Occupy Wall Street (OWS) was the name given to the protest movement that began in September, 2011 in Zuccotti Park, located next to New York City’s financial district. The protests were fueled by a collective sense that things in our economy are not fair or right. But the protesters did not do a good job of focusing their complaints and thus have been labeled as malcontents who don’t know what they stand for or want. The media would ask 10 protestors what the movement stood for and would get 10 different answers. (Bloomgarden, 4)
So, what are the protesters so upset about?
Inequality in this country has hit a level that has been seen only once in the nation’s history, and unemployment has reached a level that has been seen only once since the Great Depression. And, at the same time, corporate profits are at a record high.
Let’s start with the obvious, unemployment. Three years after the financial crisis, the unemployment rate is still at the highest level since the Great Depression. Jobs are scarce, so many adults have given up looking for them. Thus, a sharp decline in the “participation ratio.” And it’s not like unemployment these days is a quick, painful jolt. A record percentage of unemployed people have been unemployed for longer than 6 months . It’s not just construction workers who can’t find jobs. The median duration of all unemployment is also near an all-time high. The job situation in America is painful for nearly everyone in America. But theres one class who actually get richer and prosper MORE with every economic downfall. (Bloomgarden, 6).
Every day, corporate profits hit another all time high. With the exception of a brief period in 2007 (just before the crash), profits are higher than they’ve been since the 1950s. And they are VASTLY higher than they’ve been for most of the intervening half-century. CEO pay is now 350X the average worker’s pay, up from 50X from 1985. CEO pay has skyrocketed 300% since 1990. Corporate profits have doubled. The average “production worker” pay has increased 4% while the minimum wage has actually dropped due to inflation. (Giove, 3).
In short, while CEOs and shareholders have been cashing in, wages as a percent of the economy have dropped to an all-time low. Of course, life is great if you’re in the top 1% of American wage earners. You’re hauling in a bigger percentage of the country’s total pre-tax income than you have at any time since the late 1920s. Your share of the national income, in fact, is almost 2X the long-term average. Income inequality has gotten so extreme here that the US now ranks 93rd in the world in “income equality.” China’s ahead of us. So is India. So is Iran. (CIA chart).
Few people would have a problem with inequality if the American Dream were still fully intact, if it were easy to work your way into that top 1%. But, unfortunately, social mobility in this country is also near an all-time low. It’s nearly impossible to work your way up from a poor social class to the top 1%. So what does all this mean in terms of net worth? It means that the top 1% of Americans own 42% of the financial wealth in this country. The top 5%, meanwhile, own nearly 70%. And then there are the taxes. It’s a great time to be rich in America, because taxes on the nation’s highest-earners are close to the lowest they’ve ever been in our countries history. The aggregate tax rate for the top 1% is lower than for the next 9%—and not much higher than it is for pretty much everyone else. (Giove, 5)
And now we come to the type of American corporation that deserves a big share of the blame; the banks. Remember when we (the taxpayers) bailed out the banks? Yes, and remember the reason we were told we had to bail out the banks? We had to bail out the banks, we were told, so that the banks could keep lending to American businesses. Without that lending, we were told, society would collapse. But the banks have not been lending to small business after we bailed them out. What have banks been doing since 2007 if not lending money to American companies? They are lending money to America’s government by buying risk-free Treasury bonds and other government-guaranteed securities.
Meanwhile, of course, the banks are able to borrow money FOR FREE. Because the Fed has slashed rates to basically zero. And the banks have slashed the rates they pay on deposits to basically zero. So they can have all the money they want, for nearly free! Banks are so big and so invested in our economy now, we can’t prosecute them under the law, we can’t let them fail, the big banks have America wrapped around their finger, and they are squeezing all the money they can out from under us. When you can borrow money for nothing, and lend it back to the government risk-free for a few percentage points, you can COIN MONEY. And the banks are doing that. According to IRA, the “net interest margin” made by US banks in the first six months of this year is $211 Billion. (Giove, 3).
The average banker in New York City made $361,330 in 2011.
OWS’s goals included a reduction in the influence of corporations on politics, more balanced distribution of income, better paying jobs, bank reform, forgiveness of student loan debt, or other relief for indebted students, and alleviation of the foreclosure situation. Some will argue that the Occupy movement did succeed in bringing attention to the issue of income inequality and “tax fairness,” which is true. However the movement was not focused, and fizzled out after a couple of months. At some point, the movement had to focus on clear goals, or end up fading away into something similar to the anti-globalization and anti-war protests we used to see during the Bush Administration.
The federal government’s debt rose by $1.09 trillion in 2012, and currently now stands at $16.8 trillion. The big banks still tightly control the money in the US, and are now too big to prosecute. The debt on students and average workers nearly mimics the US’s own debt crisis. And corporations who pay very little or none at all taxes have seen record profits, their CEO’s accruing massive wealth. Some say this is just the price we pay for being in the modern capitalist society.
It’s too late for us to prevent any more damage to our economy, and it will take a long time to recover fully. It is not too late, however, to learn from our mistakes.
Giove, Candice (January 8, 2012). “OWS has money to burn”. New York Post.
Stone, Oliver , and Peter Kuznick. The Untold History of the United States. New York: Gallery Books, 2012. Print.