Friday, October 21, 2011

Occupy Wall Street V: Diagnosing And Attacking The Symptoms Of Our Collective Disease

This past weekend, I witnessed the Occupy Wall Street movement up close and in full force in Portland, Oregon. When I returned to Eugene, Oregon, where I’m serving as a Visiting Professor this semester at the University of Oregon School of Law, the movement had peacefully taken over one of the main public parks downtown. I’m planning on stopping by this evening or over the weekend. The movement has been peaceful, and most importantly it has gotten a great deal of people thinking and talking. Here, in Oregon, students and people I meet on the street are abuzz about the movement and the financial condition the majority of Americans find themselves in today.

Last week, I conducted a lunchtime talk for students, staff, and faculty entitled “Race and the Financial Crisis: Sorting Myth from Reality.” This talk was well attended and resulted in many lengthy follow-up discussions with students and colleagues. Among students, many of my discussions have centered on the Occupy Wall Street Movement, what ideology it espouses and how it should move forward or morph into a political movement with lasting impact. My recent talk and subsequent discussions have forced me to think deeply about the Occupy Wall Street Movement, and to pose some strategic questions.

I commend the Occupy Wall Street Movement organizers, largely grass-roots individuals from all walks of life, young and old, brown, yellow, and white for the discussion and level of introspection that they’ve forced the American populace to confront whether they agree or disagree with the movement. I’ve followed the movement throughout its duration; I’ve watched an insipient movement grow into a national and international movement and dialogue. My meager suggestion to the Occupy Wall Street Movement is to hone in and focus on the public policy choices and paths of our business leaders and politicians (both Democrat and Republican) that have forced 99% of us into the dire straits we find ourselves.

I think the Financial Crisis or Great Recession has sparked frustration and despair not seen in this nation and world for several generations. Congress threw a lifeline in the form of bailouts and corporate welfare to big banks and Wall Street, but somehow forgot about Main Street. In Washington, we are politically gridlocked. Republican politicians would rather see one man lose his job, President Barack Obama, than debate meaningful policies to create jobs and opportunities for the masses. Republicans talk about “job creators” whose taxes we shouldn’t raise. When was the last time Paris Hilton, and other rich folks who largely inherited their wealth created a job? The so-called “job creators” are hoarders and consumers maximizing their own self-interest, utility and profit. I give the Republicans credit for acting from the same playbook and staying on message. They have better PR and marketing people than some of our biggest corporations. These folks stay on message, and stick to their talking points without deviation. This observation is reinforced on the rare occasions when I have the stomach to watch Fox News.

Democrats had their chance when they were a majority, early in President Obama’s term, and squandered the opportunities presented because of disunion, and lack of focus. In many ways, it is hard to tell a Democrat from a Republican in Washington. Personally, I think they are all drinking the same Kool-Aid. Democrats have adopted the rhetoric of Republicans. I’ve noticed lately, President Obama can’t finish a sentence or complete a statement without ending it with “…and it will lower the budget deficit” or "...we need to ease regulations." Democrats preach and cajole about the evils of regulation, much like their Republican counterparts. Democrats expound and trumpet free markets and private enterprise as much as Republicans nowadays.

Democrats and Republicans alike have failed 99% of us in American society. We have to keep the pressure on both parties. I say all of this to say clearly to the Occupy Wall Street Movement, keep the debate focused on the economic, political, and cultural policies that keep 99% of us indentured permanently to 1% of the population who own the means of production, and profit from their capital and investments while we slave away as laborers in the proverbial fields. Before a doctor can attack or treat a problem, he/she must first diagnose it. In my humble opinion, an economic, political, social and cultural doctrine that often goes unnamed, unidentified, and unspoken has gotten us in this terrible predicament. You ask what is it? What could this horrible disease be called? It is named Neo-Liberalism; and it took hold of our economic, political, social and cultural policies about 30-40 years ago.

Neo-Liberalism has four (4) main premises:

  • The rule of the market—free enterprise and private enterprise—which entails cutting public expenditures for social services like education, healthcare, and other public initiatives;
  • Deregulation—little to no government regulation where profit maximization by private market actors is jeopardized or perceived as being harmed;
  • Privatization—selling of state owned enterprises, goods, and services to private investors in the name of efficiency, which often leads to concentration of wealth and higher consumer payments and outlays for goods and services; and
  • Elimination of the concept of the “public good” or “community”—in other words, “individual responsibility” is valued at a premium, every man, woman, and child in society has to fend for themselves and if they don’t succeed they’re just “lazy” or “shiftless.”

Alas, doesn’t this all sound familiar. Business, political, social and cultural leaders have been pushing this false prophesy down our throats for years. Democrats and Republicans alike have pursued a Neo-Liberal agenda in Washington and in our respective state capitals, from Columbus to Sacramento. I’ll give you many Democrat and Republican examples (you can figure out for yourself which Administration or Congress hawked these policies):

Truly, the list goes on. I myself, and other bloggers on this blog, like andre cummings, Lydie Pierre-Louis, and Steve Ramirez, to single out a few, have written about the ill-effects of deregulation and Neo-Liberal policies on a multitude of levels. Neo-Liberalism has morphed into Neo-Feudalism in this nation; fewer control the vast majority of assets, resources, and real wealth in society. The wealth gap is continually expanding. 99% are the surfs and servants of the 1% aristocracy and overlords. We are in the midst of a New Gilded Age with new Robber Barons emerging each day.

The wages of sin of a small minority are being visited on a vast majority. The Wall Street elites who got us into this mess go unpunished for their crimes, while their victims, those of us on Main Street, have been wrongfully convicted and serve their sentence and do their hard labor and eat their prison food. Where is the Innocence Project when you need it? America needs you Barry Scheck! Overturn our convictions, the glove doesn't fit.

The Financial Crisis has been a wake-up or clarion call to a multitude of people. The consequences of the Financial Crisis have been visited upon those least responsible for the economic crisis (i.e. women, children, people of color, and the elderly) in order to prop up powerfully entrenched elites, and those responsible for the financial bleeding. Society is at a serious underappreciated crossroads. Clearly, in this nation we are decidedly moving away from our Keynesian Economic Assumptions: full employment; economic equality; and regulation of private cartels. American Capitalism is turning into Vulture Capitalism where the weakest die on the side of the economic road or highway and are devoured to sustain the wealthy and elites. We are witnessing a failure of capitalism. The dust will settle somewhere and it might not be pretty. The economic pressure cooker may very well explode.

I challenge the Occupy Wall Street Movement to take a page from the finely honed Republican playbook to stay on message, find a talking point and stick to it. I submit to you, in our sound bite society, message truly does matter. One of the real big issues that has gotten us to this point is Neo-Liberalism—Occupy Wall Street Movement ideologically and intellectually pick up on this message and educate your followers and the public on the ills of the doctrine. Advocate a return to Keynesian Doctrine—full employment, economic equality and extension of the American Dream to as many as possible, and regulation of private cartels in the interests of the public good or community. We are all in this together. We can't afford to allow our racial, social, gender, or class differences to derail us.

The Occupy Wall Street Movement has the eyes and hears of the American and international public, carry a clear message forward. I thank and appreciate the Occupy Wall Street Movement for sparking a positive and non-violent discourse on issues that inform our society. Young and old, and people of all shades and walks of life are forcing a debate on the structure of our society that will have what I suspect will be a lasting impact for years to come. In the 1990’s, President Clinton helped reinvent welfare, as we know it. In 2011, the new mantra should be to reinvent corporate welfare, as we know it. We can no longer afford to bailout Wall Street, and write a blank check for the mistakes and miscues of corporate elites. Generally, we can and should reinvent American Capitalism, as we know it, moving forward to a bright future, to recapture the American Dream we were all told we could reach for and achieve. Occupy Wall Street is helping us to do just that. More power to those of you spearheading a timely and vast movement!


  1. Professor Grant:

    This is a powerful post. Thank you for writing it. What were your main points in your Oregon Law lecture "Race and the Financial Crisis: Separating Myth from Reality"?

  2. Great Article on Neo-Liberalism!

    You could also say that Obama's Healthcare Reform falls under Neo-Liberalism. The so-called Tea Party argues it is socialism, and that argument is completely absurd!

    The Healthcare Reform forces us to buy from mega-corporations.

    I'm not arguing against the fact that everyone deserves Healthcare. Please don't interpret this post as starting up that whole debate.

    I'm merely pointing out (1) The current plan for better or worse, benefits big business in the medical industry (2) The Health Care resisters/protesters (Tea Party or what have you) are clueless in identifying what they perceive as the problem.

    The correct protesting would be towards a Fascist Corporate Control System and not Socialism.

    This is just an observation at the nature of the system and is not intended to weigh the pros and cons of the system. Perhaps the corporate control system is the best, perhaps its not. I'm just pointing out the winners.

    - Steve Newbold

  3. Anonymous,

    Thank you for your comments. In my talk at Oregon entitled "Race and the Financial Crisis: Sorting Myth from Reality" I talked about the mythical Conservative explanation of minority borrowers and the Community Reinvestment Act of 1977 as the main causes of the Financial Crisis. I pointed out that it is dangerous to assign blame in one direction when trying to analyze and account for such a complex event. In the wake of the Financial Crisis, public and private actors have pointed fingers of blame at each other, but have failed to acknowledge their own culpability. In this discussion I talked about a variety of factors that helped contribute to the Financial Crisis. In essence, I ended by providing my Top Ten List of causes of the Financial Crisis. Here's my Top Ten List:

    • American society's propensity to rack up enormous debts on many levels that were difficult or impossible to repay—The Consumer Culture;
    • Widespread failures in regulation and supervision;
    • Dramatic failures of corporate governance and risk management at systemically important financial institutions;
    • A combination of excessive borrowing, risky investments, and lack of transparency among financial actors;
    • Governmental and political unpreparedness and inconsistent response to the crisis as it unfolded that caused uncertainty and panic in financial markets (i.e. bailing out Bear Stearns while allowing Lehman Brothers to fail);
    • Systemic breakdown in accountability and ethics in the financial system—short-term profit maximization tied to compensation and shareholder profit;
    • Mortgage-lending standards and mortgage securitization practices that lit a pipeline of contagion (i.e. NINJA loans);
    • Unregulated over-the-counter derivatives trading and the creation of other exotic financial instruments (i.e. Credit Default Swaps);
    • Failure of the credit rating agencies to perform their duties in an unbiased fashion—Pay-to-Pay practices in securitization transactions; and
    • The repeal of Glass-Steagall in 1999, and the tearing down of bank firewalls with the passage of Gramm-Leach-Bliley.

    Again, thank you so much for your comment.

  4. Anonymous,

    Thank you for your comment and observations about Neo-Liberalism. I too don't want to rehash the whole healthcare debate, however, I think you might be on to something. As corporate earnings reports have indicated private insurance companies have been the true winners in Healthcare Reform. With impunity, and no logical or justifiable rationale, these private actors have raised our premiums to maximize their profits. Big Insurance wins big in this instance. I think you are also correct--The Tea Party Movement might want to stop labeling Healthcare Reform as "socialism," but rather start looking at it as a form of Neo-Liberal corporate welfare.

  5. I agree, I didn't mean to hijack the thread into the healthcare debate. I guess, my opinion is that government is subservient to various industries to a large enough degree, that we can accurately call our current form of government has evolved into full blown Fascism. I think this explains why Bush-Obama policies are identical on the major issues (wars, bailouts, "police-state policies").

    Neo-Liberalism and Neo-Conservatism are really the result of someone like Obama coming into office, and realizing that if he wants to do something like Healthcare Reform, he has to compromise his plan so the corporations win.

    You touched on a lot of good topics, so I hate to go to Healthcare when your article was about much more than that.

    I enjoyed your commentary on "Race and Financial Cris." It is such a complicated topic. I think for awhile conservatives were arguing its the borrowers fault, but I think as time as past, most of them admit that the subprime crash was due to "predatory lending."

    I know quite a few people who worked in subprime, and they were making serious money. Lot of middle class people were making 6 figures for the first time rubber stamping loans. I know 25 year-olds who were making 100k loving life back then.

    Everyone was exploited in this system. The rich created the predatory lending with their low standards (almost no standards), the middle class sales people's greed was exploited (the ones I knew fully admit, they knew something "wasn't right" while this was all going on).

    While I 100% believe the system was corrupt and immoral, the borrowers cannot escape blame.

    If we own anything we own our own lives and are responsible for ourselves. I think with the borrowers it was a mixture of exploting those not affluent enough to understand their fiances, but probably even more so the social pressure that society puts on one to own a home.

    I say this critique of the borrowers, fully being thankful, that I was a first year law student in 2008, single, and under no pressure from the world to say you gotta own a home. But hell, if I was married and had a kid, and wanted him to go to a nicer school, or something, that damn well could have been me.

    So I'm not talking down to these borrowers, but merely pointing out how the situation I imagine many faced.

    That being said, one has the responsibility for his own life and unfortunately life's lessons teach us the hard way that we can't depend on those in power to look out for us, be it a powerful corporation or a government entity who purports that their "regulatory standards" are in place to protect us.

    - Steve Newbold

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