Monday, October 17, 2011

Let's Talk Percentages

I am a college senior about to graduate completely debt free.
I pay for all of my living expences by working 30+ hours a week making barely above minimum wage.
I chose a moderately priced, in-state public university.
I started saving $ for school at age 17.
I got decent grades in high school & received 2 scholarships which cover 90% of my tuition.
I currently have a 3.8 GPA.
I live comfortably in a cheap apt, knowing I can't have everything I want.
I don't eat out every day, or even once a month.
I have no credit card, new car, iPad, or smart phone -- and I"m perfectly OK with that.
If I did have debt, I would not blame Wall St. or the government for my own bad decisions.
I live below my means to continue saving for the future.
I expect nothing to be handed to me, and will continue to work my @$$ off for everything I have.
That's how it's supposed to work.
I am NOT the 99%, and whether or not you are is YOUR decision.
- An anonymous image posted to Facebook

If the master's house caught on fire, the house negro would fight harder to put the blaze out than the master would.
- Malcolm X

About a month ago, a group of people started camping out in Zuccotti Park near Wall Street in New York City. Within days, others had joined them, and by the end of the first week, word had gotten out, mostly through social media, that this was the start of a civil protest: one that has come to be known as 'Occupy Wall Street'. The people there, and the people in similar 'occupy' movements that have sprung up around the U.S. and the world, identify with what they call 'the 99%', which is their way of dividing the world between those who work on Wall Street and make exorbitant amounts of money, and those who are basically having their money taken away by this '1%'.

You may think that's a deliberately provocative comment there, at the end of that last paragraph. It's not. I can back it up. But first, a bit more about the occupiers.

If nothing else, the occupiers have accomplished one amazing thing: they've shifted the tone of conversation in this country about the role of government in the national economy. Since 1980, the national conversation about the role of government has slowly shifted from how government can support those who need economic help, to about how government can get out of the business of providing help to anybody, but can help protect the money that extremely wealthy people already have. Case in point: in 2007, the government moved quickly to approve $700 billion in aid to beleaguered banks, with few strings attached and no effective oversight, and it turned out that many banks didn't actually need the money they were given, as evidenced by how quickly many of them paid the money back when it became politically unsatisfying for them to have it. Less than two years later, the House and Senate argued for months as to whether or not $40 billion was too much money to provide to extend unemployment benefits during a time of vast and increasing unemployment.

Now, well, the protesters have amazing public sympathy and support; according to one poll, New Yorkers are overwhelmingly supportive of the protest and the protesters right to assemble -- including a majority of self-identified Republicans.

A lot of people are fretting that the protests don't seem to have a point; the protesters need to make specific demands, they say, or at least get a logo. These people are missing the point.

Fundamentally, the protests channel two sources of moral power: the concept of civil disobedience, enunciated by Thoreau and glossed with non-violence by Gandhi, and the power of the Constitution, specifically the First Amendment and its promise that "the right of the people peaceably to assemble, and to petition the Government for a redress of grievances" should not be prohibited. Even more to the point, the occupiers are making a point simply by being where they are -- that government, originally constituted for the people and by the people, no longer truly serves the people, despite frequently engaging in rhetoric that suggests it still does. That's why government agencies are so loath to move against the occupiers, except when they break out of their civil disobedience zone and do something that can be, even in part, a justification for a crackdown. If, say, the New York Police Department moves in en masse and evicts the Occupy Wall Street crowd from Zuccotti Park, they're admitting that they're not protecting the right of the people to peaceably assemble -- they're protecting the privilege of those who work on Wall Street to not have to look out their windows and wonder what these teeming masses are 'really' up to.

In the process, a lot of interesting points get raised. For instance, more people have been arrested for Occupy Wall Street related activities, which harm nobody outside Zuccotti Park, than have been arrested for tanking the U.S. economy via fraud and misrepresentation.

Okay, second would-be provocative statement. Time to back this up.

Steve Eisman. John Paulson. Michael Burry. Jamie Mai and Charlie Ledley. These are the names of people who made a crap-ton of money during the run-up to the financial crisis of 2008 for a good reason: they all figured out that the exotic investments being cooked up by mortgage brokers were basically crap and bet heavily against them. Their story is told in "The Big Short," by Michael Lewis, a writer who probably expected a much bigger to-do to be made of this book than was made about "Moneyball", a book which was basically about using investment ideas in baseball. The point is, when the big banks lamented that nobody could have foreseen how the collateralized debt obligations and other alphabet soup investments they created were ultimately worthless, they're wrong -- very few outside the banks themselves knew, and even they didn't figure out the true extent of the problem until the big banks basically, as one, stopped letting them bet against the securities they'd been betting against.

The supreme irony of the anonymous Facebooker's image is that, despite her own assertion that working her ass off, not expecting handouts, and not blaming other people for her own bad decisions as 'how it should be', when the big banks realized they'd made bad decisions, they went straight to the government for a handout and blamed subprime mortgage holders for not realizing they were being sold magic beans and throwing them out the window. That's why I think of her, and others like her who are finding it cathartic to assert so-called 'traditional' values in the guise of not siding with 'the 99%' as house negroes -- they're taking up blankets and fighting the fire because, if the house burns down, they don't have anywhere to live. They like the system, because they see themselves as being able to participate in it, perhaps even one day rise above it. They believe in what used to be called The American Dream.

So here's my last point -- the difference between these house negroes and the actual 1%.

Most people believe that, if you've earned money -- by labor, by investment, by whatever legal means -- that money belongs to you.

The 1% believe that, if you have money and they can get it away from you -- by raiding your pension fund, by charging you exorbitant fees to get access to your own money in a bank or investment fund -- then it belongs to them. And they believe they can get all the money. And the 1% aren't just looking at the 99%s money; they're looking at all the money. Every member of the 1% wants every dollar that exists, and will stop at nothing to get it. If you still don't believe me, check out David Cay Johnston's book "Perfectly Legal", on how the super-rich game the tax system so that they pay less in taxes than you likely do.

That's why, even if you don't 'agree' with the 99%, you're in the 99%. Unless you're a selfish asshole.