Why aren’t people out there on the street, burning a bus or something?” I’ve been asking this question for almost as long as it took me to absorb the fact that the generation going to be worse off than their parents, for the first time since the 1930s depression, seemed to be calmly living the crumbling American dream,watching a tiny group of rich incumbents feed off the system. One in six is poor in America. One per cent of the rich have a net worth more than the bottom 90% together. Real wages have remained almost stagnant while productivity has gone up. Worse, from 1985 to 2005, 80% of the wage increase went to the top 1% of population. No wonder more and more young people are living with their parents than ever before because they can’t afford housing and have no jobs or have low-paying jobs. “And you’re not angry?” I’ve been obsessively asking.
Answers have varied from people believing in the American dream of having the opportunity to become a millionaire and therefore not wanting to curb enterprise through government action, to the poor simply not voting and therefore unable to voice their frustration at remaining poor. A dean at a Yale college has an insight. Part of youth insurgencies in her college days, she was in a core group of the student protest, was wire-tapped and took the government to court in a class action suit. “Could it be that we, who were protesters, are now in positions of power and know how to deal with the discontent?” she questions herself.
I find the protest I am looking for eerily quickly. It begins almost as a joke. Dismissed as taking up space that construction workers use to eat lunch, and a spark on wet grass, the Occupy Wall Street protest (occupywallst.org) began as a raggedy bunch congregating on Wall Street on 17 September. Now onto its third week and gaining traction, it’s beginning to spill over to other cities. The arrest of 700 peaceful protesters on Sunday, 2 October, synchronously the birth anniversary of Mahatma Gandhi, will act as the firecracker event. Nothing gets middle-class attention as much as one of our own getting arrested for peacefully protesting.
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What’s the protest about? Americans are protesting (finally) the concentration of economic power in the hands of a few. It aims to “end the monied corruption of our democracy” (http://www.adbusters.org/campaigns/occupywallstreet). People want jobs, more equality and less Wall Street. That Wall Street has become the target is not surprising. The lack of pain felt by the financial sector hurt real people badly enough, but what may have finally prompted action were comments like the one a day trader made on the BBC last week. He said “governments don’t run the world, Goldman Sachs does” and that he dreamt of another recession (http://www.bbc.co.uk/news/business-15059135). A recession to real people is about not having jobs. Of losing your home. Of not having medical care. Global finance has got detached from what happens to people—as long as the money keeps coming, it doesn’t matter who gets hurt.
Governments have been sluggish in putting things right and even the small steps are looking too tiny and too late. Change is coming more from Europe than the US. A financial transaction tax (FTT) is on the anvil in Europe to put a dampener on hot global financial flows. But Europe imposing an FTT without the US and the UK doing so will just move hot money to other markets. The mass protest may actually help those in the government that see the need for more such moves but find the political gridlock impossible to navigate. These reformers will do well to remember that to use regulation as a stick will work for a while, but loopholes will be found by the global monster that has been created that needs cash to stuff into its mouth in larger and larger quantities. This may be the time to rethink incentives at a conceptual level. Incentives have been used to reward excessive risk taking and shareholder interest. We need to rework them such that the corporation (shareholders and the management) finds it in their interest to look after employees, consumers and the wider environment in which they operate.
Message to @OccupyWallSt and https://occupywallst.org/: Go to http://www.indiaagainstcorruption.org/ and hook up with people who ran one of the smartest protest camps in the world. It is easy to fight against a dictator—the enemy is defined. It is much tougher to define the enemy within. Corruption, like inequality, is difficult to get a handle on. Pegging the fight against corruption to a movement to get an anti-corruption Bill through Parliament gave the street protest a strategic core around which people could gather. Take a quick poll in India and except for the erudite talking heads and op-ed writers, not many can tell you what the Lok Pal Bill really says. But the Lok Pal Bill, as constructed by Team Anna, is according to the mass middle class in India, the road that leads out of corruption.
Certified financial planner Monika Halan is editor, Mint Money. She writes on issues of financial literacy and investor protection and is currently at Yale as World Fellow 2011. She can be reached at email@example.com