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?