Although portrayed as opposites, the Tea Party and Occupy Wall Street protesters are essentially kissing cousins, both with important contributions to make to America. Neither movement believes that our nation is working for them. They see a society rigged by big government, big labor and big business against the people. They have a point.
Ironically, they would each be more persuasive if they acted together, instead of allowing themselves to be exploited by the squabbling and ineffective political parties. Engagement in a war of attrition dilutes the power of both groups. However, the two movements could claim victory if they force our nation to rethink and rebuild our economy and our civil society based on a shared belief in the best of our democratic values and capitalist roots.
President Obama has broken trust with the American people. Not only has he left us more bitterly divided than ever imaginable, but since the beginning of his presidency, 1.3 million more Americans are unemployed, 913,000 private sector jobs have been destroyed, 13 million people have been added to food stamp dependency and over 6 million have lost their homes. While our economy needs 90,000 new jobs each month just to keep up with our national birth rate, we have reached that threshold only 9 times since February 2009.
All that is bad enough, but at the same time our government has increased our debt burden from $5.8 trillion in 2008 (40.3% of GDP) to over $9 trillion in 2011 (67% of GDP). And, our annual federal government budget deficit has grown from $458 billion in 2008 to $1.4 trillion in 2011. Only 19% of Americans "always" or "mostly" trust the government to do what is right, down from 75% in 1958. Millions are fed up and are opting to "starve the beast". That is not crazy.
In light of all this, the government's disproportionate protection of the financial sector is appalling. The implied guarantee for "too big to fail" banks, a tax regime that levies lower tax rates on financial engineers making millions at hedge funds and private equity funds than on earners in any other industry, and the failure of banks to loosen financing for small and medium sized businesses hurts the majority. Lending to small and medium businesses has fallen to $607 billion from $711 billion in 2008. This is in spite of the June 2011 report by the Federal Reserve that excess reserves at banks totals nearly $1.57 trillion -- 20 times what banks need to satisfy their reserve requirements. These realities provide evidence of collusion between the political and financial elites. Frustration, even anger, with this state of our country is not insane or unreasonable.
But, to blame either a duplicitous government or a greedy private sector is too simple. Instead, we need to ask all sides to put aside their divisive rhetoric and work together to restore the shared greatness of America. Although abused in recent years, capitalism has been the bedrock of our prosperity and our fairness. In order for our economy to lift all of our citizens, our economy will need to be powered by the private sector and government will have to take actions that are anathema to the vested interests of both parties.
We must find common ground to reform our tax system, eliminate most tax subsidies, recalibrate our regulations, restructure our entitlement programs, re-create a smaller and wiser government and establish private-public partnerships for many essential tasks.
We have had leadership in America in the past that has brought us together in this way. Bill Clinton had it right in his State of the Union Address in 1996 when he said, "the era of big government is over. But we cannot go back to the era of fending for yourself. We have to go forward to the era of working together as a community, as a team, as one America, with all of us reaching across these lines that divide us -- the division, the discrimination, the rancor -- we have to reach across it to find common ground. We have got to work together if we want America to work".
The Occupy Wall Street and the Tea Party movements both have legitimate gripes. We need to be what we have always been; a nation that creates better opportunities for a greater number of people. It is through the hopes and dreams and hard work of the believers in the American Dream that our differences will disappear and our confidence will return. After all, deep down in our soul we know that with inspired leadership, which we sorely lack right now, success, and even outrageous fortune, should be available to anyone who works hard and plays by the rules in America.
Lynn Forester de Rothschild is CEO of EL Rothschild, LLC and the co-Chair of the "Better Values, Better Markets" Task Force at the Henry Jackson Society in London. You can follow her on Facebook, Twitter, and at Ldereport.com.