Occupy Wall Street: In Search of Honest Capitalism

People complain that the Occupy Wall Street movement has no goals, even though the General Assembly has posted a clear statement of principles. I consider myself a part of this movement, and I’d like to state what I think this important protest needs to achieve.

I know a little bit about finance. No, actually, I know a whole lot about finance. I worked two years directly on Wall Street, and another two years before that for a banking research boutique, Loan Pricing Corporation (now known as Thompson Reuters LPC). In 1999 I made a personal profit of over $100,000 on a dot-com IPO (as I wrote about in my memoir of the Silicon Alley boom). I have gained and lost money on other stock market investments as well, and I’ve read many books about high finance, from The House of Morgan by Ron Chernow to Too Big to Fail by Andrew Ross Sorkin.


The American banking industry crashed in 2007 and 2008. Unfortunately, the dishonest practices that led to this crash have not been changed. Neither, largely, has the cast of characters siphoning money from the financial marketplace. Some people think we need a revolution, and they may be right — but before that, we need five concrete changes to take place before the American people can believe in the integrity of the banking industry again. Here are the five changes:


1. End inflated salaries

Inflated executive salaries aren’t just a symptom of the problem — they are the problem. If a bank executive is earning 10 million dollars a year, he is expected to produce more than 10 million dollars a year in value to that bank. How can he possibly do that? Honest investing won’t do the trick. Therefore, an executive earning $10,000,000 a year will inevitably begin engaging in shady practices to earn his keep.

Bonus-based pay on Wall Street began as an honest tradition. If a bank has an exceptionally profitable year and delivers great value for its stockholders and customers, it’s fair for the executives to get big bonuses. But honest banking is a hard, slow grind, and it’s not always very profitable. After a few good years in the 1980s, it became customary for banking executives to expect big bonus payments every year. This is where the problem began. What happened when the banks didn’t do well one year? Then the executives started spending all their time finding ways to ensure that, on the books at least, the numbers appeared to be exceptional even when they weren’t. So this became the main activity that has kept most of our Wall Street executives busy for the last few decades — at the expense of honest business.

I saw it with my own eyes in 1999 when I watched my dot-com company go public, underwritten by Goldman Sachs. Everything about that IPO was fishy, but it was a rollicking success. A year later, our stock was worthless. However, the executives who collected the fees got to keep their money.

American workers shouldn’t have to put their savings and investments into banks whose leaders earn more than ten times what the lowest paid employees of their banks earn. Let’s assume (optimistically) that a janitor employed by a bank earns $30,000 a year. I’d like to see that bank president earning $300,000 a year.

Does that mean that high finance will lose its Harvard rocket scientists, its analytic “geniuses”? I don’t think so — $300,000 a year is a nice wage for a smart person to earn. But any “genius” who thinks he needs to earn more than $300,000 a year may not be cut out for an honest career on Wall Street anyway. Good riddance.

2. Outlaw short selling

Short selling is a form of gambling, exactly like Texas Hold’em Poker. It should be made illegal, because it does a lot of damage. To short a company’s stock is to bet directly against that company’s success. It’s a vile concept, and the fact that short selling was a gigantic, lucrative market in the years leading up to the 2007/2008 crash should have been a crazy gigantic red flag to overseers that something was wrong. But the oversight agencies saw nothing wrong, and short selling is still legal, and still generating large profits, today! Why?

3. End hedge funds

The brokers will really cry if they have to let go of hedge funds and other so-called risk management derivatives. These instruments are extremely lucrative (though they do nothing to fund business or generate items of value). The credit default swap market was the single biggest cause of the crash of 2007 and 2008.

And yet, because they are extremely lucrative, hedge funds and credit default swaps and other risk management (hah!) instruments remain legal today. Why? They do not serve to help the growth of honest business in any way. They are simply profit-guarantee devices. In good years, they help to produce real profits. In bad years, they produce fake profits (to keep the $10,000,000/year executives looking good). This is what our executives spend their time working on, when they should be funding and investing in successful growing businesses.

4. Keep savings banks, investment banks and insurance companies separate

The purpose of a savings bank should be to guarantee depositor investments. The purpose of an investment bank should be to fund promising companies and bring them to success. The purpose of an insurance company should be to make sure that its customers are taken care of when hardships occur. These three businesses used to be honest businesses, and they need to become honest businesses again.

We used to have oversight laws, like the Glass-Steagall Act. Then these laws were gradually repealed during the 1980s and 1990s, as part of the bad idea (still inexplicably popular among Republicans today) known as Reaganomics. Our savings banks starting morphing into investment banks, and these conglomerates started morphing into insurance companies. These morphed entities (what’s a Citigroup? what’s a JP Morgan Chase?) still rule Wall Street today. Of course, all this morphing has done nothing to help the economy.

5. End bank merger mania

I can’t tell you how many freaking times the bank that holds my personal checking account has changed hands in the past ten years, and how many times the bank that holds my home mortgage has changed hands too. North Fork Bank becomes Capital One, Bowery Savings becomes Greenpoint Bank, Wachovia becomes Well Fargo. Who’s zooming who? How is this game of musical chairs helping to serve the customers of these banks, or helping the American economy?

Oh, that’s right — it’s not. Bank executives merge with each other when they run out of other ways to conjure up fake profits, other ways to explain their $10,000,000 salaries. Merger merry-go-round is taking place to this very day.

This is why we are occupying Wall Street.

The movement does not stand against capitalism, and it certainly doesn’t stand for communism. It’s a movement for honest capitalism. Honest capitalism in America — funding good emerging businesses so that they succeed — what a concept! Our bankers should try it sometime.

Some in the Occupy Wall Street movement thinks our financial system is too rotten, too corrupt to be saved. Indeed, this is the radical belief that the Occupy movement shares with the Tea Party movement.

I also believe our financial system is rotten as hell. I know it is, and Congress is rotten with Wall Street money too. This is why they won’t pass legislation to fix anything.

But, I think the American banking industry can be cured. I wish the Obama administration were doing much more about this, but I do appreciate that they have passed regulation that moves things in the right direction.

The Obamacare health care reform bill of 2010 was a small but an important step forward (no matter how much mud the Koch brothers sling at it). The Dodd-Frank finance reform bill of 2010 was also a step forward, though there is evidence that it is barely being enforced. Neither the Obamacare nor the Dodd-Frank regulations go anywhere near far enough.

But I do hope honest capitalism is possible in America. It sure is a far cry from the way business has been conducted on Wall Street since Ronald Reagan became President, though. Tough changes are required. This is why we’re occupying Wall Street, and (at last count) 900 other cities around the world today.

28 Responses

  1. 6. reject the excessively
    6. reject the excessively consumer-driven-dependent economy / mindset?

  2. Familiar pattern: You tell us
    Familiar pattern: You tell us (a few times) how much you know about the topic at hand and then invite us to debate…but only within the narrow parameters you define.

    Here’s what I know: I know many of the folks at OWS, I’ve been there a bunch of times, and I’m writing for the Occupied Wall Street Journal. So it’s 100% news to me that “it’s a movement for honest capitalism.”

    At least half the protestors seek to smash capitalism (with good reason) but if you choose to ignore that well, yet again, you’ve constructed a debate far too narrow to do anything except make the participants feel better about themselves for a few minutes.

    I can elaborate on OWS and capitalism but I doubt that will get me too far here. So, for now, my two recent OWS-related articles:

    http://www.fairsharecommonheritage.org/2011/10/02/bring-the-noise-can-occupy-wall-street-revive-left-activism

    http://www.fairsharecommonheritage.org/2011/10/09/occupy-imperfection-choosing-process-over-purity

  3. Hey Mickey — well, I do
    Hey Mickey — well, I do invite open debate. I’ve had some pretty lively debates right here with you, and I hope to have more.

    I acknowledged that my opinion regarding honest capitalism is not every OWS’s opinion. I agree with you, based on my own conversations with other protestors, that the fix-capitalism/smash-capitalism divide runs about 50%-50%.

    But I don’t know what you are objecting to in terms of the way I frame my arguments here. Of course I am presenting my own opinions, and nothing but. That should be obvious. The byline of this whole blog is “Opinions, Observations and Research”.

    Anyway, Mickey, disagreements aside, I’ll be up at the NYC protests again next week and I’ll try to hook up with you if you’re around.

  4. Besides if YOU know things
    Besides if YOU know things are not right, do you need to point out a solution or just that changes need to be done? Was the Constitution written before the revolution or a few years later? Did the Tea Party of Massachusetts know where the whole thing was headed when they dumped the tea?

  5. “Short selling is a form of
    “Short selling is a form of gambling, exactly like Texas Hold’em Poker. It should be made illegal, because it does a lot of damage. To short a company’s stock is to bet directly against that company’s success. It’s a vile concept, and the fact that short selling was a gigantic, lucrative market in the years leading up to the 2007/2008 crash should have been a crazy gigantic red flag to overseers that something was wrong. ”

    I’m currently reading Amity Schlaes’s THE FORGOTTEN MAN — a book that was marketed as a “corrective” to alleged myths about the New Deal. One passage that’s interesting is on short selling — a practice that Herbert Hoover was against and tried to control while he was still in power. (The Roosevelt administration was more adament yet in its campaign against speculation and greed; this providing neo-con critics of Roosevelt a pretext to argue he was “anti-market”).

    Schlaes ends up defending short selling as part of what she considers healthy market dynamics. I suspect that is the framework that the current debate will take place within as well, in terms of any mainstream media coverage it may receive.

  6. interesting question: fix
    interesting question: fix capitalism or smash capitalism.

    not sure how or why we’d want to “smash capitalism.” not even the 20th century communist juggernauts were able to entirely smash capitalism. i mean, smash wall street rape and looting, and the utter stranglehold on government of self-interested megabucks corporate power in general, yes. (but are those things really “capitalism,” or just massive fraud on many fronts?)

  7. Mnaz, thanks for the comment,
    Mnaz, thanks for the comment, I see it the same way.

    Finn, it’s an important point that Amity Schlaes’s book defending the practice of short selling was published before the market crash began in 2007 (just a few months before, in fact). The biggest evidence that short selling helps to introduce instability into the stock market is the fact that it helped to cause the crash of 2007/2008. “Too Big to Fail” by Andrew Ross Sorkin shows how short sellers countered every attempt by Richard Fuld to boost the falling stock price of Lehman Brothers. The short sellers were motivated to see Lehman Brothers crash because they made a fortune on it. This is also documented in Michael Lewis’s “The Big Short”.

    Also, short selling does not in any way serve the proper purpose of a stock market, which is to provide growing businesses with a source of investment. Short selling does not fund any business or help growth in any way. I have no idea why it’s still legal when other toxic scams aren’t. Because it’s so lucrative, I guess.

    The government has recently shut down many online poker companies. But it still allows short selling on Wall Street. Why?

  8. Levi, I like the way you’ve
    Levi, I like the way you’ve stated these five changes. I’m not sure about the fifth one, ending merger mania, but you are correct about the others and I will definitely send letters and emails to my various representatives in government about these.

  9. p.s. I understand why people
    p.s. I understand why people are saying that it’s okay to start making noise even before you have a solution, but to me, I really like having some good concrete suggestions to push.

  10. You can’t really understand
    You can’t really understand Capitalism until you’re ready and willing to see all its flaws.

    It would appear Levi Asher sees only Capitalism’s “good points” and wishes to make them dominate over the “bad points,” which apparently –if I read Asher correctly– are dominant now merely by fluke of fate, or happenstance, or the whimsy of the Deus who hasn’t yet started up his Machina in order to insert the “good points” as dominant once again.

    I’d say it takes a man of little to non-existent imagination to find himself limited in scope to capitalism, and only capitalism.

    And merely mentioning other options in a derogatory or dismissive fashion, that’s bringing it full-circle to my first sentence above. Avoidance is such good placebo-medicine!

  11. Hi Levi,
    I came across an

    Hi Levi,

    I came across an article in the Atlantic about why the Tea Party and OWS should get together.

    It had in it a passage from a Guardian article I found interesting.

    _____

    Brendan Steinhauser of Freedomworks, a Washington-based group that runs a nationwide network of Tea Party off-shoots, says that “the tea parties arose out of opposition to the Wall Street bail-outs in 2008 – that was the event that gave birth to them, so yes it’s funny that the Occupy Wall Street guys are also against phoney capitalism and we agree about that.”

    But that’s where the affinity ends, he says. He observed the Occupy DC rally outside the Capitol and says what he saw there were “the same leftists, the same union organisers, the same Castro supporters you see on every leftist demonstration. It’s same-old, same-old.”
    ______

  12. Hi Levi,
    Thank you for the

    Hi Levi,

    Thank you for the info. I thought derivatives had been illegalized. I’m sure you’ve heard about that room full of super computers located so close to Wall Street that they interpret market data and make micro-transactions a fraction of a second before anyone else can. We’re functioning like neurotic squirrels; mindlessly hoarding nuts.

    My congressperson informed me that she’s fighting hard for good legislation. I replied that the process could be streamlined if campaign contributions were outlawed. Taxes could fund equal PBS TV time for candidates and then the elected officials would only be indebted to the voters. I haven’t heard back from her.

    The whole world is revolting against corruption. Things could improve faster if we were more concerned with living together in peace rather than what religion we are, or aren’t.

  13. ah yes, those awful, evil
    ah yes, those awful, evil union organizers . . . how terrible.

    tea partiers vs. OWS? similar? well, yes and no. the original tea partiers (from the bush era) were a more genuine grass roots group– a movement that has now been, for the most part, hijacked by corporate media (FAUX “News,” et al) and the corporate power infrastructure to help do its political bidding. as this article explores . . .

    article, re: the new corporatism in american “grass roots” (from 5/3/10)

    [url]http://www.newpol.org/node/298[/url]

    excerpts:

    —-“the major political parties, both Republicans and Democrats, are creating new foundations and non-governmental organizations to expand the base of the parties and attract new voters. Those party think-tanks and NGOs in turn create what could be called PSEUDO-SOCIAL MOVEMENTS, often describing themselves as “grassroots,” though, in fact, they are created and controlled from above by inside-the-beltway D.C. organizations. . . . we’re witnessing the development of a new corporatism in American politics.”

    —- “The ultimate goal of the Republican and Democratic Party neo-corporatism is to prevent the development of independent political parties which might DISRUPT THE REGULAR POWER ROTATION of the two capitalist parties.”

    —-” ….the Republican Party’s economic conservatives, still representing the interests of FINANCE, INDUSTRY and OIL, also both helped to create the EVANGELICAL religious right, which acted to draw lower middle class and working class white voters into the party’s fold.”

    —- “Similarly, with the rise of the civil rights movement of the 1960s, the Democratic Party succeeded in drawing in and SUBORDINATING the NAACP . . . The organized women’s movement too SUCCUMBED. The workers movement of the 1930s, the civil rights organizations in the 1960s, and the women’s groups in the 1970s had all been tumultuous movements, but once gathered into the Democratic fold they OSSIFIED . . . .When these groups pressed hard enough, the Democrats would take up their cause, and often even a TOKEN EFFORT proved to be enough to continue winning the votes of workers, African Americans, Latinos and women.”

    . . . . (for years i thought of corporatism in politics as strictly right-wing. but as the following examples show, the left side of the aisle has had some success with top-down “grass roots.”)

    —- “MoveOn.org provided the prototype of the a group created and commanded by Democratic party loyalists who wished to use the organization to both create and CONTAIN a social movement.”

    —- “Genuine grassroots immigrant groups and their allies will have little if any voice in the political process of passing some sort of immigration reform, which will remain in the hand of the Democratic Party. The Democrats will subordinate RIFA (Reform Immigration for America) to their aims.”

    —- “By January 2009 the Tea Party had been born — and while the proliferation of Tea Party websites, organizations, political programs, and ideological orientations gave the impression of a genuine grassroots movement, in fact the Republican Party and its most conservative think-tanks backed by the corporations had quickly taken command of the group.”

    —- “. . . at this point most independent anti-war activists are working to build a new INDEPENDENT anti-war coalition of some sort. Certainly the continuing war in Iraq, the expansion of the war in Afghanistan, and the shameful drone attacks on Pakistan which have killed civilians demand that we build a NEW anti-war movement, and MoveOn.org, with its commitment to the President and the Democrats cannot and will not provide leadership. Ultimately, for those of us who work in the grassroots, the point is this: We need no condescending gardeners.”

  14. Start writing your novels as
    Start writing your novels as keen lean and accurate as this Ashman and you will outsell Faulkner. Your five points reek of veracity. This possibly is the best piece of prose I’ve read of yours. Good Job Levi.

    jmvm

  15. That’s the best piece of
    That’s the best piece of prose I’ve read of yours, Ashman. So many people want to make capitalism the problem (it has its problems don’t get me wrong) but free markets = democracy. Chewing on Lenin’s cigar stub isn’t the solution. I guess what goes on Wall Street is so far beyond normal market based economics. It isn’t capitalism per say–its a whole new problem.

    The U.S. has a mixed socialist economic system like the rest of the west. The problems is that it used to be hard work (even if it the janitor mentioned above) used to mean you’d get ahead-maybe not light years ahead-but have a decent place to live, a new car, kids in college type thing going on-bust your off in the Status Quo and still have nothing.

    Even the GOP makes some good points (well not often) but for the everyman (99%) working hard isn’t rewarding–you’ll get enough to make it but not much more.

    The ultra wealthy reward themselves–buy the upper middle class (with their campaign dollars) into supporting them via ‘tax cuts’ and such. Reagan, Nixon, even Taft and Hoover still had us in mind. Boehner and his buddies remind me of corrupt Roman senators—I don’t think as Americans we are supposed to be enslaved—it isn’t class warfare when 99% is against 1%. When 99% is against 1% is means that we are against slavery.

    jmvm

  16. Hello, and thank you!, Levi,

    Hello, and thank you!, Levi,
    I have been looking and thinking for two years and more, for a term that so rightly and succinctly captures WHAT (I think) WE ALL WANT: “Honest Capitalism”. Even those who despise Capitalism as the long term solution or template for equitable economics, will still prefer and regard Honest Capitalism as the ideal and the promise that has been squandered, but might still be regained.
    I think, as I believe you do, that there is no doubt but that we – as a nation – could have enjoyed prosperity, security and social progress (in areas like race-relations, prison reform, education, unemployment, and environmental commitment – to say nothing of pressing issues like the injustice of the “death penalty) without a crash, were it not for the outright and unbridled greed that overtook and, finally, controlled Wall Street and Washington.
    This greed is unbridled, unknown, and unaccountable. No workbook of Capitalism includes a chapter on sovereign debt; whereby one nation can undermine the economy of another by sheer force of will –thereby gaining an advantage that, before, only war could win.
    What so many pundits make their living propounding is nonsense. Capitalism, if it survives – and perhaps it should, though I am no longer faithful – must change. The unregulated “money-instinct” that capitalists (like Hannety and Palin) trumpet and uphold must be supplanted by belief in a locally-based – not therefore provincial – system which has moral ties and connections of mutual interest with the communities (and moral priorities) which they “serve.” Most importantly, the people must reassert the priority of the polity, over the capitalist.
    We put our necks on the line to have a free state: not so some impudent geek can get rich while we fight wars and suffer the consequences of not being smart enough to inhabit his world. Sooner or later, we have to face up to the (ugly or frightening) fact that freedom for all means, that there can be allowed no freedom for one, or for some small group, to usurp the opportunities and freedom of the many.
    Political philosophy is hard work! But I do admire you for doing it, for doing it in a timely fashion, and for not shirking the nay-sayers who may come along. This is a great essay. Levi; not least because it says what needs to be said, NOW.
    Power to the People, Brother! Thanks, for this . . .
    Regards, as always
    kjml

  17. P.S. Pardon the come-back,
    P.S. Pardon the come-back, if you will:
    I appreciate and value the straight talk of the respondents, as well as your own, Levi: it as been a god-send of insight and information for me – and I am sure, to other non-economic-whiz-kid types. Perhaps, you have no idea what value of knowledge and wisdom your site elicits and produces. Perhaps you do; in either case: Thanks to you, and to all the respondents, as well, who shared their insights and on-the-job knowledge; it helps the rest of us who know too little but will also fight this fight!
    P.S.S. I hope that nobody demonizes the individual people who work to sustain this system! They are not the origin of the problem. The problem is, as you have pointed out, at the head — we need a moral-capitalist mind-frame. That does not mean a single head (or leader) of the capitalist machinery, but a spirit of (local and broad) moral accountability among the leaders and heads of the various (and over-arching) machines.
    We thought we had this when “father knows best” was the most popular show on TV. We trusted it implicitly when Fonzie was in the Cunnighams’ guest bedroom. Though he may not have been available, he – the ace of industry (our father) – was doing well and (we thought) he was doing right! Somewhere along the way, we lost our moral guardian . . . or he lost his morals . . . Whichever way, or how, it happened – and there will be time enough for recrimination later — the important thing is, can we find an answer? I support your attitude, your perspective and your theory, Levi: I honestly do!
    Thanks for speaking up!
    kjml

  18. Mickey Z, I clicked on your
    Mickey Z, I clicked on your links and read the articles you wrote. It almost seems like you and Levi and comparing apples to oranges. For those who want to smash capitalism – do they want to replace it with something else, or just not replace it with anything, or what exactly? I can never quite grasp what you are seeking. A few weeks ago, you said that I misrepresented the meaning of anarchy and sent me a link about it. Somewhere in the information was the statement, “there are several models for an anarchic society” or some words to that effect. But to me, if there’s a “model” then it’s just another system with its own rules. It makes me think that when you say “anarchy,” you really mean Libertarianism. You seem like someone who wants to change everything all at once, and I just don’t know if that’s the way to do it.

  19. btw, i think the “lack of
    btw, i think the “lack of purpose / focus” derision heaped on the movement (much of it from wall street itself ! ), while somewhat valid on paper (based mostly on superficial observation), also misses the point in some ways.

    the movement does in fact have specific objections to wall street’s abuse and fraud, as this thread demonstrates for example. but aside from that, we also need to realize that simply becoming aware of (and sharply dissatisfied with) the problem(s) is step one. there can be no “change” unless the “99-percenters” begin to confront their dissatisfaction, recognize its various degrees of commonality, and get somewhat more “on the same page.” obama can stand up there and preach “yes we can” until the cows come home, but if there’s no “we” to join in, then nothing meaningful will change. (yes i know, mickey– obama is one of THEM … but it’s a nice fantasy at least).

  20. Levi, couldn’t agree
    Levi, couldn’t agree more.

    Everyone seems to be crying out for a single compelling message and actionable goal.

    May I humbly suggest the all inclusive “No taxation without participation.”

    Or the slightly louder “NO TAXATION WITHOUT PARTICIPATION!!”

  21. How about this: Everybody
    How about this: Everybody just stop investing in all those god damn money market funds and put your money in a regular savings account and buy only the cheapest houses you can find. This is what I did 20 years ago. I don’t have much money but I’m comfortable enough.

  22. Our elected officials should
    Our elected officials should be protecting us and the economy by preventing special interest groups from buying new laws and regulations that favor only them at everyone else’s expense.

    Corruption in a democracy is facilitated by the ethical ignorance of the majority of the citizens. If someone believes their government is hopelessly crooked they will go along rather than risk being labeled “naive” and left behind.

    At the core of corruption is personal integrity. That said, personal integrity can fade quickly if a person’s wellbeing feels threatened. I say “feels” because even if a threat is only suspected, the body reacts exactly the same as if it were facing a real and present danger; it becomes stressed.

    The more unresolved stress we carry, the more anxiety (false fear) we can experience and the easier we can become additionally stressed. Overly-stressed persons can feel threatened and so naturally put themselves first.

    If we regularly manage our stress, we’re happier. Happy people are uncomfortable around unethical behavior and unethecal proposals. It’s all about priorities.

  23. The country, and indeed, the
    The country, and indeed, the world, seems to feel the end of the game as we have grown to know it so well for at least 100 years. Our world grew tremendously fast with such inventions such as electricity, air flight, television and the immediacy of our communication systmes, harnessing the atom, medical advances, the battles of two World Wars, the Moon landing… the list has been extremely long.

    Now as we are into our first decade of the new millennium, those things that we were so familiar with that we all grew up with whether we agreed with them or not, we knew of them. Here we are now and as far as the world seems to appear chaos and confusion seems to be the inheritance of the past 20th Century and the conviction that there HAS to be something else besides the seeming futility of the stress and and futility of a financial system that is nothing more than another remnant of the 20th Century – the Monopoly Game.

    Yes, we who grew up in a vibrant and somewhat insane environment of playing the Capitalist game of Monopoly now find ourselves with that 1% who have won the game. They have all the money and there is no way the other 99% will ever have the chance the even come close to competing in the game. But that 1% knows they have won but there is the problem of what they do with the winnings – those billions and trillions of dollars they have control over. That is something the game of Monopoly never explained – other than stopping the game and starting over next week. Maybe you or your sister may have a chance at winning the game. We all had a chance.

    Yesterday, Poland’s great union organizer, Lech Walesa, stated:

    “We need to change, reform the capitalist system” because we need “more justice, more people’s interests, and less money for money’s sake.

    “We cannot accept a situation when capitalism is making huge money and then does not know what to do with it,” Walesa told the AP. “It should invest in new jobs.”

    When the Monopoly game is over, whoever has the most money is suddenly clueless as to what to do with all that money. They have everything they ever dreamed of and now they sit with unlimited funds sitting uselessly while all the rest of us have nothing to play with.

    In part, does not OWS feel as though they are unable to play the game anymore… the money is held by 1% and Reagan’s famous “trickle down economics” leaves us hungry and without. The Uber-Rich have made all that money and the don’t know what to do with it, despite the knowledge that there are millions of people who need money and are willing to work for it.

    Is this the end of Capitalism or is the 21st Century going to be one that will find another economic system that treats more people more fairly than Monopoly pieces rusting in the alleyways? Certainly there needs to be a better way… if there isn’t one then a Revolution on a scale never before seen globally will occur. The anger is real, the frustration is real, and the need to find a better way that is of this Century is mandatory for all.

  24. that’s not a bad analogy,
    that’s not a bad analogy, cec. yes, you do tend to reach a point playing “monopoly” where haves have everything and the have-nots are bled dry— game over.

    i’m still a little confused over the idea of “transitioning out of capitalism” (or “smashing” it?). is that realistically the best goal? or even possible? unless “capitalism” is being used to mean the entrenched excess and abuse of global banking syndicate and all related (inter-related?) transnational juggernauts of planet rape and such …

  25. Re: “”transitioning out of
    Re: “”transitioning out of capitalism”

    I see capitalism as we have lived thru it, as an economic system that served the world rather well throughout the 20th Century, however as we are now in the early years of the 21st with the turmoil within our economic system, I believe it’s mandatory for a new system to arise from the imminent ashes of the old… either that or we will see massive unemployment, massive hunger and homelessness, unbelievable hardships not only in the U.S. but throughout the world as we knew it… it will all be unrecognizable from that which we all have grown up in and firmly believed in as the best economic system that could serve us.

    Is this the ‘transitioning out” phase that we see on the immediate horizon? It certainly could be altho the times are so tumultuous now to visual anything but confusion and chaos is fogging up the transition, if indeed it is what we are experiencing.

    One thing is certain, many countries throughout the world seem to be going thru the same mess as our own country. The latest I heard was over 200 cities and towns in the U.S. have some support and marches favoring the OWS mentality. Add to that for the first time in our history we are also witness to the upheaval of the Mid East systems of governing… an interesting adjunct to what else is going on in the U.S., Europe and possibly in Mexico (as I recently read) and that of South America may very well join in.

    With that many people upset and unhappy about the way things are, optimistically there would have to be some legitimate answers ‘out there’ that can establish a more favorable system than that of the 20th Century, which we’ve clearly outgrown.

  26. Wall Street, Greed & Disaster
    Wall Street, Greed & Disaster – “Foreclosure of American Dream By Wall Street”

    – Nalliah Thayabharan

    Wall Street is a confidence trick, a dazzling edifice built on paper promises, gambling, bets and rampant speculation. Wall Street doesn’t manufacture or produce anything. The Wall Street however attractive it may appear is built on paper.
    Modern day bank robbers are at Wall Street but they wear grey suits and not masks. Rampant speculators, propagandists and financiers of Wall Street are given some unfair advantage over the average consumers and taxpayers and the cumulative effect of the people watching selfishness prevail over the public interest has been an undermining of the public’s trust in the present US government. There’s no question the Wall Street is rigged against the average consumers and taxpayers. The Wall Street has a lot more information. Wall Street jerry-rig the system so that Wall Street always win. If the Wall Street loses trillions, the US Treasury will bail the Wall Street out so it can go back and do it again.
    50 trillion dollars in global wealth was erased between September 2007 and March 2009, including 7 trillion dollars in the US stock market, 6 trillion dollars in the US housing market, 8 trillion dollars in the US retirement and household wealth, 2 trillion dollars in the US individual retirement accounts, 2 trillion dollars in the US traditional defined benefit plans and 3 trillion dollars in the US nonpension assets. Greed, arrogance and incompetence created a massive meltdown, cost trillions, and still Wall Street comes out richer and more powerful.
    There are trillions dollars of new money taken again from Americans to make deals and hand out outrageous bonuses. And when these trillions run out Wall Street will come back for more until the dollar becomes junk. The value of the US dollar declined very significantly during the last 70 years. The value of the US dollar in 1940 was worth 2,000% more than the value of the US dollar now.
    Many big US manufacturers are outsourcing to Mexico and China to increase their profits, adding more unemployment in the USA. Manufacturing jobs in the USA declined 37% between 1998 and 2010. Since manufacturing industries declined in the USA, the US competitiveness in the global marketplace is also declined.
    Robust financial markets don’t imperil capitalism. In the early 1980′s Wall Street began to escape reasonable important regulations of the marketplace. The US government gradually adopted a “too big to fail” policy for the Wall Street, saving lenders to failing businesses from losses. The demise of Glass Steagall act helped spawn the credit crisis by allowing the Wall Street to create financial instruments that escaped reasonable limits, including constraints on speculative borrowing and requirements for the disclosure of important facts.
    The Wall Street eventually posed an untenable risk to the US economy—a risk that culminated in the trillions of dollars’ worth of the US government bailouts and guarantees that the US government scrambled starting in late 2008. But in 2008 the US government was compelled to replace private risktakers at the Wall Street with government capital so that money and credit flows wouldn’t stop, precipitating a depression. As a result, these Wall Street became impervious to the vital market discipline that the threat of loss provides. The Wall Street lenders to financial markets continue to understand that the US government would protect them in the future if necessary. This implicit guarantee by the US government harms capitalism and economic growth.
    The top 6 US banks had assets of less than one fifth of US GDP in 1995. Now they have two third of US GDP. The financial crisis was created by the biggest US banks to consolidate power. The big banks became stronger as a result of the bailout by the US Treasury. The big banks are turning that increased economic clout into more political power. Wall Street has undue influence on the US government policies and this situation reflects a failure of democratic representation for the other 99 percent Americans.
    Oligarchy is the political power based on economic power. And it’s the rise of the Wall Street in economic terms, that it’d turn into political power. And Wall Street then feed that back into more deregulation, more opportunities to go out and take reckless risks and capture trillions of dollars.
    Wall Street only has the lobbyists. Today more than 42,000 Wall Street lobbyists manipulate USA’s 537 elected officials with huge campaign contributions that fund candidates who support their agenda. It no longer matters who’s the President of USA.
    Since the heads of Wall Street and their representatives are afraid because they don’t have the substance or the arguments, they will not come out and debate with the people who occupy the Wall Street.
    The political and economical leadership of the US has chosed to cartel profits and transformed the US economy to serve the colluding and unlawful oligarchy. The political and economical leadership of the US is bailing out failed paradigms with trillions of dollars while committing social injustice to its people. The political and economical leadership of the US including the US Congress have now become Wall Street’s “Trojan Horses”. The US banks are borrowing money at near zero interest from the US government, then lending it back to the US government at even mere fractions higher interest than they are paying. The net interest margin made by the US banks by lending the money back to the US federal government in the first 6 months of 2011 is 210 billion dollars.
    Due to the oligarchs’ rapacious looting and their purchase of a politically protected luxurious lifestyle, the people of the US are on the road to permanent serfdom under a police state. The democracy was not given to the people of the US on a platter. It is not theirs for all time, irrespective of their efforts. Either people of the US organize and they find political leadership to take this on or they are going to be in deep trouble.
    The failure of governance to address the current critical issues have already produced catastrophic consequences. Now we are experiencing a major global paradigm shift and it is still unfolding.

    “There is no calamity greater than lavish desires, no greater guilt than discontentment and no greater disaster than greed”
    – Laozi
    “Greedy desire is endless and therefore can never be satisfied”
    – Buddha

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Litkicks will turn 30 years old in the summer of 2024! We can’t believe it ourselves. We don’t run as many blog posts about books and writers as we used to, but founder Marc Eliot Stein aka Levi Asher is busy running two podcasts. Please check out our latest work!