With all the talk about #OccupyWallSt, the question that keeps coming to mind is – Why don’t they get it? I’m not talking about the corporate fat cats who gorge themselves while families struggle to make ends meet. Those guys have a system that’s bought and paid for to ensure they stay just as fat and sassy as they are now.
And I’m not talking about the people in Zucotti Park protesting. They get that the only way to change the system is with massive popular support, growing daily until Washington and Wall St feel enough pressure to change.
So who doesn’t get it? The average American.
Over the past few days, I have been trying to explain the whole Occupy Wall St. idea to a number of people, and they just don’t understand it. They can’t grasp that a group of people can protest against corporate takeover of politics without having a specific set of demands. They don’t understand that true representative democracy isn’t about pushing your individual agenda forward, but figuring out what is best for all. And they don’t seem to understand that in a movement that is less than three weeks old, you aren’t going to have all the answers from the get go.
But what does that have to do with the economy? A lot, as it turns out.
Many have tried to paint this protest as a group of ne’er-do-wells trying to get rid of capitalism. But it’s quite a bit more sophisticated than that. To quote Tim O’Reilly (founder and CEO of tech publisher O’Reilly Media) from his Google+ post this afternoon:
I was hoping to get on camera to voice my support for some of the key ideas behind this protest – that many of the companies in our financial sector have started extracting far more value from our society than they provide to it, and that we need businesses to remember a more honest form of capitalism, where companies make money by providing sufficient value to customers that they are happy to pay for it, where the gap between the amount extracted in profits to owners doesn’t so far outstrip the amount paid to workers in the business that those workers need to go into debt to pay for ordinary living expenses, where government protects all its citizens, not just those who can afford lobbyists, and where society as a whole feels the virtuous circle that can only happen when companies create more value than they capture for themselves.
That’s where the rubber in the protest hits the economy road. This isn’t about destroying capitalism. It’s about making it honest, and frankly, sustainable.
When these corporations reserve the wealth for themselves, by turning huge profits, then taking the profits offshore or using those profits to pay less taxes than the receptionist at the front desk, they are bastardizing capitalism. As O’Reilly points out, true sustainable capitalism delivers more value than it retains.
Why? Because that value is then transferred to the consumer in terms of wages, which are then used to – wait for it – spend on goods produced by these corporations. Which generates more revenue and the cycle perpetuates.
Where else does it affect the economy? The taxes that these companies avoid paying are what we use to improve infrastructure, to pay for services like police and firefighters, and to keep us safe. Every penny they take out of this country is a penny lost to the American people, and countless opportunities lost in terms of improving this country.
Instead, what these companies are doing is pulling the money out, and either hanging on to it – then paying their executives hundreds to thousands of times more than their employees, or they use it to circumvent the one process that we as Americans have to exercise our will – the political process. When a company, hiding behind PACs and interest groups can funnel millions of dollars anonymously to exert their power on the political system, especially to ensure they pay even less in taxes and get subsidies to take their money out of the country, they damage the economy. That’s money that they made from the American people, and instead of supporting those people and delivering value back, they retain the value for themselves.
But this is a death-spiral plan. The more they retain, the less the average American has to pay their bills and purchase their products. It’s ensuring they have a smaller and smaller customer base, just to reap short-term profits. They are killing the American economy so they can retain the spoils for themselves. It will inevitably run up against the law of diminishing returns. At some point, they will no longer have enough money to stay afloat, having given too much to executives and fat cats, and not enough back into the economy in terms of wages and taxes. And then, they’ll cry that they are about to go out of business, and need to be bailed out.
Sound familiar? Of course it does. Within just a few months after banks were given a bailout, they began paying their execs exorbitant bonuses again. Meanwhile, the economy continued to flounder. What additional value did these execs and account reps create? All they did was make bets on the economy. They produced nothing. They created nothing – and they kept the spoils for themselves.
Until corporations can be removed from the political process, and until they can be held accountable for their actions, rather than hiding behind the anonymity of “personhood” in terms of campaign donations, they will continue to exert undue force in politics. And the economy will continue to suffer for their short-sightedness.
And this is what these folks who pooh-pooh the protest don’t get. This isn’t about left or right. It’s about correcting practices that continue to damage our economy on a daily basis. They side with the corporations, even as those same corporations are killing their standard of living for their own benefit. At some point, if the economy continues to falter, they’ll start to understand. Because humans learn more from pain than pleasure. We have a need to hit bottom to learn the hard lessons.
Or maybe, just maybe, they’ll start to understand that the way things have been doesn’t work. That cutting taxes doesn’t create jobs when the people with the money don’t spend it on jobs. That politics of the people, by the people and for the people doesn’t work when a corporation can pretend it’s a person and spend without limit. And when corporations can hide behind anonymity so that their contributions can sway the political process without repercussion.
Every day, the folks in Zucotti Park hold a General Assembly – a gathering to decide on the most important issues for that group, in a truly democratic process. They want all Americans to have that same ability to be heard. Maybe, if they hang on, more Americans will want it for themselves.