Update: Occupy Wall Street at One Year: What Impact Has the Movement Had?
publication date: Sep 24, 2012
Update: About a year ago, I wrote the article below about the increasing number of Occupy Wall Street (OWS) protests around the country. I critiqued the movement and compared and contrasted it to the Tea Party movement on the right. I also made some predictions for what impact OWS would likely have on politics, the economy and the stock market. (Please read article below.)
The movement looks to be fizzling and the media and public have lost interest. Google searches for OWS are down more than 98 percent from a year ago. I believe all of the predictions I made a year ago in the article below have come true.
Occupy Wall Street: Protester Gatherings Increase Around the Country
The "Occupy Wall Street" (OWS) protests that started in New York's financial district are spreading around the country. Some pundits are starting to see this as the left's answer to the popular Tea Party rallies than energized conservatives before the 2010 Congressional elections. Unlike the Tea Party however, OWS seems unable or unwilling to articulate what it is that they want (see video below from CBS Sacramento television reporter Tony Lopez).
They aren't shy, however, about voicing what they don't like which includes bankers, the highly paid and the wealthy. OWS blames the 2008 financial crisis and the continued high unemployment rate on Wall Street firms. That shouldn't be surprising since that's the constant refrain we've heard out of many liberal politicians in Washington since 2008.
The truth is that the severe recession of 2008 was caused by a multitude of factors. From my observations and analysis, there's plenty of bi-partisan blame to go around for the contributing role that government policies had contributing to the 2008 financial crisis. Playing the blame game, of course, isn't going to fix anything. And, now three years later, any politician (or group) seeking to mindlessly and simplistically affix blame to another politician or group doesn't deserve to be in public office.
The Bush administration, the far left argues, is to blame for the failure of Fannie Mae and Freddie Mac and the housing bubble and its subsequent breaking. If that's true, how then do they explain this New York Times article which clearly documents the Bush administrations' attempts to better regulate and oversee those housing loan agencies and the opposition of key Democrats like Barney Frank:
The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.
Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry.
The new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies. It would exercise authority over any new lines of business. And it would determine whether the two are adequately managing the risks of their ballooning portfolios.
The plan is an acknowledgment by the administration that oversight of Fannie Mae and Freddie Mac -- which together have issued more than $1.5 trillion in outstanding debt -- is broken.
''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.''
Representative Melvin L. Watt, Democrat of North Carolina, agreed.
''I don't see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing,'' Mr. Watt said.
My point in presenting these facts, which were ironically memorialized by the left leaning New York Times, is to show how they clearly contradict the conventional wisdom of what are clearly partisan political arguments.
But What about the Massive Income Disparities?
Many in the Occupy Wall Street (OWS) crowd are united in their belief that the U.S. economic system is unjust and yields too much to the people at the top. The highest income earners in America have annual incomes above $10 million. While I have done well in my career and I'm happy with my success, I will tell you that I have never earned anywhere near that amount of money (or even one million dollars) in my best years. I don't resent those who have earned much more than I have. Frankly, I don't really care! You don't need that much money to be happy and I can show you plenty of financially wealthy folks who aren't emotionally wealthy.
It seems that at least part of the unhappiness of the OWS movement is jealousy - and ignorance. In numerous interviews I've seen of the protestors, they say things like they want to "demolish" and "destroy" our economic system and identify themselves as socialists and even communists.
But these folks miss a very important point. Lower income earners in America are so much better off than the vast majority of people in the rest of the world and are so much better off than previous generations were in America. For some perspective on this topic, watch this insightful ReasonTV video hosted by Drew Carey:
What the Occupy Wall Street Movement Means to the Economy and Stock Market
Unlike the Tea Party movement which I correctly predicted would move Congress back to the political center in the 2010 mid-term elections, I don't see the Occupy Wall Street (OWS) movement having an important political, economic or stock market impact.
At a very local level, however, OWS is likely to harm some local merchants and increasing New York City costs. New York Mayor Michael Bloomberg complained that OWS is hurting the city's tourism and increasing its police costs among causing other problems.
We Need More Americans to be Paid $10+ Million
OWS is wrong about income disparities in America and their cause. The wealthiest Americans can now accumulate even greater wealth due to the globalization in many industries not because we have an "unjust economic system." The late Steve Jobs, for example, accumulated a net worth well into the billions of dollars because his creative products could be sold around the globe.
The more American entrepreneurs who succeed, the more highly paid, wealthy people will be created along with all the jobs within those companies.
And therein lays an important reason why we don't have more qualified people wanting to run for President of the United States. It pays a mere $400,000 per year, an amount that a successful orthodontist makes for straightening the teeth of teenagers, which is hardly enough compensation for all the stresses and downsides that come with the job.
The President should probably be paid at least $25 million per year if not more. And, how about giving the President a hefty bonus for accomplishing important milestones such as reducing the unemployment rate below a particular level?