More on Occupy Wall Street–Stiglitz and Madrick add their voices
by Linda Beale
More on Occupy Wall Street–Stiglitz and Madrick add their voices
Jim Swan, the Not-an-economist blogger who writes about “economics and the economy in the wake of the financial crisis”, is definitely a supporter of the Occupy Wall Street protest movement.
In an earlier post, I noted the addition of labor concerns to the voices supporting the movement–important, because so much of the impact of financialization of the economy has been to create a two-tiered social structure of privileged banker/investor/managers versus marginalized worker. Decades-long actions have undermined unionization–by limiting secondary strikes, by empowering employers to dominate workplace discussions, by weakly enforcing labor laws, by disempowering workers from forming unions, and now by the right’s efforts in the states to gut collective bargaining by public workers, in the process using a divisive technique of pitting private workers whose efforts to unionize have been hardest hit by the weakening of labor protections against public workers whose unions have given them more ability to claim decent wages. As a result, the vast majority of Americans find themselves with declining standards of living as wages stagnate or decline, while heads of big business rake in a bigger and bigger share no matter how the company actually fares, resulting in ridiculous golden parachutes for failed executives.
Notaneconomist notes the importance of progressive economic thinkers paying attention to the Occupy Wall Street group: see Occupy Wall Street? It’s About Time!, providing video and transcript links covering progressive economist Joe Stiglitz and economic historian Jeff Madrick addressing the group October 2. Part of the post follows.
Two excerpts from the Wall Street event (October 2):
Stiglitz: Our financial markets have an important role to play. They’re supposed to allocate capital and manage risk, but they’ve misallocated capital and created risk. We are bearing the cost of their misdeeds. There’s a system where we’ve socialized losses and privatized gains. That’s not capitalism! That’s not a market economy. That’s a distorted economy, and if we continue with that, we won’t succeed in growing, and we won’t succeed in creating a just society….
Madrick: The FBI actually told the powers that be that there was an epidemic of fraud in 2004 in the mortgage market. Washington and the Federal Reserve had the power to do something about that. They did not. The more bad mortgages went on, the predatory lending got worse, and the powers that be—in particular and let me name names, Alan Greenspan, the Chairman of the Federal Reserve—was able to retire in glory. Is there something with this picture? There sure is…
My only question is why the demonstrations didn’t happen sooner. Perhaps it has taken this long for it all to sink in. Not only did Wall Street recklessness create the crisis as government regulators looked on, but now bankers are back playing the same game and complaining of government interference, with no acknowledgment of the bailout that pulled them back from the brink.
Speaking of the bankers lack of acknowledgement of the bailout, Swan goes to NPR’s interview a year ago with Wall Street bar patrons (an investment banker, an institutional investor, a credit rating agency quant). That’s definitely worth reading in full at NotanEconomist (linked again in case you want to), but here’s the key part. After the interviewer suggests that the interviewees should acknowledge that all three benefited from the massive government intervention to protect the financial system, one of them says that the reason he still had a job was “because I’m a smart person”, not because Wall Street was bailed out. They view the fact that the industry was bailed out as irrelevant to their situation–they just used their smarts to take advantage of the situation and land well-situated.
originally published at ataxingmatter
VIDEO – Nobel Prize Winning Economist Joseph Stiglitz Addresses Wall Street Protesters – #OccupyWallStreet
looks like they’re having fun…
I have read (can’t remember where) that Rockefeller, Vanderbilt and Carnegie agreed in priniciple with the 16th Amendment because they saw it as an attempt to introduce fairness into the American economy. They already owned everything anyhow and they had cast a wary eye on the Russian Revolution and the spread of socialist governments in Europe. They concluded that paying a modest income tax wouldn’t kill them.
Fastforward a hundred or so years. Eric Cantor and others in Congress in conservative circles see the OWS people as dangerous mobs. We are now told that to impose a more progressive income tax on higher income people will destroy the economy, capitalism, and the American Way. That’s funny because they look like a pretty peaceful bunch to me. For one thing, I don’t see any guns and rifles, semi-automatic or otherwise, in the crowd which is armed, if at all, with signs, wierd masks and gawd-awful costumes. No white-face Joker signs or rattlesnake banners among them.
These people are young, energetic and determined. You can bet your bippy they’re going to vote and contribute to Move On and all those horrible Commie Pinko socialista organizations seeking to impose taxes on the heroic millionaires, hedge fund managers, and K Street lobbyists who got us where we are today. Yep, OWS is gonna be a real pain-in-the-ass, in one form or another, for a long, long time. Well, Wall Street, you deserve it. Take a lesson from the guys who invented robber baron capitalism. They could afford to pay taxes, and you can, too. NancyO
re: why the demonstrations didn’t happen sooner… there was hope in the political process for an election of a politician who offered promises and later hired Goldman Sachs….
What should be the onjective of the anti Wall Street 99’ers? A new party of the 99’ers. Take over the place with a new third party. Establish new rules. The internet and facebook allow networking that can overcome Wall Sreet’s Finance and control of America’s two traditional parties.
For new rules a societal useful technocracy can determine relative value of goods and services and use the soveign currency accordingly.
The biggest difference between the 1930’s and 2000 teen’s is that there is now a large population who have earned their social security checks. This QE mandated money is a tremendously stabilizing macroeconomic force in a depression.
The Federal Reserve Chairman understands this with QE 3-12 in the ante room for working classes’ social security and other useful projects and jobs for entry level workers.
Europe is, of necessity, dissolving; the money-debt-asset macroeconomy saturated with bad debt and overvalued assets – tied to bad debt- is transitioning with a denominating in time with the precision of physics.
Nice tax payers money at work w all those police watching.