Politicians and regulators assuaged public outrage by promising reforms that would prevent such a crisis from occurring again. But not much has improved. We haven’t even managed much of a regime change. Many of the bankers, regulators and politicians who drove the policies that led to the crisis are still in their chairs. Many of the big banks are even bigger. Too big to fail is still a major systemic threat.” I made this comment over 8 months ago as the civil unrest in Egypt was boiling over.
At the time, I wondered how long it would take before citizens in other parts of the world would grow tired of the income disparity that seems to have become a global epidemic: “How much longer will the American public tolerate government-subsidized success for large corporations while many are running out of unemployment benefits and over 40 million Americans are on food stamps? There has to be a tipping point somewhere.”
From Arab Spring to Autumn in America
The protests this spring in the Middle East seem to have given way to widespread – albeit mostly peaceful – demonstrations in more than 1500 cities across the globe this fall. Most are taking place under the auspices of the Occupy Wall Street movement. I read all the time that the movement lacks a coherent message. That may be true, but many people can identify with the pervasive sense that there’s something rotten in the halls of power worldwide, that capitalism isn’t functioning as it should and that the middle class has somehow been handed the bill for mistakes made by both ends of the political spectrum while CEOs of failed banks walked away with millions.
One OWS spokesman summed it up this way: “Does anyone really not know what the basic message is of this protest: that Wall Street is oozing corruption and criminality and its unrestrained political power—in the form of crony capitalism and ownership of political institutions—is destroying financial security for everyone else?” The chart at the top of this article illustrates just one of the reasons Wall Street protesters are angry: The top 1% of American wage earners are taking bigger percentage of the country’s total pre-tax income than at any time since the late 1920s. Their share of the national income, in fact, is almost twice the long-term average!
Josh Brown, otherwise known as the Reformed Broker, added a lot more detail in his open letter to the banks that don’t seem to get why people are mad. Incidentally, Josh is part of the 1%. He works in finance and I’m guessing he’s doing alright. That’s the thing about Occupy Wall Street. Some of its most ardent supporters actually work there, or used to. Check out the story of Josh’s encounter with Suzanne, a former Wall Streeter and current member of the 1%. She’s down in Zuccotti Park personifying the fact that not all Occupy Wall Street sympathizers are “stoners, losers and fringe elements.”
MSM Missing in Action
It’s worth pointing out that the mainstream media (especially financial networks like CNBC) have been slow to cover the Occupy Wall Street protests. When they do, they usually throw in a few winks, nods, and sarcastic jabs about the legitimacy of those involved. It’s so far been left to blogs, social media and online publications to bring the real issues to light. (Today’s chart is from online news aggregator Business Insider.)
Documentaries like the Oscar winning Inside Job offer a lot of details on how and why crony capitalism helped spawn the 2008 financial crisis. Why have none of the MSM outlets with the budgets to support it not sent armies of investigative reporters out there to find out what really happened? Maybe it’s because they didn’t know any better. Or maybe it’s because they would never again get an interview with the business and political heavyweights that draw the big ratings. Or maybe it’s because they are owned by the crony capitalists in question.
Either way, it seems like a good idea to get your information from a variety of sources. If you’re relying on the mainstream media alone, you may only be getting one side of the story. It still amazes me how some of the folks who looked so guilty in Inside Job are regularly invited to express their views in the financial media.
Occupy Wall Street: Have We Reached the Tipping Point?