Should Americans Support the Tea Party or Occupy Wall Street?
"I'm an American underwater in debt and with a stagnant income. Which group should I support: the Tea Party or Occupy Wall Street?"
The Tea Party has a coherent message: Stop the bailouts, stop the cronyism, and stop swindling today’s voters with empty promises and sinking future generations under mountains of debt.
What caused the crisis, the indebtedness, the unemployment, the stagnation? The culprits are state agencies and enterprises, including our Federal Reserve (our government’s bank), Federal Housing Administration (FHA), Federal National Mortgage Association (Fannie Mae), and Federal Home Loan Mortgage Corporation (Freddie Mac), which jointly flooded the country with cheap credit and encouraged and subsidized unsound banking and subprime mortgages, all to encourage wider home ownership, paper prosperity, and cozy relationships with their cronies. We got a housing bubble, mountains of unpayable debt, and a financial crisis. Thanks, Uncle Sam.
The Occupiers have the wrong address. The subprime crisis was designed in Washington, not New York. The FHA discouraged down payments (those old fashioned “savings”), pushing them from their traditional level of 20% down to 3% - and at the start of 2008 to 0%. Everyone, regardless of whether they can afford it, should own a home! Don’t save; speculate in the hope that prices will rise!
Government sponsored enterprises Fannie and Freddie “securitized” home loans under congressional mandates to direct more funds to lower incomes. In 1996, the Department of Housing and Urban Development directed Fannie and Freddie to target 42% of financing to borrowers with incomes below the median in their areas, going to 50% in 2000 and 52% in 2005. Such funding was directed to financing even mobile homes, a move lauded by Rep. Barney Frank as “one of the most important things to happen to make home ownership affordable to people who might otherwise be shut out of the market.” Also, “special affordable” loans were created, with HUD directing Fannie and Freddie to target 12% of financing to borrowers earning less than 60% of the median income, a percentage that rose to 20% in 2000, then 22% in 2005. That percentage was scheduled to go to 28% in 2008.
A speculative bubble was pumped up by deliberate government policies. Gains were private, but losses were government guaranteed. Sound banking principles were discarded and people were encouraged to load up on unsustainable debt. And when the bubble burst, homeowners, who were encouraged by government policy to buy bigger houses than they could afford, found themselves under water. Insolvent banks – some of the biggest of the big guys - were bailed out, and the printing presses were fired up even further.
Cronyism is on the rise and getting worse. Obama’s Solyndra scandal is just the tip of the iceberg. Both Democrats and Republicans are raking in the money from the financial firms; as the Washington Post just noted, “Obama has brought in more money from employees of banks, hedge funds and other financial service companies than all of the GOP candidates combined.” When you’re in power, everyone wants to be your friend.
Government debts and printing-press money will harm future generations. It’s unfair. It’s immoral. And it’s going to be solved not by occupying Phoenix, or Wall Street, or Atlanta, but by demanding that spendthrift politicians stop the bailouts and the cronyism, put the brakes on spending, and pay attention to a truly radical concept: arithmetic. Those are sound Tea Party values.
Photo Credit: Wikimedia Commons
Read Peter Rothberg's argument here. For more, see the PDF copy of the book that Tom Palmer edited, The Morality of Capitalism.
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Guest Professor
Tom Palmer
Tom G. Palmer is a senior fellow at the Cato Institute, and director of Cato University, the Institute's educational arm. Palmer is also the vice president for international programs at the Atlas Economic Research Foundation, and is responsible for establishing operating programs in 14 languages and managing programs for a worldwide network of think tanks. Before joining Cato he was an H. B. Earhart Fellow at Hertford College, Oxford University, and a vice president of the Institute for Humane Studies at George Mason University. He frequently lectures in North America, Europe, Eurasia, Africa, Latin America, China, and the Middle East on political science, public choice, civil society, and the moral, legal, and historical foundations of individual rights. He has publish...
Peter Rothberg
Peter Rothberg, the Nation's Associate Publisher for Special Projects, has been writing the Act Now blog covering the world of activism since 2003. His previous positions with The Nation include publicity director, web editor, special projects director and intern. A former contributor to Air America radio's daily Nation Minute commentaries, Rothberg is also a former speech-writer for civil rights leader Julian Bond. A member of the Brooklyn Literary Council and the board of Living Liberally, Rothberg lives in Brooklyn, where he was born and raised.
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The Discussion
Close All ThreadsIt seem to me that the most effective way to shrink the government and get back on track is to purge congress and essentially start over. The biggest problem with trying to do this is the incumbent problem. Everybody thinks congress is worthless except for their reps and senators. So nothing changes, for obvious reasons.
About 15 years ago I saw a chart of congress persons that showed their net worth when they started and their net worth currently. I can't find such a list anywhere. If such a list were published widely and the extent of the corruption were exposed so clearly, maybe it would help get the turnover we need. Anyone know where such a chart can be found? I don't see it on any government web sites :)
I have no intrest in the Mic, please give it to some one who is poor. Now seeing how most do not have a clue what the Tea Party is, I will share, its just people. The working class of America. Now from my files to you, now because of this Law Suite in Florida Repulican Officials's vs. Tea Party.
AlterNet News / The Investigative Fund at The Nation Institute / By Tristram Korten
Tea Party Smackdown in Florida
In a spate of lawsuits, the Republian Party of Florida is trying to put a stop to a third party called the Florida TEA Party.....
I wish to Welcome you to the Tea Party Independent Forum.
Some say a impossible task, I say it has been done and is Protected by Constitutional Law. No One Owns the Tea Party, its like saying We The People were born Subjects unto this Government.
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The problem is in Washington, right smack on the laps of the GOP and their "tea" "party" darlings. Keep voting for the same "small govt, less tax" policy that brought us the economic tsunami, just more of the same from the good ole "drill baby drill" crowd. Or we could try something new, like true economic and political reforms, such as the Occupy movement is discussing. Here is a simple explanation of how we got here: http://phoenixville.patch.com/blog_posts/how-trickle-down-theory-is-ruining-our-schools-and-closing-our-libraries-thank-you-ronald-reagan
Coming soon, how we begin to dig our way out, starting with Balanced Budget Fairness Act, Main Street Recovery Petition and tax reforms that make sense, not more tax welfare for billionaires.
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Tom Palmer: "The Occupiers have the wrong address. The subprime crisis was designed in Washington, not New York."
First off, the word you are looking for is occupants, not "occupiers". Secondly, I won't argue with you on the point that Washington DC is the epicenter of our nation's fiscal problems. But their specific address is 133 C Street SE... not on Pennsylvania Ave.
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The question, albeit directed to Americans, I believe is open to every other person across the globe. Personally, I believe OWS is only a diversionary extension of one of the principles of the Tea Party.
Who is behind the bailouts? The State. (check the Nigerian version of a proposed 3.1trillion naira bailout for banks - facebook wall)
The economic challenges currently being endured is not a PRODUCT OF THE RELENTLESS effort of free-marker capitalists, but a syndication of the 'state' and its cronies under the pretense of economic stimulation that has increasingly yielded no positive results.
Hence, while I support the OWS protests, I strongly think there is need for clarity in differentiating between free-market capitalists and cronyism
I used to think that democratic governance and corporate governance were antithetical in nature, but then I put my old Hegelian thinking cap on, and suddenly realized that the real thesis-antithesis is between free trade capitalism, an ideal type that we never see in reality, and corporate governance. This is due to the fact that every corporation seeks monopoly, vertical, horizontal, and eternal, and that is the antithesis of the free trade capitalist unicorn.
Seen from this perspective, democracy is the evolutionary synthesis that alone can control the antipathy between the other two zeitgeists.
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Thanks for the article. For more on what Libertarians do worldwide: http://www.Libertarian-International.org
As a teen Libertarian in appointive public office, I co-host its pilot community project, a non-partisan Libertarian-interested community in the US. It has 3000+ users, Libs in over 20 public offices, and Lib-interested public officials participating in some 30 positions. With coalition projects from homelessness to ballot fairness (http://www.ERCPinellas.org) we respectfully intereact with TEA, OWS and other groups--on common ground.
That common ground is more public awareness of Libertarian voluntary tools--tools many Libs used to insulate their families from bad policies, and address the root causes of anti-choice immigration & other backfiring rules. Nothing else matters.
Oh, the Heavy Hand of Excess Regulation ...
Levin and Coburn • http://hsgac.senate.gov/public/index.cfm?FuseAction=Subcommittees.Investigations">Senate Investigations
http://levin.senate.gov/senate/committees/investigations/">Permanent Subcommittee on Investigations
http://levin.senate.gov/newsroom/press/release/us-senate-investigations-subcommittee-releases-levin-coburn-report-on-the-financial-crisis">U.S. Senate Investigations Subcommittee Releases Levin-Coburn Report on the Financial Crisis
NYT • http://www.nytimes.com/interactive/2011/04/14/business/14crisis-docviewer.html">Wall Street and the Financial Crisis : Anatomy of a Financial Collapse
Thrive • http://www.thrivemovement.com/infographics/historyofthefed/">The Decline of the Dollar : A Brief History of the Federal Reserve
It's 11 ...
Mr. Rothberg:
I'm hoping to get your take as to what you see the OWS movement's impact within the Democratic establishment. While you mentioned links between the Tea Party and more established conservative groups, these affiliations didn't start until quite a while after the first Tea Party protests in early 09. By contrast, organized labor has already thrown its hat in with the OWS protests in NY and elsewhere in the nation.
Do you think the OWS protestors will move the Democrats more to the left in this election year as the Tea Party did in 2010? Or, are the demands of this movement too nebulous and the coalition too diverse to have any real impact upon the political landscape?
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Tom, for some reason it won't allow me to make this comment further down the article where it fits after another comment, but I want to make this point. You brought up the Community Reinvestment Act as an example of the government pressuring banks to make loans to unqualified people. What is interesting about that is during the subprime is that the lending companies making the vast majority of bad loans were exempt from CRA regulation. Decision One, Crevecor Mortgage, Option One, and First Franklin are all examples of subprime lenders who were exempt, because they had no branches or deposits, just lending. The point of the CRA was to prevent banks from not lending where they had branches. If you have branches in certain areas some level of investment in that area should be expected
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I'm not racist enough and I spell too well to be in the Tea Party. So, OWS it is!
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“Again, in a ship, if a man were at liberty to do what he chose, but were devoid of mind and excellence in navigation (aretes kybernetikes), do you perceive what must happen to him and his fellow sailors?”
— Plato, “Alcibiades”, 135A
Limited government. Everyone believes in it. They disagree about the location of the limits, who should govern, and the form of government.
Anyone who looks at the issue from a systems perspective knows that there are limits to limiting governance. Systems of a given size and complexity will have governing systems of proportionate size and complexity — if they are to achieve any aims at all, beginning with the aim to survive.
Let's call that the “Law Of Requisite Governance”.
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I do wonder whether the looming government debt issue, which motivated much of the Tea Party movement but which seems not to be a factor in the Occupy Wall Street movement, is of interest. Or is a Greek future really nothing to worry about? (The Greeks have the Germans to bail them out, at least in the short term. Who will bail out the Americans?)
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Barry,
http://www.youtube.com/watch%3Fv%3DLZxvYdYOqWQ
Jingoistic ad hominim does not convince the thoughtful.
Trying to stop crony capitalism by limiting the government is the equivalent of fighting the drug war by imprisoning the users. A proven ineffective tactic.
Do you want to stop the corruption running rampant in the country? The only way is to demand absolute transparency in ALL governmental funding, ALL campaign funding and ALL PAC and lobbying funding. There can be no more acceptance of jobs from private industry after people have been regulating those industries. There can be no influence peddling by having former elected officials work in the lobbying industry. ANYONE WHO HAS EVER WORKED FOR THE GOVERNMENT IS SUBJECT TO FINANCIAL SCRUTINY AND PROSECUTION FOR THE REST OF THEIR LIVES.
Sound draconian? It is, and its probably not enough. Corps need even more with heavier sentences.
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The American way of life is being lost to a hostile corporate takeover. The Occupiers see it wide and bright and that is why they started with Wall Street. It may be partly symbolic, but what it symbolizes is real enough — Wall Street harbors the moneychangers who defile the temple of our disappearing democracy, and that is where the purification must start.
Sure, the honor of the government has been bought, but the Occupiers know who is buying it and who is reselling it. Trying to tell them we should starve the beast of democratic government to bulk up the beast of corporate rule is like saying that we should get rid of the prostitutes and just keep that pimps.
The People demand answers that do not insult their intelligence.
So stop that.
Now.
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One more topic should be introduced. Peter wants to spend more. And more. And more. Deficit spending through the roof. Extra taxes on the rich (which would cover a quite small portion of those deficits), just because ... hey, they're rich and I'm not.
The arithmetic is clear: this is unsustainable. If you want to get a look at our future, visit Greece. Promises that can't be kept because there are not the savings or resources available to fulfill them. The politician makes the promise today and doesn't worry, because the bill will come due later, when he's off the scene. Bush promised a war that wouldn't cost us anything! Wow. The Iraqi oil revenues would pay for everything! Whoohooo! Well, that didn't turn out well, thousands and thousands of lives later and billions upon billions upon billions of dollars later. All that "stimulus" spending to make Humvees...sure made us all rich, didn't it. No, it didn't.
If you spend money like there's no tomorrow, there might not be one. We are facing a very serious fiscal crisis of the modern state, thanks to war and entitlements. I don't see OWS or Peter talking about it. Who's going to pay up?
Of course, a good Galbraithian says, "we all owe it to ourselves." Um, right. When you end up paying staggering taxes to pay the interest on the debt, since we've been borrowing to make the present interest payments, you'll see what utter sophistry that is. The ever greater mountain debt is unsustainable and completely immoral. Putting that burden on young people is wrong, wrong, wrong. I think that the Tea Party has had something to say on this. I've yet to hear anything from Peter or the people defecating in the park in New York.
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Steven Hobbs, I'm still waiting for you to post documentation that any Tea Party members were responsible for ANY violence, much less the specific incident you alleged.
If you're going to make such statements, please be man enough to back them up.
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I sympathize with the Tea Party and OWS, But agree with Ash's comments earlier -- neither side has all the answers.
We could be seeing the start of consensus between right and left on some issues though, due first to the Tea Party, and now OWS.
Both Rs & Ds have agreed to reduce our debt & deficit via the Super Committee. They're rightly hashing out how to hit the $1.2 trillion mark, but both sides agree a deal must be reached.
What consensus comes out of OWS remains to be seen, but as others have pointed out there is broad bipartisan anger at Wall Street. That anger, deservedly directed at bankers who earned vast sums betting against their own clients (see Citibank's $285 million fine last week) must now be channeled into repairing our economy & politics -- not weakening them further.
Another aspect of Occupy Wall Street (perhaps not explicit), repeal corporation "personhood" giving 1% an unlimited say in the country's political agenda.
The Tea Party's concern is opposite: our government plays too big a hand in business. But OWS draws attention to the unfair hand corporations play in society — the police force, elections, the nation's agenda. Corporations' free speech in elections have completely diluted the average American's concerns. Deregulation, aka putting short-term profits ahead of financial security & welfare for average citizens, helped lead to this mess. Citizens United tips the scale further.
Look to the nation's politics of the last 2 years: Tea Party gained traction with help from Koch Industries. OWS is about refocusing our conversation on the 99%.
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Both Tea Party and Occupy Wall Street are underlying serious issues. But they are not identfying the same source of the problems. Should we blame regulators or banks ? Who is supposed to monitor and protect public interest, banks or regulators? Banks are following rules, then blame those who wrote these rules. If you say those rules were written by banks themeselves then we should question ourselves on who should write these rules and what theses rules should be like ? Here is the difference, Tea Party want to correct the problem at it core, Occupy Wall Street wants to correct the results of the problem..... !
Both Tea Party and Occupy Wall Street are underlying serious issues. But they are not identfying the same source of the problems. Should we blame regulators or banks ? Who is supposed to monitor and protect public interest, banks or regulators? Banks are following rules, then blame those who wrote these rules. If you say those rules were written by banks themeselves then we should question ourselves on who should write these rules and what theses rules should be like ? Here is the difference, Tea Party want to correct the problem at it core, Occupy Wall Street wants to correct the results of the problem..... !
There are voices here who view this dilemma as primarily or entirely govt. caused, while praising corps. & unbridled markets. They also say that shareholders & the market itself are sufficient, alone, to control the markets.
Consider:
1. Our dilemmas are two, not one: govt (political pandering), & private sector (unchecked corp. greed).
2. Control mechanisms: elections (for govt), minimum needed regs (for market), media & judiciary (for both).
3. Corporations: the voices say greed makes optimum performance & results. I say that unchecked greed knowingly created worthless paper that gave us mortgage meltdown. Corps. are "persons" & therefore accountable to community & society, not just accountants & shareholders (who perhaps ought to share in corp. liabilities as well as profits).
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I would like to ask Peter Rothbers to correct a factual element in his assessment :
''Look at the GOP's presidential primary. The two main Tea Party candidates, Michelle Bachmann and Rick Perry, can't even convince the GOP's most loyal electorate to support the Tea Party agenda, and if right-wing voters in red states aren't buying the Tea Party's faux-populist line, why should any of the rest of us?''
This is not true because both Bachman and Perry have lost support due to their personal political skills, Gardasil/retardation blunder for Bachman and Debating for Perry, and whether they can beat Obama in a general election.
Therefore the fall of these 2 candidates doesn't mean a rejection of Tea Party policies by the GOP electorate.
America is so strong that we find our financial system and long-understood ways of living together and doing business crumbling, while most people continue to go about their daily lives, and protest with neither OWS nor the Tea Party. Yet, the majority also know that "something is wrong." This is not about surveys, "popularity," or who funds whom. It isn't even about "the country is headed in the wrong direction." The country is in a bad place, and America is not alone. Long-valued paths to adulthood, homes and family life have eroded - education leading to a good job, home ownership, and the ability to earn a good living. A poster and a tent in a park, a billion Tweets, and a tricorn hat won't enforce accountability on government or Wall Street. Only discipline and refusal to submit can.
I have a thought to offer Dr. Palmer in a spirit of friendship. I believe it is valuable to concede that the financial crisis was also the result of systemically flawed private action, e.g. the fee system which paid brokers a flat rate for generating loans irrespective of risk. Explicitly making this point is not only "honorable," it gets to the heart of why classical liberals believe what they do.
Human nature is deeply flawed. Every individual is shortsighted or avaricious at some time. The question is how well societal institutions can cope with this inevitability. Systemic risk could arise in a totally free market, but the alternative to letting banks fail is anesthetizing private actors from the consequences of their folly. A free society weathers these dark nights best. That is key.
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The goal of the Tea Party to my understanding is to pressure both houses of Congress to be more transparent, to spend less, and to act more as though they had actually read the constitution at some point in their lives. To accomplish those goals they have challenged those who voted for stimulus or supported bailouts. Success in so doing put old guard crony
GOP on notice that they need to dot their conservative 'i's and cross their conservative 't's, a thing beneficial in and of itself to the brothers Koch. I figure pressure to perform is stated in dollars not sense, as in Delaware.
OWS is like "Fight Club" without intellectual support. The loose unaccountable style is akin to agitprop. The call for 1% accountability and tax is therefore, orchestrated hypocrisy. Thus I do not trust it.
I've also enjoyed this discussion and thank Peter, those who have joined in, and the PolicyMic.com team.
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I just want to thank everyone, especially Dr. Palmer and our host at PolicyMic, Jake Horowitz, for taking part in such a robust and lively and generally civil debate. I'm learning a lot.
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An old Fable comes to mind when considering this question.
The Grasshopper and the Ant.
As a confirmed Tea Partier/Ant I support the legal changes needed to change our government from within.
Jenny Hatch
More thoughts on my Blog: http://jennyhatch.com/2011/10/20/occupy-wall-street-as-compared-to-the-tea-party-written-by-a-tea-party-organizer/
Hi. I am late to this discussion, so if this is redundant, apologies. Regarding the claim that deregulation caused the present crisis, please check out The House That Uncle Sam Built: the Untold Story of the Great Recession of 2008 by the economist Steve Horwitz and Peter Boettke. Link here; http://www.fee.org/wp-content/uploads/2009/12/HouseUncleSamBuiltBooklet.pdf
In particular, see appendix A, the myth of Deregulation. From 1980, 4 regulations for every deregulation.
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That's what the Tea Party looks like from inside the Kochcoon? Here in the hinterland it looks like the sort of Republican Party reptile that talked free markets while supporting bailouts. And the poll-leading Republican presidential candidate also supported TARP. A recent poll shows that a plurality of 49% of the OWS crowd also believes that bailouts were justified. A pox on both their igloos.
While I want to sympathize with the Occupiers for their denunciation of crony-capitalism and the revolving door between financial market authorities and Wall street, their policy naivety is really off putting. Pretty much all policy suggestions coming out of the Occupiers (increasing taxes on high revenues, their obsession with the Glass-Steagal Act, etc.) are a train wreck. What is interesting is that while the Tea Party movement has been criticized for not being an intellectual movement, they're the ones with the sound economic and policy answers to the questions Occupiers are asking. The Occupiers' blind attachment to any piece of policy that would increase the Government's size, regardless of the perverse effect, is finally suggesting that they're a much more emotional movement.
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Raymond Hanna of Act for America Boston sent me this...
This is who we battle as free AMERICANS,
This needs to get around. Those of you who may have been enamoured of Obama should now see clearly what he is about. Open your eyes. I was once in the NEA but I got out. What are these people thinking, and how can this country (through the media) turn a blind eye to what Obama is striving to achieve? Destruction and death. It's only a tinder box out there of class warfare about to erupt and when it does, Hussein will declare martial law, cancel the elections and step out as the dictator that Che and Lenin were advocating. The Muslim Brotherhood is all over this stuff, especially the OWS protests. It has been proven in Orlando, and Obama has come out in support of this rabble.
The choice is obvious for me... TEA PARTY all the way! Coherent pro-American message, restore the US Constitution and Bill Of Rights, and we KNOW what we protest and we have workable solutions. The OWS movement is supported by George Soros, the Communist Party USA, and the American Nazi Party, among other anti-American groups. It also seems to have an identity crisis, as well as they are targeting only part of the problem, with the root being the HUGE government, it's spending and anti-business regulated environment.
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Another important point about Fannie and Freddie: Their risk management staffs did not have the guts to urge the removal of well-intentioned initiatives (such as the ones Dr. Palmer mentioned) that were destabilizing our entire financial system. The risk management people weren't stupid-- it's a classic principal-agent problem. These guys knew it would be politically impossible for the government to stop helping poor people (not to mention the racial implications) "own" homes, so instead of risking their job security to urge a return to sustainability, they kept on collecting paychecks and ignored the fact that home prices couldn't appreciate forever.
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Another important point about Fannie and Freddie: Their risk management staffs did not have the guts to urge the removal of well-intentioned initiatives (such as the ones Dr. Palmer mentioned) that were destabilizing our entire financial system. The risk management people weren't stupid-- it's a classic principal-agent problem. These guys knew it would be politically impossible for the government to stop helping poor people (not to mention the racial implications) "own" homes, so instead of risking their job security to urge a return to sustainability, they kept on collecting paychecks and ignored the fact that home prices couldn't appreciate forever.
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Tea Party.
The Occupy Whatever operation is organized and financed by communists and global socialists, animated by SEIU and ACORN core agitators, spiked with anarchist malfeasants, and populated with disaffected useful idiots. They urinate and defacate in the public areas of their 'demonstrations', leave the place a mess, defy authorities trying to maintain order and decorum, seek to obstruct normal routines, and generally act like tantrum-throwing adolescents.
The Tea Party, OTOH, voice their concerns, act with decorum and respect, police their areas spotless when the demonstrations are over, and generally act like concerned, responsible adults.
There is no comparison as to the quality of the respective members. One is high-class, the other is riff-raff.
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No one word is powerful enough that it is acceptable to use it within it's own definition. So it goes for a political and or economic system. If one must employ the political and or economic system they wish to destroy in their attempt to destroy it, then it is a system that is so powerful that to destroy it would result in the declination of liberty and prosperity. Occupy Wall Street protesters are the epitome of the latter, in that they are employing a freedom allowed to them not through the socialism they wish to impose, but through the democracy they wish to destroy. They are making signs and using electronics, all made possible not through the socialist government they wish to establish, but through the system of capitalism of which they wish to destroy. Occupy Wall Street = Hypocrisy
I really don't understand this mentality of having to pick one or the other. Should Americans be force-fed a perception that they have to choose between one or the other; or should Americans simply support America?
What is wrong with taking the best parts of both and forming your own opinion?
What is wrong with voting for candidates, not political parties?
I just don't understand why people buy into the concept that you have to choose your team. It's irrelevant, people should be voting on the particular candidate based on best choice. In the same way, people should vote on bills based on their point of view and how it affects them on an individual basis.
People get caught up in the intellectual/ego side of politics. When you apply real life/family to the equation, truth emerges.
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Now that I'm multiply-posting, I think that one thing everybody who is disgruntled should have in common is outrage over the mortgage crisis and ongoing scandals that devastated not just our, but the world's economy. I am personally about $70,000 under water on my own, A-paper mortgage. Could I walk away? Yeah. Do I want to? No. The bad mortgages started here in So Cal, but the really egregious abuse occurred in Florida. There was so much I can't even find the real condo scheme that destroyed hundreds of lives - this is ANOTHER scam. http://www.time.com/time/business/article/0,8599,1817407,00.html
This article is from March 2011 - and this is ongoing -
http://www.usatoday.com/money/economy/housing/2011-03-25-fha-problem-lenders-enforcement.htm
This is to this day, not being dealt with.
At www.peoplescommonground.org there is common sense ideas that are aligned with both The Tea Party and OWS. The truth is, we dont need polarization. Its not Us vs Them. Thats what keeps the current system entrenched.
The groups have different methods but both have create global conversations that shift the collective mindset. Now we just need a representative electorate that endorses the right ideas to restore faith in our system.
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Augggh indeed! I'm sorry about that - my computer sat there for such a long time and now I see, it was commenting . . . and commenting . . . and commenting. I am so sorry - if I could remove I would, but do not know how.
I think that while I in no way support the majority of the far right views of the Tea Party, what they do have is a unified message. I think that if the OWS could agree on one unified message, and articulate it, it would be able to stand out in the political dialogue of this day and age.
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There are many things that I have learned from my 700 politics-related pages on Facebook, including about a hundred of the Occupy X pages, along with my 700 Facebook friends, the lion's share of whom I added in connection with the drives to recall Rick Snyder as Governor of Michigan and to repeal the Emergency Manager Law that he and his TEAGOP cronies ramrodded through the State Legislature this year.
First off, the folks out there are nowhere near as dumb as most of our PolicyMicers and visitors seem to think they are. Indeed, most of them are far better informed about what is happening on their local scenes and in the country at large than the median commentator here.
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Peter Rothberg writes that the defining feature of Occupy Wall Street is its independence, but he misses an important point in history of the Tea Party. At the beginning of the Tea Party (and by beginning look back to the Tax Day Tea Party in 2009, long before the National Tea Party Convention of 2010) the Tea Party was just as politically independent as Occupy Wall Street is now. The grassroots organizers then were just as jealous to guard the movement from politicians and the astroturf as the OWS is now, but were far more organized. Given the lack of organizational structure at OWS, I hardly expect they will be able to fend off the unions and politicans much longer. And when they lose their independence, they will lose their populist appeal with it.
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Dr. Palmer has this right. The problem is not Wall Street, but rather government.
The Fed mismanaged the money supply, creating low and even negative (real) interest rates. This, combined with mandates and subsidies, led to a housing bubble. The Fed and the government have prolonged the recession by preventing the necessary post-bubble adjustments, including by bailing out banks and maintaining extremely low interest rates.
The answer for a free and prosperous economy is to end the Fed and disentangle the government from financial services. This means closing Fannie Mae, Freddie Mac, the FHA, and the FDIC, and ending government regulation. Let firms freely compete, and succeed or fail, without taxpayers being exposed to their losses.
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First off: wow - I'd just like to thank both of the guest authors for diving head first into the debate here and mixing it up in the comment section!
One thing I find interesting about both OWS and the Tea Party is where the intersect: Ron Paul's supporters exist in both movements.
The members of both of these movements share a suspicion of powerful institutions. To varying degrees, they fear both Big Government and Big Business. In addition, both movements tend to be somewhat skeptical of religious institutions. The Tea Party lacks the religiosity of the conservative grassroots. And OWS? I'm guessing they're missing church while sleeping on the ground.
They both share skepticism toward large institutions, but their movements both suffer when skepticism becomes conspiracy/paranoia
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Both sides to this debate led to the mortgage meltdown. Govt for encouraging reduced standards & regs, the financial industry for wanting to pump through new loans for points and then package the new risk with stable loans.
The answer to the question: "Should Americans Support Tea Party or OWS?", the lion's share of our support should go to OWS.
The meltdown dilemma is compounded by govt red ink budgets. Most of that red ink is entitlements. Entitlements are not the problem; our safety net is necessary. The problem is management & funding of the safety net. Fund it properly!! Or require every American, from birth, to have his/her own retirement account, also health insurance!!
Meanwhile, banks must NOT be permitted to chase unjustified risk ever again. OWS, not Tea Party. Obvious.
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There is something that keeps bothering me about our recent discussions of the Occupy Movement (OM) and related concerns of the American populace. There are 1500+ community pages on my Facebook interest list, about half of those concerned with political issues, with the split between what most folks would call liberal & conservative POVs being about 9 to 1. So my newsfeed gives me an admittedly lopsided but widespread finger on the pulse of what Facebookers talk about, politically speaking. I don't have all the OM pages yet, probably only a hundred of the 300+ U.S. pages at last count. But it's possible for a person to get a sense of what the people out there are saying is bothering them, and by my lights there is a consistent signal coming through the noise, interference, and jamming.
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Sorry, Darwin, but you're simply in error. A little research would help. The members of the Federal Reserve boards who determine Fed policy are nominated by the President of the United States and confirmed by the Senate: http://www.federalreserve.gov/faqs/about_12591.htm
Fannie Mae was created as a Government-Sponsored Enterprise by Congress in 1938. Private shares were later issued, but it retained special privileges and borrowing powers. Freddie Mac was created as a Government Sponsored Enterprise in 1970, also with privileges not available to normal private firms. Both were widely acknowledged to have implicit guarantees from the taxpayers, which were considered advantages in attracting capital. Private firms do not have their own line of credit from the treasury, nor do they respond to directives from the Congress or the Department of Housing and Urban Development. They are part and parcel of state power, or of "state capitalism," if you prefer.
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Corporations, by their very nature, are designed to be "greedy." Their sole purpose is to maximize value for their shareholders. It must be assumed that if they see new ways to do this, such as default swaps or CDO's, they are going to do so.
It's the government's job to create regulations that force corporations to find ways to achieve this purpose without significant harm to the rest of society. Thus, the lack of regulations like capital requirements for TBTF banks (shifting risk to shareholders instead of taxpayers), requirements that originating banks hang on to a % of their loans, and tying executive pay to “long term” profits were the problem.
Blaming Wall Street is like blaming a dog for attacking the mailman. It's the owner's responsibility to lock him up.
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Like most TPers, you don't know what Ron Paul knows, that the Federal Reserve is a completely private corporation answering to no one other than their shareholders. Occasionally the chairman will go before congress, but only to tell them what he is doing this week and to advise on what bills to pass. And the Fed is the one with the printing presses, not the government. Otherwise, there would be no govt. debt.
Fannie and Freddie were also completely private corporations, until the bubble popped and they were bailed out by the shrub. THEN they became government entities. Financial institutions invented securitized mortgages, sold those securities and invented the derivatives, just to make more money. None of it was guaranteed - until the wall st. bailouts.
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In response to Peter Rothberg's article: I'm astounded that it's even necessary for you to inform people that austerity crushes an economy in the shorter term. I'm not even sure how to respond to critics of emergency/temporary stimulus. can someone explain why it's bad?
The classic argument against government spending is that it crowds out private investment. But the stimulus spending was mostly infrastructure spending and money to help states avoid laying off teachers and firefighters. Are conservatives claiming that the stimulus is crowding out private investment in road building and firefighting?
Someone educate me why a low tax country with plenty of private capital available should react to a downward spiral in demand by cutting spending. Help me understand. I'm stupid, apparently
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Cronyism? Solyndra is a scandal? Oh. OK. Seems more like a failed government loan and a political embarrassment. I've yet to see anything pointing to scandal. There have been some unfounded accusations, but no one has shown that anyone did anything "scandalous".
“Obama has brought in more money from employees of banks, hedge funds and other financial service companies than all of the GOP candidates combined.”
That's evidence of "cronyism"? Last time I checked, political donations are legal. And haven't you read the news? Obama wants to raise these people's taxes! That's favoritism and cronyism?
There is one reason why Obama is ahead of the GOP in financial services fundraising:
The GOP candidates' campaigns are grossly incompetent.
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I find it interesting that Mr. Rothberg lists "student debt forgiveness" as one of the "crystal clear goals" of OWS.
Last I checked, people aren't forced to take out student loans at gunpoint. They choose to take loans out because they are making an investment, hoping that the risk will pay off in the form of employment and a higher salary than they would obtain otherwise. Why should taxpayers be forced to compensate someone for making a poor investment decision? If I borrow 200k to be an Art History major and I can't find a job afterwards, why should the taxpayer be forced to subsidize my terrible financial decisions.
I guess OWS isn't fundamentally opposed to bailouts for risky and self-indulgent financial behavior.
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If some companies, mainly banks, have a huge power criticized by the movement "occupy Wall street", this is because of government monopoly of coercion which is used to distribute privileges and favors to particular groups instead of protecting people life, private property and fruit of labor. This is crony capitalism where the responsibility is shared between rent seekers and Government. The only way to challenge the excess of power of enterprises is that government won't longer any gifts to distribute to lobbies. It should use the power of coercion only to save property rights such as enterprises understand that the only way to prosper is to be efficient in providing goods and services not through political connections.
I would support OWS. The whole reason the government allowed so many loans to happen that shouldn't have is because of the very platform the Tea Party ascribes to. This platform is that people should have the freedom to trade as they wish because whatever happen the market will fix itself. However, the market is not a living organism. Therefore, it cannot choose to fix itself to help those in trouble. If something positive happens, it is only by mere chance.
If a person in debt supports the Tea Party, s/he will only be getting the same problems that caused the meltdown and a random possibility of fixture. OWS can provide austerity measures to relieve the symptoms of the problem and a living human to control the financial system to fix it including greater accountability.
The policy push for more mortgage lending was clearly a policy matter; that is what FHA, Fannie, Freddie, and other agencies were charged with doing. Securitization of those loans by Government Sponsored Enterprises reduced the bank's exposure to the risk and moved it to agencies with implicit taxpayer guarantees. Is it any wonder that bank lending standards fell so dramatically, which certainly helps to explain the 115% loans. None of those were "exempt from regulations." The financial sector is very, very heavily "regulated"; the problem is that the regulations -- quite deliberately -- created excessively risky loan practices that would not be sustainable in a normal market with proper incentives (e.g., not expecting bailouts). I highly recommend Johan Norberg's very fine book "Financial Fiasco: How America's Infatuation with Home Ownership and Easy Money Created the Economic Crisis" http://www.amazon.com/Financial-Fiasco-Americas-Infatuation-Ownership/dp/1935308130/ref=sr_1_sc_1?ie=UTF8&qid=1319238539&sr=8-1-spell
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While FHA, Fannie, and Freddie, did lower down payment standards that is not alone the reason for what is going on. Washington did start a culture of deregulation that led to exotic products being created. But Fannie, Freddie, and FHA were not making 115% loans, or no doc loans, or stated income loans, or 100% loans to people with scores lower than 580. These are the types of loans that kicked off the crisis. These loans were created by investors and subprime lenders who were exempt from regulations. The government push for home ownership while a bit misguided, did not encourage people to buy more then they could afford. When people took advantage of these programs and bought homes the market turned to a sellers market, causing prices and values to climb.
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Will the last actual OWS activist who gets fed up listening to these policy wonks bat their theoretical shuttlecocks over the net please turn out the lights?
That is all ...
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Peter Rothberg presents a very good summary of the overlap and very real differences between the two movements. The only point that I can see that he missed is the OWS is international and the Tea Party is not.
That any common ground exists is encouraging. The benefit, if both movements can gain support from a significant number of members of Congress, might be re-opening a path to bi-partisan solutions in favor of ordinary Americans.
Neither. You should support the Supercommittee, and groups like No Labels and the Committee for a Responsible Federal Budget who are urging pragmatic compromise.
The only way we're going to get out of the mess in which we've dug ourselves is to recognize that we're all in this together. Both sides have legitimate grievances and unless an until we recognize that fact, we'll continue to suffer from polarization and gridlock.
I'd like to discuss why we have to treat them as homogeneous hiveminds, and pit the two against one another. Either group has valid concerns, and both have their share of morons who are simply along for the ride.
I would also add that cronyism by the members of the middle or lower income class is no better than cronyism of the banks and corporations.
The position like the one expressed by the young man in this video (http://www.youtube.com/watch?v=wrPGoPFRUdc&feature=youtube_gdata_player) that some peaceful citizens owes other people their tuition or pension is extremely problematic.
One may only wonder what such people will be shouting, and, more importnatly, doing, when the US government finally defaults or hyperinflates which is basically the same. That it will, is a sure matter.
Gary -- People criticized the Bush tax cuts for not creating jobs because they were sold to the public explicitly as a JOB-CREATION TOOL. What I find funny is how all the people who gave W a pass for running up a huge deficit have now, under Obama, become deficit hawks.
Leif -- Thanks for the good questions. I think I have answers but I'll ponder your remarks on the subway home and will reply tonight.
I recommend that you learn to distinguish rhetoric from reality. Then you need to find out what actually happened in those States where people are now suffering the buyer's remorse of having succumbed to the TEA Party Line. It's not that all of them were dumb enough to buy that line, but many were fooled by the old bait-and-switch, candidates who camouflaged their hidden Teadiot agenda by running slick Madison Avenue campaign ads to disguise themselves as “compassionate conservatives”, “kinder, gentler Republicans”, and other brands of thick-sliced baloney like that.
The information is out there, you have no excuse anymore for being conned.
Gary -- It's hard to get a true sense of something so non-traditional in one stroll. The fact is that OWS has absolutely no institutional links to any progressive or liberal groups. The unions (largely) share the protestors message and wish they could get the same attention as OWS but they've actually been very frustrated at their inability to co-opt or even really get involved in the movement. Talk to some folks on your next stroll and ask some questions. Also, logic is difficult, but the fact that joblessness has increased over the last few yrs despite government spending does not actually prove that austerity creates job.
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Both dr. Palmer and Mr Rothberg raise interesting points and have equally valid arguments when it comes to analyzing the cronyism. My question though is: if clearly government action was one problem (if not, the biggest) that caused the housing bubble, the debt crisis and the wider financial crisis, why do the OW protesters want recipes that ask for even more government interference. Do they actually believe that now "it will be different"? Or that suddenly Capitol Hill and The White House are staffed with better politicians that will not be tricked into cronyism? Why would work now what failed in the past and got us in this mess, i.e. government intervention.
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Personally I do not think this is a simple either or question. Both movements are organic, spontaneous, and thus hold a wide spectrum of beliefs. However at the core they both recognize the same problem, that the status quo of the relationship between business and government is horribly broken. Power is far too concentrated in the hands of a few elite in DC and NYC. Most Americans seem to grasp this as well and that is why these two movements have support from many sectors of society.
I do not expect to see these two groups working together hand in hand, but with so many people upset about the status quo do you think there is any chance we will see a decrease in cronyism, corporatism, corruption, and similar social ills?
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So maybe if we combine Palmer and Rothberg's essays we can answer the million dollar question, "Who are the OWS protestors?" How could we all have missed the obvious. Both authors agree both movements disdain Wall Street and Washington's Bailouts. Both authors admit many other similarities join the groups including their rare spontaneous birth.But both authors agree OWS is younger, more educated and more disorgnaized. We should have guessed the obvious. OWS is populated by the Tea Party's college educated unemployed children.
I actually took a stroll through Zuccotti Park this afternoon. Yikes. If these people represent the 99%, please count me among the other 1%.
Peter notes that "austerity" and budget cutting doesn't create jobs. Well, we've had anything but austerity over the past 3 years. The federal gov't has dumped trillions into the economy. What has it gotten us? More poverty; more unemployment; more debt.
As for the popularity of OWS, I am not surprised in the least. At this point, they are just complaining about the status quo. There's plenty to complain about. It's when they start talking actual solutions that their popularity will plummet.
Finally, to suggest that there are no institutional ties seems to be a bit naive. What about all the unions members I see marching around?
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Spot on!
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