A Few Thoughts On The Occupy Wall Street Movement

A Few Thoughts On The Occupy Wall Street Movement Brian Rogers Zero Hedge October 15, 2011 A Few Thoughts On The Occupy Wall Street Movement “The machinery by which Wall Street separates the opportunity to speculate from the unwanted returns and burdens of ownership is ingenious, precise and almost beautiful. Banks supply funds to brokers, brokers to customers, and the collateral goes back to banks in a smooth and all but automatic flow. Margins – the cash which the speculator must supply in addition to the securities to protect the loan and which he must augment if the value of the collateral securities should fall and so lower the protection they provide – are effortlessly calculated and watched. The interest rate moves quickly and easily to keep the supply of funds adjusted to the demand. Wall Street, however, has never been able to express its pride in these arrangements. They are admirable and even wonderful only in relation to the purpose they serve. The purpose is to accommodate the speculator and facilitate speculation.

But the purposes cannot be admitted. If Wall Street confessed this purpose, many thousands of moral men and women would have no choice but to condemn it for nurturing an evil thing and call for reform. Margin trading must be defended not on the grounds that it efficiently and ingeniously assists the speculator, but that it encourages the extra trading which changes a thin and anemic market into a thick and healthy one. Wall Street, in these matters, is like a lovely and accomplished woman who must wear black cotton stockings, heavy woolen underwear, and parade her knowledge as a cook because, unhappily, her supreme accomplishment is as a harlot.”

- The Great Crash: 1929, John Kenneth Galbraith, First Published 1955 The More Things Change…

It’s amazing to read the quote above from John Kenneth Galbraith’s great book on the stock market crash of 1929 and consider where we are today. Despite the fact that the events above happened over 80 years ago, it’s plain to see that the modus operandi of Wall Street writ large has changed little. Smoke, mirrors and heavy doses of propaganda laden obfuscation are required to keep the masses complacent and ignorant of the dangers Wall Street places on the shoulders of ordinary people. Virtually unlimited leverage for investment banks? Check. CDS markets traded over-the-counter and away from any transparent exchange? No problem. CMOs and CDOs as healthy vehicles to efficiently distribute and allocate risk? Foolproof. It all works fine until it

doesn’t. Enter stage right, the crash of 2008.

The average American citizen is quickly falling behind their global peers in terms of education levels and many find the topics of economics and finance far too dense to comprehend. So it’s no small accomplishment that the enormous amount of taxpayer bailouts and Fed monetary injections have finally awoken the American middle and lower classes up to the reality of a terribly unbalanced financial system. This awakening is currently represented by the Occupy Wall Street protests. However, lest you think these protests will simply go away once winter sets in, think again. Even if the official Occupy Wall Street protest dissipates in the next few months, the word has gotten out and the message is finding an interested audience that fails to conform to traditional political boundaries.

How Occupy Wall Street Will Change Things Suddenly, all over this country students are questioning their economics professors about the standard dogma they are being taught which is visibly failing all around them. How can the PhD.’s preparing tomorrow’s generation of finance and economic leaders continue to teach Keynesian doctrine with a straight face? How can they possibly defend the bailouts and the Fed’s enormous hand in manipulating asset prices as anything even remotely resembling capitalism?

As these students graduate and begin their own careers over the next few years (assuming they find jobs in the first place) they will enter the workforce much more aware of the slight of hand that has taken place whereby organic growth was replaced with extremely dangerous debt growth. Then they’ll stop and think about their own student loans and how the non-dischargeable nature of those loans chain them to the very system they are questioning. These students will be heavily in debt, face few good job prospects and will thus have plenty of time on their hands.

Hello political volatility.

And what about the lower and middle classes? It really doesn’t matter what your political affiliation is, if you make less than some magic number defined as “rich”, say the $250k that is currently bandied about, neither political party is really working for you. Both parties have contributed wildly to the overspending that currently burdens our fiscal and monetary accounts.

Both parties are deeply in bed with the banking industry. Arguing over who supports Wall Street more is simply a matter of degree. Both parties support the monetary intervention of the Fed and the inflation that has slowly rendered our country uncompetitive since 1971, a role the Fed was never originally envisioned to play.

If you’re unemployed due to your job being shipped overseas, have been kicked out of your house by a robo-signing bank, worry about the tax burden your kids will face down the road, concerned that your public or private pension will be woefully inadequate to maintain your current living standards or have mountains of non-dischargeable students loans owed to Sallie Mae, you should be paying close attention to and likely supportive of the OWS movement.

Repubs vs. Dems: A False Dichotomy

Vote Republican? The Repubs increased debt from around $5.6tr in 2000 to over $10tr by 2008.

They also passed the massive social entitlement program Medicare Part D without any mechanism for actually paying the tab. The party of small government and fiscal conservatism you say? Yea, right.

Vote Democrat? The Dems supported the bailout of the banks, the funding of ruinous foreign wars started by the Repubs, the re-nomination of Ben Bernanke as the head of the Fed and appointed to the highest offices of White House influence – the very architects that helped create the global financial disaster we currently face. Summers, Geithner, Rubin and many others have had President Obama’s ear since day 1. You think those guys are advocating a solution which would see the banks actually take write-downs and losses as any other business would have to?

Not likely.

Both major parties spend enormous time and money maintaining their own power bases of large, wealthy campaign contributors to try and outspend their competition in the next election. When they win, they serve their campaign contribution masters well with the hopes that this process will be rinse, wash and repeat the next time around. Both parties support no term limits. Both parties support liberal campaign finance laws. Both parties kowtow to Wall Street.

So what’s a disenfranchised, frustrated, out-of-work lower or middle class citizen to do?

Here Comes the Third (And Perhaps Even Fourth and Fifth) Party Movements Tea Party was the first threat to the status quo. I happened to be watching Rick Santelli’s rant on CNBC back on February 19, 2009. It was brilliant and really captured the mood of those of us who had always imagined our economy to be truly capitalistic. Instead, as soon as the uber-connected banks faced the threat of actually losing money, they called their good buddies in DC (in many cases former co-workers) and demanded a payout or else the world will end.

Naturally, Congress feared the campaign contributions would end so they quickly wrote a $700bn check.

Of course the first TARP vote failed, but they needed that cover to save a bit of face. The powers that be were never too worried that they couldn’t scare the financially ignorant in Congress into coughing up some dough. Vote doesn’t pass, market tanks, many pants are wet in DC and ipso facto, the money flows. Many of us were outraged and Mr. Santelli crystallized the moment.

This led to the Tea Party. But for the status quo, the Tea Party was easy to diffuse. Sprinkle in a few right-wing ideologues spouting fire and brimstone and the mainstream voter will be justifiably turned off. The modern Tea Party, just like the one back in Boston in 1773, weren’t inspired by social issues, they were inspired by economic issues. And yet, the status quo and mainstream media has been extremely successful in painting the modern Tea Party movement as nothing more than rebellious right wing Republicans looking for something more conservative than the mother ship Republican party.

Occupy Wall Street, in my opinion, represents a refinement of the original Tea Party rant and the next political movement to be inspired since 2008. This movement represents the point where it’s

no longer just financial insiders like Mr. Santelli that understand the graft and corruption that is our current system. No, this movement is solidly being peopled by folks from a broad array of life experiences, political stripes and philosophical leanings. It will be much harder for the status quo to dilute this message. Harder, but not impossible.

Phase II Coming To A City Near You I keep thinking about Gandhi’s great quote, “First they ignore you, then they laugh at you, then they fight you, then you win.” It seems to me that we are at the end of the ‘then they laugh at you’ phase. Watching CNBC lately, the snarky comments from the talking heads have eased off quite a bit and now they are reporting live from Zuccotti Park with a more serious tone. At the same time, the city of NY seems to be reaching the end of its tolerance towards the movement.

Next step is the ‘then they fight you’ phase. This is when things will get interesting. Arrests will be made, traumatic video of cop-on-protestor violence uploaded to Youtube and people you’ve never heard of will suddenly emerge as leaders in this growing movement. How will this affect the upcoming election? It’s impossible to predict but it’s going to be interesting to watch.

The bottom line is this thing is going mainstream and although the message isn’t completely clear or concise, Americans all over the country are beginning to sense the turning point this movement represents.

2012 Presidential Election Obama recently tried to embrace the OWS movement. I find this extremely hypocritical given his role in sustaining the very institutions the group is protesting against and his frequent trips to NY to raise some more Wall Street money for his re-election war chest.

How about the Republican candidates? Most are dismissing the protestors even though the basic premise of the movement is a more fair and balanced (pun intended) system for all Americans.

After vast injections of campaign finance money, the Repubs have come to believe that the banking industry is a much better constituent than mainstream Americans. At least the banks have money to finance their campaigns. They seem happy to ignore the circular argument that the government creates money to loan to the banks at 0% so that the banks can then loan that money back to the US government with interest and virtually guaranteed capital gains and then give some of those interest payments/capital gains back to the politicians in the form of lobbying/campaign finance funds to ensure more no-cost loans and bailouts. What a beautiful business model!

Ron Paul, of course, gets the joke very well. But the media is working overtime to ignore Ron Paul at every turn lest the American public actually start to understand the logic of his positions.

So as much as I’d love to see the guy win, I still think Ron Paul is a man ahead of his times.

Rather than lead this movement from the front, I think it’s more likely that his philosophies will serve as the inspirational base for future leaders.

The Genie is Out of the Bottle

What eventually became the Arab Spring is spreading and quickly becoming a Western Winter.

Protests in Europe and America are growing in size and intensity. Awareness of the unfair and crony-capitalistic nature of our current political/financial system is spreading. Americans of all economic, geographic, philosophic and political stripes are questioning the very foundations upon which our “prosperity” has been based for decades. Slowly they are realizing that they were always playing a rigged game that they were never designed to win. As you’d imagine, this is not sitting so well with them and some are starting to stand up and make their voice heard. Don’t think for one second that this is going to stop. Americans by the millions are losing their homes, their jobs, their savings and their futures.

In their brilliant book about the history of US generations, The Fourth Turning, William Strauss and Neil Howe called the current phase of history we are passing through as a ‘Fourth Turning’.

Their characterization of this phase is as follows, “A CRISIS arises in response to sudden threats that previously would have been ignored or deferred, but which are now perceived as dire. Great worldly perils boil off the clutter and complexity of life, leaving behind one simple imperative: The society must prevail. This requires a solid public consensus, aggressive institutions, and personal sacrifice.” -The Fourth Turning, Strauss and Howe, 1999 Whether the protestors realize it or not, their role in history is an important and necessary one.

They are shining a disinfecting light on much of what is wrong with our current economic/political model. Major changes are coming, many of which would have seemed unimaginable only a few years ago. Class warfare, generational warfare and perhaps even military warfare are coming next. As extreme as these views might seem, just study history a bit and you will see that every great empire falls this way. We will be no different. And when it’s all said and done, a straight line will be drawn from Rick Santelli’s rant, to Zuccotti Park to whatever comes next. Eventually a more vibrant, dynamic America will emerge from this chaos and pain. But that’s the ‘then you win’ phase. And we ain’t there yet.

Cheers, Brian

Wall Street sit-in goes global Saturday

ReutersBy Alastair Macdonald | Reuters – Fri, Oct 14, 2011 LONDON (Reuters) - For an October revolution, dress warm. That's the word going out politely - on the Web to rally street protests on Saturday around the globe from New Zealand to Alaska via London, Frankfurt, Washington and, of course, New York, where the past month's Occupy Wall Street movement has inspired a worldwide yell of anger at banks and financiers.

How many will show up, let alone stay to camp out to disrupt city centers for days, or months, to come, is anyone's guess. The hundreds at Manhattan's Zuccotti Park were calling for back-up on Friday, fearing imminent eviction. Rome expects tens of thousands at a national protest of more traditional stamp.

Related: 5 facts about the Occupy Wall Street movement Few other police forces expect more than a few thousand to turn out on the day for what is billed as an exercise in social media-spread, Arab Spring-inspired, grassroots democracy with an emphasis on peaceful, homespun debate, as seen among Madrid's "indignados" in June or at the current Wall Street park sit-in.

Blogs and Facebook pages devoted to "October 15" - #O15 on Twitter - abound with exhortations to keep the peace, bring an open mind, a sleeping bag, food and warm clothing; in Britain, "Occupy London Stock Exchange" is at pains to stress it does not plan to actually, well, occupy the stock exchange.

That may turn off those with a taste for the kind of anarchic violence seen in London in August, at anti-capitalism protests of the past decade and at some rallies against spending cuts in Europe this year. But, as Karlin Younger of consultancy Control Risks said: "When there's a protest by an organization that's very grassroots, you can't be sure who will show up."

Concrete demands are few from those who proclaim "We are the 99 percent," other than a general sense that the other 1 percent - the "greedy and corrupt" rich, and especially banks should pay more, and that elected governments are not listening.

"It's time for us to unite; it's time for them to listen; people of the world, rise up!" proclaims the Web site United for #GlobalChange. "We are not goods in the hands of politicians and bankers who do not represent us ... We will peacefully demonstrate, talk and organize until we make it happen."

By doing so peacefully, many hope for a wider political impact, by amplifying the chord their ideas strike with millions of voters in wealthy countries who feel ever more squeezed by the global financial crisis while the rich seem to get richer."ENOUGH IS ENOUGH" "We have people from all walks of life joining us every day," said Spyro, one of those behind a Facebook page in London which has grown to have some 12,000 followers in a few weeks, enthused by Occupy Wall Street. Some 5,000 have posted that they will turn out, though even some activists expect fewer will.

Spyro, a 28-year-old graduate who has a well-paid job and did not want his family name published, summed up the main target of the global protests as "the financial system."

Angry at taxpayer bailouts of banks since crisis hit in 2008 and at big bonuses still paid to some who work in them while unemployment blights the lives of many young Britons, he said: "People all over the world, we are saying 'Enough is enough'."

What the remedy would be, Spyro said, was not for him to say but should emerge from public debate - a common theme for those camping out off Wall Street since mid-September, who have stirred up U.S. political debate and, a Reuters poll found, won sympathy from over a third of Americans.

A suggestions log posted at http://15october.net ("This space is ready for YOUR idea for the

revolution") range from a mass cutting up of credit cards ("hit the banks where it counts") to "use technology to make education free."

For all such utopianism, the possibility that peaceful mass action, helped by new technologies, can bring real change has been reinforced by the success of Arab uprisings this year.

"I've been waiting for this protest for a long time, since 2008," said Daniel Schreiber, 28, an editor in Berlin. "I was always wondering why people aren't outraged and why nothing has happened and finally, three years later, it's happening."

Quite what is happening, though, is hard to say. The biggest turnouts are expected where local conditions are most acute.

Italian police are preparing for tens of thousands to march in Rome against austerity measures planned by the beleaguered government of Prime Minister Silvio Berlusconi.

Yet in crisis-ravaged Athens, where big protests have seen violence at times of late, a sense of fatigue and futility may limit numbers on Saturday. In Madrid, where thousands of young "indignados," or "angry ones," camped out for weeks, many also feel the movement has run out of steam since the summer.

Germans, where sympathy for southern Europe's debt troubles is patchy, the financial center of Frankfurt, and the European Central Bank in particular, is expected to be a focus of marches calling by the Spanish-inspired Real Democracy Now movement.

Complicating German sentiments, however, a series of small bombs found on trains has stirred memories of the left-wing guerrilla attacks that grew in the 1970s from frustration at a lack of change after the student protests of 1968.

CITY OF LONDON British student protests a year ago were marked by some acts of violence by what authorities say were hard-core anarchists. Days of looting in London in August were put down to motives that mingled political discontent with criminal opportunism.

As an international center of finance, the City of London is key target. But organizers know strong police powers make setting up a Wall Street-style protest camp there far from easy.

"There's quite a bit of fatigue setting in," said one young veteran of last year's protests against higher university fees. "But if it's still going by Monday or Tuesday, I think that will excite students and they will head down. The City is much more the focus of people's anger now,

compared to a year ago."

A long Saturday of rallies may start in New Zealand, where the Occupy Auckland Facebook page provides links recommending "suitable clothing ... a sleeping bag, a tent, food" -- but, in a family-friendly spirit, strictly no drugs or alcohol.

Asian authorities and businesses may have less to fear, since most of their economies are still growing strongly.

Tracking across the time zones, through towns large and small ("Occupy Norwich!" reads a website from the picturesque English city), the New York example has also prompted calls for similar occupations in dozens of U.S. cities from Saturday.

In Houston, protesters plan to tap into anger at big oil companies. As the world's day ends, hardy souls will be marching in Fairbanks. "We will be obeying traffic lights," insist the authors of OccupyAlaska.org, and they "will be dressed warm."

History suggests such actions are unlikely, of themselves, to change the world. As one anonymous poster at 15october.net writes, "Fleshing out ideas into living reality has always been the bugbear of radical politics." And while anger at corporate greed is widespread, there are plenty of voters who would agree with the Australian who posted on the OccupySydney site that those marching will be "the lazy, the paranoid, the confused."

But some analysts do see a potential for political change.

Jeff Madrick, a prominent economics writer, speaks warmly of the serious and reasonable debate he found at Zuccotti Park. Revolutions may be rare, but the protests could push lawmakers to act on some of the demands, he said last week: "It may begin to change public opinion enough to give Congress, people in Washington, the courage of their own convictions."

Move On Tries to Take Over Occupy Wall Street Protests Washington’s Blog October 15, 2011 Move On Tries to Co-Opt the Protests David DeGraw – one of the primary Wall Street protest organizers – just sent me the following email: Top MoveOn leaders / executives are all over national television speaking for the movement. fully appreciate the help and support of MoveOn, but the MSM is clearly using them as the spokespeople for OWS. This is an blatant attempt to fracture the 99% into a Democratic Party organization. The leadership of MoveON are Democratic Party operatives. they are divide and conquer pawns. For years they ignored Wall Street protests to keep complete focus on the Republicans, in favor of Goldman’s Obama and Wall Street’s Democratic leadership.

If anyone at Move On or Daily Kos would like to have a public debate about these comments, we invite it.

Please help us stop this divide and conquer attempt.

DeGraw – who is wholly non-partisan [like the writers at Washington's Blog] – tells me that about half of the protesters are liberals, but the other half are libertarians (and see this.)

This mirrors what one of the original organizers of the “Occupy Trenton” protest told me: MoveOn attempted to set the agenda and pretend it was their event.

As I noted last week: Everyone’s trying to cash in on the courage and conviction of the Wall Street protesters.

People are trying to associate Occupy Wall Street with their pet projects, in the same way that advertisers try to associate the goodwill of the Super Bowl, NBA playoffs, World Series or Olympics with their product.

But I hear from OWS organizers that the protesters come from totally diverse political affiliations. Many protesters support Ron Paul, many like Obama, others are for other parties or candidates or don’t vote at all.

The protesters themselves are having none of it, tweeting today: We don’t want to be the democratic tea party or liberal tea party. We want to be our own movement separate of any political affiliation. Update: Another tweet from the protesters: We don’t represent liberal interests nor are we the liberal tea party. We represent the interest of the 99% And as I pointed out Tuesday: The two main challenges [facing the protesters are]: (1) An attempt by both the Democratic and Republican parties to co-opt it (see this, this and this); and (2) agents provocateur (see this, this and this) [and here].

ITS SIMPLE END THE FED