Saturday, October 15, 2011

America: Land Of Opportunity No More

Money & Society

The New York Stock Exchange, a Gambling Pit:  As Vince Cable, British cabinet minister, has said: "Investment banking has, in recent years, resembled a casino, and the massive scale of gambling losses has dragged down traditional business and retail lending activities as banks try to rebuild their balance sheets. This was one aspect of modern financial liberalization that had dire consequences."
I have been following the Occupy Wall Street story, reading accounts in various media, including The Wall Street Journal, Bloomberg Businessweek, and The Telegraph. The common thinking among the mainstream media is that the persons part of this movement have no clear message, or at least an unclear and inchoate one, full of rantings and ravings and mixed-up left-wing ideology. Or their target ought to be Washington. Or they ought to stop protesting, take a shower and get a job. Of course, this is the message that the mainstream, now mostly, corporate conservative media want to impart to its readers. These kids are mixed up and lazy.

Perhaps not. Paul Krugman and Joseph Stiglitz, both Nobel laureates in economics don't think so, lending their support to the ideas behind the movement (See here and here).

Of course, there is a message, but it might not be as clear as it ought to be. The protesters want change, and remember protest is a legitimate constitutional and fundamental right in a democracy; in totalitarian states, well, that's another matter. The protest is about opportunity, or rather, the lack of opportunity for persons, notably the young, college and university graduates. They want jobs; they want to work at a time in history when almost 24 million Americans do not have a full-time job. And things are not looking better.

Consider the following. In "A Flight Plan For the American Economy, Fareed Zakaria  writes in
Right now we have our priorities badly skewed. We spend far too much on retirement and health care programs for the elderly, the Defense Department and tax exceptions and deductions for the middle and upper classes. But we spend far too little on the investment programs that will create good new jobs for the future. We need to do both in a grand national rebalancing — and we need to do it fast.
That was written in June 2011. Seven million jobs have been lost since the 2008 economic meltdown, and millions more were lost before then. Whatever jobs have been created since then have been chiefly low-paying part-time jobs, paying less than $20,000 a year. The majority of jobs lost were good, well-paying jobs. The problem is that there are now no jobs for the young, and certainly none for which they were educated. If they are complaining about the inequity in the distribution of wealth, it's worth listening to.

In America, there is a strong bias against slothfulness and handouts and an equally strong favoritism toward self-sufficiency and the work ethic. It can be boiled down to this: "If you don't work, you won't eat," whose origins are found in the New Testament teaching of Paul the Apostle in the Second Book of Thessalonians, chapter 3, verse 10.

As for why Wall Street is the target of their wrath, that's also plain to understand. Wall Street has become the symbol of what is wrong with America, including overly influencing the federal government's fiscal and economic policies. (For more, see What Does Wall Street Really Do?)  When it received a huge bailout (handout) from the government, through its 700-billion-dollar TARP program, something not available to hard-working middle-class taxpayers, it sent a clear message to regular individuals that the democratic capitalist system that they admired and supported was now officially broken. In short, they received money for failure.

Which leads to the idea: It's not working for the vast majority of persons. It's not that Wall Street is bad; it's just not good. At least the way it is today. When banks don't lend and Wall Street doesn't invest greatly in new technologies and in new companies, it doesn't serve the purposes of capitalism. It serves itself.

Reform Wall Street

That's the central message. Wall Street needs reform if it is to (once again) become a central part of democratic capitalism. As it stands now, it has become a private club (bank, if you will) to enrich the lives of the few privileged elites. Such a system, full of apparent inequities, cannot sustain itself for long. As for self-regulation, it cannot work for the same reason that you can't expect foxes to guard a hen-house, or pigs to stop eating (see On Excesses).

It goes against human nature to expect humans to self-regulate, to stop themselves from taking, if the taking is easy and without cost or consequence. After a while, such worthies think it their right and privilege—business as usual. As President Obama suggested about Wall Street, they might not have broken any laws, but what they did was morally wrong.

It's not about a revolution, literally or figuratively. It's about reform and badly needed legal regulations with teeth and real penalties that would bring capitalism and the entrepreneurial spirit back to America. Laws when applied fairly can turn the avaricious heart fearful, at least for most persons.

If America would bring fairness back into the financial and economic system, other nations would follow suit, starting with the other G8 industrialized nations, including my own, Canada, and then the rest of the G20 nations might follow suit. Reform is better than revolution, since revolutions are bloody, murderous and vengeful, taking decades to recover from the destruction and have viable results. The American, French and Russian Revolutions are but a few examples.

If the message of Occupy Wall Street is to reform Wall Street and bring a renewed form of democratic capitalism to America, where persons have equal opportunity to jobs and to capital, then it's a message I support. Then, it might soon become the Land of Opportunity, once again.

I know. . . it's only a dream.