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Occupy Wall Street: A Banker Explains What REALLY Happened to America


 
This is a guest editorial from Dangerous Minds reader Em, expanding on some pointed commentary he’s made elsewhere on this blog. Em—who’ll keep his last name to himself, thank you very much—works in the financial industry:

During the 2008 economic crash I was employed by a large British multinational bank and, as a result, watched from abroad as the economy of my home country collapsed. Now that I’m employed by a big US multinational here in the Citi of New York, my opinion about what happened hasn’t really changed. Unfortunately, until the recent Occupy Wall Street protests, it looked as if the right was going to successfully rewrite the story of what caused the US financial collapse by knitting together their usual mishmash of half-baked economic nonsense while the so-called ‘left’ (ie, anyone who didn’t buy into the rapidly solidifying narrative) sat on the sidelines, apparently unable to counter these idiotic and demonstrably false notions. You know the theories: Rich people create jobs, Unions kill competitiveness, and the financial collapse was caused not by too little government intervention, but too much, through the quasi-private Fed. In other words, all the things that seemed directly opposite to what the real causes were (and continue to be) of the US’s fiscal woes.

The reality, of course, is just the opposite of what’s often said, and all you really need to do is take a quick look at the facts.

Put simply, the problem with our current economic situation in the US is that the middle class was effectively de-capitalized starting in the late 1970s and in particular starting with the presidency of Ronald Reagan.

This matters because it’s not the wealthy that create jobs, it’s the middle class. A fact: 65% of all job creation in the US occurs in companies with 50 employees or less. This is clearly not the realm of the ultra-rich, who have no real desire to create another large company. In fact, the idea that cutting the personal taxes of, for instance, the CEO of my company would create more jobs is laughable. Would he use his own money to hire additional employees? The idea just doesn’t make any sense. No, jobs are created by the middle class as they try to become wealthy, but only if the middle class is sufficiently equipped with capital, education, free time and other basics.

One accidental byproduct of the labor movement of the early 20th century was a strong middle class that had access to education and other basic services. More importantly, with Union wages, they now had some excess capital which they bet on countless small opportunities they saw in every sector of the economy. As those businesses developed, they gave rise to the unprecedented economic growth and prosperity of the 1950s and 1960s and, of course, plenty of jobs. A particularly timely example in fact can be seen in the story of Steve Jobs, who came from working class parents and started Apple computers in a garage. All of the jobs created by Jobs at Apple computer were therefore a result of second-generation working class prosperity and capital, combined with a solid education system. That’s the American story, not “give billionaires more money and they’ll make more jobs”.

So what happened to our economy? What caused the fiscal collapse? Simply put, the financial collapse of 2008 was the result of a long-term assault on the working class, particularly in the form of Union Wages. Starting with Ronald Reagan and his sacking of the striking Air Traffic controllers, the US began a long, steady assault on Union power and wages in the US. For instance, in 1983 US Union membership was at around 20%, whereas today it is merely half that. Globalization hasn’t helped, as workers were repeatedly told that their high union wages were causing their jobs to be sent overseas. As a result, through the 90s and into the first decade of the 20th century, the working class had been in effect de-capitalized and prevented from investing in all of those opportunities that working people have always seen out of the corner of their eye, as they shoveled coal, or wired up office buildings, or sold home heating. And because all of those businesses were never started, they therefore never grew into larger businesses thus generating all of those jobs that the businesses of previous generations had created.

Of course, there have been ‘drugs’ administered that allowed us to ignore what was really happening and the vast gaping wound that was developing: One of these drugs was ultra-cheap capital, and as the wealthy (who were already wealthy and didn’t need to create new businesses) looked for places to put their money, Wall Street obligingly created special derivative securities that allowed, theoretically, the true risk to be tamed and (they claimed) packaged, so that the wealthy could invest in the housing market, this latter of course spurred on by the cheap money the Fed was throwing out limousine windows on The Street.

Were it not for the housing bubble, we might have noticed that the economy had been hollowed out and shipped largely overseas. We therefore convinced ourselves that everything was going fine, and that ‘laissez faire’ capitalism was continuing to deliver the goods.  This was, of course a lie: This was by no means laissez faire and those most particularly hoodwinked by the shell-game economy thought that the Fed was to blame.

Of course, the Fed was sort of to blame, but the fact was that the Fed was really just overextended, using its special powers to cover the deepening hole in the economy.

You could, of course, argue that all of this was inevitable: With China and the BRIC countries coming on line and driving the cost of manufacturing down to practically nothing, the Unions had to give up their gains or else jobs would have departed the US even more quickly.

That, of course, is also bullshit. An interesting fact: The two European countries with plenty of extra cash, Germany and Sweden, are also the two most unionized countries in the western world. What? Yes: Germany in particular is practically pwnd by its auto worker unions, and the result is a stable and prosperous economy, with plenty of cash left over even after absorbing the economic basket case of East Germany (remember them?). Meanwhile, Mercedez and BMW continue to clobber Detroit, so the problem clearly isn’t too much union power in the US: It’s too little.

Come to think of it, why is it that unionized workers in the US have had to compete with third-world wage slaves working in dangerous factories that belch hideous levels of pollution into the rapidly heating skies? Of course, a truly protectionist trade policy would make US goods uncompetitive and keep us beholden to US factory bosses. But a carefully deployed trade policy that protects US union gains by making the playing field level, that’s what is necessary. In other words, there should be significant tariffs on goods coming into the US that are made in countries that do not have real pollution controls in place, or that subject their workers to inhumane or dangerous working conditions.

So that’s it: The US sold out the middle class in order to benefit a group of extremely wealthy individuals who aren’t equipped to efficiently utilize such high concentrations of capital. The right argues that this is good for business and results in jobs, but the reason this clearly does not work is because the right’s economic theories are based on a revisionist history in which the US unions never existed. The unions did exist in the US, and for a time they were reasonably (though not overly) powerful, and to that same extent we enjoyed a few generations of prosperity that will never return unless we examine the facts carefully and divest ourselves of all of the pseudo-economic theories of the right.

About the author: Em was a founding member (with John Cale and others) of the New York punk band Doppler Effect in the early 1980s. After living in China in the late 80s, Em worked in the physics and electrical engineering space until 2002, at which time he moved into the financial world. In July of 2010, Em returned to the US after living in London for several years. He is a member of the UMOUR art/event collective. He blogs at The Magic Lantern, his"litterbox of the soul.”

Posted by Richard Metzger | Discussion
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Dead Man Walker: Huge recall effort gears up to recall WI governor


 
The results of the recall elections of the WI state reps might have been mixed, but that was then and this is now. Just a few months later, the political headwinds have shifted suddenly. I don’t think things look too promising for the continuing political career of Scott Walker. It’s time to make it hot for this bastard.

Via AlterNet:

Organizers in Wisconsin will have 60 days to collect 540,208 signatures as they announce plans to kick off an effort to recall Governor Scott Walker, the man whose extreme levels of union-busting intransigence led to hundres of thousands of protesters descending on the capital, in a standoff that riveted the nation and led to a resurgence of pro-labor activism. One group, United Wisconsin already has over 200,000 promised recall signatures through its organizing efforts.

On the Ed Show last night, Wisconsin Democratic Party Chairman Mike Tate explained why, after deliberation, the party along with groups of activists forged during the protests had decided to go forward with this action, feeling that they couldn’t wait any longer to try to recall Walker. Video of their conversation is embedded below.

If the drive is successful, elections could potentially be held in Spring 2012. Find out official information here. (It’s a testament to the popularity behind the recall that there are quite a few unofficial recall Walker sites flooding the web already!)

 

Visit msnbc.com for breaking news, world news, and news about the economy

Posted by Richard Metzger | Discussion
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Occupy Wall Street: One of the 1% in solidarity with the 99%
10.11.2011
10:37 am

Topics:
Class War
Current Events
Politics

Tags:
Occupy Wall Street
1%


 
Some idiots will no doubt think this young woman is a “class traitor” but history will make fools of them.

Thank you, Glen E. Friedman!

Posted by Tara McGinley | Discussion
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Chilling video: Police get aggressive with veterans at Occupy Boston


 
I’m not anti-cop and I never have been, but there’s quite something disturbing about what happens in this video.

Via Joan Walsh at Salon, who calls this the “worst” moment of Occupy Wall Street so far:

On Monday night, Boston police broke up the Occupy Boston protest, and in the process, they tore down an American flag and knocked down at least one American military veteran.

A group of Veterans for Peace stood in a line in front of the Occupy Boston protesters, and after the police warned the entire group to disperse, a line of cops marched out of the darkness and seemed to move on the veterans first.

John Nilles, a 74-year-old Vietnam veteran, told the Boston Globe he was knocked down during the arrests. “I have absolutely no use for police anymore,” he said. “I don’t know what I’m going to do.” You can hear protesters on the video screaming over and over, “We are veterans of the United States of America.” It’s chilling.

The video is dark, so it’s hard to see exactly what’s happening, but when the American flag starts to totter, it’s like the Iwo Jima moment in reverse.

What compelling reason was there for this eviction to occur in the first place? These folks weren’t hurting anyone, they were just being good citizens. They’re standing up for themselves.

This is an extraordinary time in American history. The police officers who were involved with this action need to ponder which side they’re on.
 

 

Posted by Richard Metzger | Discussion
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Glenn Beck warns of the coming of the ‘violent left’


 
At the ultra-conservative Values Voter Summit over the weekend, Glenn Beck, eager to demonstrate his old skool soothsayer prowess, claims he foretold of the “violent left” coming two years ago, but only succeeds in looking like a man on the wrong side of history…
 

 
UPDATE: Here’s Beck from his show today saying that the Occupy Wall Street protesters will “kill everybody”!
 

 
Via Right Wing Watch

Posted by Richard Metzger | Discussion
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Slavoj Žižek speaks to Occupy Wall Street


Portrait of Slavoj Žižek by Luca Del Baldo (his other work is amazing, too)

Look what you’re missing if you’re not at Occupy Wall Street! This occurred on Sunday.

I’m going to NYC in a little over a week and I cannot wait to see what’s going on in Zuccotti Park with my own eyes. How awesome would it be to see Slavoj Žižek just show up and speak?

Via AlterNet:

The latest in a long parade of intellectuals, celebrities, pop stars and all types of creative people to visit the occupation down at Liberty Plaza was Slovenian philosopher and public intellectual Slavoj Zizek. 

Zizek addressed the crowd through the “People’s Mic,” standing above the crowd and limiting his words to short phrases that were easily repeated by the crowd. “The problem is the system,” he told the protesters.

“Carnivals come cheap. What matters is the day after, when we will have to return to normal life. Will there be any changes then? I don’t want you to remember these days you know, like ‘oh, we were young, it was beautiful.’ Remember that our basic message is ‘We are allowed to think about alternatives.’”

It’s a holiday today, right? If you live in the NY metro area (or you’re near the train lines in NJ or CT), today is probably a great day to go and show your support.

Can you imagine being a Berliner who stayed home when the wall fell? Don’t be a lazy idiot, this is fucking history in the making. Go support Occupy Wall Street today!

And if you are not convinced, then READ THIS and I’ll bet at least a few of you who were on the fence will go after that…
 

 
Part II is after the jump…

Posted by Richard Metzger | Discussion
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99%: A soldier takes the fight to Bank Of America at Occupy Austin


 
Here’s a video I shot yesterday at Occupy Austin. It’s one of the rare moments in which something real broke through the empty rhetoric and hippie dippy slacker vibe that has dominated Austin’s shamefully disorganized and ineffective attempt at solidarity with the Occupy Wall Street movement.

I asked my friend and New York activist Marty Weinstein to write a piece to accompany the video. He has a keen sense of what went wrong with America’s deranged banking system and brings some passion and fire to the mix which provides counterbalance to my feelings of dismay with the way things are going in Austin. But I’m not going to allow my frustration to stand in the way of my own personal revolution. Today, my mission is to get Andrea and Arianna’s story out there - one of millions from the 99%. I may be disillusioned on a local level,but I am solidly behind OWS and will continue to do what I can to keep the fight alive in the Capitol of Texas.

If the video you see here doesn’t get you off of your couch and into the street to join the Occupy Wall Street movement, I have doubts about your humanity.

Andrea, Arianna and her sister are just 3 voices of the millions in the 99% of this country who have fallen victim to the bottomless pit of greed in our banking system. This system has bought the government, its regulators, and the mortgage rating services so they could enrich themselves off the backs of the working middle class. As of right now, 30% of the homes in America are either in foreclosure or have lost so much of their original value that their worth is far below the price of the mortgage. This destruction of the housing market is the core of what is driving the nation’s economy back into a recession.

Andrea served in the military, and when her service was done only wanted to start a life with her young daughters. She was fortunate to be assisted by Habitat For Humanity, and she spent her own sweat equity just to afford a decent place to live. She has lived in that house for 15 years. Unfortunately the rigged system that allows mortgages to be re-sold put her in debt to Bank of America, one of the 6 largest financial institutions in the country, with assets totaling $1.4 trillion.

When the banking crisis hit in 2008, Bank of America received $20 billion in bailout money from U.S. taxpayers, and an additional $118 billion in guarantees against bad mortgage loans. Instead of approaching their customers with their despicable tail between their legs, they chose to punish their debtors with increased charges, and in Andrea’s case raised her affordable mortgage payments by a whopping 95%. Andrea would have done better dealing with the Mafia.

This is a story of someone who served her country and is now having her entire family’s life be destroyed by that country. They are the 99%. So are you. - M. Weinstein


Update: Here’s an article about Andrea Simpson-Jones from a 1995 issue of a University of Texas newsletter. The article, “Building The American Dream,” communicates Andrea’s profound hope for a better future at a time when things did start looking up for her. It is a tragedy that 16 years later her dreams may be crushed by a system that no longer encourages dreams but is in the business of manufacturing nightmares.

My interview with Andrea and Arianna begins at the 4:46 point in the video. In the short time that I spent with them, I came to admire them deeply. This is the fuel that keeps my motor running.
 

Posted by Marc Campbell | Discussion
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Rep. Eric Cantor:  Craven toady of the rich; man on the wrong side of history


 
Republican House Majority Leader Eric Cantor puked up the following ruling class talking points about Occupy Wall Street onstage at the 2011 Voter Values Summit in Washington, DC, this morning:

“If you read the newspapers today, I for one am increasingly concerned about the growing mobs occupying Wall Street and the other cities across the country.”

“Believe it or not, some in this town have actually condoned the pitting of Americans against Americans.”

He really ought to be concerned, if you ask me…

Some see the 99%, while others see only “mobs.”

It’s almost funny. Almost.

The clip isn’t online anywhere, yet, but even hearing his voice saying this shit in my mind as I read it is painful enough. I’m not sure I want to actually hear it. As TPM points out:

Seeding concern about the relatively undefined protest movement spreading across the county is a growing movement among the right. Tea Party types are turning the past criticisms of their movement on Occupy Wall Street. Meanwhile Republican presidential candidates are casting it as some kind of revolt by the poor.

For their part, Democrats are not sure what to do.

Republicans seem to have found their footing on Occupy Wall Street however, and Cantor exemplified it well today.

The “Clue Train” could smack these guys in a head-on collision and they wouldn’t feel a thing, would they?

Update: Here’s the video, it’s special:
 

Posted by Richard Metzger | Discussion
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‘Occupy Austin’ day one: 2000 gather at peaceful protest
10.06.2011
09:03 pm

Topics:
Activism
Class War
Politics

Tags:
Occupy Austin


 
Day one of Occupy Austin has been orderly, enthusiastic, and free of any confrontations with police. An estimated 2000 people were massed in front of City Hall when I left the scene earlier this evening. It was a diverse gathering, ranging from young granola heads to gray-haired retirees, the unemployed, students, cowboys, members of the military and office-workers. The crowd was predominately white and anglo, but the number of Hispanic activists was encouraging. In Texas there can be no political uprising without the support of the Mexican-American community. Fortunately, Austin has one of the most vital, proud and potentially powerful Hispanic populations of any state in the Southwest and I think they’re going to become increasingly engaged in the OWS movement.

Overall, the atmosphere was festive, with pockets of people engaged in political discourse and speculation as to how long the occupation will last and in what form it will manifest.

It is against Austin city ordinances for the protesters to pitch tents or sleep overnight in the area around City Hall, so the occupation is quite limited in contrast to what has been taking place at Zuccotti Park in New York City. Many of the protesters say they may disregard the law and attempt to pitch tents or lay down bedding around City Hall. That would be the first test to see how much Austin authorities and the chief of police are willing to bend. So far the cops seem to be enjoying hanging out with the crowd and soaking in the sun. Hopefully they’ll continue to serve their roles as peace keepers.

I expect the crowds to grow over the weekend and I’ll be there to add my voice to the mix and film the action.

Here’s a short hi-def video I shot of today’s protest. The photos are by Mirgun Akyavas. Watch it full screen.
 

Posted by Marc Campbell | Discussion
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‘Drive their stock price to zero’: Max Keiser’s advice to the Occupy Wall Street movement


 
Iconoclastic financial commentator Max Keiser with a (very) good suggestion for a longer term strategy. This needs to get passed around.
 

Posted by Richard Metzger | Discussion
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