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.