For over a week protesters have been growing in numbers on Wall Street, with unclear demands but clear rage. Hundreds have been arrested as they shut down the Brooklyn Bridge and sympathy protests spread to other cities. Left wing notables such as Chris Hedges, Michael Moore and Matt Taibbi have described this as the start of a new movement (Hedges said it was the ‘best hope’ for America to recover from this crisis) and slowly the media is starting to take note.
So what’s happening? First, the left has been silent for much of this economic crisis because until early 2011 the Democrats held power in Congress and the Presidency. As health care reform passed, “Don’t ask don’t tell” repealed and other changes made, most on the left held out hope that Obama would pursue a truly progressive agenda. To be sure, the Hedges, Moores and Taibbis gave up on Obama long ago. He stayed in Iraq and Afghanistan, had policies very friendly to Wall Street, and the call for tax increases on the wealthy — something which gets labeled class warfare on the right — is seen as pathetically trivial. The far left wants real class warfare because, they argue, it’s been waged on the US by Wall Street and the business elite for years.
Students and others whose hope was kindled by the Obama candidacy, and who look at the tea partiers as almost anachronistic, wanting to go back to America like it was decades ago, had drifted towards apathy. Now a movement is starting that might ignite their interest again — sort of an anti-tea party.
The cause of their ire is clear: Wall Street and big money. These are firms that created the debacle of 2008 thanks to unregulated derivatives trade and what in retrospect can only be called fraudulent but legal deals. They raked in hundreds of millions of dollars of bonuses for deals that were setting the stage for a crisis as serious as the Great Depression. Then when all hell broke loose and Americans were out of work and unable to keep up their mortgages, the government made sure the financial sector did not collapse. Soon they were back making record profits, even as the world economy sunk.
Beyond that the wealthy have managed to create for themselves a zone of safety where their wealth is not at risk and they don’t have to do anything special to be a top earner. Just being born in the wealthy class virtually guarantees you will stay there unless you really screw things up. Meanwhile being born poor assures you’ll remain poor unless you undertake a heroic effort with luck and creativity. Some accomplish that, but overall class mobility in the US is low.
In the last thirty years as the wealthy have received record tax cuts to the lowest levels in history (and have loopholes and other ways to avoid more), the top one percent have had their income grow by 281%
This chart shows that the more you earn, the greater your income growth. For the nearly thirty year period the bottom 60% — more than half of the population — had earnings increase by 25%, the bottom 20% only 16%. Politics is about relative gains and loses, and obviously there has been a relative shift of wealth to the highest earners. 281% for the top 1%, only 25% for the bottom 60%. For the last thirty years the wealthy have done very well, even as the rest of the country has stagnated. As unemployment officially lingers at near 10%, but if you took into account everyone who would want to work could be close to 20%, it’s very clear that Americans are hurting, even as the wealthy hold on to their gangs and Republicans scream “class warfare” whenever someone wants to increase their taxes even a little.
This is going to get people mad. People accepted the massive growth in income disparity over the last 30 years (we were most equal in 1976 in the last year of the Ford Administration, now income distribution is like that of the late 19th Century) thanks to lower prices via foreign goods and the illusion that the economy was a success. Now that illusion has faded and people are coming to grips with the fact that the US is in decline, with an economy based on consumption rather than production. Massive debt by both the government (100% of GDP) and the private sector (total debt government and private sector: 400% of GDP) have created a structural crisis, one that can’t be fixed with a quick stimulus or a few policy changes.
The tea party’s rage is real, but they so far have gone for illusory solutions. If only government spent less and cut regulations, then “job creators” would move in and magically fix the economy. It sounds so easy, so painless, and thus they are angered by those ignorant Democrats who can’t see that they are standing in the way of a simple, clear solution to America’s ills. If only it were so easy! That solution is pure fantasy. Of course, the Democrats had their painless solution. Spend more money, save jobs, help out states and don’t worry about the debt — we’ll pay it off when we’re growing again! They are angered by those ignorant Republicans who don’t understand that cutting spending slows the economy even more than tax increases would!
The “Occupy Wall Street” movement, which is starting to spread, seems to recognize the folly of the “easy solutions” have been fed to us by an elite which wants to protect its advantage and avoid anything that might get in the way of continuing to profit without significant competition. They call themselves capitalists but they do all they can to avoid having to undertake the risks capitalism is supposed to entail. They’ve convinced many people that the choice is “capitalism or socialism” and they’re the good side of that false dichotomy, while “big government” (by definition socialism in that world view) is the bad side.
President Obama until now has tried to reform rather than radically alter the system. As an outsider, he’s been keen to reassure the moneyed elite that he’s not a threat, believing that will be more effective than creating animosity from those who have the power to make or break his Presidency. While the tea party complains about “establishment Republicans,” Obama remains an “establishment Democrat.”
So the protests grow. The left is starting to counter the right in both rage and demands for radical change. Beneath the surface organizations are being built that can be mobilized for political action going forward, the infrastructure of a true progressive movement is starting to grow. Just as the tea party irritates establishment Republicans, this group will be a thorn in the side of establishment Democrats.
To many people the idea of protesters in a prosperous democracy modeling their movement after protests that overthrew an oppressive dictatorship in Egypt is silly. Yet they have felt helpless as both parties have courted the business elite, had the same insiders (Clinton’s economic team was more free market than Reagan’s had been, and many of them were brought into the Obama Administration), and stood back as jobs moved off shore, the middle class lost ground, and the country drifted into decline.
These folk are finding their voice as this crisis, now three years old, enters a new stage.