On #OccupyWallStreet and the Danger of Elite Capture

We’re now in the process of clearing up an interesting blogoshere miscommunication. Paul Krugman made a gracious reply to a remark in Links on a post of his on OccupyWallStreet that I was very keen about (Krugman gets it) and a related New York Times op ed that I liked save one paragraph which rubbed me the wrong way:

A better critique of the protests is the absence of specific policy demands. It would probably be helpful if protesters could agree on at least a few main policy changes they would like to see enacted. But we shouldn’t make too much of the lack of specifics. It’s clear what kinds of things the Occupy Wall Street demonstrators want, and it’s really the job of policy intellectuals and politicians to fill in the details.

I took this as “leave this to the elites” and added,” Aargh. What about “The elites in America are corrupt” don’t you understand?”

I appreciate the difficulties of working in op-ed space and style limits (Krugman is a master of this format) and Krugman said that my reading wasn’t what he meant to convey or stood for:

When I said that it was the job of policy intellectuals to fill in the details for the Occupy Wall Street protestors, I didn’t mean “don’t worry your pretty little heads about it, we’ll work it out”. I meant job literally as in responsibility: people like Joe Stiglitz and me have an obligation to work on this, helping to translate what justifiably angry citizens are saying into more fleshed-out proposals. That doesn’t mean taking the public out of the loop; it means putting whatever expertise you have to work on the public’s behalf.

I mean sure, I’m an elitist in the sense that I believe that economics is a technical subject that benefits from study and hard thinking. But that’s very different from being anti-democratic.

Now what I said was clipped (and admittedly a bit sharp) and given the reaction in comments, I was not sufficiently clear.

I’m the first to admit I don’t have a good solution, but being aware of dangers increases the odds of navigating them successfully. Frankly I’ve been disconcerted at the calls for OccupyWallStreet to put forth demands. I’ve been party to extended e-mail exchanges among media types where a query regarding how OWS should deal with the demand that they put forth demands quickly devolved into most of the recipients trying to put forth proposals, rather than answer the question that was put to them. So I may be unduly sensitive to this issue.

But more broadly, I fear Krugman is unduly optimistic about the behavior of his putative peers. The evidence is considerable that quite a few individuals and groups are keen to co-opt OccupyWallStreet, so they are already under pressure to identify who their real allies are versus probable Quislings.

And the evidence of corruption among the elites is substantial. As recently as the early 1980s, the overwhelming majority of people who went into government agencies did so out of a spirit of public-mindedness, not with an eye to how the resume-burnishing and connection-mongering would pay off later. The revolving door has become institutionalized, and rampant conflicts of interest are accepted unblinkingly.

Krugman’s own despair about the failure to learn the lessons of the Depression, which is really a failure of his discipline, is telling. Even if there are individuals who are open to more radical change, when discussions move from high level goals (which as Krugman correctly points out, OWS is perfectly capable of articulating on its own) to detailed prescriptions, it moves into an arena where the few who get it are sorely outgunned.

Now it is true that well placed individuals can do a tremendous amount of good. We’ve cited Marriner Eccles, who among other things, drafted much of FDR’s financial reforms, as a prime example. But unfortunately, the reverse is even more true, of the potential for individuals and groups to do tremendous damage while advancing their own interests. It would take too long to describe here, but I can point to one influential industry that was effectively ruined by a Machiavel, and his actions caused even greater damage to the public at large. We similarly cited the example of Patrick Honohan, who as the head of Ireland’s central bank, effectively sold out his nation out of greater fealty to his position on the ECB governing council.

Krugman and fellow economists like Stiglitz, as well as other members of Obama’s initial finance team who favored aggressive financial services industry reform like Paul Volcker, may finally be in a position to exert real influence. But for every one of them, there are at least 50 members of the hackocracy. I think OWS is best served on building on its current momentum, getting more followers and extending its reach, since the dangers of elite capture are serious. There is nothing more that the orthodoxy would like to do than neuter the aims of OWS via inside the Beltway dealings and negotiation of hard to understand legislative fine print.

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  1. YankeeFrank

    I had the impression that much of the federal bureaucracy was actually public-minded types but the political appointed heads would be the careerist opportunists we’d have to fight. That’s why I thought one demand should be that our federal bureaus should function like the British system that has career civil servants in all positions, including the heads. From what you’ve written here I’m guessing its not as simple as that.

    1. dcblogger

      I have lived here all my life and can tell you that the worker bees or Greater Washington and their contractors are truly dedicated to serving the public. It is only at the very top, the surface scum, that the sell-outs rule. But the surface scum is in a position to wreck harm not just on our country, but the whole world. Occupy Wall Street is working much better than I hoped. I certainly did not expect that groups would form all across the nation.

      1. nathan tankus

        doesn’t this imply that one of ows demands should be that bureaucracys are less hierarchical so that heads of bureaus and agencies can’t make major decisions without the support of others in the agency?

      2. Richard Kline

        So dcblogger, I agree with your prespective re: the orientation of most in the Federal bureaucracy. The bulk are _civil_ servants in the best sense, who signed on to competently execute the mission and policy of their departments or outfits. This, to me is a cause of optimisim in that those worker bees are _not_ captured to the hollow-out-and-enserf program of the 1% but are in fact a brake and a buffer against that special interested program. However those at the top are quite capable of adulterating, enervating, or perverting the functioning of their departments, not simply to the level of ignoring the laws they are charged to enforce but to sitting down on the same side of the table with those they are to regulate against the public interest as we now see _pervasively_ in DC, regardless of which side of the two-headed single party is nominally in power.

        I don’t think that the Occupiers have any illusions regarding the higher level corruption in government. The slavering hunger of the Bamacrats, Rubinites, and Nude Democrats to somehow coopt this emergent resistance at ground level will fail; more than that, it will look presumtuous, tacky, and selfish, for that is all that this false handshake from the top is or will be.

        1. Heron

          It is also important to remember how, in practice, civil service protection laws have been weakened since Bush was elected in 2001. Legally, the letter of the laws wasn’t changed, but the Bush admin became quite expert at driving civil servants out of their departments through the aggressive use of the levers they did control (pay, internal organization, personnel, benefits, work-place environment), and adding new layers of admin-loyal oversight to bureaus (NPR’s “Ombudsman”, added by Bush seemingly with the sole purpose of implementing conservative-favoring “reforms” in the network, and Bush-era changes to the FCC, are good examples). Making this worse, the Bush admin replaced most of those driven out with the unqualified, ideologically fanatical graduates of second and third-tier conservative degree mills like Liberty University; people who had no intention of carrying out the work of the agency or even respecting its mandate and, as a result of both inexperience and attitude, were quickly corrupted. This led both to the endless stream of agency scandals we all grew used to during those years, Katrina being the most notable, as well as a lax oversight regime that invited industrial failures, like the interminable FDA recalls and alerts that seemed to plague the last decade.

          As a result, agencies not only find themselves frequently in conflict with the persons assigned to run them as you have pointed out, but they’ve also found themselves more beholden to the White House in a practical sense than once was the case. The proposition that an agency more answerable to the Presidency than to its own charter will inevitably do a poor job of carrying out said charter is self-evident.

          1. Richard Kline

            So Hereon, understood, particularly the deliberate recruitment of footslogger ideologues at the entry level as a ‘sand in the crankcase’ deliberate strategy. But this is better pointed out by you, as someone closer to it, than as me, someone outside looking in. Thanks for the insight.

            There are worms in the bowels of the system . . . .

        2. Jim Tarrant

          Yeah, it’s more complicated. On foreign affairs, there are “earmarks” that require State and USAID to follow ideologically driven budget requirements. In general, domestic earmarks are “pork”, some of which may be worthwhile projects but a lot of which are just driving Federal bucks to local districts.

          By the way, since Reconstruction, there has been a huge amount of Federal Government investment in the states of the former Confederacy. Even more so since WWII. This has resulted in the situation that the so-called Red States pay less in Federal taxes than they receive in Federal expenditures. And these are the same people that want to destroy the Federal Government.

          1. Richard Kline

            So Jim, the income transfer into the Deep South is paradoxical, isn’t it? This is meant to buy votes, although there was endemic poverty and structural underdevelopment there so there were larger reasons than political ones alone. But the sheer _ingratitude_, not to say horsesassness of many on the receiving end of national largesse is breathtaking at times.

            BTW, this point was made in detail several years ago by none other than Paul Krugman, who detailed the funding outflow from New Jersey to red-voting states whose voters putatively loathed Big Guvmint. There are larger socio-cultural processes behind this than simple human stupidity—but don’t rule the latter force out, the universe all but runs on it at times.

  2. F. Beard

    Frankly I’ve been disconcerted at the calls for OccupyWallStreet to put forth demands. Yves Smith

    I agree. The message that “It isn’t working for 99% of US” is enough.

    1. furiouscalves

      the message is there is nothing that the current government/business elite controlled and corrupted system can do that will work to placate the stakeholders in this uprising. it is nothing short of massive and complete creative destruction that is needed. then we will see.

      “All the revision in the world will not save a bad first draft” or something.

      to Aqaba? maybe damascus? and then well we will just see what happens.


      Also yves, please don’t feed the monkeys or you’ll look like one too.

    2. Richard Kline

      What I found disconcerting about the media’s quest to find the demands motivating the Occupiers was just that single word, ‘demands.’ That together with the rapidity of the media’s insistence that there must be demands. By itself it said everything about the media strategy anti-occupation while also ignoring the substantive statements of individuals at the occupations and the process of the occupations. ‘Demands’ are what disgruntled extremists ‘agitate’ for, in common, anti-popular media presentation of the last twenty years. Demands for ‘special’ pay; demands for ‘special’ treatment. Demands for ‘scapegoats’ to be dragged expensively into court. Demands for ‘acknowledgment’ from the politicos ‘at the top.’ You know: labor ‘demands,’ and all that stuff. The point was/is if demands can be elicited, than those in the occupation _must_ be agitators, which means that they must be malcontents, which means that they must be ‘unrepresentative,’ which means that they must be selfish interests; bums looking for handouts and blood, because that’s who the media presents as having ‘demands’ rather than ‘negotiating’ stances, or operational ‘missions’ like Serious People.

      What the occupiers have had are questions. “Why aren’t there indictments for fraud and worse?” “Why are we firing nurses and teachers when corporate profits will hit a RECORD this year?” “Why to the richest pay no tax while state and local governments are crushed with debt?” “Why does the Beltway do absolutely nothing about employment?” “Why have student grants disappeared to be replaced by predatory loans without which we cannot get the education employers and the System demand from us?” These questions may _become_ demands, but they aren’t, yet. They, and most of the rest of us 99%, would realy like to have answers. But the media have done everything possible to _exclude_ questions of this kind, to push them to small, late, interior paragraphs in turgid pabalum articles and to exclude them from the broadcast media altogether. These questions, and the statements which go with them, cannot exist in the reportage of those on the occupations, so they do not exist. Brief statements from the most disgruntled, mostly “I lost my job,” are all of that the media sees fit to print, so there is a dearth of motivation; a media-created dearth, for there is ample substance if one goes and talks to the occupiers.

      The occupation is also about process. About community rather than celebrity; and about solidarity rather than cooptation. The media has contempt for those goals, and so can’t be bothered to report them as relevant.

        1. Richard Kline

          So Joe, I’ve been down to Westlake at the Occupation on and off, and will be there on the 15th. Our paths will cross.

      1. Mondo


        You are making an important point, and I am surprised that no one else in these comments has picked that up (yet):

        Why not start with a list of questions, open-ended, something everyone could work on, add to, start thinking about, and it would also give the media something to work with (if they want). Your list is an excellent starting point btw.

        1. JustAnObserver

          Absolutely agree. Probably the most important single thing about OWS as that they are asking these questions and, implicit in this, is the fact that they seem to have rejected the tired litany of conventional “blame” poured onto us by the MSM – CRA, Fannie&Freddie, the deficit, etc. etc.

          This seems to relate to something my doctoral supervisor once said to me. His contention was that the most important dichotomy in the academic sphere was between those who asked the questions (made conjectures) and those who solved/answered them (proved theorems) or, as he put it, the distinction between “posing” and “cracking”. In his view although history most often seems to favour the crackers with most of the kudos it was through the posers that any human project got both its direction and its initial momentum. It follows from this that the critical thing is to spend a lot of time & effort getting the questions absolutely right *before* trying to move and create answers.

          More simply: OWS are in the “what problem are we really trying to solve and why?” phase and its far too early yet to expect definitive answers (aka demands).

        2. Glenn Condell

          We don’t have demands, we have questions.
          We don’t want promises, we want answers.

          It is a wonderfully precise formulation, well said Richard. ‘Demands’ based movements are easily tarred as librul which means death in the US mediascape.

          Relentlessly hewing to questions just as likely to be asked by conservatives as progressives is the way, so that desperate attempts to draw the movement leftward into dangerous pinko territory, or rightward into co-opted Beltway neuteredness will be too obvious to work.

          1. Richard Kline

            So Glenn, we call them concerns in Quaker practice, but that’s a little too reserved for the occupiers and for these times, perhaps. But yes, approaching power with open hands and questions is very disarming of all that power seeks to employ to keep everyone else _dis_empowered. I would recommend that approach to the Occupiers, unlike the ‘all rage, all the time’ of the easily manipulated Tea Potters. And as a debating and tactical strategy, asking questions really puts authority in a bind. If they answer, they’ve acknowledge your standing to ask; if they don’t, their indifference discredits them. If they lie, they’re readily caught out and they lose the standing, while they cannot tell the truth.

            And while I do have questions like these, as I say I’ve had time to think. What is most important now is for the Occupiers to think these things through themselves. Some of them they know, some of them know, some of them haven’t had the time; all of them have to carry things forward. Their approach is what counts.

        3. Richard Kline

          So Mondo, I’ve been asking these questions for (a lot more than) four years, so I’ve had time to get them polished up. Anyone is welcome to start a list, and if they want to put these questions anywhere on them that’s fine by me. I’m in agreement, tactically, with the commentor just below you who says that an insistence on asking, and pursuing, questions is optimal as it breaks the me vs. you positioning endemic in the media and inside the Beltway. —And the criminals in office will have no satisfactory answers to these questions, so their failure to answer is ‘answerable,’ as it were.

          Regarding questioners vs. puzzlers, yes. Socretes and the Buddha asked questions, I always keep that in mind. I have been on the questioner side my whole intellectual life, and to me it’s totally where the action is. Asking the right question is 98% of discovery, so getting good at it is the way up and out to the light. Sometimes, you learn that you were wrong, and you have to be open to that. Most of the time, you learn that you didn’t even know what you were looking for it because, as it turns out, it’s the gleamy, shiny, boombastic discovery sitting on the library shelf right n-e-x-t to the thing you went in to get ahold of, but now can’t tear yourself away from. Just my perspective . . . .

    3. john newman

      Ok, I agree, but wouldn’t it be fun to get the whole park chanting “mark to market, mark to market, mark to market” for a couple of days to see how the talking heads tried to spin it?

      1. Glenn Condell

        It would be wonderful, but even better would be watching media and Beltway flacks on TV trying to spin it or avoid talking about it. The taking points supplied them would command them to (a) ignore the chants, and if that proved impossible, to (b) pretend that the protesters chanted several ‘conflicting’ messages, mentioning none, and if even that failed to prevent them looking like Wall St suckholes, then (c) reluctantly report that the crowd were chanting ‘mark to market’, a rather arcane accounting term one of the leaders must have read somewhere, the implication being that, after days of demands that OWS have some demands, they have hurriedly adopted some abstruse idea to try and fill the apparent intellectual vacancy at the heart of their misguided movement.

        There will be voxpops of seemingly clueless OWSers who flub questions on the mechanics of the FASB rule change which has precluded mark to market – this will appear to validate the impression that OWS is unfocussed and really just a narcissistic hissy fit from people who have nothing to complain about, a more bourgeois, civilised version of the London riots.

        I think we could add a phrase to the chant which would not water the message down, in fact I think a second phrase helps a chant scan better anyway, say…

        Mark to market, tax the rich!
        Mark to market, tax the rich!

        Public banking, Tobin tax!
        Public banking, Tobin tax!

        Money out of politics, prosecute the frauds!
        Money out of politics, prosecute the frauds!

        And so on.

    4. jal

      The OWS movement are full of people who need to learn and want to learn.
      Use this gathering to teach them.

      They need to learn the message that Karl has been preaching.


      Do your part to pass on what Karl has taught you and soon they will know what has to be done.


      Give me some men who are stout-hearted men,
      Who will fight, for the right they adore,
      Start me with ten who are stout-hearted men,
      And I’ll soon give you ten thousand more.
      Shoulder to shoulder and bolder and bolder,
      They grow as they go to the fore.
      Then there’s nothing in the world can halt or mar a plan,
      When stout-hearted men can stick together man to man.

  3. Carol

    I think the idea that people are actually watching and aware (the 99%) of what the 1% is doing may be a strong incentive for those who would do the right thing but hesitate due to fear of being reviled by the 1%. So, maybe the 99% aren’t formulating policy, but those who can will if they feel that SOMEONE had their back.

  4. John Casper

    “Frankly I’ve been disconcerted at the calls for OccupyWallStreet to put forth demands.” Yves Smith


  5. F. Beard

    I mean sure, I’m an elitist in the sense that I believe that economics is a technical subject that benefits from study and hard thinking. Paul Krugman

    Here’s a new lead for you Mr. Krugman: A money system that depends on:

    1) Theft of purchasing power from the entire population including and especially the poor (since they are not usually “credit-worthy” themselves)
    2) Usury
    3) Extensive government privilege in a so-called “free market”
    CANNOT be good.

    1. psychohistorian

      When Mr Krugman does an article describing the face of American imperialism that the rest of the world has been faced with for the past 50 years, I will believe that he deserves some elitist stature.

      Until then, not so much. More like a shill at the margin, deflecting pointed questions about the puppet master behind the curtain. Hey Krugman. How about a study/model showing all the interlocking directorship/ownership by the global inherited rich of our world. It would be an interesting study to contemplate the strings of the puppet masters but maybe a bit too technical for Mr Krugman to put his hard work into.

      1. Procopius

        You know, I stumbled across what might have been such a study, and now I’m kicking myself because I didn’t bookmark it. Somebody did a very computer-intensive network analysis using publicly available information about corporate structure, and found there were a just couple of hundred corporations which had dominating influence over all the rest. Unfortunately I found it late at night and wasn’t able to easily understand the academic paper, so I just shrugged, said, “I’m not surprised,” and moved on. It was within the last couple of months, but aside from the description I’ve just given I can’t think of anything that might help you google it.

        1. different clue


          That network-map that Cirsium linked to might be what you are thinking of?

          This might be something else that does some of the explaining and laying out the lines of power that you want.
          It is called They Rule.

        2. Yves Smith Post author

          It’s a garbage in, garbage out study. Convincing analysis of the wrong data.

          It was done by people who did network analysis and understand nothing about investing. They didn’t distinguish between shares held in custody (shares in brokerage accounts at Merrill were attributed to BofA) and passive funds (who don’t give a damn about what they own and don’t vote the shares but are concerned above all with replicating the index as cheaply as possible).

  6. readerOfTeaLeaves

    Agree there is a huge risk of OWS being co-opted.
    I feel as if I have been waiting several years (or maybe 20+) for people to ‘take to the streets’.

    The US culture is used to quick descriptions, quick fixes, a transactional role for political activity — you want a bill? Put money in my campaign coffers; it is all quid pro quo.

    What The Beltway and the MSM are really asking the OWS activists is: “What’s your price, and do we pay you in media exposure, hard cold cash, or can we get off easy if we kiss your naive asses with some symbolic chatter about a Dream Legislative Agenda?”

    In “Treasure Islands”, Nicholas Shaxson states that ‘tax’ is going to be a key issue in the 21st century. I didn’t realize how right he was when I first first read that book, but as I look at the OWS agenda, it looks like ‘tax’ is a key theme. This is also true for the indignados, in Egypt, and the other signs of social contempt for corrupt government.

    ‘Tax’ — as a political issue not in control of law firms and corporations — is *the last thing* The Beltway wants to hear; I figured Eric Cantor’s clueless insults about OWS were fairly predictable confirmation that OWS is starting to actually have an impact.

    1. psychohistorian

      I have been waiting 40+ years and am pleased to see the opportunity for REAL change potentially move forward in my lifetime.

      Where do I sign up for martyrdom to further the collapse of our anti-humanistic social system? My life for one of global inherited rich sociopaths. A few hundred volunteers like me and we can change the world for the better.

      Peace is my goal but I am not afraid of dying to move society away from our current situation.

  7. Francois T

    There is nothing more that the orthodoxy would like to do than neuter the aims of OWS via inside the Beltway dealings and negotiation of hard to understand legislative fine print.

    Ding! Ding! Ding! Ding!

    The lady wins a ballon of Baron Otard XO, and a Cohiba too, should she so please!

    That’s the crux of the whole “What? We demand?” of the OWS metamovement. The Establishment is so scared and disconcerted by this social phenom that they can’t think of nothing else than discredit them as Unserious (the supreme sin in Beltway parlance) because they do not have coherent “demands”.

    But the OWS people are much smarter than that. They KNOW that a list of demands would be like Abu Mazen starting negotiating settlements with Nutty Yahoo; an endless maze of procedural semantic bullshit, delays and stalling tactics designed to auto-generate failure.

    Instead of this recipe for frustration, they’ve weave themselves as an immense Rorschach test, a cauldron of primeval social and human emotions, frustrations and aspirations that is there, ready to absorb, nurture and grow into something different.

    What will be the final outcomes? Who knows? The fascinating thing is watching the elites’ reaction to OWS: That is quite telling of the state of fear prevalent among them.

    1. aletheia33

      “weave themselves as an immense Rorschach test”

      great metaphor, and the test process is well up and running.

  8. Francois T

    BTW, if you have the stomach for it, check this “anti-OWS” site; the amount of bullshit conveyed in these pictures is an ode to the conservatardism so prevalent in some segment of those afflicted by willful fuckwadism and ignorance.

      1. Lidia

        wow… that poor kid who works 70 hours a week, brags about no health insurance, and yet “doesn’t blame Wall St.” The Kool-Aid has been very very potent.

        I think this kind of attitude cannot be explained rationally. It has something to do with the impulses that religion stimulates. In this case, the “religion” is AmericanDream™ Bootstrap® Independence/Individualism, seeing themselves as atoms of free will having nothing to do (either positively or negatively) with their environment or the system they are in.

        1. decora

          i love the one that says “i dont blame wall street, i blame the corrupt politicians”

          if he read a few more books about the crisis, he’d realize those are often the same thing. then again, with only 3 days off in the past 2 years maybe he didnt have time to read the crisis books. . . .

    1. Carla

      Thank you for the information and the warning. With so much that is disgusting in the world, I think I will pass on this, but it’s always good to have the choice.

      Oh, maybe I used a loaded phrase. Ready, aim, ….no guns here, only words.

    2. KFritz

      No comments section @ that site! Wonder which of those Wunderarbeiters designed, created, and PAID for that propaganda–based on an unsubstantiated premise that the “Occupy” folk are looking for handouts. If those folk took a few of those hours they’re so proud of working, just a few, and paid attention to someone besides Glen Beck, they might have a different outlook.

      1. KFritz

        A couple of them BRAG about not having health insurance. I wonder if they know that the US spends a greater % of GDP on health than any nation.

        1. LucyLulu

          Yep, and those ‘self-insured’ folks universally lose their “no handout” philosophy real quick when they show up in the ER critically injured or seriously ill. Having to face one’s own death vs. pronouncing it for others has a way of changing one’s perspective. But as everybody knows, that will never happen. You’d never find medical staff to work in ER’s (or other facilities) if we started letting people die due to lack of money.

          I have a neighbor/semi-good friend who has been TP from the start. I mean, radical extreme TP, convinced that I’m a communist (and I’m far from extreme liberal). She lost her job a little over a year ago and couldn’t make her mortgage payments. Wells was foreclosing within 4 months of her last payment with sale scheduled within 60 days (she had 30% equity). She still hasn’t found a regular job but has been doing some substitute teaching and dog-sitting for spending money and whatever. OK, I helped her some, too. But now she is food stamps and got into a program that paid all the foreclosure and late costs, got her up to date, and 12 months payments. Twenty percent of the loan is forgiven each year she remains in the house, so after five years, the loan is gone. Meanwhile it is interest free. I want that deal, waah.

          But here is the kicker. She sees no incongruence between her ‘no government’, ‘no tax’ political stance that guts social programs and her current participation. And that’s what bothers me. The ones that are happy with current health care invariably have health care. TP’ers want to get rid of the things they personally don’t need. But if the situation changes and suddenly they need help, well then, that is different. It’s no longer a government handout. I don’t quite follow the logic but from several other similar experiences that seems to be the gist of it.

          1. Glenn Condell

            ‘Yep, and those ‘self-insured’ folks universally lose their “no handout” philosophy real quick when they show up in the ER critically injured or seriously ill’

            As did their secular saints Hayek and Rand. Nice to see some consistency in libertarian hypocrisy, over the years and from top to bottom.

        2. LucyLulu

          A couple of them BRAG about not having health insurance. I wonder if they know that the US spends a greater % of GDP on health than any nation.

          We also spend almost twice as much per capita, despite not insuring all, with resulting mediocre outcomes….. higher birth mortality, shorter lifespans (4-5 years less than Canadians), high (possibly highest) rates obesity, etc.

          Our healthcare system is seriously broken and needs a complete structural overhaul if we don’t want our healthcare costs to start bankrupting us in the 2020’s. Shifting the cost from the public to the private sector is not a solution, esp. considering private sector health costs are higher in terms of dollar spent per unit of healthcare received.

    3. JimS

      It doesn’t surprise me that young and healthy people can work long hours and need no health care. Do they understand that they are just the current version of a person who, over a lifetime, will be sick sometimes, and old sometimes?

      Right-wingers like to tell the story of the grasshoppers and the ants. The grasshoppers take no thought for the future, while the ants prepare for it. They compare themselves to the ants.

      But “be proud of working hard for low wages while you’re young and healthy, and don’t worry about when you’re old and sick” isn’t an ant way of life. It’s a grasshopper way of life. Tea partiers are grasshoppers who think the bad times won’t come for them.

      1. davidgmills

        That’s an awfully bad analogy when you think about it. Since they pride themselves on being individualistic, they are much more like the grasshopper. Ants work for the common good.

    4. avgJohn

      “an ode to the conservatardism so prevalent in some segment of those afflicted by willful fuckwadism and ignorance.”

      Maybe you should rethink how you react to the initial suspicion of working class stiffs to the OWC. This kind of derogatory language isn’t going to get us anywhere. They may see themselves as part of the 53%, but you need to understand that they too are still part of the 99%. This may require a little bit of patience and tolerance from people who are a little bit better informed. In particular, many of the commenters on this site are well informed about issues concerning stagnated wages, high unemployment, and bleaker prospects for the future of the middle class, as well as the corruption on Wall Street and government. But I am from a blue-collar working stiff family, and I know these people. Basically, I am proudly one of them.

      You may disagree with them, but let’s not attack them. That is what those in power want us to do. Reduce us from 99% to 53% to 10%, and so on and so forth. Divide and conquer. So “save your bullets” and ire for the elites. I am not a historian, but I have read divide and conquer was the strategy Romans used to conquer Europe. Don’t let them divide us.

      Remember, it was Ross Perot who appealed so much to these same folks, with his message of warning about the Wall Street or corporist lobbyists, with $1000 suits and alligator shoes, selling out Main Street America, and the giant sucking sound from free-trade, trickle-down economics. It was the elite Democrats, elite Republicans and Bill Clinton who embraced NAFTA and Milton Friedman’s global free trade nonsense.

      These people are for the most part not a threat to the OWC movement. They are too busy trying to make ends meet, to have time for informing themselves about how Wall Street has gained a strangle hold on America. Help eductate them. Simply ask them questions such as “what purpose does Wall Street serve to our society?” “Why do they make so much money, and wield so much power, just buying and selling financial instruments?”. “Would you like to see corrution and cronyism eliminated from our political system?”. “Would you like to see policies put in place that helped the small business man and woman on Main Street succeed, and served to strengthen the business environment of local communities, instead of directing investment and creating jobs off-shore?”.

      As the the movement crytalizes around a message of eliminating fraud, waste, and corruption in big government, Wall Street, and multi-national big business, we can win the hearts of the 53%, the 23% and the 10%, convince them that they are part of “we the people”, the 99%, and the movement serves the interest of us all. Just insist to them that you are fighting for them too, even if they don’t appreciate it, and they will eventually overcome their suspicions and fear and join us.

  9. Steve

    Yves: “Now it is true that well placed individuals can do a tremendous amount of good. We’ve cited Marriner Eccles, who among other things, drafted much of FDRs’ financial reforms, as a prime example.”

    The paradox is that the reformers of those days built institutions and had a positive agenda. After all, the Federal Reserve building in DC is named for Mr. Eccles. They saw government institutions as a positive force.

    Today, these institutions are corrupt and their power is used against the people. They protect oligarchs. I have criticized OWS for not having any explicit, “positive” goals. I guess at this point I would settle for knowing which institutions they want dismantled or reformed in lieu of a positive agenda.

    Otherwise it’s just performance art.

  10. Robert Consoli


    To the participants in #OCCUPYWALLSTREET…

    I spit in your faces.

    Big bad protestors. Occupying the smallest square in New York, the way I’ve heard it. An organized kitchen and nursery? Yay! And with your quaint call and response chants! Oy! Tell me. When one policeman’s club goes ‘bonk’ against your skulls do 100 people shout ‘Bonk!’?

    How are you going to achieve your ends? What are your ends, fergawdsake! What are you threatening to do? Cut up the button tree into buttons? You’re pathetic! You think you can bring down the largest and most powerful malefactors in this country with LGBT theater? The big CEOs can barely conceal their laughter long enough to down their scotch without choking. Why is it, do you think, that their response is to send out their cheapest clowns to deal with you? Don’t you know that they are certain (and they are right) that when the cold comes you’ll all go home. They think it because, since you don’t really stand for anything, you will go home.

    If you want to effect change then you have to DEMAND something! These people move billions of dollars every day to various nefarious destinations. Do you think they care because one of you may have belonged to a Union in Wisconsin?


    They don’t.

    You have to DEMAND something. Just gathering in the street won’t change anything except your arrest status.

    But Bobby, you say, we’re just a bunch of out of work doofuses. We don’t know what to ask for (whine, snivvle). It’s not our fault that we’re stupid; it’s because we’re morally superior.

    I’ll tell you what to ask for.

    You tell the powers that be that you’re not going anywhere until Congress passes and our chicken-shit president signs the following legislation:

    “Resolved that (a) any person or organization who offers any inducement, monetary or otherwise to someone running for Federal office shall be guilty of a Class A felony and subject to a fine of 100 times the amount offered and a prison sentence of at least 5 and no more than 15 years to be served in a Federal penitentiary.

    (b) any person or organization who solicits any monetary or other good for the purpose of conducting a political campaign for Federal office shall be guilty of a Class A felony and subject to a fine of 100 times the amount solicited and a prison sentence of at least 5 and no more than 15 years to be served in a Federal penitentiary.”

    There are a lot more laws like this which should be passed but that will do for a start. The reaction of the Powers that Be will be furious; not just ‘no’ but ‘FUCK NO!’ They’ll try to scare you with fairy tales that only rich men will be able to run for office, that it won’t keep the money out of politics, that the Roberts Court will overturn it, that campaign contributions are something Americans have done for hundreds of years (like slavery), etc. etc.

    Don’t believe them. If #OCCUPYWALLSTREET makes this one issue visible then you will have put a real cockroach into the belly of our occupying capitalist shit class. Because campaign bribes ARE the heart of American corruption; all else follows from it. It is through campaign bribes that corporations have converted a free republic into an aristocracy that would have shamed the ancien regime.

    Oh, and here’s your slogan: ‘IT’S THE BRIBES, STUPID!’

    They’ll put up obstacles because most legislators, as far as I can see, only go into politics to get rich. But let them; let them scream and shout about the unfairness of it all; perhaps the American people through your efforts will finally wonder what Congress and the President are really doing with all those bribes and why the Roberts court is so corrupt.

    It’s not a magic solution (magical thinking is your forte, not mine) but it will affect a very broad range of issues for the better. More than that needs to be done but this will be a great start. I’m sure you have some idiot lawyer among you who can make my proposed language suitable for legislative action.

    You’re welcome.


    1. F. Beard

      And with your quaint call and response chants! Robert Consoli

      That reminds me of “Childhood’s End” by Arthur C. Clarke.

      But as for your solutions (and others); they can wait till enough heat builds for people to see the light.

    2. Debber

      People are mad because TBTF banks lent money to firms like Countrywide, who in turn created billions in dicey loans, who then sold them back to the banks, who chopped them up and sold them to, among other things, your state’s worker retirement funds. Banks like Goldman, JP Morgan and Bank of America stole the retirement nest eggs of firemen, teachers, cops, as well as those of investors. This was Wall Street hotshots stealing money from grandma.
      the use of the MERS electronic registration system, for one. By law banks are supposed to register with county offices in each state every time they sold or resold a mortgage and pay fees each time. Guess what? They didn’t. Instead they registered with MERS – the private deed-transfer agency – allowing them to systematically and illegally bypass local taxes.
      Federal regulators and prosecutors have let the banks & investment firms that tried to burn up the world economy get off with “settlements” – i.e. whitewash jobs that involved the banks paying pathetically small fines without even being required to admit wrongdoing. Then the banks used shareholder money to pay the paltry fines.
      These are crimes, this is historical thievery. No one, not one of the Wall Street criminals have been charged with these crimes.
      Our demand? Arrest them. Bring them to justice.
      But we all know that is a laugh. White House & Congress are the pockets of these people. They get to rewrite the laws that should be holding them accountable.

      1. Susan the other

        Michael Hudson calls all of those hasty mortgages ‘illegal conveyances’ because they were written in full knowledge that the mortgagor could not repay the loan. There are good laws on the books, in every code, state or federal, that delineate the elements of an illegal conveyance. We should step us as citizens and use our established laws. And above and beyond that, we need to write new laws that further define illegal conveyances as those which are based on the very thin air of false funds.

        1. davidgmills

          Judges are doing nothing but supporting the banks. Time and time again they have made rulings that have gutted the cases of the homeowners.

          It really doesn’t matter that the law is on the homeowners side; the judges find some way to rule against the homeowners.

          If the judges had started knocking these mortgages down en masse, OWS might not have ever happened.

    3. psychohistorian

      It is interesting to see such fear or trollism active to do exactly what Yves said is the last thing OWS should do now….make a narrow demand.

      Take a deep breath and ask yourself if you are a sharing individual. If you are not, you have something to worry about because, IMO, most of the 99% believe in sharing. If you believe in sharing then I suggest you get with friends and community and figure out what works for the 99% going forward.

        1. psychohistorian

          Its all about layering. Ask any native of the NW how to survive outside in the cold and wet.

          I am into sharing the little I have within my boundaries of trust. Are you? I do have a small home and have even installed a used sauna so if you really are cold, I can fix that, at least temporarily.


        2. Fïréan

          I do believe that many if not more will be there ( unless forcibly removed) when the cold comes, and likewise in other cities too.

          Mr.Consoli, is hoping for a free meal and a small stipend in a Venician restaurant not magical thinking ? It does seem to be your forte.

        3. citizendave

          Here’s a few minutes of video of outdoors events in Madison last February and March, by Matt Wisniewski. The cold didn’t bother them. I hope OWS will persist, through the onslaught of attempted co-optation, cold weather, and come what may. http://vimeo.com/20928996

    4. reslez

      Here’s a guy who accuses others of living in a fantasy when he himself mistakenly believes the law still means something.

      They own the law, brainiac. They own the courts. They own the legislators. They got the Supreme Court saying corporations are people. Banks break laws 40 times a day throwing people out of houses and no one blinks an eye. They don’t give a fig about the law.

      Looks like you need another One Demand. Make it good!

  11. LucyLulu

    Great coverage of the OWS protests, Yves. You are the only site I regularly visit that “gets” the project. As somebody mentioned about, “we are the 99%” is the essence and the sum of the message, IMO. What makes it both so difficult for people to flesh out and disconcerting is that the message becomes a mirror a mirror for people which they view themselves within. When people look in that mirror in terms of the 99% or the 1%, it evokes all different kinds of images and emotions depending on that individual’s own life experiences and beliefs.

    I, too, worry about the movement being co-opted, much like the Tea Party was. I even worry about the union involvement. The offers of money, manpower, exposure, expertise, and other types of assistance I would imagine can be hard to resist.

  12. Paul Repstock

    Yves nailed that one. The experts haven’t been able to solve or even define the problem yet. They don’t seem to have the imagination to think outside the box. I don’t think the solution is in economics. So long as mankind is ruled by economic systems based on materialism, (which btw is the 900 lb gorrila in the room), then the people will fight and kill to collect the most material.

    I don’t have a good solution yet either, but I sense there is one out there. Perhaps the People’s protests can define it.

    Justice cannot exist without Courage. http://www.opednews.com/articles/R-U-One-in-300-for-Justice-by-Paul-Repstock-111002-630.html

  13. Robert Consoli

    I didn’t make my screed sufficiently incisive.

    “Resolved that (a) any person or organization who offers any good, monetary or otherwise to a second party for the purpose of conducting a campaign for Federal office shall be guilty of a Class A felony and subject to a fine of 100 times the amount offered and a prison sentence of at least 5 and no more than 15 years to be served in a Federal penitentiary.

    1. psychohistorian


      It is not like your idea isn’t a potentially positive component in a much more comprehensive adjustment but arguing your silver bullet further is just continuing to make Yves point about co-option a this point.

      I would like to read your potential solution to the fact that one tenth of one percent of the world own everything. What do you think about inheritance?

    2. davidgmills

      And then if it was passed (good luck with that) all you would need is a prosecutor willing to take on big money (good luck finding one) and a trial judge willing to do the same (good luck with that) and an appellate court willing to uphold a conviction (good luck with that) and a supreme court willing to uphold the appellate court (good luck with that).

      Piece of cake.

      Then there is always the guillotine.

  14. Eureka Springs

    Though I am enjoying watching many twist in the wind… The Occupy web site answers far more of questions raised for those who are sincerely interested. That said, I too think we need clear demands… and we need them fairly soon or we will lose momentum more than we gain. Face it, Americans are impatient to a fault. So let’s act with demands to our advantage.

    Tomorrow I begin anew as an active participant in Occupy Fayetteville, Occupy Bentonville Home of Wal-Mart, Occupy North West Arkansas. I can tell by the participants on local facebook pages alone… many need clear goals. Or at least clear reasons why we are waiting… and how to feel effective in the meanwhile.

    1. Sy Krass

      Maybe we should have a simple mantra, Eureka


  15. friend


    You must be able to say what you want in 20 words or less, or you cannot build broad public support for it.

    As I understand it, the banksters engineered huge debt that must be written off. Who will take the loss? By what mechanism?

    20 word answer needed

    how do we prevent it from happening again?

    20 word limit

    1. Yves Smith Post author

      We seem to have broad public support for OWS as honking/waving drivers on Brooklyn Bridge last weekend, the rapid proliferation of Occupy gatherings in other cities and the swift change in media attitude and coverage attest.

      And they didn’t adhere to your rule.

      Or to the extent they did, “We Are the 99%” suffices.

      1. friend

        Consciousness raising is good.

        But ultimately there must be action to make change.

        What are we for? How can it work?

        The public does not trust anyone. There is no sense of the way out.

        What do we want?

        Everyone decries the failure of the American people to take to the streets. Take to the streets FOR WHAT?

        The public will not catch fire behind a progressive platform until the public can easily understand what it is, and tell the neighbor what it is, and why it is a good thing.

        1. Susan the other

          I’m only a sympathetic observer but I think I have just learned an epic lesson: There is enormous power in Lack-of-Trust.

    2. Paul Tioxon

      Nationalize all of the banks. 50 State Federal Grand Jury Investigation of all bank management.

  16. Tom Hickey

    What I am struck by is that no one in politics, the media, or for that matter, many over age 30 have a clue about what the young protestors “want.” It’s not so much about what they want from the system, but what they don’t want. They don’t want the existing system. They want fundamental change. Why?

    The are living in the digital age, and they speak digital. They think in terms of open source, distributed networks, and social media, etc. They don’t think in terms of the universe of discourse that prevails and they reject the institutional arrangements of the 20th century.

    Moreover, they are global thinkers rather than regionalists or nationalists. They want to live in 21st century world and they want to live in it now, while some of the planets resources are still left.

    These are people concerned with the future, and they are young enough to realize that on the present trajectory, they have no future. They have nothing to lose ad everything to gain.

    This is similar to the period between 1964, when Mario Savio brought the Free Speech Movement to national attention with his speech on the steps of Sproul Hall at Berkeley, and 1967, when the first large anti-war demonstrations were held in DC. That was followed by the debacle at the 1968 Democratic Convention in Chicago and the trial of the Chicago Seven (which began as the Chicago Eight, until Bobby Seale was isolated to be tried as a Black Panther).

    Of course, things will go very differently this time. Back then all communications capability the protestors had available was the free press and word of mouth. Now digital technology and instantaneous global communication rules, and the protestors know how to use it. Moreover, this time the enemy was different, recognized as the ruling elite comprised of the military-corporate-financial-governmental complex that is dominated by money in form of campaign contributions and lobbying, and cemented in power through the revolving door and crony capitalism.

    This is just the beginning of something big that Ravi Batra projected in The New Golden Age: The Coming Revolution against Political Corruption and Economic Chaos, and Strauss & Howe’s The Fourth Turning. Everything is right on schedule and we aren’t yet even in the second leg down of Great Depression II. The best and worst are yet to come. It will likely be a story that unfolds over this decade and changes the course of events in the remainder of this century.

    1. psychohistorian

      Nice comment, thanks.

      People need to get a grip. We didn’t get this fucked up overnight and it will take a while to do anything, if there is the expressed public will to do something to resolve our social ills.

    2. Robert Consoli

      “and they reject the institutional arrangements of the 20th century ”

      I apologize for the intemperate tone but this is fuzzy-thinking balderdash. (sorry)

      What you’re doing with all this airy-fairy language is justifying the raising of hope among the participants of #OCCUPY without proposing anything that they can FIGHT for. And by FIGHT I mean fight in the public arena for something that they believe is right. Just plonking themselves down in front of Wall Street and allowing themselves to be maced might give them a righteous feeling but it’s NOT a program for improvement. Do you suppose that the CEO of Bechtel will wake up tomorrow and see the coverage on CNN and think, ‘Gosh, maybe they’re right, maybe I should rethink all those Defense contracts! Maybe our company is partly to blame for our society’s problems!’

      No. I don’t think so either.

      But just to say that people are young, and that they’re digital, and, they’re enthusiastic, and…!, and…! and…, gurus and stuff! is just magical thinking. America is great because it offers a public arena in which people can passionately advocate for what they think is better. Politics is tough and requires fighters – America allows them a place. That’s the arena that #OCCUPY has to learn to use. Do you suppose that all the old farts like me will just magically reorganize society to make it young-digital-people-friendly? We’re not going to make any changes unless those changes are passionately fought for and can survive competition with alternative proposals.

      If they don’t passionately advocate SOMETHING they will be crushed .. deservedly so.


      1. Tom Hickey

        You have ever participated in large protests or been an activist? Doesn’t sound like it.

        Things don’t work that way in the real world, which is based on emotional involvement, forceful intent and strong commitment to cause. The protestors don’t have to express that cause explicitly because they grok it.

        Moreover, if they tried to express it in their language the “grown ups” would not understand what they are talking about and misrepresent it. In addition, it is very difficult to hijack something if you don’t know what it is.

        This is a very well conceived campaign and the activists are in it for the long haul, which will take years to bear fruit and involve a lot of apparent defeats before victory.

        Anyone who thinks this a bunch of stoned DFH’s that don’t know what they are about just doesn’t get it.

        1. Paul Repstock

          “Grok”….priceless and true…:)

          And we had all better be “in it for the long haul” We are playing keepsies. What has mainstreet scared spitless is that the only way we “win” is if the whole rotting carcass collapses. They have yet to accept that the only reason any of us ‘own’ anything is at the whim of the system. I hope the protestors get that part??

          1. aet

            What’s with all the apocalypto ‘collapse’ language? Who needs “creative destruction”, besides the shock troops of vulture/disaster capitalism? Nobody.

            Gently fade away, is what old ways do – manners and mores insensibly change, so as to become eventually unrecognizable when compared to what they used to be.

            Businessmen used to think slavery was a-ok…you’ll have a difficult time finding one who would admit to that today!

            Our saving grace, as ever it was, is that things change.
            Like it, or not.

            OSW is just another step in that long long march to a better world, which has actually been going rather well, though some are loathe to admit it.

        2. aet

          I don’t know exactly what OWS is about…but I do know what actually counts in the long run.

          Staying power.

          1. Tom Hickey

            Exactly. And those who have nothing to lose have incredible staying power. TPTB know this and when they recognize that momentum is gathering with will try repression, which never works, and then resort to the ultimate weapon, co-optation — giving it to just enough of the protestors demand to reduce their energy. That’s one reason that making specific demands is not good strategy. Why signal one’s battle plan to the enemy commanders when the objective is capitulation.

      2. casino implosion

        I’m down there (after work most days) not because I’m advocating a Tobin Tax or whatever technocratic fix, but because I’m @#$% furious and I’ve been waiting for three years for a chance to show it. Everyone else I’ve talked to down there feels the same way.

        1. citizendave

          “…because I’m @#$% furious…” casino – That’s part of the energy that will sustain OWS and keep you warm through the winter.

      3. reslez

        Such impatience over something that began barely 3 weeks ago! I have the sense this commenter (and others like him) expect to be spoon-fed a market tested 10 point program. That’s not how the future works.

        These people are building a consensus that 99% of Americans can get behind. If all you’re looking for is a prepackaged list of bullet points to “fight” for, you need to look elsewhere. If not, maybe you should head on down to your local Occupation and get to work.

    3. friend

      It is not the 60s. Nothing like it.

      The key to the 60s was the immediacy of the evil in daily life.

      You saw racial discrimination daily. The violence could happen at any time.

      You could be drafted. Killed. Friends and relatives were drafted. Were killed.

      There was no way to ignore the evil, and something obvious to oppose.

      What is the financial system now? What is wrong?

      We went to the banks and got loans? How was it evil? Why did it destroy our jobs?

      Most people are angry, but only the rightwing demogogues have offered (false) targets AND a plan of action.

      Leftwing bitching is not a plan. And it is not even hope.

      1. Nathanael

        The immediacy of the evil is obvious. People are being thrown out of their homes, having their houses stolen, being thrown out of their jobs, etc., while they watch rich criminals feast, party, and scold them.

        The *solution* is less obvious, but have no doubt, the evil is quite obvious.

  17. scraping_by

    “…economics is a technical subject that benefits from study and hard thinking. But that’s very different from being anti-democratic.”

    How about this: once you separate money from what money is and what people do with money, and why there’s money in the first place–that is, when you make it an abstract quantity for random calculus functions–the only question left is how high are you piling the bullshit?

    If the field stayed oth the academic reservation, there’d be no harm in remaining unstained by reality.

      1. aet

        Why there’s money in the first place?

        Well that’s an easy one – it is an invention which serves to multiply the ends of human endeavour.

        Put another way: Both individuals and societies can do things through the use of money which they could not possibly otherwise do, without it.

        That is obvious.

        1. Karl

          Only obvious in the same way that “everyone knows the world is flat!” or “everyone knows that man can never fly!”.

          What I see is that money clearly subverts human endeavor. It facilitates corruption and short-term thinking. It’s a primitive form of information technology which is economically useful in a hierarchical society, but then so was slavery. We can get by just fine without either.

          You might not be able to imagine anything else, but as Mr. Hickey points out, some OWS participants see new economic possibilities in social networks, peer production, and open source.

          1. Nathanael

            Money is a useful tool for trading (handing over things of value) with strangers who you don’t fully trust.

            I think you can’t really deny that. It’s valuable and its value is not going away.

            That said, we should focus on making money available *for that purpose*. Most of the financial bullshit we have does not help money fulfill its purpose.

        2. Lidia

          “it is an invention which serves to multiply the ends of human endeavour.”

          I would replace “multiply” with LEVERAGE: money leverages human endeavours, at this point to beyond their capacity for fulfillment. Once you understand that it’s all leverage, and that leverage always tries to run to infinity, then you know that we have to impose a very different economic system than the one we have been used to, in order to survive.

          Money as we know it does not just lubricate trade, it calls forth—it mathematically imposes—waste and destruction.

          “the ends of human endeavour”

          What are those ends?

          Do we or can we agree upon them?

          Is it an unquestionable universal good to have more mortgage brokers? More airline stewards? More software developers? All human activity and values are going to be called into question in the upcoming decades.

    1. friend

      money (credit) is a promise

      If you give me this, I will give you something that allows you to get something in return

      financial dysfunction is how the promises are broken

  18. notsofastfriend

    Paul Krugman is an establishment mouthpiece in the same vein as David Walker. Both espousing variant views yet bought and paid for by establishment interests.

    Just as the original grassroots Tea Party (fiscal conservative/anti-war Ron Paul inspired tea party) was hijacked by the Republican Party (neo-con) so too will “Occupy Wall Street” movement be hijacked by the Democratic Party (main stream hypocrite.

    Hope resides with you “The critical thinker” and your courage to denounce “All” establishment lies. That they originate from the left or right…

    1. aet

      Revisionist crap: the tea party was born entire on the floor of the Chicago Merc – I saw it, fer cryin’ out loud – it’s nothing but a well-constructed and sophisto con-job, from top to bottom, and from start to finish.

      Everybody who preaches ever lower taxes is an idiot, and in every modern case where such views gain the ascendant in policy, that society becomes measurably worse off over time.

      1. psychohistorian

        Today a friend sent me his retort to the Tea Party folks;


        Works for me.

      2. notsofastfriend

        I was there too. Rick Santelli went into a diatribe about taxes and S**t. That was the Neo-Con takeover you silly person. Think bud… Think!

  19. dan

    Thank you Yves for a VERY important reminder. As Hedges says, you are either on the side of truth and justice or power and privilege.

    Until the finance sector gets fixed (in multiple senses), the focus needs to remain on truth and justice.

    1. readerOfTeaLeaves

      Completely agree that finance needs to be fixed.
      But as I watch events, it becomes clear that not only the legislative process – but also the *judicial* process – is part of what got us in this mess.

      In ECONned, Yves discusses the perversions of academia (including law schools) by corporate interests and ‘benefactors’. Bill Black has had more than one NC guest post on this topic, and it’s role in socializing judges to favor capital and corporate interests.

      So in order to address the structures of finance, realistically it will also require more attention to who is appointed to judgeships, what their background is. And lifetime terms for the Supreme Court and other federal judges is turning out to produce sclerotic legal reasoning.

      Cleaning up finance is going to run into a buzz saw of conservative judges appointed in the Bush I and Bush II eras. That’s an ongoing problem… unless they start to look at how badly their own pension funds have been looted.

      1. aet

        The lifetime appointments also buttress judicial independence, which is crucial: indeed, your point, and it is a good one, is that the judges appointed are too much creatures of the party line of the republicans whoi appointed them.

        Yes: the Conservative Justices are using the precedents set by previous ideologically liberal Justices ( used by those liberal justices to advance equality rights ) to deny the democratic legislatures their ability to govern in accordance with the wishes of the majority of the electorate.

        The previous Jurists were using their power to declare statutes constitutionally invalid to advance the equality interests of minorities; while the conservatives are now using that same power, to maintain existing economic structures , even in the face of the legislatures attempting to modify those structures.

        I’m personally leery of having judges be so very free in the striking down of legislation. Indeed, IMHO the present conservative justices have, by their actions of misusing the expanded powers the liberal justices took unto themselves, themselves demonstrated the validity of those very objections which a previous generation of conservative jurists advanced against those liberal justices!

        That pith of their objection then, was that the Justices were usurping the functions of the Legislature.

        They have proven themselves correct!

        1. Nathanael

          Just wrong, but I’ll address the most important point only.

          Lifetime appointments are a disaster, because they mean that if you can get one stooge in, you have endless power. Lifetime appointments mean that any bought-and-paid-for crook who gets on the bench *stays* on the bench.

          Impeachment would be a remedy for this, but the Senate is permanently broken and you can’t get 2/3 of it to agree to anything sensible.

          Judicial independence is more than adequately insured by the *14-year term* which New York State judges have — it’s quite long enough that they’re not worrying about re-election or re-appointment (it’s rare for them to even serve two terms). But, crucially, it doesn’t have the “if we get this guy on the bench we win the lottery and own this place for the rest of his life” aspect which lifetime tenure has.

      2. Knative

        I was thinking about this the other day. Like, campaign finance reform is illegal because it violates corporate free speech, so how do people change that outside of rewriting the constitution? It seems almost impossible with the system the way it is. AND THEN I thought that this problem that was partially created by anti-abortion groups who made the courts a political battleground. Kind of neat/depressing dynamic.

        1. Dan

          The abiility of politicians to accept and use money with little fear and transparency for accountability is the root of our evils. Every politician can essentially use unspent campaign contributions as personal piggy banks. There are so many loopholes that make this legal and no one covers it.

          Corruption in academia is another huge issue. Academics and their 501c3 protected status allow them to operate without accountability to anyone and immunity to what would be illegal for most of us.

          You could make a valid RICO claim against so many of our institutions of public trust. it’s organized crime operating under the veil of the “American Dream” and can be deflected through mass distraction and claims of “it’s worse elsewhere” and “but they have iPads!”

          1. Pete

            “The abiility of politicians to accept and use money with little fear and transparency for accountability is the root of our evils.”

            Respectfully disagree. That’s a symptom. The disease is the artificial scarcity created by an interest bearing debt based monetary system. Need to address the social arrangement that is ‘money’ itself.

  20. Namazu

    Economics is a subject that belongs in the time-out chair until further notice. The “technical” conclusions of its “practitioners” are curiously aligned to their personal ideologies and the sources of their consulting fees. If you suspect that credit plays a major role in our 30-year national nightmare, you might not want to outsource your brain to some monetarist (i.e., any) academic. People like Krugman are poison to OWS. [Oh, and there was Enron.]

    1. aet

      Credit in itself is not a problem, in any amount: it is the bad credit which is specifically the problem.

      So…take care, not to throw out the good with the bad; try to save the baby, even while discarding the dirty bath-water.

      1. notsofastfriend

        Credit is not bad… The use of Fiat currency compounded with fractional reserve lending well that’s just downright evil and the ultimate sin (Usury).

        1. F. Beard

          The use of Fiat currency notsofastfriend

          Fiat is the ONLY ethical government money form. What is not ethical is that we are forced to use fiat for ALL debts, not just government ones.

          with fractional reserve lending notsofastfriend

          Which is a form of fraud.

          well that’s just downright evil and the ultimate sin (Usury). notsofastfriend

          Usury is lending anything for any interest. See Deuteronomy 23:19-20.

  21. Campbeln

    “It would take too long to describe here, but I can point to one influential industry that was effectively ruined by a Machiavel, and his actions caused even greater damage to the public at large.”

    My interest is piqued! Who/what industry (anyone)?


    1. Yves Smith Post author

      OK, clues:

      1. It is small and is now throughly discredited, yet still wields power way out of proportion to its size

      2. 20 years ago, it was still influential but rarely discussed and most people would have said it performed competently (its faults were known and users knew how to allow for them) and was useful

      3. It has been regularly pilloried in the financial blogosphere and in Congressional hearings.

      1. KWinIa

        Payday loan companies? Thoroughly dicredited? Check. Too much power? Check. Small? Probably not.

      2. Yves Smith Post author

        No one is close!

        Payday loan companies were never seen as sorta useful/not harmful.

        Private sector.

        1. Foppe

          The CRA’s? (if so, the ‘machiavel’ hint went flat, because I don’t really know their history.)

        2. Nathanael

          Ratings agencies? Title insurers? Mortgage brokers? All fit the bill.

          Who’s the Machiavelli? I don’t know the history.

  22. Hugh

    It seems a bit thickheaded to ask what a movement that talks about 99%ers and is named OccupyWallStreet is really about.

    I see OWS less as the determiner of programs and demands and more as the creator of the public space where such discussions can occur. Just by being there eliciting reactions and nonreactions from the powers that be has served a useful purpose because virtually none of them focus on us the 99% as real people and what we are, the country, not as abstraction but as flesh and blood.

    1. aet

      It’s simply politics. Nothing more or less: politics conducted by those who don’t have the millions to hire pros to do their politicking for them. But they DO have the time.

  23. orionATL

    does OWS need a “talking point”, a “negotiating point”, a “demand”?

    hell, i don’t know. i haven’t been there and slept on that cold, cold ground.

    but if that movement decided it needed or wanted a single focused demand, it might be provoked by this statement of our prez:

    “… Barack Obama slept through his securities law class at Harvard. That’s the only explanation I can offer for his answer to Jake Tapper’s question at a press conference Thursday. Tapper asked him about the failure of his administration to prosecute a single Wall Street executive. From the transcript.

    Well, first on the issue of prosecutions on Wall Street, one of the biggest problems about the collapse of Lehmans and the subsequent financial crisis and the whole subprime lending fiasco is that a lot of that stuff wasn’t necessarily illegal, it was just immoral or inappropriate or reckless….

    By “a lot of stuff”, the President means everything that happened, from fraudulent sales of real estate mortgage-backed securities, to Repo 105, to filing false affidavits in foreclosure proceedings. He knows this even though there have been no criminal investigations, no FBI inquiries, no Grand Jury subpoenas, and apparently no review of independent investigations. For him, this isn’t about law. He just knows that the immoral and inappropriate and reckless behavior that caused the Great Crash and the Lesser Depression wasn’t a crime.

    Obama’s blanket pardon isn’t newsworthy. No one in the national media picked it up. I checked the New York Times, the Washington Post, the Wall Street Journal, the LA Times, and the Chicago Tribune (which published the AP report). None of them mentioned the Q&A. I checked Google News and couldn’t find any mention of it except in live blogs. Obama’s dismissive response reflects the view of the American Oligarchy, the financial elites who run the country, and the media they own and operate.

    Tapper asked the question in the context of Occupy Wall Street, pointing out that one theme is the failure of his administration prosecute a single Wall Street executive. The President refused to acknowledge the pervasive fraud documented by the Financial Crisis Inquiry Commission, Senators Levin and Coburn, ProPublica, and every other independent investigation. Yves Smith lays out some of the crimes here.

    That connection might have alerted him to the anger throughout the country at his failure to prosecute, but he doesn’t get it. He doesn’t see that only the American Oligarchy believes that no one should be held accountable for the frauds that led to the Great Crash. All the people he talks to share that view, and he can’t imagine that average Americans, the people he keeps asking for $3 for his re-election, want the law to be enforced and want banksters to go to jail. He has his own explanation…”

    fron: massassicio, firedoglake, 10/7/11

    so the questions OWS might begin demanding answers from president obama for are the likes of:

    – president obama, has your doj investigated TBTF banks for fraud,

    both multiple streams of mortgage fraud,


    multiple streams of fraud arising from “securitazation” of mortgages,


    multiple streams of fraud arising from mortgage servicing operations by those same TVTF “banks”.

    1. friend


      As I am sure you know, it was no accident.

      Big O identifies with the elites. He wants to be part of their world. He wants to preserve their world. Protect it.

      The whole approach from the beginning in 2009 has focused upon putting Humpty Dumpty back together again.

      O does NOT WANT reform (and certainly not prosecutions). O wants to protect Wall Street from the rabble.

    1. Paul Repstock

      That makes perfect sense in the new reality. Bradley Manning is guilty by presidential edict alone. Mr. Awlaki is dead by Presidential edict. And so if the President/God says WallStreet is innocent, then it must be so.

      Who has any need of Laws or Courts. Congress is merely window dressing.

      1. psychohistorian

        And wasn’t it our last “president” who talked about our Constitution as just a piece of paper?

        So now we have a Constitutional lawyer as “president” to insure that that piece of paper is shredded properly for the global inherited rich.

        The demise of our imperialistic overlords cannot come soon enough for me.

  24. Anne Hunt

    Anyone who thinks career civil employees / SEIU member are committed to public service is too dumb to sit at akeyboard. Federal, state and county employees are there to waste time and collect a pension. Why keep these drones around?

    1. Paul Repstock

      Where would you find work for them?
      70% of employment is nonproductive.
      there is a 20% under-employment a 20% unemployment and 10% who aren’t even counted.
      The problem with the civil service is not their employment, but rather that they have the power to spawn and regulate everthing else.

      1. aet

        At least they have money to spend to keep other people employed.

        Your solution to our economic problems is to throw even more people out of work?

    2. orionATL

      an intemperate and profoundly ignorant comment:

      – aids prevention in the u.s. and oversess

      – chronuc disease – heart, lung, and kidney – study and prevention

      – cancer research

      – diplomatic activities, including the boring
      matter of your passport

      – tax collection

      – census

      – national security ( grossly exaggerated threat but not to be dispensed with)

      -medicine, water, and food standards

      – regulation of banks and stock exchange activities

      add a few more on your own, ann hunt.

    3. aet

      Yeah, the local gangster’s goon squad are preferable to the city police as far as you’re concerned , right?

      1. aet

        Last Reply meant for Ms. Hunt, not you orion!

        I like public servants : that is to say, that they’ve always done right by me, whenever I’ve had dealings with them. Although they can be a pain at times, too.

    4. psychohistorian

      Your generalization about a specific government group being all bad is a ruse. The sociopathy is at the top and not necessarily endemic to the group with the lone exceptions that come to my mind which would be our Senate and now a chunk of the Supreme Court.

      We get the government we organize ourselves to have, given the opportunity. I think that voting should be a requirement as should stints of civil service throughout your life in return for educational opportunities. Society could excel with good government that enables and enhances lives rather than exert control for some elitist group or groups.

    5. Scapegoat

      An intemperate and profoundly ignorant comment indeed. As a civil servant with a master’s in business, a background in the private sector, and a deep commitment to providing the American public with excellent service at the Social Security Administration, I assure you that such beliefs only serve to support elite actions to undermine the quality and access available at the levels of government that directly serve the American people. This kind of misplaced resentment and fear serves our ruling political class well. They use it to justify continued underfunding and understaffing of the very government services and goods that the 98% depend upon — often unknowingly, according to recent polls.

    6. Brizie

      Anne Hunt
      Listen to yourself.
      That’s like saying: Women aren’t qualifed to vote.
      Like saying: Niggers are too lazy to work.
      You have a deep-seated prejudice unconnected to reality. Obviously many other equally-misinformed people share your pathological prejudice. Please, all of you who have these simple-minded prejudices, examine yourself, examine why you hate these people and get some help for yourself.
      In the meantime please refrain from spewing such hateful prejudice against any group you feel are not your people, who are “them.”

  25. anon48

    Making demands is not practical at this point. It implies negotiation. With whom should they be negotiating ? What are the OWS goals? What are their limits? My perception is that while individually they may believe they know what OWS wants, as a group they do not. They appear to be so focused upon using proper tactics, intra-group communication methods, etc, that they have neglected the most importance piece- the very purpose of their existence. So how does one start the negotiating process by making demands when it’s still not clear what the ultimate group objective might be.

    I agree that consensus building is an important component of the process as it helps develop stronger bonds between member and group. However, that cannot be their sole activity if they want to accomplish truly lasting meaningful change.

    Suppose back in 1770’s that instead of the men that we now admire as the founding fathers, a different group of leaders arose who thought it more important that the sole focus of all organizing efforts should be about process of communication among and between the colonists. This as opposed to the actual meaningful discussions that took place. Those that generated the ideas, insights and passion later evolving into the core values of a nation, encapsulated in documents of which we’re all familiar. And that still to this day draw a majority of the diverse people living within the fifty states to them.

    My experiences while serving in the nonprofit arena as both an outside consultant and as a volunteer board member for a number of different organizations tell me of the importance of how organizations . I’ve seen organizations run in various ways from command and control leadership at one end of the continuum to a few at the other end relying almost totally upon consensus-building. My experience is that neither works very well. Most leaders who rely entirely upon command and control eventually sap the passion, excitement and ultimately dissolve the motivation and passion of the group. Organizations that have neither a clear mission nor set of core values eventually wind up just floundering because of a lack of direction. Only a few NPO’s were thriving organizations because they seemed to have uncovered the right balance between the two extremes.

    OWS also has to find the right balance for itself between these two extremes. I’m sincerely rooting for them because I believe many of them(especially the young) are truly being screwed royally by the status quo. My heart is with them but my gut tells me that the movement will either fizzle or be led astray unless a group of leaders steps forward that can help them develop a clear purpose and set of core values that can further be synthesized into an inspirational mission that will attract a larger group of motivated supporters to join with them. Seems to me that OWS must evolve as an organization along these lines before it can effectively make demands or conduct any negotiation.

    Further, they have to do this and take charge of their own destiny, or else, as Yves points out in the article above, there’s a huge risk that others with hidden agendas will step into the void and co-opt the direction of this movement.

    1. Tom Hickey

      anon48, you are way ahead of the game. That’s not how group dynamics works in these kinds of things. This is movement just gathering steam and building consensus. Long way to go yet. And the aim is not a negotiated solution. The objective is capitulation.

      1. psychohistorian

        I agree.

        Laughing the global inherited rich out of control of our society and into rooms at the Hague is not negotiable.

        It is an expression by society that the folks at the top of the current class based system are no longer in control of setting social and economic policy.

      2. anon48

        Precisely the reason for my concern. Developing a common purpose and set of core values takes time. Group dynamics is about evolution of roles, norms and dynamics- establishing the infrastructure of the group. Because of the time this process takes, there is a risk that too much energy will be focused upon process while not enough spent of purpose. Without purpose they’ll be rudderless. Without clear direction they risk being co-opted.

        The other point I was making was that I don’t see how OWS can develop a list of meaningful demands without first having clearly defined their purpose and values. It’s putting the cart before the horse.

        1. anon48

          BTW- Group dynamics function most efficiently when there’s a leader(facilitator) who helps keep the group’s collective eye focused upon the ball.

          1. Mel

            Well, efficiency is not what’s deeply needed. The Obama administration is probably up to its neck in efficiency, and has more than anybody can use.

            What you need now is an effective movement.

            Eugene Debs knew it:
            “I am not a Labor Leader; I do not want you to follow me or anyone else; if you are looking for a Moses to lead you out of this capitalist wilderness, you will stay right where you are. I would not lead you into the promised land if I could, because if I led you in, some one else would lead you out. You must use your heads as well as your hands, and get yourself out of your present condition.”

            (I’m trying to put together a coherent comment based on John Ralston Saul’s _Voltaire’s Bastards_. That book has a lot to say about the technologies of legalism and management, and the way they are enemies of consideration and community action. I’m having trouble extracting and compressing. We’ll see.)

          2. Yves Smith Post author

            Apparent consent facilitated by a leader often proves to be paper thin. This is a Western hierarchical model, implicitly. Look at what a divided mess most companies are and tell me how hard that works. A huge amount of energy dissipated in infighting.

          3. Nathanael

            Who needs a leader? The 99% know at least the first thing they want: justice. Another word for that is fairness. If you want examples, they want rich thieves to go to prison, and they want poor hardworking people to be able to make ends meet.

            I think it’s frankly disingenuous to claim that OWS’s demands are unclear. They’re very clear, it’s just that the elite is denying reality, claiming that the problems which OWS is organized around don’t exist.

            If Obama (for example) claims that there was no crime committed by bankers, Obama is then unable to admit that the OWS people are demanding that criminal bankers go to jail. Etc.

  26. jonerik

    I don;t agree that Marriner Eccles drafted most of FDR’s financial reforms. Marriner Eccles was not even part of the New Deal as far I’m aware before 1935 when some of the most comprehensive reforms were enacted. E.g. the Banking Act of 1933, the Securities Act of 1933, the Securities and Exchange Act of 1934 and the Public Utility Holding Company Act of 1935. Eccles was with the Federal Reserve and not really part of FDR’s cabinet. People might hate to hear it, but most of the best reforms were drafted by lawyers, not economists. I think this skill is sorely missing in the legislation today. I’ve heard Dodd-Frank was about 2,000 pages. Really? C’mon. There’s no excuse for that.

    1. aet

      As any such economic reforms must need be embedded in the words of the laws and regulations, it is only natural that such be drafted by the usual crew – that is, by those jurists who specialize in the drafting of Laws and Regulations. Of course, there is considerable room and need for inter-disciplinary work on the details.

      For an example see:


    2. Tom Hickey

      Marriner Eccles was a gift from God, and FDR was able to recognize at least some of his greatness and take advantage of it. But FDR’s Treasury secretary, Henry Morgenthau, Jr., was an advocate of balanced budgets. FDR listened to the wrong advice in 1936 and the economy famously dipped in 1937 as a result.

    3. Yves Smith Post author

      Not correct, particularly your assumption that he had to be in the cabinet to be involved in the legislative process:

      Below are excerpts from the testimony of Marriner Eccles to the Senate Committee on the Investigation of Economic Problems in 1933. It is an historic document – laying out the future terms of the Federal Deposit Insurance Corporation, the management of money supply nationally through open market operations, the Bretton Woods Accord on currency stability, mortgage refinancing as monetary stimulus, and reforms of the Federal Reserve System to eradicate the excesses of untamed capitalism and financial dominance of Wall Street. He proposes higher income and inheritance taxes as essential to promote economic growth, curb inequality and forestall political instability. He encourages federal regulation of child labor, unemployment insurance, social security and other farsighted reforms. And he avows himself a capitalist throughout…

      Following his testimony, the Utah banker was invited by Franklin Roosevelt to come to Washington to spearhead legislation to enact his proposed reforms. Within two years he had drafted and enacted the Securities Act of 1933 and the Banking Act of 1933 (a.k.a., The Glass-Steagall Act, which separated investment and commercial banking and established the FDIC) and the Banking Act of 1935 (which created the modern Board of Governors of the Federal Reserve System and Federal Open Market Committee). He served as Chairman of the Board of Governors of the Federal Reserve System from 1934 until 1951.

      It looks like the only major piece of FDR’s financial legislation he didn’t help write was the Securities and Exchange Act of 1934


    4. friend

      I love the story in Lords of Finance about how FDR took the US off the Gold Standard.

      ALL of his whiz kids advisors opposed the move. Ultimately, they resigned. Pure ignorance!

      But FDR just sensed that prices were too low and going off the Gold Standard would raise prices. So he did it.

      Years later, economists decided it was wise for this that and the other reason.

      1. Yves Smith Post author

        I got stuck partway though Lords of Finance (I didn’t like the writing style) but the version in Once in Golconda is great.

        Roosevelt convenes a meeting of IIRC eight of his top economic advisors (they are pretty eclectic, Roosevelt liked getting really diverse views). He throws out some discussion items about the gold standard. The group debates it for a while. Roosevelt then announces he’s going off the gold standard, which is a bolt out of the blue. The group explodes and tells him it will be Armageddon if he does that. Roosevelt laughs and thanks them for their views and says he’s going to do it anyhow.

        1. Nathanael

          FDR had gotten one key piece of advice which told him to go off the gold standard: a letter from John Maynard Keynes.

          I think he knew enough to know which advisor knew what he was talking about. After all, Keynes had proven himself right when the rest of the world disagreed with him, back at the end of World War One.

  27. steve from virginia

    Pretty sad, all will learn the hard way. Once there are gas lines people will figure it out real fast but by then it will be too late for anyone to do anything.

    Krugman brandishes the stimulus ray-gun in all directions, that’s all he knows how to do. “I know more about the Great Depression than you do”. Maybe, maybe not. I never heard from Krugman or Stiglitz or anyone else that FDR bailed out the US banks the first week he took office and how he took the US off the gold standard, also bailing out the same banks. The banks would never have been able to satisfy the gold clauses in outstanding contracts …

    Neither of the experts nor Bernanke talk about how the depression lasted until 1947, until the Marshall Plan and Levittown and TV and the ‘National Security Act of 1947’. We got the Air Force, the CIA and nuclear assembly lines, the largest peacetime military budget, ever.

    The depression was a social change from agrarian to advertising. We lost our souls back then, before I was born and probably most of the people here.

    Japan and Germany lost world war two in a small town in Mongolia in August of 1939, before the war started in September. Who could have possibly guessed? That’s how the devil works in this world. Neither country had a clue … how countries and leaders and economists and marchers don’t have a clue, now.

    Our parents borrowed from the future so they could have it all, they borrowed from our kids. Are you starting to get the picture? The cupboard is bare.

    The kids want the system to work as advertised, so they can get a bigger slice. Sorry kids, yr parents ate all the slices, you get the crumbs.

    1. psychohistorian

      What sort of BS is this this?
      “…too late to do anything.”
      “Our parents borrowed from the future so they could have it all,…..”

      It is only going to be too late when there are no more humans breathing and we are quite a way from there.

      I am old enough to have been at that meeting where us old folks decided to borrow from the future so we could have it all. It didn’t go down quite like that. Sure, we thought this rampant consumerism idea was great. Making everything cheaper so folks had to replace stuff just made lots of sense to us. Not everyone bought into the perpetual war on people and drugs and, truth be known, they really bait switched us there. Most of us really did want peace but understood that war was good for the economy so hate prevailed.

      Now about the borrow from the future concept to have it all now. You sound like a man of faith Steve. We were told to have faith in the American dollar and not gold and we bought the package hook, line and sinker. Just work your ass off and BELIEVE. Well, it seems that magic Randian free lunch machine didn’t quite work out as planned by us lowly public. We demanded the corporate world make greed their God to our and our children’s ultimate detriment. I remember it clearly…..like it was yesterday.

    2. F. Beard

      Our parents borrowed from the future so they could have it all, steve from virginia

      Impossible unless they had a time machine. It is impossible to borrow real goods and services from the future. If your parents enjoyed a good life it was because they provided it for each other. The only thing borrowed was “money” and that is mere illegitimate bookkeeping entries given the nature of our money which is counterfeit credit.

      1. Jean

        Thank you!!! The financialized world we inhabit takes hold of the mind and nourishes pure, unadulterated nonsensical thought.

        One of the most vital utilities to the substance our lives is electricity. Next week’s electricity does not yet exist.

    3. Nathanael

      Uh, no.

      FDR only bailed out SOME of the banks. Take a look sometime at the list of banks which were summarily and permanently closed during the “bank holiday”.

      This matters.

  28. Economic Maverick

    I was out in the DC OccupyKST protest myself, and attended my first General Assembly. Even for seasoned activists, it’s a different bear entirely. For elite wonks, there would be a learning curve to figure out how to engage their system. The upside to this system is that it makes it more difficult for an elite or institutional entity to capture. On the downside, the fluid and horizontal nature of their organization also makes it more difficult to come up with definitive goals, assuming the collective organism they’ve developed even wants to have prescriptive goals

  29. Darren Kenworthy

    An hour before the Occupy Portland premarch assembly a few hundred people had already gathered, and the press were present as well, though the Fox news van didn’t arrive until shortly before the event, scheduled for noon October 6th. The bicycle police were present, but not in large numbers. The largest specimens had obviously been selected. There were peacekeepers organizing themselves (blue tape armbands) the national lawyers guild folks (about 25 of them) in green hats and armbands. People were gathered loosely by mode of dress; their were folks of every possible description, including some people in their boardroom uniform, but obviously in sympathy. The working group that did the pre-planning seemed, based on mode of dress, comprised of several different individuals and groups. One of them, visibly more nervous then the rest, and dressed/ groomed for prime time (most of them, including the ones with “interview team” name tags, were not) gave two brief interviews, one to a local news team, and one to what appeared to be team from a high school media class. At noon the swiftly growing crowd coaleced with minimum prodding from the working group. The working group did some basic organizing with megaphones, interspersed with use of the “people’s mic”. Little of what was said in the middle of the plaza could be heard at the edge of the continually growing crowd. Pertinent to this thread is an incident that occurred at the first use of the “people’s mic” by someone not in the working group; a local radio host introduced himself by saying “I am (his name)” whereupon some in them crowd didn’t repeat what he said, and some said “I am not (his name) The rest of what he said was barely carried by the mic at all, especially when he began speaking in longer sentances with fewer pauses. During this time the police presence increased to about 20- 25, still bike-mounted, spread around the outskirts of the crowd and across the street and the fire/ rescue main station. When approached the poilice were conversable but reserved, and interested in whether they were speaking to a “protester” or an observer. Their sentiment seemed to be that the protest was a public nuisance, and perhaps unwarranted. They criticized the fact that no route had been announced, and that permission had not been sought. When presented with the perspective that ordinary channels are corrupted, necessitating recourse to demonstrative acts based on constitutional rights but ignoring local ordinances, officers showed some sympathy. By 1:00pm, when this account ends, over 2000 people were gathered, an estimated 500- 800 of them close enough to the center of the crowd (made up primarily of the people who arrived earlier). to participate in the conversation going on there via the “people’s mic”. The numbers presented here are very rough, but likely conservative. The flow into the plaza continued as this observer left.

  30. chris

    Krugman sums it up very well…..he is an elitist just like the rest of the 1%…
    The problem is that the arrogant elites think that if they come up with some bullshit about economic theory that it will confuse the public enough that they won’t question it..even though it smells so bad……
    Economics is pure elitist propaganda that is meant to control the masses and give the 1% complete rule and complete control of finances.

    I am so sick of this crap from all the economists and all the bs from the elitist that have tried to brain wash main street america that they were not smart enough to understand the money system so just let elites screw you out of your money.

  31. dshatin

    scientists recently revealed a serious genetic mutation in human DNA that began during the 1940s that caused babies to be born lacking the capacity to differentiate right from wrong and to experience and to develop empathy.

    these babies were tracked in a longitudenal study by scientists affiliated with Mishtakonic University. these babies were studied over the course of their lifetime. researchers based upon their quantitative data and qualitative observations tried to warn others of the possibility of the dangers this large multiple cohort of high IQ, aggressive babies lacking the capacity for moral decision making and empathy would be to society and the country’s stability, but noone would listen.

    1. 2 illegal wars. hundreds of thousands of deaths of innocents for no f’ing reason, funded by tax payers money $2 – $3 trillion dollars taken away from education, social security, safety net programs, NASA, NOAA, students, fellowships, science R and D…..

    2. Total abnegation by SEC and the Commodities Futures Trading Commission, turning a blind eye to the financial destruction of the american people and the total and complete destruction of the vestigial remnants of an agricultural and manufacturing and engineering based economy by for years incentivizing the big sucking sound of U.S. jobs going to India and China.

    There are so many wrongs that have been committed against the American people and people of the world through financial fraud, that warrant major criminal adjudication people have stood up and will remain standing up for we refuse to lay down for them and die a quiet death in destitution.

    F everything..it isn’t about old, young, analog, digital….it is about morals and ethics, primitive, powerful motivators. To quote a General while trying to rally his barefoot, freezing, despondent troops before Crossing the Delaware River on the bitter cold snowy evening on December 24th,

    “Right Makes Might”

    G*d Bless All and May those who have been impoverished by or direct victims of these empathy-less thieves be made whole and may our nation once and for all time clean out the purile from our federal election process.

    Further, a plea to Economists everywhere: What country can possibly survive on a cockamamie notion of consumption? What brainy economist came up with the economic plan for the United States where 70% of the economy was based soley on consumption?

    Occupy Wall St is a reflection of the best in us and what could be; we see in your faces and hear in your stories the pain and devastation and hurt that caused to you that never should have been allowed to happen, and your rage and fury, tempered by your honesty, integrity and morality; who wait wordlessly for the financial criminals to be rounded up in criminal proceedings and imprisoned for financial crimes against their fellow man., for starters.

    Those that govern have lost all trust by the governed. Repeatedly and with breathtaking speed the financiers stole it all. Everything. With impunity.
    The Witching Hour for the ‘Investment Houses” and the “Banksters” is now here. Heads will roll. The people will be made whole. And the criminals can eat their derivatives and cdos for breakfast lunch and dinner.

    1. Steve

      Please continue! I sure hope this type of perspective is dominant among the OWS crowd. If so, then there really is something big happening. And, the Tea Party diversion of shifting all blame toward ‘evil liberal progressive government’ is going to be crushed. Oh please, let it be so.

  32. Herman Sniffles

    This could be an odd revolution. It looks like the bad guys are going to have to apologise for something they’ve never officially been accused of. They better hope we don’t start listening to the Doors again.

  33. Otter

    What most terrifies the owners is the risk that peasants might start talking to each other.

    The unemployed physicist and the unemployed truckdriver might discover they have a lot in common. They might discover they have little in common with the owners and their creatures in DC and Hollywood. They might begin to think all kinds of unauthorized thoughts.

    Forty years ago, it was called “concsiousness raising”.

    1. Yves Smith Post author

      I used that expression once, agreed 100%. And remember sit ins and teach ins? This looks to be a very much improved version of that concept.

  34. Lidia

    “economics is a technical subject that benefits from study and hard thinking.”

    Except that it doesn’t/hasn’t. Else why would we still be in the state we are in, after applying so many person-years of Ph.D-level study, research, writing, etc.? Far from helping the situation, they are basically practicing an advanced form of voodoo medicine, justifying continual bloodletting of the patient even as her vital signs weaken.

    The idea of economists as some sort of engineers or “technicians”—whose solutions can be counted upon, in particular if their purveyors seem to be well-intentioned and “on our side”—is in itself fraudulent and misleading.

    Economists have no tools, paradigms or algorithms they can apply that will mitigate the situation before us. They are as aliens, describing a planet and inhabitants that do not exist—their talk is as coherent and relevant as this dialogue:

    Scotty: Shunt the deuterium from the main cryo-pump to the auxiliary tank.

    Lt. Commander Geordi La Forge: Er, the tank can’t withstand that kind of pressure.

    Scotty: [laughs] Where’d you… where’d you get that idea?

    Lt. Commander Geordi La Forge: What do you mean, where did I get that idea? It’s in the impulse engine specifications.

    Scotty: Regulation 42/15 – Pressure Variances on the IRC Tank Storage?

    Lt. Commander Geordi La Forge: Yeah.

    Scotty: Forget it. I wrote it. A good engineer is always a wee bit conservative, at least on paper. Just bypass the secondary cut-off valve and boost the flow. It’ll work.

    Only when everyone steps OUTSIDE of the fantasy framing of all “economic” blather by professional “economists”
    (except those in the marginal-but-growing field of ecological economics, who take pains to include actual resource and energy flows in their figurings), and when a sizeable majority come to accept the fact that we can’t “boost the flow”, and can—moreover—get to the other side of the pain and blame that that’s going to entail, are we going to make any real progress (progress in intellectual and political terms).

    When Krugman finally figures it all out, I do, however, look forward to his contributions in, say, the grinding of corn or the hauling of water.

    1. Nathanael

      No, economics really does benefit from study and hard thinking.

      Trouble is, most “economists” don’t study (the right things). What you need to study, for economics, is mostly history and some psychology. The reason Krugman makes accurate predictions is that he’s studied quite a lot of economic history and some psychology.

      Second trouble is, most “economists” don’t think hard (about what they should be thinking about). In some ways it’s not a very hard subject — you try to find some psychological model which matches real-world history and make predictions from it.

      But academic economics wandered up its own arse a while back and most of it turned into some sort of dubious scholastic exercise unrelated to the real world.

      Anyone with high-school algebra and a basic understanding of accounting is capable of studying the history and psychology, and then doing economics. It’s not hard, anyone with those minimal prerequisites and a lot of time (to research history) can be a real economist. Most academic economists aren’t real economists.

      1. Nathanael

        Oh, um, how could I fail to mention the very serious problem that most “economists” are PAID to do bad economics? It’s hard to convince a man of something when his salary depends on him not believing it, and all that.

  35. Fiver

    Paul Krugman “gets it”?

    Krugman’s economics is that of an historically very particular post-WWII US that completely ignores the overwhelmingly advantageous position the US held: the only economic power standing; the leading edge across the gamut of technology and organization; a still unsurpassed resource base. Which is why it could pay down its debt and build a global Empire to go with the Continental one. A very, very lucrative, but increasingly expensive to maintain one.

    His thinking ASSUMES continued US-based, globalized, corporate Empire. The concept carries no economic weight except as a military/security budget number, rather than being understood as underpinning all the premises of all the arguments re how to deal with the current crisis going forward. Where’s the US without the global reserve currency status? Or multinational corporate pricing power? Or the IMF as enforcer? No recognition whatever of the idiosyncratic nature of this economy. No room for things like intense competition morphing relentlessly into conflict, rebellion, war, religious revivals, technological revolution, major value changes, and especially, no room in the model for now endemic white collar crime on a scale that shatters nations.

    When he actually calls for Bernanke’s or Geithner’s or Blankfein’s or Paulson’s or Bush’s or Obama’s or Gates’ or Petreaus’ or somebody with a face’s appointment with a prison, I’ll give him another look.

    1. Nathanael

      Erm, no. You clearly haven’t studied Krugman’s research history at all. He actually does study a lot of what you think he doesn’t.

      Frankly, he’s been warning that the wave of white-collar crime and the government’s complicity in it will lead to political collapse of one sort or anther….

  36. Earl Killian

    When you wrote, “I’m the first to admit I don’t have a good solution,” it was ambiguous which solution you meant. I expect you do know the solution to our economic troubles, but you don’t know how to get the US to implement that solution. Is that what you meant?

  37. pj

    I think the first thing we could ask ourselves is how we are actively participating in keeping the beast alive?

    Are you obeying the laws? Paying taxes? Exercising your right to vote?

    Do you shackle yourself to the beast, paying homage and actively participating in your own enslavement to Wall Street, the world’s wealthy, government elites and their “systems” of collection and enforced cooperation?

    Nothing stops until we stop it. It stops when the 99% say it does – and not until. There is a peaceful, non-violent way to wage war and win, after all.

    Turn off the spigot.

  38. René

    Make Revolution, Not Reform: A Warning to the ‘Occupy’ Movement

    “Avoid co-optation, control, centralization and institutionalization. Co-optation will turn revolution into reform. Remain decentralized, grass roots, and radical. The enemy is not simply the banks and corporations, but all the institutions and ideas which seek to define, dominate, control, oppress and destroy humanity.”


  39. ftm

    The success of OWS will hinge on whether they can sustain their presence not whether they have an initial coherent set of “demands” to present to the world.

    If they successfully organize themselves and continue to grow, a parsimonious ideology will emerge. If it doesn’t emerge, the movement won’t grow.

    Americans and young ones in particular are startlingly apolitical, it will take months and years of fumbling around and trying things on before any real challenge to power can be mounted. Tune in to the livestream from Zuccotti Park for five minutes and you’ll see immediately.

    I am hopeful for OWS but expect a long takeoff.

  40. craazyman

    I suspect Dr. Krugman means well.

    But one can reasonably ask — regarding the professors’ and the policy wonk’s apparent new mission to integrate conscience and consciousness into their formulations:





    To be fair, some have long-ago awakened, for sure. But the average, the average . . . they leave little grounds for confidence.

  41. alex

    Wow, does this ever bring out the fringe. And I have never understood all the bile directed at Krugman. There are plenty of things I disagree with him about, he can be arrogant in his academic way, yada, yada, yada, but ask yourself this: would you rather have him or Mankiw giving policy advice? The 99% would be much better off if at least some of what Krugman has advocated over the last decade been done.

    As for #OWS, God bless them and thanks. Hopefully this will continue and at least change the discourse a bit, which is an important part of politics. You can’t change anything if the talking heads never ask the right questions. Hopefully it will counteract the anti-labor, anti-99% propaganda that’s been incessantly, and increasingly, droned from the telescreens for the last 30 years. Big Brother understood the value of ceaseless background noise about victories in Eurasia and increases in the chocolate ration.

    If you’re hoping for a replay of the French Revolution or a radical economic experiment though, forget it. I’ll be happy with Bill Black (or his likeness) back on the job, enforcement of the _existing_ Prompt Corrective Action law, a re-run of the Pecora Commission, and the reinstatement of Glass-Steagall. Some people want Robespierre when what we really need is FDR. Although at this point almost anything would seem like an improvement over Obama doing his best to make Herbie Hoover look good, and the Republicans trying to make Obama look like our savior.

    1. JTFaraday

      So, your opinion of the French Revolution and failure to understand “all the bile directed at Krugman” aside, how far away do you think you are right now from your preferred moderate end goal of “having Bill Black back on the job,” prosecuting Wall Street for control fraud?

      Should we just turn this over to the policy intellectuals in DC two weeks from now, or what?

      1. Steve

        That’s what I was going to say…

        The ideal solution to our problems IS Bill Black… make our Justice Department do it’s job. Blabering elites like Krugman are very effective at diverting all attention away from what MUST happen… the criminals MUST go to jail and give back to us our resources and government.

        At this point, anyone who still believes “they didn’t do anything illegal” is either totally ignorant or totally corrupt. I don’t think Krugman is ignorant.

        1. Nathanael

          Um, Krugman knows perfectly well that the banks did illegal things. He *reads* Naked Capitalism.

          Are you thinking of Obama, perhaps?

      2. alex

        “how far away do you think you are right now from your preferred moderate end goal of “having Bill Black back on the job,” prosecuting Wall Street for control fraud?”

        Pretty far, which is why I hope #OWS keeps growing. I want to see radical action, like enforcing federal law.

        “Should we just turn this over to the policy intellectuals in DC two weeks from now, or what?”

        Apparently if I don’t think we’ll see a replay of the French Revolution then I think the 99% should shut up and leave everything to Very Serious People. Curious reasoning. Please explain.

    2. Nathanael

      Hoping for FDR, expecting the French Revolution because the elites absolutely refuse to allow FDR on the job.

      Remember that the French Revolution would have been a mild, reformist affair if the King had just gone along with the National Assembly’s economic reform proposals, instead of conspiring with a foreign army to overthrow them.

  42. Jean

    The Lord’s Prayer, learned by Christian children everywhere, and prayed regularly by all Christians, might help:

    Give us THIS DAY, our DAILY BREAD.

    Rearranging the stresses illustrates the point perfectly.

  43. Bill

    So when does one of the OWS sit-ins/ demonstrations turn into a Kent State . Corporatist Elites made money off the Vietnam War too , and didn’t want to lose the Golden Goose – We won then , we WILL WIN now .

  44. Tim

    Yeah right Pal, well this boy is ignoring whatever
    is written in the New York Times, it may be representative of a couple dozen thousand people in NYC but they don’t
    speak for me and I don’t respect them and frankly I am starting to think that they are our enemy.

    One thing’s for sure, I’m getting Wall Street out of
    my wallet.

    No ATM card, I’ll pay cash thank you, no
    credit card unless there is no fee and I pay it off
    at the end of the month. Money is in a free
    checking account at a credit union.

    Mortgage paid off, not one cent goes to the parasites in New York or Charlotte or anywhere.

    Wonder how many of the people occupying Wall Street are handing their money over to the enemy voluntarily?

  45. BondsOfSteel

    IMHO, the lack of policy change demands in OWS protests really are about the failure of leadership of our elites.

    The people on the streets don’t feel there is a leader that speaks for them. They want new elites.

  46. Blunt

    “Frankly I’ve been disconcerted at the calls for OccupyWallStreet to put forth demands.”

    Absolutely, Yves.

    I think that Krugman and the vast majority of over-educated and wonkish critics need to ask themselves a few questions they might find useful in parsing their infinite need to overwhelm all discussions with their intellectual preoccupations. To wit:

    1) Hmmm, and would a solid agenda help you at all to understand that things have gone very awry in USA? What would a list of talking points provide that an open invitation to speak your own mind without an agenda doesn’t provide?

    2) BHO and the Dems provided a “platform. McCain and the GOP did the same.The congressional GOP/Tea Party have done the same, but what exactly has been accomplished by those agendas in terms of ending torture and occupation abroad and job loss and financial capture of democracy in USA? How have the banks been better regulated or the kleptocracy curbed by the proliferation of agendas?

    I’m not certain that I see a positive argument on providing a list of points. I think that the point is people should get off their behinds, shut down tvs and the pervasive ideas that someone else’s agenda will help me participate in a democratic government or protest. They won’t.

    For a democracy to work I must form my own notions of what should be done without delegating or abdicating my power to Dave and Charlie Koch, or Jamie Dimon, BHO, or John Boehner. My work is to clarify my mind and effort, and then unite with others willing to promote democratic solutions and hear their ideas and hopes. That appears to be happening at OWS.

    3) That OWS doesn’t sound like a G8 summit, a session of Congress or the O’Reilly Show isn’t a bug, it’s a truly democratic feature. That being so and our heritage of pushing democracy and making the world safe for said democracy, why do Americans (most especially the policy elites) not understand the concept of democracy and criticize those who do for not having a set-in-stone agenda they can renege on in six months and be labeled by yourself and others as “failures?”

    Paul and others, get used to the fact that democracy has a plethora of agendas and that the difficult part is allowing all voices to take part, listen, speak and choose among a myriad choices.

  47. The Derivative Project

    Yves, thank you very much for your continued great work. It is so critical for effective change. Would you and perhaps Occupy Wall Street be able to help air this issue on the lack of rights for individual retirement savers to have their day in court when there have been fiduciary breaches to the Investment Advisors Act of 1940 in their retirement accounts?

    It is not easy to summarize but it is an ongoing crucial issue that makes it easy for Wall Street to continue pushing dangerous products and useless fees, without fear of any legal recourse, such as what happened during the 2008 crisis.


  48. Steve

    I sure hope a significant number at OWSers are following Yves Smith. Dare we dream… Yves Smith, a prominent adviser helping President Elizabeth Warren to remove the Global Mafia corruption from our government and corporations!!! Please Yves, we desperately need leaders like you to encourage Dr. Warren to run against Obama!

    Regarding “the Danger of Elite Capture”, I sure hope the OWSers are reading and passing around thousands (eventually millions!) of copies of Naomi Klein’s book The Shock Doctrine – The Rise of Disaster Capitalism. This book provides dozens (seems like hundreds!) of examples of “Elite Capture”.

    Please, everybody, if

    1) you are looking for proof that there is an organized criminal force (i.e. the Elite… or more specifically the Global Elite) working to deprive (i.e. loot) whole nations (including the U.S.A) of their resources and wealth, and

    2) you want to understand how the Global Elite take control of (i.e. capture) one government after another, and

    3) you want to understand how the Global Elites then methodically take the wealth and resources from these countries (hint: “first by inflation and then by deflation”… “Disaster Capitalism”… they first rig the economies to fail, methodically inducing rapid catastrophic collapses (i.e. crises), and then ride in on their white horses to save the economy by purchasing everything… at fire-sale prices),

    then please, please read The Shock Doctrine.

  49. Steve

    What I’m looking for from the OWS movement…

    1. Form a consensus that Global Corporations (centered around Global Finance Bankers) are, in fact, an Organized Global Crime Syndicate (i.e. Global Mafia) who, over the past 30 years, have methodically Captured Our Governments and transformed our Democracies (healthy, happy, nation states focused on equal-opportunity-for-all) into Fascist Dictatorships (rule by Elite Oligarchs/Aristocrats/Supremacists who first concentrate and then take control of essentially all wealth and power).

    2. Convince Tea Partiers that our problems stem NOT from Government Capture of Corporations (i.e. Socialism) but rather from Corporate Capture of Governments (i.e. Fascism).

    3. Form a consensus that Globalization in it’s current form (i.e. giving complete control of the worlds supply-side and demand-side resources to the Global Mafia Elite, who care NOTHING for the average person) is a very big mistake.

    4. Form a consensus that Free Market Trickle-Down Economics is nothing but a deception (“The Big Lie”) propagated by the criminal Global Mafia Elite.

    5. Demand that Elizabeth Warren run against Obama in the primaries.

    6. Demand that new economic perspectives, analysis, and policies be considered, conducted, and implemented immediately (please, everybody, read Michael Hudson).

    7. Demand that massive resources be put in place to immediately and aggressively investigate, indict, and prosecute the Global Mafia Criminals. Our highest priority must be to restore our Justice Systems and take back from the criminals control of our wealth and resources (please, everybody, if you have been duped by the “they didn’t do anything illegal” propaganda, then read William Black, you’ll be happy to discover that it’s quite the opposite, “everything they did was illegal”).

  50. decora

    Yves, you shouldn’t be apologizing, you are like someone pointing out there are prostitutes all over Dubai, and some Sheikh says “oh ,, but theres one little corner without prostitutes, they arent ALL OVER dubai”

    i mean the situation is fucking ridiculous. Leah McGrath Goodman has a fascinating paragraph in her book The Asylum about how alot of financial journalists are on the same ‘revolving door’ track as the regulators — after a few years grinding it out on a beat, they get upgraded to a wall street firm (or off-wall-street firm) where they make masses of money.

    just another piece to pile on the gigantic mound of evidence that Economics itself is captured, sort of like Physics was by the priests and Catholic Church. there were tons of physicists back in Galileo’s day who were glad to watch him be tortured until he agreed to say the Earth didn’t move. . . . but nobody remembers who the fuck they were. And yet, they had the good jobs teaching in unversities, they had the trips round the capitals to do the old-timey version of Punditry, and they had their corrupt deals with the power structure. It wasn’t science, it sure as hell wasn’t academic. It was intellectual prostitution.

    Krugman needs to go sit down and watch a copy of Sagan’s COSMOS on hulu — he explains very beautifully the difference between fact and speculation, evidence + reason and hierarchy and submission to authority.

  51. Fiver

    The lesson of the Tea Party is instructive:

    1) Genuine public response rooted in anger and disgust at grotesque bank bailouts and pandering to rank criminals is immediately hijacked by Very Big Money.

    2) Movement quickly captures the public political space for angry opposition to status quo that SHOULD’VE been occupied by a much-invigorated “left”, but which wasn’t because so many had been self-bound-and-gagged by the smooth-talking, right-wing elite technocrat slickster Obama.

    3) Big $$ deploys Tea Party politically to drag entire discussion into the far right bleachers to provide endless distraction circus cover to mask the throttling of any real effort of any kind to address ANY of the reasons for the crisis. Result? A year wasted on the world’s stupidest health care plan. Another on MAJOR expansion of illegal wars and executions, continued relentless pumping of stock and commodity markets, complete failure to deal with brute facts of BP oil spill and incoherent energy policy, no action whatever on housing, endless meaningless MSM blather. Oh, and when was the last time anyone checked in on the “reconstruction” of Haiti? Or Iraq? Or Detroit?

    4) A third year pissed away on Bush tax cuts, payroll tax cuts, bogus budget talks aimed only at ensuring continued shoveling of money at Wall Street and corporations. But a backlash already well underway – a backlash anticipated and LED by the very same Big $$. From late Spring on, as if they had not existed all along, one after another, Trump, Beck, Palin, Bachmann, Perry and all the rest of the “Extremes” are each in turn suddenly the object of “scrutiny” and effortlessly knocked over like so many stick men.

    5) A “relieved” country moves back into the “safe” ground (ignoring how distant that ground is from a now-mythical former “middle”) of an Obama/Romney contest between the 2 traditional faces of Wall Street/Washington oligarchy, the Tea Party having secured them 3 precious years to first fully recover, then take full advantage of the crisis locking in further trillions in gains and even greater concentration of power.

    It was a brilliant follow-up to planting Obama in the White House (and installing Mr. Depression, The Bernank at the Fed in 2006 in full knowledge a debt crisis was at hand).


    1) They are very, very shrewd, these Masters of ours.

    2) And utterly ruthless. Being beaten up by a cop, while of course repugnant, is the very least to be expected by any group that dares dream to mount a real challenge to this immense corporate/state power structure. Ask any Iraqi. Or any Muslim anywhere, for that matter. Or a Greek, or Spaniard, or Irishman or Mexican, or Congolese, or….

    3) So it requires a strategy that fully recognizes the enormous asymmetry of power, of the pure capability arrayed against us, and the brute fact of a willingness on the part of this state to use whatever means necessary to preserve the status quo. They will without compunction ratchet up the scale of their response in direct proportion to the perceived level of threat – they have in place everything they can even imagine to be required to be deployed directly to this end. Let’s be clear as to history: It took a century of revolution, serial depressions and war (1840’s through 1940’s) to put these bastards partially in a cage the first time around. They are not going to go down any more gently this time.

    4)It is every bit as clear that the world cannot withstand another global paroxysm of violence. So any strategy much recognize that while targeted disruption and scalable violence will most certainly be committed by the state against any effort that is gaining any traction at all, it cannot successfully be countered with violence (overt, or in the background a la Mandela and the seething threat just behind him) this time.

    Then what?

    Well, obviously, some truly massive public response, as in millions in the streets repeatedly, would garner some real attention, some earnest nodding of the usual suspect elite heads and mouthings from politicians that the public’s concerns are both “understandable” and “understood”, that they now “get it” – as if it was all some big miscommunication on the part of the public for decades. And indeed a bigger basket of borrowed bones to grind into short-term, temp-job stimulus soup would again be tossed without the remotest semblance of a real plan going forward or real intent to change anything but the rhetoric. Make an example or two, say bust up BoA, disappear Goldman into private hands, that sort of thing. Buy a couple years. And THEN what? Don’t ever forget – the efforts of many millions for 10 years culminated only in the end the Draft, not the actual War in Vietnam which, also never forget, Vietnam very, very, badly lost – 2 generations and a country destroyed.

    That’s WITH millions in the streets simply registering anger and dismay. But quite apart from the fact that isn’t happening, and is very unlikely to happen, is UNDIRECTED, non-strategic, non-tactical mass “protest” even relevant in an otherwise completely atomized, anti-communal, asymmetric information/power based society? Particularly one in which the very value of the “masses” (i.e., their labor) has been all but obliterated? What happens when you take the “mass” out of “masses”?

    This corporate state would prefer nothing better than to be confronted by a standard “grass roots” exercise on the part of the powerless, particularly one NOT aimed at overtly challenging the power equation. After all, what better than to face an opposition that eschews any concrete goals or plans to attain them?

    We simply have to be a whole lot smarter. We have only 1 real weapon: the potential for highly organized, targeted non-cooperation on the part of those whose non-cooperation actually would matter. Mobilizing the “masses” cannot win this because neither their labor, their purchasing power nor their potential fighting muscle is relevant. This struggle for socio-economic justice anchored in democratic rights and principles, if it is to occur at all, must take place within the broad, priveleged elite itself – it necessitates a true values revolution within the professional, the well-educated, the highly trained/skilled ranks – the lawyers, the economists, the academics, the scientists, the doctors, the media producers, the systems engineers and technologists who run everything, the……- all the people who in pursuit of their narrow, compartmentalized “fields” or “careers” or just “work”, created this giant TBTF global complex of interlocked systems but left the keys sitting on the dash for the power mad to commandeer at their leisure. It is THEIR non-cooperation with anything that furthers the global corporate state that will make or break any serious attempt to meaningfully change course and avert certain calamity just a decade or so down the road – as remember, the status quo really is hopelessly broken.

    Consider the act of Private Manning. His refusal to continue to sanction the abomination that had become the US military’s “war on terror” in Iraq and Afghanistan, dozens of other countries, and within the US itself. A refusal that has cost him very, very dearly indeed. It is precisely THAT sort of courage and radical withdrawal of cooperation that must be emulated and propagated by the literally millions of “progressives” or “liberals” or “concerned citizens” who actually occupy positions within their spheres that truly MATTER to the performance of that sphere within the context of its service to the larger system.

    We know where the “Brightest” are and what they’re up to. Now where’s the “Best”?

  52. harvest moon

    Yves, thank you for highlighting OWS needing to stay wide open. This is the conversation we desperately need, the engagement, the emotion, the magnetism to draw people in. History shows it takes a very small % of any populace to initiate change and the horizontal nature of OWS with gatherings springing up in cities all over the country is heartening. Can this 99% populism take hold to affect the deepset problems we engage today? If it stays generic yet vibrant, bringing divergent interests together, certainly.

  53. DPirate

    How an intellectual (his own self-title, of course) can assume the responsibility for defining the aims of a general populist movement (that he does not care to join though he certainly possesses the means and opportunity to do so) is beyond me. His denial of co-option (sp?) is ridiculous on it’s face; this lack of thought might give the lie to the intellectual tag were it not that greater intellect does allow for greater self-justification.

    At any rate, I’d submit that a movement’s power comes from it’s generality. Attempt to define it and you’ll corral and dismember it. It’s the difference between a sea change and a policy alteration.

    Krugman is valuable doing what he’s been doing, as far as that goes. If he decides to go camp out in the street people may take him more seriously when he desires to speak for those who already are.

  54. proximity1

    Reply to avgJohn at http://www.nakedcapitalism.com/2011/10/on-occupywallstreet-and-the-danger-of-elite-capture.html#comment-488826 :

    Maybe you should rethink how you react to the initial suspicion of working class stiffs to the OWC.
    … …
    They may see themselves as part of the 53%, but you need to understand that they too are still part of the 99%. This may require a little bit of patience and tolerance from people who are a little bit better informed. In particular, many of the commenters on this site are well informed about issues concerning stagnated wages, high unemployment, and bleaker prospects for the future of the middle class, as well as the corruption on Wall Street and government. But I am from a blue-collar working stiff family, and I know these people. Basically, I am proudly one of them.
    … …
    These people are for the most part not a threat to the OWC movement. They are too busy trying to make ends meet, to have time for informing themselves about how Wall Street has gained a strangle hold on America. Help educate them. Simply ask them questions such as “what purpose does Wall Street serve to our society?” “Why do they make so much money, and wield so much power, just buying and selling financial instruments?”. “Would you like to see corruption and cronyism eliminated from our political system?”. “Would you like to see policies put in place that helped the small business man and woman on Main Street succeed, and served to strengthen the business environment of local communities, instead of directing investment and creating jobs off-shore?”.
    As the the movement crystalizes around a message of eliminating fraud, waste, and corruption in big government, Wall Street, and multi-national big business, we can win the hearts of the 53%, the 23% and the 10%, convince them that they are part of “we the people”, the 99%, and the movement serves the interest of us all. Just insist to them that you are fighting for them too, even if they don’t appreciate it, and they will eventually overcome their suspicions and fear and join us.

    Because I think there are some important disjunctions and mistakes in your line of reasoning and that these are very important to our better understanding of the blockages to real progress , I offer this in reply:
    You tell us that you’re from a family which is among the ranks of what you describe as blue-collar working stiffs, and describe numbers of them as being, initially at least, suspicious of the OWC protesters—a suspicion you urge we first try and understand. You urge, further, “Help educate them. Simply ask them questions…” and “Just insist to them that you are fighting for them too, even if they don’t appreciate it, and they will eventually overcome their suspicions and fear and join us.”
    But with all of that you set yourself very much apart from the great majority of those who, you also tell us, and rightly so, I think, “… are too busy trying to make ends meet, to have time for informing themselves about how Wall Street has gained a strangle hold on America.” You may be from a blue-collar family but you are clearly also now very different from the kind of social and political assumed views that so characterize them. They are very largely people who reflexively (that means “without first listening to and cricitally thinking about opposing opinion”) support right-wing political talking points and vote (when they vote at all) for those who espouse them. They vote overwhelmingly for Republican party candidates and incumbent office-holders or for the even more extreme elements of right-wing political groups and this is now a generations-old situation. In as much as this doesn’t describe you, you are very much unlike them, whatever your family roots may be. You’re also not “too busy trying to make ends meet, to have time for informing (yourself) about how Wall Street has gained a strangle hold on America” or you wouldn’t be participating in this site’s blog and that sets you apart from the great majority of them. These are serious problems which can’t be wished away.
    While I very much agree with your observation that the great majority of the top elites—by which I mean most of the upper reaches of the top 1% and the many more who do their bidding and actually operate our corrupted system—like and want nothing better than to preëmpt any budding coalition between the angry left-wing (whether well-informed or not) and the angry right-wing (whether well-informed or not) who have been and continue to be politically and economically savaged entirely by this brutal system’s design, you don’t seem to recognize how far this division-and-conquering is already simply an accomplished fact, not a potential danger in a hypothetical future. The truth is quite bleak and we must grasp it even if we refuse to accept it as inevitable: the work of divide-and-conquer is now and has long been made terribly easy to accomplish and maintain with small but continuous effort in the mass-media—radio, television, film, and, now, internet. These combine to produce a situation in which we virtually bathe in a constant soup of politically divisive and alienating demoralization. Note well, this is a “feature” of, not a “bug” in, the system’s operation. This is our now-corrupt social and political order as it is currently made and intended to work. “Liberal” has for decades been made a term of abuse and an object of deep contempt among many of the group you would have us here better understand and teach. Your arguments presuppose that with enough time and care, we can in effect educate a very large part (that is, most) of them into coming around to sharing important basic understandings of the prevailing systemic dysfunction. But that assumption has little in real experience to support it. It is not just that the ideological gulf between a ‘them’ and an ‘us’ is enormous, it’s also that the terms and conditions of even its hypothetical bridging are anything but evident now. By their assumed alienation from any imaginable approach to a counter view and their behaviors which flow from it, they remain very much something of a “…threat to the OWC movement” whether we here (or others elsewhere) like it or not.
    What you’re suggesting be done is anything but feasible right now and the means to change this circumstance aren’t clear and will, if made clear, be ferociously faught. We must understand this.

    1. Nathanael

      Minor point. The Internet, although it shares *some* characteristics with the mass media, is *not* a mass medium.

      It’s two-way, not one-way. (Even when radio has “call-ins”, they censor them.) It’s hard to censor. (Possible, certainly, but a continuously difficult problem, unlike TV, which is truly easy to censor.)

      It self-organizes people into relatively small groups, rather than blanketing them with a single message. Yes, it does end up organizing into a “scale-free network” following an exponential pattern of readership, with a single giant hub (right now, Google), but the hub position, or any other position of great influence, can be lost very quickly and spontaneously by only a few ‘wrong moves’ (anyone remember Yahoo?).

      I sometimes wonder if the exact type of kleptocratic environment we’ve been dealing with was made possible by television (which first became significant in the 1950s) and is dying because of the Internet (which first became significant in the 1990s).

      1. proximity1


        Nathanael says:
        October 9, 2011 at 10:35 pm

        By any reasonable definition of a “mass medium”–and, particularly, as measured by gross usage, i.e. total numbers of individuals using a medium, how can the internet fail to qualify as a mass medium in its aggregate use?

        The second aspect, then, apart from the issue of numbers of users, is your objection concerning the nature of the internet as somehow distinct from other mass media. You mention that because (per your assertion) the internet is a “two-way” medium, it is different in an important way from other mass media mentioned (radio, television, film).

        However, even if one grants this “two-way” character of the internet, this supposed distinction doesn’t exempt the medium from the criticisms which I’m pointing out as applying to radio, television and film. In important ways, the internet duplicates many of the worst features of other mass media and even exacerbates some of them in some respects. To understand why, you need a more sophisticated grasp of the social and psychological ramifications of mass media. This entails consideration of how radio, television, film and internet affect cognitive processes and how these differ from reading traditional a printed-page–from books to magazines and newspapers.

        In the following works, and the references they cite, you can begin to find this better, more sophisticated grasp of how to understand mass media as social forces which work upon our consciousnesses whether we are aware of it or not and especially if we are not aware of it.

        “Caveat lector” in the world of electronic digital mass media.

        see, for reference:

        Postman, Neil: Technopoly 1993, Vintage Books, Random House, Knopf, New York,



        Jacoby, Susan: The Age of American Unreason, 2009, Vintage Books, Random House, New York.


        These, of course, just scratch the surface and offer a staring point.

        By the way, a recently published study from Ericsson undermines your view that television (traditional broadcast TV) is “dying”–that this ins’t true is among the study’s “key findings”. Search on “TV & Video Consumer Trend Report 2011” or click on http://www.ericsson.com/news/1543649 and see the report in PDF.

        cheers, P.

      2. proximity1

        further to my comment, I recommend the article linked here:


        … “The first and most important thing to understand about mainstream blogging is that it is made up of a numerically tiny and considerably homogeneous group of connected insiders. Criticisms of the prominent blogosphere are often blunted by online mythology, and that is nowhere more clear than in the idea that there is this vast swath of disparate people from different backgrounds, all of whom contribute to this open and accessible online forum where ideas are judged on merit.

        “The truth of the matter is that the blogosphere is largely a closed loop. The ability of individuals, particularly those dedicated to amateur blogging (out of principle or out of practicality), to penetrate the larger conversation is quite small.” …

        –a very important and insightful article and one the credit for the notice of which I owe to a link posted by this site’s editor, Yves Smith.

  55. Nathanael

    Let me try to be clear about what Krugman actually means.

    OWS could declare that we want the bankers to stop gambling with our money.

    It is the job of someone like Krugman to specify that that means the reinstatement of Glass-Steagal.

    OWS could declare that we want to maintain full employment.

    It is then the job of someone like Krugman to explain that that means fiat money, and printing it when necessary. (Because there are crazy goldbugs trying to convince people of the opposite.)

    That’s what he means by saying it’s the job of intellectuals to provide details. Not to provide goals. It’s their job to provide details. That’s really the social purpose of intellectuals….

  56. spit

    I’m sorry to have missed this post when it was new. It’s dead on. There are a million ways that this movement can be twisted into something far less helpful, and people should be aware that there are tons of very highly paid people trying to figure out just how to do that right now. Some of them aren’t even malicious, they’re just clueless. Some are malicious, and they’re often not the stupid ones, unfortunately.

    Issuing “demands” at this time would be counterproductive, which is probably why so many actual, real-life elites are demanding demands. “Demands,” as a specific point-by-point list, are for blackmail, not for broad and meaningful social protest. I can see why so many of our politicos would mix these up, since they’re so fond of blackmail as a political tactic, but it would totally miss the point.

    The entire point of the thing right now is that some little old lady retiree in Iowa is figuring out that not only is _she_ being given a raw deal, but those kids out there with too much student loan debt are screwed, too, and so is that guy three streets over who can’t keep up with his house payments, and so is somebody in Texas who is underwater and can’t move to take a new job that pays enough to cover increased tuition costs for his 2 college age kids.

    It’s a big game of connect-the-dots, it’s what we’ve needed for fucking ever, instead of constantly being set against that other “lazy” shlub over there.

    “We’re not going to be ignored anymore, and we know that we’re getting screwed” is all the message people need to be putting out right now.

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