The #Occupy Wall Street movement has gained quite a bit of momentum, press, and popularity. But it really is not new: Remember the WTO protests in Seattle in 1999 (I lived there, and one night was literally locked in a restaurant with a friend, because the manager decided it was better to give the 10 people who just happened to be eating that night free food & drink, than open the doors and invite possible destruction)? And just like then, it is really difficult to understand just where the movement will take us in terms of politics and federal economic policy.
The litany from the #OWS and its supporters describe a bleak world: 18% of those 18 – 25 in the US are unemployed, and the numbers in Europe are worse (Spain = 46%); According to the Economist, young workers face higher taxes, longer working time until retirement, and lower benefits compared to their parents. The middle-aged, who in theory should be protected against turbulence in the market place due to work-place seniority and the advantage of having established savings, are watching their investments continually lose value.
Time to be realistic: Our entire economic system is based upon free market capitalism, and we cannot undo what has taken 225 years to build without chaos worse than what #OWS has brought to our attention. But if we are going to maintain and protect our free market system, then we must also maintain and protect those that power it. If we protect a company’s right to off-source work to increase profits, then we also need the social services that can help those ungraciously dumped workers back home. I find the politicians and pundits that vilify #OWS and simultaneously want to underfund unemployment benefits hypocritical – and unfathomable.
We have lots of proof that government interference distorts costs and quality in industry. Remember air-travel before deregulation? And the policies affecting housing and property markets circa 2005-2008 were not exactly laissez-faire (remember that from high school?). It is hard to argue against the fact that allowing free markets to compete against one another, in the absence of aggressive governmental oversight, has resulted in success for the United States: No one can claim we aren’t a military, economic, medical, or technological superpower of the world.
But to go as extreme as to say that our current model is perfect is just as narrow-sighted. According to the US census, 50% of US households make less than $50,000. And although it is tough to say what value cuts off that elusive 1% from the rest of us (if we used wealth, that would mean owning assets and income over $9 million, whereas if we used income alone it would mean making more than $750,000/year), we definitely need a system that eliminates tax loopholes for the super-wealthy, and requires companies to fund our social safety-nets.
For me, #OWS has crystallized three things: 1) Fairer tax policies, and a requirement that companies respect the social contract that provides them free market-policies; 2) More incentives & mechanisms for individual Americans to create savings (The US cannot seem to figure out how to do this: In Sept 2011 Americans increased purchases of durable goods while savings and income remained flat), and 3) While our current entitlements & social well-fare programs (medicaid, social security, unemployment) are not perfect, they are still necessary. And in my opinion, what an ethical and just country should be proud to offer.