Paul Krugman On Occupy Wall Street
Check out Nobel Prize winner Paul Krugman in the NYT on the response of both Wall Street financiers and Republican politicians to the Occupy Wall Street protests, aptly titled ‘Panic of the Plutocrats’:
It remains to be seen whether the Occupy Wall Street protests will change America’s direction. Yet the protests have already elicited a remarkably hysterical reaction from Wall Street, the super-rich in general, and politicians and pundits who reliably serve the interests of the wealthiest hundredth of a percent.
And this reaction tells you something important — namely, that the extremists threatening American values are what F.D.R. called “economic royalists,” not the people camping in Zuccotti Park.
Consider first how Republican politicians have portrayed the modest-sized if growing demonstrations, which have involved some confrontations with the police — confrontations that seem to have involved a lot of police overreaction — but nothing one could call a riot. And there has in fact been nothing so far to match the behavior of Tea Party crowds in the summer of 2009.
Nonetheless, Eric Cantor, the House majority leader, has denounced “mobs” and “the pitting of Americans against Americans.” The G.O.P. presidential candidates have weighed in, with Mitt Romney accusing the protesters of waging “class warfare,” while Herman Cain calls them “anti-American.” My favorite, however, is Senator Rand Paul, who for some reason worries that the protesters will start seizing iPads, because they believe rich people don’t deserve to have them.
Michael Bloomberg, New York’s mayor and a financial-industry titan in his own right, was a bit more moderate, but still accused the protesters of trying to “take the jobs away from people working in this city,” a statement that bears no resemblance to the movement’s actual goals.
And if you were listening to talking heads on CNBC, you learned that the protesters “let their freak flags fly,” and are “aligned with Lenin.”
The way to understand all of this is to realize that it’s part of a broader syndrome, in which wealthy Americans who benefit hugely from a system rigged in their favor react with hysteria to anyone who points out just how rigged the system is.
Last year, you may recall, a number of financial-industry barons went wild over very mild criticism from President Obama. They denounced Mr. Obama as being almost a socialist for endorsing the so-called Volcker rule, which would simply prohibit banks backed by federal guarantees from engaging in risky speculation. And as for their reaction to proposals to close a loophole that lets some of them pay remarkably low taxes — well, Stephen Schwarzman, chairman of the Blackstone Group, compared it to Hitler’s invasion of Poland.
(…)
What’s going on here? The answer, surely, is that Wall Street’s Masters of the Universe realize, deep down, how morally indefensible their position is. They’re not John Galt; they’re not even Steve Jobs. They’re people who got rich by peddling complex financial schemes that, far from delivering clear benefits to the American people, helped push us into a crisis whose aftereffects continue to blight the lives of tens of millions of their fellow citizens.
Yet they have paid no price. Their institutions were bailed out by taxpayers, with few strings attached. They continue to benefit from explicit and implicit federal guarantees — basically, they’re still in a game of heads they win, tails taxpayers lose. And they benefit from tax loopholes that in many cases have people with multimillion-dollar incomes paying lower rates than middle-class families.
This special treatment can’t bear close scrutiny — and therefore, as they see it, there must be no close scrutiny. Anyone who points out the obvious, no matter how calmly and moderately, must be demonized and driven from the stage. In fact, the more reasonable and moderate a critic sounds, the more urgently he or she must be demonized, hence the frantic sliming of Elizabeth Warren.
So who’s really being un-American here? Not the protesters, who are simply trying to get their voices heard. No, the real extremists here are America’s oligarchs, who want to suppress any criticism of the sources of their wealth.
What I think the best thing of Occupy Wall Street is is that it finally puts the financial malpractices of an industry very much related to the actual top 1 percent of super-rich people in the US, in combination with their rescue by 99 percent of tax payers (i.e., the public), on the democratic agenda.
But the fundamental injustice in pretty much the entire Western world nowadays is the fact that the welfare state, a scheme for the public good, is being dismantled as a result of costs made to save the financial industry. An industry that through its own corrupt schemes, not beneficial to anyone but themselves, has itself created the greatest economic recession since the nineteen-thirties. They should not be awarded bonuses. And poor, sick and unemployed people should not have to suffer for them. There is nothing ‘left-wing’ about that. It’s common sense. That’s why I would love to see these protests spread to Europe, even though I myself am in favour of a regulated form of capitalism.
Finally – not from Paul Krugman – to point out empirically how disparagingly vast the gap between the top 1 percent and the lower 90 percent in the US is, check out these stats from Mother Jones. The first shows the composition of the top 1 percent; the second shows their wealth.
I mean, seriously. There’s nothing wrong with a bit of wealth inequality. But you don’t need to be a socialist to understand that such a huge gap between rich, middle class (if not already vaporized) and poor is not beneficial to any society, let alone a democratic one. And this gap has widened exponentially in the last thirty years, it wasn’t there before. The most fucked up societies are the ones with sudden, huge material inequalities. With the exception of the UK, Europe’s not as bad as the US in this respect – but getting close.
