinstate Glass-Steagall to separate federally insured commercial banks from risky investment banks.
• Add surtaxes on the wealthiest Americans.

• Increase the 15% capital gains taxe to more closely equalize tax rates between wealth and work.

• End the hedge fund manager loophole which taxes their compensation at 15%.

• Enact a financial transactions tax to raise $100 billion a year and reduce speculation.

• End the War in Afghanistan and substantially reduce Cold-War level military budgets.

• Pursue civil and criminal prosecutions of Wall Street speculators whose fraudulent activities caused the financial crisis--send some bankers to jail.

• Adopt Medicare For All to join the rest of the advanced capitalist world in providing universal health care at half the per capita cost as the US.

• End the influence of money in politics which is often the reason such common sense reforms fail to get political tractions from politicians who rely on big money contributions to get elected.

Rolling Stone's Matt Taibbi has just published his own suggested 5 point program which overlaps with much of the above.

Whether or not the the #Occupy Wall Street protesters explicitly adopt such policy proposals or only generate political energy for the spirit of them, the Krugman/Stiglitz Army is at last on the march. As Krugman himself blogs, "this may be the start of something both big and good".

*Credit to Rick Yeselson writing on Ezra Klein's Washington Post blog for first alluding to the concept of Krugman's army

**For readers interested in more specific policy proposals on how to reduce the power of Wall Street, create jobs, strengthen the middle class, restructure the economy, and reduce the influence of money in politics, Google and find read articles and books to read by Paul Krugman, Joseph Stiglitz, Robert Reich, Dean Baker, Robert Kuttner, Nouriel Roubini, James Galbraith, Simon Johnson, Jeff Madrick, Naomi Klein, Cornell West, Jacob Hacker, Bill McKibben, Thomas Ferguson, Lawrence Lessig and Dylan Ratigan, among others.