Wall Street should heed OccupyWallStreet

Police protect a Wall Street icon in NYC, and SF protestors occupy a Chase bank. Photo by David Shankbone & Stephen Lam/Reuters

Corporate America should be paying attention to #OccupyWallStreet, which at breathtaking speed — less than three weeks —  has sparked protests across America, made the front pages of national newspapers and led to an explosion of creative and effective Web-based content. (Check out We are the 99%.) This unruly, chaotic series of leaderless demonstrations may or may not be the beginnings of a left-wing equivalent of the Tea Party–that is, a grass roots movement with the power to impact the national political conversation — but it’s not going to fade away anytime soon.

To be sure–lots of things now being said by and about these protestors are laughable. Manhattan’s financial district is not Tahrir Square.  Capitalism itself is not the problem. Taxing the richest 1%, even at confiscatory rates, won’t support the other 99%. One unofficial list of “proposed demands”  from the group includes a $20 minimum wage, free college tuition, a trillion dollars for infrastructure, another trillion for ecological restoration and across the board debt forgiveness for all. Whoopee! Like so much of what passes for political debate these days in America, the conversation here is all about benefits, and not at all about costs. Didn’t any of these kids take economics in college?

Nor is these protests “the most important thing in the world,” as Naomi Klein said the other day. Not yet, anyway.

But they are important, and here’s why. These nonviolent actions are built around a couple of fundamental arguments — grievances, really — that business leaders and fans of capitalism (like me) need to take seriously.

First, the American economy isn’t working for tens of millions of people–not just the unemployed, but many more who are living from paycheck to paycheck. People are scared, frustrated, discouraged, angry or all of the above. They no longer believe that working hard and playing by the rules will give them a better life. They’re probably right. Low-skilled workers  in particular are disconnected from the American dream of an ever-improving standard of living.

Second, the rich powerful people who are largely but not entirely responsible for the financial crisis and the global recession – the shorthand for this group is “Wall Street” – have, for the most part, neither apologized for their actions or nor paid a price. They created the mess (yes, with the help of reckless borrowers) but they’re doing fine. Come to think of it,  they’re doing fine because the rest of us bailed them out.

How to restore the American dream is a problem way above my pay grade, but it’s more likely to be dealt with by improving education, reforming the health care system, investing in research, making it easier for  immigrants to settle here and generally creating opportunities for economic growth than it is by soaking the rich.  The U.S. economy accounted for less 25% of global GDP in 2009; a decade earlier, our share of the world economy output was more than 30%. We’re a nation in relative decline, folks. We lived beyond our means for years and now we may all have to get used to making do with less.

But bringing accountability to corporate America–that is, satisfying the second grievance, is an easier job, and one best done by business leaders, not by government. It’s important because cynicism about big business is a corrosive force. Here are a few places to start.

1. Listen. If you work on Wall Street or in a big company, take a break from the office, wander over to the demonstrators and ask them why they’re there. Or do so virtually, by visiting OccupyWallStreet or #OccupyWallStreet (actually, adbusters) or especially We are the 99%. These are your customers or potential customers. You need to understand their passions.

2. Curb CEO pay. Nothing breeds cynicism about business as much as outsized pay for top execs. Everyone, and I mean everyone, in business knows that CEOs are overpaid. Worst of all is pay for failure. HP’s failed CEO Leo Apotheker was paid $25 million for less than a year of work, says CNNMoney. Jeffrey Goldberg of The Atlantic reports today that CEO Craig Dubow of Gannett, a crappy newspaper company if ever there was one, stands to collect up to $37 million in retirement benefits. The company’s stock plummeted during his tenure. Boards of directors that approve these pay packages should be ashamed, as should institutional shareholders that fail to hold boards accountable. Investors of the World, Unite!

3. Stimulate the economy. Make it easier for homeowners to refinance their mortgage at today’s low rates, as David Wessel argued recently in The Wall Street Journal.  Scale up energy efficiency in buildings, which lowers electricity bills and creates jobs. Get creative about providing part-time work, so that fewer people are entirely out of the workforce. If you’re an investor, take a risk on an entrepreneur with a crazy idea.

4. Join the political debate. Not to advance narrow corporate interests but to argue for the long-term, sensible thinking requires to solve big problems like the economic slowdown, the federal deficit, climate change and health care. Don’t let  the Tea Party and OccupyWallStreet drown out the middle.

Wall Street, in particular, needs to wake up.

One reason for doing so should be obvious. It’s never a good thing when millions of people attack your brand. I’m already hearing radio commercials for “your local bank” designed to capitalize on people’s frustrations with the big banks, i.e., Bank of America, Citi and Chase.

More important, an America where many millions of people feel angry and disenfranchised is not going to be a good place in which to do business–or to live.

Comments

  1. What I find interesting is the media’s reaction to this vs. the Tea Party. Before the TP got hijacked by the cultural conservatives, it was a bunch of angry people with more or less the same issues as OWS. Will they find common ground?

  2. This comment was emailed to me by Francesca Rheannon, who asked me to post it:

    Marc, the proposed demands that you characterize as “laughable” are not so much on closer examination. After all, the list of countries that already offer free college education include many capitalist nations, including Argentina, Brazil, Denmark, Finland, Norway, Scotland and Sweden. A trillion dollars for ecological restoration is a drop in the bucket compared to the cost of not spending that, as the Stern Report pointed out. A trillion dollars for infrastructure spending would also avoid much higher costs of doing nothing, including the incalculable cost to lives (as shown by the collapse of the Minneapolis bridge); it would also create lots of good jobs here at home that would boost spending through the multiplier effect and increase tax revenues to spend down the deficit — a real fiscal stimulus. Just ending the Bush tax cuts could erase 75% of the budget deficit; if we went back to the Clinton era marginal tax rates, much less the tax rates that obtained during that rabid socialist era of the Eisenhower Administration (which kicked off the Golden Age of American prosperity); we’d probably end up with a budget surplus. Across the board debt forgiveness is a time honored practice (remember Jubilee Year?). It may be an outlier to ask for total debt forgiveness, but it would only be justice to ask for debt forgiveness from same banks and credit institutions that profited so handsomely off the Casino on Wall Street and destroyed the savings of millions of Americans. Taxpayers gave them trillions on the so far unfulfilled promise that they would lend the money back to get the economy going. Since they’re not lending, they would do a lot more to boost the economy by forgiving the underwater mortgages and student loan debts they hold. I’m not holding my breath, but that doesn’t make it a bad idea.

  3. In my lifetime I have seen so many great advances made in living standards, for most. There has not been accompanying success in attaining greater social happiness, world peace or eliminating poverty. Over the past decades in the developed world, our society has turned into a consumption monster where more is never enough, for so many. Excesses have been pumped into the way we live, under the intense pressure applied by corporate marketing. Commercial interests are now always in faces ‘encouraging’ us onward.

    Too many, too large corporations are producing too many goods and services that do not have positive value to society or may even be permanently harmful. But to reign this in is bad for the economy and jobs.

    I do not see a pleasant solution in our future.

  4. Great column, Marc. I am waiting for my return flight from Beijing. Seeing the intense infrastructure, from the Great Wall to the bird’s nest, incredible subway system much of which was built in less than 10 years and airport, infrastructure investments appear to be a great way to boost an economy.
    If we can get the ‘I’ve got mine. Screw you.’ Republicans to see past their disconnected, knee jerk, foolishness about real investment in the country we may clean up our environment get people back to work and get a second chance at being great.

  5. I appreciate your perspective! CNN had the most laughable “Segment” “covering” this in all media, ever, where they basically took one man’s reason for being there, put up a moking response “proving” him wrong, and they actually used air time for this…

    I protested in my home town, we marched. My sign, my message “$hop locally. Be a Con$cious Con$umer” If the masses would stop giving these greedy corps their own “Diry dollar” we would make a difference, they’d hear that, for sure.

    People need to learn to knock on their dam neighbors door to ask for some of the oranges falling off their tree only to rot on the ground, vs. Drive to Safeway to BUY oranges that were trucked in…I don’t support stupid practices, so I stand united with my fellow pissed off Americans, because I AM AMERICAN and I CAN. :) Thanks Marc! Great read…

  6. Granpa Ken! “There has not been accompanying success in attaining greater social happiness, world peace or eliminating poverty.” There has! There has, the media does not show it! I promise, there is. You unfortunately have to go looking for it…it’s buired in everything else negative surrounding it, but it’s there…

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