Home > #OWS, finance, news, rant > Wall Street and the protests

Wall Street and the protests

October 13, 2011

Today I want to update you on my involvement with the Occupy Wall Street protest and also make an observation about the defensive behavior we see by the Wall Streeters themselves.

Update

Yesterday after work I went back to the protests and looked around to offer a teach-in. Unfortunately it hadn’t been sufficiently organized: the contact who had originally invited me wasn’t around, and hadn’t confirmed with me on email, and nobody else knew anything. It was also very windy, threatening rain, and the noise of the drumming was overbearing. There were drumming circles on two of the four corners of the square, and in the other two corners there were already meetings going on. It would be great if the protests could restrict the drumming area so that people could actually talk.

However, I kind of suspected this would happen, so I wasn’t disappointed. I handed out some flyers with a few friends that met me down there, and I met a few new really interesting and engaging people. I got re-invited to give a teach-in by a very nice man named Rock, who took my information.  Rock suggested a daytime talk sometime around noon, and this sounds about right. Hopefully this will pan out, but even if it doesn’t now I have a flyer to distribute and it’s a conversation starter if nothing else. One of my friends also suggested having a t-shirt made with the phrase, “ask me about the financial system” printed on it. I think this is a great idea. I will go back down and be involved when I can make the time.

Also, I wanted to share Matt Taibbi’s column about the protest. His five top demands have a lot in common with the ones we came up with here.

Act Crazy

You know how some people win fights even though they’re not big or strong? They act totally crazy and angry, and it works because it confuses their opponents. This is what I think the tactic of the big bosses on Wall Street is right now. They’ve got Tim Geithner talking about it:

“They react to what is pretty modest, common sense observations about the system as if they are deep affronts to the dignity of their profession. And I don’t understand why they are so sensitive,” Geithner said at a forum hosted by The Atlantic and the Aspen Institute.

We’ve also seen Paul Krugman address this:

Last year, you may recall, a number of financial-industry barons went wild over very mild criticism from President Obama. They denounced Mr. Obama as being almost a socialist for endorsing the so-called Volcker rule, which would simply prohibit banks backed by federal guarantees from engaging in risky speculation. And as for their reaction to proposals to close a loophole that lets some of them pay remarkably low taxes — well, Stephen Schwarzman, chairman of the Blackstone Group, compared it to Hitler’s invasion of Poland.

The overall idea is to act like they are the victims somehow. Actually there’s another article in Bloomberg about the Wall St suffering, which I find fascinating as a phrase, and which contains passages like this one:

Bankers aren’t optimistic about those gains. Options Group’s Karp said he met last month over tea at the Gramercy Park Hotel in New York with a trader who made $500,000 last year at one of the six largest U.S. banks.

The trader, a 27-year-old Ivy League graduate, complained that he has worked harder this year and will be paid less. The headhunter told him to stay put and collect his bonus.

Here’s the thing. They are suffering, in exactly the same way that a child who is spoiled suffers when they are told they can’t get a toy in a store that they want even though they have one at home just like it. But that’s not real need, that’s a temper tantrum. It’s the parents’ responsibility to ignore that kind of posturing and establish reasonable expectations. But the analogy becomes kind of painful here, because who are the parents?

I guess you’d want them to be the government, or the regulators, but the problem is that those groups have shown the same lack of imagination (or fear) of a new world as the people on Wall Street.

So even though the protests are disorganized and sometimes annoying, the very fact that they are putting pressure on the system to fundamentally change is why I will continue to support them.

Categories: #OWS, finance, news, rant
  1. October 14, 2011 at 4:37 am

    Matt Tabi’s demands sound eminently sensible. i think a tax per transaction might be better than a percentage tax. Currently there is an incentive to try and hide large transactions from the market by breaking them up into several smaller transactions and putting them through ‘dark pools’. Fewer, larger transactions would aid market transparency.

    The Paul Krugman article is excellent!

    In the Bloomberg article we find:

    “I don’t think it’s a time to make money — this is a time to rig for survival,” said Charles Stevenson, 64, president of hedge fund Navigator Group Inc. and head of the co-op board at 740 Park Ave. The building, home to Blackstone Group LP Chairman Stephen Schwarzman and CIT Group Inc. Chief Executive Officer John Thain, was among those picketed by protesters yesterday. “The future is not going to be like a past we knew,” he said. “There’s no exit from this morass.”

    which seems to agree with Koo’s theories.

  2. Chris sheridan
    October 30, 2011 at 1:30 am

    Hi I heard that president wilson agreed to create the federal reserve before being elected, and since 1913 a private bank called the federal reserve loans all money to the government at interest. Doesn’t that mean that there will never be enough money in existence to get out of debt to that bank? Wasn’t the IRS also created by Wilson to ensure the interest owed to the private bank is repaid? If a private bank can print money to loan to us, why can’t we print our own money to pay back that loan? It seems unconstitional to me. Thanks

    • October 30, 2011 at 1:25 pm

      From FogOfWar:

      First, the Fed isn’t really a “private bank” in an important sense of the word: if the Fed makes a “profit”, 100% of that “profit” goes to the US Treasury, not any privately-owned institutions. Also, more than 1/2 of the Fed’s governing board is appointed by the government, with representatives also appointed by private institutions like JP Morgan (but a minority). Note that when you pay your taxes, you write the check to “U.S. Department of the Treasury”, which is an agency of the government (along with the IRS), and not private in any way.

      I’d say the IRS was created in 1913 in order to collect tax revenue for the government’s expenses. Tax revenue and government expenses existed pre-1913, but tax collection was limited in practice by the “direct apportionment” clause of the Constitution (e.g., the Revenue Act of 1861, and the Pollock decision). The 16th Amendment to the Constitution of the United States of America was ratified in 1913 and states:

      “The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.”

      Article III of the Constitution of the United States of America grants the Supreme Court the authority to interpret the US Constitution. The Supreme Court has addressed the 16th Amendment several times (including challenges to it’s proper ratification), and consistently finds the current system of taxation is fully supported by the Constitution.

      Hope this helps.

      FoW

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