The Counter-Counter Revolution

I took a trip to Los Angeles City Hall last night because I heard a rumor that there was the start of something big going on down there. Since I have a full time job in business development (read: job creation) I couldn’t attend during the day. I was, thankfully, able to drive my $750 automobile and park it in a garage for $15.00 and make my way to the ad hoc camp that serves as the epicenter of a new wave of the ongoing populist movement in America. I expected to find a handful of stalwarts, sharing tamales and tugging on one-hitters, waiting for the next day of shallow media coverage to march and yell. What I found instead was a diverse village of individuals, mostly young, self-organizing as a spontaneous protest spurned on by a feeling of hopelessness and invisibility.

But where is it going, and how is it going to get there?

(There is an epic rundown below the fold.)

The Occupation of Occupation

The community atmosphere of a well conceived left-wing protest (or rock festival, as they are often similar) is always inspiring to me. The most noticeable feature of the OccupyLA main camp is the array of tents and tables set up to provide people with certain necessities and guidance – there is a tent for food where volunteers dish out soup to the demonstrators and homeless alike, there is a table for joining organizing committees, and most striking is the media tent where a gas generator sends juice into the MacBooks of more than a dozen livestreamers, tweeters, and underemployed J-school students who are angling to be this country’s @sandmonkey. This is all on just the third day of the spontaneous protest, even after being relocated from one side of City Hall to other. Granted, this move was made to make the protest more visible to the media (the TV trucks couldn’t park on the front lawn because of safety ordinances.)

I arrived an hour after the protest had peaked for the day. People told me that I missed quite a scene as the people peacefully took to the street and made their voices heard. But when I walked up, there was no chanting or even sign waving – cardboard platitudes decrying the evils of corporate greed and systemic injustices carpeted the ground like a massive breakdancing circle. I saw signs that I’d seen on the news just an hour before, now abandoned to the mud. What was happening instead was truly incredible, and it brought me vividly back to the dusty basement of a church in Manhattan where I’d spent the night before a G8 protest – the crowd was having a General Assembly.

For those who don’t know, when professional (or full-time, at least) organizers get a group of folks together, or arrive on the scene of a spontaneous protest, they have an extremely hard job to do: keep the protest as open as possible to all points of view and grievances while simultaneously coalescing a coherent message to deliver to the media and officials so that the protest can have an explicit purpose. It is not lost on left-wing demonstrators that their protests are often considered pointless and undisciplined. This is because it is infinitely more difficult to hold a demonstration in favor of a constructive philosophy, especially in regards to public policy. The right-wing has it easy in easy in this country. They have one message no matter what the situation is: cut taxes, cut spending, remove public regulation and put capital in charge. They have no obligation to offer solutions because they don’t believe collective action works. Even the protesters in Egypt and Syria have a simple (if monumentally more difficult and risky, and brave) task at hand: bring down the government. But for the people gathered at City Hall, the message of tearing down the systems-that-be feels at once emotionally satisfying and intellectually unproductive. There is no secret that the people in this protest were (and may still be) supporters of President Obama. It is a tricky thing to parse this admiration and access to power (through his political fortunes) from the desire to crush the state and tear down Wall Street.

At a General Assembly, we see raw, messy, and bristly democracy in action. Someone with the People’s Mic brings proposals to the GA, proposals to form committees, to approve language (One was the question of whether to create a ‘Demands’ committee or if ‘Demands’ was too strong a word…), and to resolve disagreements between groups of people. Decisions are made by consensus, with people in the crowd throwing ‘hard blocks’ when they disagree forcefully to an idea, enough to drive them from the movement. This style of group rule is incredible to watch, especially when you can witness the grievances of old civil rights activists mesh with college anarchists and environmentalists in an uncomfortable melange of ideologies and goals. Ann Coulter may think this is the opposite of the American Revolution (as if the Founding Fathers bravely defeated off a populist mob, and not an armed foreign occupation, in order to install the Constitution) – but anyone with any knowledge of how that revolution was formed, why it was formed, and how it was governed would see its simulacrum at City Hall.

Why We Fight

What brings these people together is a perceived common enemy: Wall Street. The universal feeling, regardless of the black masks and strained rhetoric, is that the financial sector has engineered the flow of income and the implementation of labor in this country to benefit a small percentage of America while plunging the rest of the population into incurable debt. They see the bailout of Wall Street banks and massive industries (and unions) as a capitulation of the people’s representatives to the denizens of capital and might. The problem with this protest thus far is that few people on the ground seem to be able to articulate how and why this is the case. There is a serious lack of economic understanding and message coming from these energetic folks, a dearth that the media (especially Fox News) is giddy to point out through cherry picked interviews and mockery.

This is, of course, the common failure of the left wing in the United States. We are not a homogeneous country, and we are not a developing one either. The need for massive social upheaval is made less imperative by an electoral system that, whether fair or open or effective or not, at least gives a timeline for a bloodless end of any given regime. Some would argue this lulls us into complacency, and that our choices of candidates and policies are so limited as to render them meaningless. This may be the case, but it is also an argument against the kind of wholesale revolution that could damage the relative prosperity and freedom of America. Successful American movements have always had specific ideologies back by cohesive and enactable legislative or judicial changes. Women’s Suffrage had this, Civil Rights had this, even Prohibition and the Tea Party (both 1773 and 2009) had this. The present left has not, and for OccupyLA to succeed, it must harness this energy into a policy that can handed to the Obama campaign team for immediate consideration.

What We’re Fighting For

I got into a lengthy conversation with a couple of gentlemen who professed themselves as the ‘Research and Education’ committee of the movement. I engaged them about what kind of data and reports they were looking for and how they planned to use it to build a coherent message for the movement. They pointed to fairly biased reporting on the city budget, showing that the city’s investment fund lends money to Wall Street firms for a quick turn around on the interest. When I tried to explain the difference between an investment and a hand-out, they glazed over. This point of view made me suspicious to them, and I suddenly had the fear that this was simply a counter movement to the tea party, an uninformed rabble of students who didn’t understand that we had already built a voluntary society and that with the removal a few obstacles, the people could be back working for themselves within the decade.

But when I moved on to mortgages, and how the banks have pushed the risk of the housing bubbles squarely onto the backs of homeowners and taxpayers, instead of taking the haircut themselves, they responded. When I described how we’ve replaced an education system with a private debt regime that keeps graduates in indentured servitude into their 50’s, they also responded. It seems that with the right targets, this populist crew with an eye on corporate profit could be directed toward legitimate issues that can be acted upon and could have a real beneficial effect.

I resolved myself to writing this piece and to reaching out to the demonstration’s organizers and the public at large with my suggestions for a clear, actable message for this movement. I believe these principles, if listed as demands, could resonate strongly with the people of this country and bring this movement to a head.

Hold Wall Street Accountable – Reform the Debt System

To this day, Goldman Sachs and the investor class have largely avoided the fallout that came with the sudden drop in the value of homes and the securities and options they constructed to abstract it and trade it on non-transparent markets. They achieved this through two methods – one was to hedge that risk by selling it back to other investors (not the ‘smart money’, mind you) so that they could win no matter what – the second was to use their considerable influence in the federal government (all the way to Hank Paulson on his knees, begging Nancy Pelosi to approve TARP) to push their losses onto the American taxpayer on the threat of a complete financial collapse. Keep in mind – they would never have been able to do this if commercial and investment banking were still kept separate, a deregulation for which we can thank Newt Gingrich and Bill Clinton.

1) Prosecute and Sue Financial Institutions and Execs for Malfeasance

I work in finance (well, venture capital and commercial real estate). The people I respect who have worked on Wall Street for years agree that the housing boom was created by crooks, for the benefit of crooks, and without consequences for those crooks. We need to put those responsible for fraud in jail, and we should sue the pants off of every bank who contributed to the systemic failure.

The Justice Department has been pushing a settlement with the banks that would help homeowners but absolve the banks of future liability relating to the crash. We should tell the President to abandon this plan just as California has done, and hold Wall Street accountable.

2) Levy Taxes on Financial Instruments

The President has already considered a financial transaction tax that would aim for the huge mergers and trades that are a matter of daily routine on Wall Street. It would target the income made by people who make money on their money.

Would this discourage investment? Yes. But it isn’t difficult to calibrate a program like this to target investments that are bad for the country but good for investors. No one ever turned down money because part of it went to taxes. As long as the circumstances are clear and unlikely to change, people will invest despite a tax. But this kind of targeted taxation can compensate the treasury (see: the people) for the constant failure of finance to hold itself up and not screw the rest of us.

3) Make the Banks Take the Hit on Mortgages

Sorry, everyone who owns shares in the banks, but the bank you own made some stupid loans. Right now, they’re either holding onto these underwater loans, extracting interest payments from workers until they have to move out and they can sell the house at a loss. They’re postponing the ‘book to market’ reality that is on the horizon, hoping their shareholders forget that houses aren’t worth as much now, and those notes they have on file will not be repaid.

Average people cannot strike a deal with the bank on their own. They can’t sit at home all day on the phone with a lender, making the case for a write-down the way someone in commercial real estate can. Only through collective action can average people make headway against entrenched, powerful financial interests. And since this is a sticking point for the entire economy, something has to be done on the federal level.

The President needs to require the banks to write down these mortgages, take the hit, and move on. Sure, the folks in that house should have their credit dinged hard – if you borrow money and don’t pay it back there have to be consequences, but those consequences must be shared with the lender who also took a risk. Kicking people out of their homes (or taking their money while you threaten to do so month after month) is the easy way to even more depressed home values and a new American underclass.

4) Make the Banks Take the Hit on Student Loans

Over the last twenty years, higher education has shifted from a non-profit, publically provided service essentially guaranteed to all productive citizens into a for-profit day care where students rack up debt and learn the various types of cannabis that can be grown indoors. This is partly because of a promise by the financial sector – if we lend students the money, they will earn from their new and better jobs and then pay it back with interest, and everybody wins. These same investors then set about sending all these same jobs that were meant to employ their debtors into more profitable markets.

Investors, including the government, took the risk on students when they lent them money to earn Bachelor’s degrees in Psychology. Those students now work at Starbucks and pay $600/month to Sallie Mae for the privilege. Are we really going to let an entire generation forgo home-ownership, children, retirement savings, and investments of their own because we were willing to let an 18 year old gamble with his future life savings to learn about East Asian history? We need a policy of widespread student loan forgiveness, for both public and private loans, so that America’s youth can spend their time and money on improving the nation and not paying back unproductive debt.

5) Pass the American Jobs Act Now

This one may seem partisan or cheerleadery, I admit, but the proposal on the table is a good one, it’s effective, and it has legitimate support in government. The proposal will create jobs now, it will fix our schools, and it will cut taxes for average working people. It is a sensible, centrist proposition that will help our economy by helping regular people, and it’s right in front of us.

Listen, I know it isn’t sexy to work within the system. I know we’re mad at Barack Obama for caving to Geithner on breaking up Citigroup, and to the Justice Dept on Guantanamo, and to the Joint Chiefs on all things war. But if we want real change, we have to be specific, and we have to be brave enough to admit that the answers will not be as easy as stuffing a rag in a bottle of vodka and tossing it at the police. Real change is constructive, not fatalistic, and if this movement is to thrive, it needs a real goal to work toward.

Thanks to LA Weekly for the pics (my camera was broke, like everyone else.)