Occupy Wall Street: An Early Assessment

I stumbled on the initial Occupy Wall Street protest by accident back on its first day of September 17th walking through the financial district in lower Manhattan. While the group seemed quite inchoate and far smaller than the 20,000 thousand or so initially advertised, I’d been intrigued by the solidarity Occupy Wall Street had expressed with protest movements in Spain or even revolutionary episodes such as the pivotal events in Cairo’s Tahrir Square during the early days of the Arab Awakening. I overheard that day some bemused onlookers who may have been low-level financial sector workers mockingly saying--‘so, this is it?’—but could not help thinking I would be hearing more about Occupy Wall Street in coming weeks. Indeed, I’d long suspected the financial crisis, policy foibles, chronic unemployment, and general corruption of our politics would sooner or later fuel a measure of social unrest in this country as it has elsewhere. We are not immune to a deadening of hope fused with deep-seated suspicion of having been essentially swindled via policy decisions resulting from a politics that is largely broken and denies a sense of genuine progress and possibility. Almost immediately after espying this nascent protest movement I left for a three week business trip to Asia before returning to New York only yesterday, where incidentally, I was asked on several occasions overseas about the growing movement.

From afar in East Asia, I noticed Occupy Wall Street has done several things right, some a result of sheer luck (read: police over-reactions), others manifesting a measure of tactical skill. A couple of the initial pepper spray incidents went viral on YouTube, one showing very young women screaming hysterically while penned—or is the term for this ‘kettled’?—by bright orange police mesh. Here the ‘luck’ of brute force helped create outsize publicity by a media that had mostly ignored the going-ons up to that point. After all, it cannot help looking like a failure of our society when generally hapless young women are being sprayed in or near their faces by male police officers twice their age simply about behavior surrounding access to public places. These could be our own daughters, after all, and it offends basic sensibility (see the footage here). Another key moment in the growing tide of the movement was the incident of mass arrests in and around the Brooklyn Bridge (again, footage available here for those who are curious), partly a result of the confusion among some of the protesters (to be sure, perhaps a convenient confusion) about whether or not they had been granted access to the vehicular lanes rather than merely the pedestrian pathway on the bridge. Regardless of the merits, mass arrests on the order of some 700 or so individuals on an iconic New York landmark will engender healthy international headlines, boosting the nascent protest movement’s profile very significantly, with this event likely having constituted the break-out.

Then, of course, there is Zuccotti Park (which Occupy Wall Street have renamed Liberty Plaza, note Zuccotti Park's original name was Liberty Plaza Park), where the protesters have erected a steadily growing encampment, showing a canny resourcefulness, despite limitations on rights to pitch tents and such, as well as been denied access to more iconic locations such as the near-by actual Wall Street itself. Critically, the protesters have intuited from the get-go that they need to physically inhabit some patch of space literally around the clock, otherwise police will likely sweep in and deny them access, without the public relations boon of a forced deportation. The ‘occupy’ part is mission-critical to the branding of Occupy Wall Street, speaking to its passionate indignation, commitment and wherewithal to maintain a 24/7 presence, and its echoes to recent revolutionary episodes such as Tahrir Square as touched on above. Regardless their presence is being increasingly felt beyond Zuccotti Park, including their forays up towards Washington and Union Squares (intelligent tactically to garner more publicity, while testing how much the authorities will aim to restrict their movements) and of course the fact that the group has metastasized with outcroppings in Boston, San Francisco, Chicago among many other locales reportedly nearing at this writing some 1,000. Also, and not unlike Egypt, the use of social media is playing a major reinforcing role leveraging the efforts of those physically on the ground.

Some of Occupy Wall Street’s more recent tactics (or at least the actions of some associated with the movement) are probably the most controversial to date—leading to almost Bull Connor type imagery of harshly swinging nightsticks (I link some of the relevant footage here)—given some protesters reportedly are attempting to rush police barricades in coordinated fashion to gain access to sites they have been prohibited from to date, say, Wall Street or the New York Stock Exchange (“NYSE”). The protesters should tread carefully here, and not overplay their hand, but why, one wonders, cannot a protest movement at least have intermittent access to such ‘sensitive’ locations, say the site of the first Presidential inauguration in this nation’s history, framed by George Washington’s impressive statue there, just across from the NYSE? Mayor Bloomberg of course has a town to run (ironically he is perhaps one of the only men competent enough in the entire country to help us through the dysfunctional political breakdown stoking these very protests via a credible third party bid) and there is always a premium to allow commerce to remain unfettered in this greatest of American cities, but one smells at least incipient whiffs of fear that, who knows, perhaps a more strategic location could be staked out and ‘occupied’, and so what then? Would a more violent eviction be required? What if the numbers grow exponentially? How many arrests could occur? What if more and more protesters replaced those arrested, indignant at the revolving mass arrests? Could blood spill? At very least one senses an increasing queasiness lurking in the back-drop among those happy to preserve the status quo. Where is this heading?

Indeed, with Occupy Wall Street, I believe some minded to be more wedded to the status quo may be more rattled than they have been to date by the Tea Party (which in its aim to minimize Government's role has an agenda often convenient to Wall Street's current mood). This is because they are directing their ire squarely towards the real elites of the country, rather than their mostly paid up for marionettes sitting in Washington. These elites are seen to have benefited from emergency large-scale existential rescues (all necessary exigencies to avoid a second Great Depression, our titular leaders would have it, and remind us often, including with respect to the precise manner by which the benevolence was proffered), with little accountability, genuine gratitude or fundamental change emitting from the financial sector post the Government's ministrations. Nor is the point whether TARP has been profitable or not, as some astoundingly shallow journalists have suggested, even if it could arguably be construed as something of a wash to the American taxpayer. Lest we forget, the TARP windfall (given the fungible nature of cash) also served to better allow for convenient de-levering on the Government’s dime (of course in part this was the point), the occasional strategic acquisition, and hundreds of millions for lobbying, advertisements and campaign contributions. With no convincing tracking of TARP funds, similar to the opaqueness around the Federal Reserve’s policy decisions whether with respect to repeated bouts of money-printing, or the Fed’s unprecedentedly generous emergency lending operations, one cannot help feeling something has become well rotten in Denmark. Given this backdrop, Occupy Wall Street, cleverly, is squarely aiming its attentions at the realer powers behind the supposed throne, that is, where the money is.

Beyond this, they are likely smarter and with more idealistic energy than their Tea Party analogues. Ranging from younger near anarchists to older protesters with almost Eisenhowerian politics (repulsed by income disparities reminiscent of the 'robber baron' era) they are a disparate bunch, to be sure. Part of what brings them together shares certain common elements, I'd suggest, such as the majority of the population wallowing in dire economic straits amidst a materially shrinking middle class, chronically elevated unemployment, career prospects for youth that have to be described as dangerously poor at present (all the while as college tuition sky-rockets), not to mention seemingly endless, vast pools of wasted monies on fundamentally flawed wars of choice, and to top it off, the perceived injustices of TARP and such banker-welfare largesse. Speaking to several of these protesters today, I met MBA students who cannot find jobs (one even told me his GPA at business school, a respectable 3.2) and law students in a similar predicament. As money gets wasted in epic fashion overseas for desperately flawed ‘provincial reconstruction teams’ in Iraq and risible ‘Government-in-a-Box’ initiatives in Afghanistan, these kids are staring at mountains of debt and an equally daunting lack of viable employment prospects (the MBA student was underemployed working as a barista at Starbucks). So there are intelligent faces and voices in these crowds—not just aimless rabble-rousers out for a rise—and I can sense this movement becoming more contagious (for instance, I detected among several of the more junior police officers perhaps some degree of sympathy for the protesters). To some extent, after all, these are our young screaming out in need, meriting not kettling and reprimands, but job prospects and dignity.

All this, incidentally, is rather a sad development for the Obama Administration. When Obama inherited a nation in deep crisis in November of 2008, with his race alone a historic pivot that inspired legions, I suspected then many hungered for true transformational change, something evocative of a Teddy Roosevelt domestically crossed with a transformational Mandela type figure on foreign policy. He largely squandered this opportunity, though I will certainly allow for the complexities of governing. Still, with respect to domestic policy, "change" means something beyond just issuing cheap populist rhetorical pot-shots about ‘fat cat bankers’ but rather cutting to the nub of the real issues (hint: not a diluted Volcker Rule--itself a half-way house short of more dramatic steps like resurrecting Glass-Steagall--and/or a politics-infused, mostly theatrical Buffett tax, and perhaps breaking up some of the larger banks that still remain too big to fail, indeed are now even bigger post-ingesting the spoils of Bear Stearns, Lehman Brothers, Merrill Lynch and Wachovia). As for international affairs, many in the country hungered for bolder progress than simply constraining the excesses of the neo-con wing and preventing the outrageous adventurism that would have accompanied a McCain Administration (though make no mistake, this was critical, and Obama does deserve due credit at least for this), but real "change", such as fulfillment of the pledge to shutter Guantanamo, pursuing serious investigations respecting how torture became acceptable Government policy, not allowing the Arab-Israeli peace process to ingloriously decay into near nothingness, or more than anything, cutting more forcefully our failed experiments in nation-building in Afghanistan and Iraq.

None of this having occurred, we are hearing a plaintive cry similar to that echoing amidst the Arab Awakening, that is to say: “Enough!” (not too dissimilar, really, from Occupy Wall Street's chant: "We Are The 99%!"). I mean, how can it be, after the most severe financial crisis since the Great Depression, involving very large doses of financial chicanery indeed, that nothing really of substance vis-a-vis legally actionable import came of the Financial Crisis Inquiry Commission (who even remembers its name, in sharp contrast to Pecora)? Or that the ‘too big to fail’ issue has now only been aggravated further? Or that the CEOs of many of these banks could not even today explain to their own shareholders what products twenty-something employees are peddling, or indeed trading, not necessarily just the SocGen and UBS follies which speak more to criminal activity by specific perpetrators (albeit with likely gross negligence by higher-ups) but respecting complex derivative products that I would bet large swaths of varied C-Suites have nary a clue about (to Paul Volcker’s appropriately sardonic point about financial innovation and the ATM being its apogee). Is it any wonder people believe some of the banks are still too large to be effectively managed, still pose systemic risk, and still require more disciplined regulation than what will doubtless prove a materially watered-down Volcker rule (not to mention Dodd-Frank), given the President is apparently more focused on money-raising in Manhattan than laudable use of his bully pulpit a la Roosevelt?

The point is not that all bankers are evil. They’re not, far from it. However, they do need to be better steered away from their own worst instincts on occasion, putting it somewhat mildly. This is particularly so given a dearth of true leadership amidst too many precincts within the financial community. Unfortunately, the face of Wall Street’s leadership has appeared too mercenary and obsessed with maximization of profits above all else (such as their bloated proprietary operations), too often forgetting banking is essentially a sell-side business where client interests must always be kept uppermost in mind. We have lost our golden age of ‘advisory’ investment bankers, represented by men such as Felix Rohatyn of Lazard Freres. Bankers like Rohatyn--beyond tours of civic duty like helping stave off New York City's bankruptcy in the 70's and serving as Ambassador to France--were always highly attentive to the needs and desires of their clients, remembering that theirs was first and foremost an advisory business and such trust and focus was sacrosanct. (It is also perhaps worth noting that, with the United States having been enmeshed in the longest war in its history in Afghanistan, and with young Americans dying a decade on for no viable strategic aim, few if any among our plutocratic classes deign to waste the merest breath on such topics. This possible factor in the breakdown in respect for our elite financial institutions--really a dearth of public leadership save when they have skin in the game--should not be forgotten either, supposed great men should comment on the great events of the day, after all, but rather they seem far too small, myopically focused on 'league tables', or perhaps more, the vagaries of carried interest taxation levels or Basel III capital requirements).

While I will readily confess I find it odd as something of a Burkean that I am sympathetic to these protesters, they are not looking to trot out the guillotines, in the main (although I did spot a "Behead the Fed" sign!), but rather, they have smelled the radicalism of the blows dealt the integrity of a representative democratic system poised by the almost unfettered oligarch-like behavior among too many elites wholly disconnected from, yes, the 99% they speak of. They are acting to secure conservative aims of re-balancing a society that is becoming dangerously unmoored and increasingly bent asunder. They want accountability and dignity and prospects. Their leaders have failed them. So they have taken to the street to lead themselves. It will not be easy in the months ahead (the encroachments of winter alone will prove a big test), but they have started something that has real potential, and should be lauded for it, and indeed urged to carry on. If so, they may accomplish something, even possibly something historic. In this goal, in my view, they should not immediately fall prey to pressure that they must issue some long laundry list of ‘demands’ that might risk ideologically ring-fencing them some and/or stealing the spontaneity of their movement, while resisting too close associations with old-line standard-bearers of the left like the unions. They have created something quite new on the American political scene, and should stoke it during these early days in a manner strictly of their choosing.