Home > crisis, Political Economy > #OccupyWallStreet: The Real Tea Party

#OccupyWallStreet: The Real Tea Party

from Dean Baker

Many people have forgotten that the Tea Party movement had its origins in the anti-TARP protests in the fall of 2008. Millions of people across the country were outraged that the government was going to loan hundreds of billions of dollars to the banks that had brought themselves and the country to the brink of ruin through their own greed and incompetence. Just as these people feared, the bailouts saved the banks, leaving their high-flying executives largely unharmed, but did little to get the economy back on its feet.

This led to enormous anger that was harnessed by right-wing politicians to go after the government, but the sentiment was always misdirected. While the right wingers want the Tea Partyers to support their efforts to roll back government social programs, large majorities of Tea Partyers actually support key programs like Social Security, Medicare, Medicaid, and even unemployment benefits. If these programs are protected, and the military budget is not cut (the right wingers oppose military cuts), there is not much left in terms of “government waste” for the Tea Partyers to attack. This leaves an incoherent movement.

The Occupy Wall Street crew picks up on the Tea Party anger directed at the use of the government to make the rich even richer. While it does not have a coherent program or list of demands at this point, the vast majority of the Occupiers understand that there is something seriously wrong in this country. The government is pursuing policies that are making those at the top very rich, while offering little for the vast majority of the population. Political figures will attempt to impose an agenda on the Occupiers just as they did the Tea Partyers, but at least there is in principle an agenda that fits their demands. The Tea Partyers were supposed to be outraged over government spending, but the vast majority of the spending goes to programs that the Tea Partyers strongly support. There is no possible program there.

But, it is easy to design programs that reverse the upward redistribution of income, for example a financial speculation tax on Wall Street or breaking up the big banks. Everyone can understand these proposals. They are good policy and also likely to be great politics, once we get around the stranglehold of Wall Street financial contributions.

See article on original website

  1. October 20, 2011 at 11:04 am

    A really interesting and promising evolution of the Tea Party, as it was believed that they were against any type of public expenses,

  2. October 20, 2011 at 12:37 pm

    “…programs that reverse the upward redistribution of income… are good policy and also likely to be great politics, once we get around the stranglehold of Wall Street financial contributions.”

    That’s something of a conundrum, no?

    • Alice
      October 21, 2011 at 10:13 am

      Dave says “That’s something of a conundrum, no?”
      Well when the Treasurers economic advosry committee is stacked to the rafters with people being paid substantial salries also working for the banks….id say its not just a conumdrum. Its a strangehold. How do you a leeche to let go, except by burning them at at one end?
      At the moment we are still feeding them our blood.

  3. October 22, 2011 at 7:03 am

    Great comments & great food for thought, but I wonder if a subliminal stranglehold on creative thought — about truly systemic change & creative solutions — is pervading not only the blogosphere but the nuosphere as well?

    Big Think may not have the solution but the article linked provides more food for thought:
    > http://bigthink.com/ideas/40649

    If the Canadians are right, and economics is its own worst enemy, could it be a lack of imagination or…what? Surely not cowardice or complacency?

    Any ideas or intuition? Anyone for some open dialogue?

  4. October 22, 2011 at 9:16 am

    Dave, Thanks also for the article on Roubini and the issues. Indeed, neither communism nor socialism is the solution, but the parasitic drain on human culture is not from labor to capitalists, but from ordinary folk to sociopathic egos, i.e., the 1%ers.

    So, will a majority of RW economists ever decide to start backing remedial action, including grassroots options for the transition to a healthy sustainable civilization?

    It would seem that if they do, the results will be much better than the results of apathy or complacency or ideologically autistic paralysis or psychic constipation or corruption or whatever it is that keeps any major response from happening.

    Am I wrong or too naive for the “real world” or…?

    • Guilherme da Fonseca-Statter
      October 24, 2011 at 9:47 am

      «Indeed, neither communism nor socialism is the solution»…
      I trust you are only referring to the crude social experiments that have so obviously and naturally failed and tainted or smeared the «noble ideals» of a socialist society…
      If people were to think in dialectical terms (like biologists and physicists generally do – see the «principle of phase transition») they would probably come to realize that a «tamed capitalism» (i.e. a «market economy» that is controlled and regulated by the citizenry – the State) will in fact be a «socialist state of affairs».
      To use a metaphor, «socialism» (or «communism»…) is to «capitalism» in a manner that is not too dissimilar from the relationship between a dog (like a «German shepherd») and a wild wolf…
      Marx being such an «evil character», I am tempted to quote Einstein:
      «I am convinced there is only one way to eliminate these grave evils, namely through the establishment of a socialist economy, accompanied by an educational system which would be oriented toward social goals. In such an economy, the means of production are owned by society itself and are utilized in a planned fashion. A planned economy, which adjusts production to the needs of the community, would distribute the work to be done among all those able to work and would guarantee a livelihood to every man, woman, and child. The education of the individual, in addition to promoting his own innate abilities, would attempt to develop in him a sense of responsibility for his fellow men in place of the glorification of power and success in our present society.»…
      My point here is that, ONCE WE UNDERSTAND THE MECHANISMS OF CAPITALISM, it is up to the citizenry to decide which way to go in order to establish a better society. Call it what you want…
      It is also my contention that in order to achieve this «understanding of the mechanisms of capitalism» the best «analytical tools» are those developed by the classics of «Political Economy» (from Adam Smith to David Ricardo) and in particular Karl Marx.

      • Dave Taylor
        October 24, 2011 at 11:24 am

        While I’m generally sympathetic to your argument, Guilherme, I don’t think a planned economy is needed, just reordering at an environmentally economical rate of production of what people actually want. I also totally disagree with you that the best analytical tools available are those of the classical era of 150 years ago. Only practitioners – the likes of economists, politicians, managers and lawyers – ignorant of the extent of the advances of understanding in real science since then (the recognition and understanding of interactive inner structures in atoms, molecular chemistry, biological cells, electronic circuits, control and information systems, brains etc) would think that the “black box” analysis done in our ignorance could be “better” than an up-to-date systems analysis accounting for the nature and creation of money and ideological differences, followed by experimental simulation and evaluation of imaginative reconstructions. Face-saving is unfortunately endemic. “Autism” about systems analysis is not absent even in this forum.

  5. Alice
    October 22, 2011 at 9:45 am

    Well today…yet again I read something truly scary in the small print of the Saturday business news in the Sydney Morning Herald (Sydney, Australia). I will attempt to explain just what is so scary but its a mixed up tale. Our federal government (both sides of politics) have been pushing for a sovereign wealth fund to be established.

    Apparently they think this is a good idea so they can maximise returns from (you guessed it – the global financial markets).

    Apparently low risk, safe returns dont hold much appeal to our politicians and they want to play bigger..with the big boys in the big financial markets…hence the idea of a soverign wealth fund (funded with my taxes)

    Now the idea of a sovereign wealth fund gives me the creeps and sends shivers up my spine given its going to be funded with the taxes I pay as a worker in an honest job. I cant really afford for anyone to gamble with my hard earned earnings.

    Apparently a few years ago Muammar Gaddafi, who recently got caught probably where he deserved to be caught (like a rat up a drainpipe) was talked into investing 1.3 billion of Libyans monies with Goldamn Sachs.

    Yep – it was the Libyan sovereign wealth fund.

    Goldman Sachs managed to “lose 98% of it in one year”. Shock horror! (or was it laughing all the way to the Goldman Sachs bank???)

    But, Blankfein, CEO of G. achs, recognising the value of Libyan potential (around 53 billion) and anxious not to lose Gaddafi offers him a seat on the board of Goldman Sachs (no voting rights of course but a seat nonetheless likely with financial incentives attached).

    Sorry but who and which firm are really the rats in the drainpipe?.

    Do I want to see Australian politicians merrily handing over the management of the sovereign wealth fund they wan to establish from my taxes (but I dont want) to Goldman Sachs?

    Tell me we (taxpayers) havent been sold out or bribed out, or just plain conned, individual by individual, by politician by politician to firms like Goldman Sachs (most adept at extracting all the value of wealth funds for themselves)?

    I wont beleive you anyway. I dont want anty of my wealth in any damn sovereign wealth fund stealimng the income from the trapped (taxpayers).

    Keep the occupation going. This sort of insanity (and greed and corruption) is a huge part of the problem we all face in these times.

    • Guilherme da Fonseca-Statter
      October 24, 2011 at 10:09 am

      Alice, you mentioned the «Libyan sovereign wealth fund» and this brings me to what is perhaps a peculiar observation. The current «Foreign Sovereign Debt» crisis afflicting countries everywhere but (in the case of the Eurozone) most particularly (in media terms…) Greece and Portugal
      With the death of Khadafi the media in Portugal have suddenly started to worry about a few billions euros that that «Libyan sovereign wealth fund» had deposited with the largest bank in the country. The reason they are so worried is simple (the new regime may want that money elsewhere rather than in Lisbon) and helps explain – in large measure – the current sovereign debt crisis.
      It goes like this:
      Whenever a rich depositor decides to transfer a few million euros (or dollars or whatever) from his/her national commercial bank to any bank in the City of London (for example), the loss of that deposit makes the situation of that commercial bank in that particular country just a little less secure (that loss of a deposit increases the bank’s «exposure» (right?…))…
      As a result of that loss of deposits there is less money (currency) in the country to keep the economy going. So those banks who became short of deposits and liquidity (as well as the largest business firms – both public and private) have to go elsewhere (to other countries) to borrow. Hence the sudden growth in national debt… and in «sovereign debt» as well, because those «foreign loans» are supposed to have a «State guaranty» (the bailout of banks being a nice precedent…). I wonder what the situation is elsewhere, but in Europe no people in the media makes reference to this triviality: it is the rich citizens of European countries themselves, that are causing this «sovereign debt crisis» and the common person in the street (or work location) seems to be blissfully unaware of this… 8-(

      • Alice
        October 25, 2011 at 9:14 am


        You mentioned something here “it is the rich citizens of European countries themselves, that are causing this «sovereign debt crisis»”

        Oh I agree. What I dont agree to is that my taxes go to forming a soveriegn wealth fund, when here in Australia, I can no longer trust the federal government, who collects our income taxes to invest it wisely BUT more importantly SAFELY so they dont lose the lions share to smart banking house (like Goldmans) who will fleece it all within a year.

        I also dont trust those politicians amongst us who are only in it for themselves and who have the power to sign off billions of dollars of taxpayers taxes over to to the so called “smart financial firm”.

        Australian local governments have already lost millions (probably billions) to Goldman Sachs triple A rated “safe” investments and are now deep in court claiming to have been “misled”.

        Hang on a minute – these are the local government rate charges people pay regularly to have their garbage picked up and their parks maintained, or their streets cleaned.

        Now, when I hear politicians in Australia talking about the need for a “sovereign wealth fund” I cringe in horror.

        You have absolutely no idea what I want to say to these politicians…let alone what I want to do to them ..but the idea of “burning them at the stake” does come to mind.

  6. October 25, 2011 at 12:14 am

    G.daFS, Your last comment is a great example of what I see as the main deficiency of the approach & theorems you support. Now, granted, Casino Capitalism has proved Marx right about the inherent unsustainability of laisez-faire capitalism, especially once the financialists achieve Plutonomy (our End Game scenario).

    However, G, you seem to gloss the substantial real world concerns of Alice, Dave, and Dean, while missing my basic point as well. You also fail to provide a detailed proposal for implementing the perfect solution you promote. Marx was wrong about the solution, but he saw the need for a solid program. While I support communitarian socialism in principle, as I keep pointing out, even to Dave, even his rigorous approach to realistic technical analysis and good management can be subverted by clever conspirators with most of society’s financial power & mechanisms of soft tyranny at their disposal.

    So, I stand by my alignment with deep RWE Seers and agree on the top priority of a complete ethical makeover of the socioeconomic paradigm, the relevant laws, governance policy, the collective world-view, and the psychology of the 1%ers.

    Now, I know that you did qualify your visionary defense of socialism with a few prerequisites, but to assume that the systemic human factors & pervasive corruption (from the core of the paradigm on up) are going to be remedied any time soon seems unrealistic to me. Dave’s suggested use of superior meta-logic, analytics, and appropriate software is fine for a rational system run by some folks other than the 1%ers and their minions. Again, though, how do we accomplish that? Until then Alice and the rest of us have every right to fear the consequences of collective delusion, naivete, inaction and de facto collusion.

    The situation reminds me of a maniacal Dirty Harry pointing his 44 Magnum at a criminal’s face and saying, “How about it — are you feeling lucky, punk?”

    Except that, in our case, the Big Gun in our collective face is held by the bad guy… or is it nature… or karma…? Or are We the Sheeple the Bad Guys for failing to do the right thing, like the “good Germans” who knew what the Nazis were up to and did nothing to prevent or stop it?

  7. Guilherme da Fonseca-Statter
    October 25, 2011 at 11:49 am

    To both Michael Douglas Monterey and Dave Taylor.
    About Marx and «Marxist solutions»…
    I understand (and agree to) most of your points. But then it is my fault if I did not make myself clear enough.
    One – Marx wrote barely anything at all about «a communist or socialist society»… A few paragraphs and mostly in a sarcastic tone, «making fun» of other «Marxists» who were advancing ideas about «how to build a socialist society». To the point that he once felt the need to expressly state «if that is Marxism, one thing is certain I am not a Marxist» (although
    he did write that in a very specific context…)
    His opus magna is «Das Kapital» and he never wrote anything remotely resembling «Das Sozialismus» (or whatever…).
    Two – It is obvious that since Marx wrote what he wrote about capitalist society, there have been tremendous scientific developments. My point is that, in the field of social sciences (including, of course, the study of the economy…) there has been a bifurcation (if you will…) at the end of the XIX century (the infamous «methodenstreit» that opposed German organicists (who were also historicists, of course…) to the then emergent «methodological individualists, creators of the very useful theoretical construct that goes by the name of «homo economicus»… So rather than «following» the methodologies of Life Sciences, economists followed the methodlogies of «quantum physics»… Where, as one professor of complexity sciences once told me «time is of no concern»… Can you imagine Time, being of no concern to the study of the economy?!?!… So many of the analytical refinements are important and could still be useful (for a better understanding of the economic processes…) but they are being misapplied due to the «fragility» or «insufficiency» of their analytical ground. It is at that level of analysis that I contend that the best methodology for the analysis of the current situation in the world economy is that one that is based on the «Labor Theory of Value», developed by the classics and perfected by Marx. You can erect upon it all the refinements of econometrics and fancy financial analysis…
    Three – Just based on personal experience with Portuguese bureaucrats, I «hate» bureaucracies… So I am not advocating any «centrally planned economy»… My point is rather that THERE ARE DIFFERENT LEVELS AND TYPES OF «PLANING»… General De Gaule in France had a Prime Minister but he also had – at the same hierarchical level – a «High Commissioner» for the PLAN… That’s how, among other things, the city of Toulouse came to be the site of AIRBUS development and manufacturing… In fact one could argue that, in part, the crisis in the European Union came about precisely as the result of the abandonment of the idea of «indicative planning»…
    Four – To conclude, my basic concern is that the «wrong diagnosis» (of the causes of our current situation) will most probably lead us and our leaders to less successful (and workable) solutions… For example… Marxists will tell you that this is a crisis of (relative) overproduction… We have become «too productive» for our own good… So let us reduce our «mandatory working hours» from 40 hours a week to 30 hours a week. JUST AS AN ILLUSTRATIVE EXAMPLE… But only a State authority can decide that…

  8. Dave Taylor
    October 25, 2011 at 9:05 pm

    Guilherme, I too am probably at fault for not making myself clear, by trying to be too concise. Let me try and follow your lead this time.

    At one, my position on Marx is to admire his diagnosis but to reject his medicine, i.e. violent revolution. As a Christian I try to “love the sinner, hate the sin”. I don’t therefore think of Marx as evil; I understand well enough that he was a Jew, not a Christian, and writing in the aftermath of the French Revolution. However, that was initially followed by Napoleon’s military empire, then government as centralised as it had been under royalty, and as in Britain it still was with its “first past the post” representative democracy. In other words, the revolution failed. Absent planners continue to dictate “solutions” without being in a position to see whether or not they work, forcing those doing it to adapt reality to the plans, and that is what I object to. I don’t object to planning in the sense of working out how best to do something, leaving those doing it free to adapt plans to reality.

    At two, where in your comment do you recognise twentieth century developments in the understanding of logic, language, the nature of linguistic communication and the necessity of error detection and correction (i.e.morality)? You think the analytical base should be the value of labour? For me that is merely contributory to the value of the labourer. And what if it is dishonest and destructive – of negative value? For me the analytical base is the minimal representation of reality (things, processes, the different representations of these, and their relationships and quantification in the dynamic logic of communication). Had economists followed the Life Sciences rather than the Physicists they would have done no better, for their logic too is static, with time treated as a thing rather than a logical relationship. Communication and the possibilities of it going wrong and being put right don’t enter into their analysis, so they remain stuck in their equilibrium, denying any need to right wrongs.

    At three, I too have worked with bureaucrats, and very early in my career developed the concept of “producer bias”: people making life easy for themselves at the expense of those they were supposed to be serving. That’s one reason why I’m a distributist: people can’t pass the can if they have to carry it themselves. There is of course a big difference between proposing that Airbus be produced at Toulouse, with this being agreed as appropriate, and planners insisting that it was.

    Basically, though, I agree with what you are saying at three and four. As I said originally, I’m generally sympathetic to your position.

    • Guilherme da Fonseca-Statter
      October 26, 2011 at 4:28 pm

      Dave, allow me to respond in three different posts as they will probably tend to be a bit too long…
      On Point One – We are almost 100% in agreement. Regarding your reference to religion, Marx himself did not like to labeled a «Jew» and he occasionally wrote somewhat disparagingly about the «Jews»… In any case from what I read of what he wrote I believe he tended to consider himself a «citizen of the world» and as another «member of the human species». Be that as it may, I think this is a side issue and not very relevant to our discussion.
      As for the «revolutionary spirit» in Marx, you are quite right. In my book (only available in Portuguese, sorry…) «The Errors of Marx and the Blunders of Others», I explicitly noted his impatience as one of his possible gravest errors. He himself (and his friend Engels) later on in life acknowledged and regretted that «youthful» sense of urgency. He had seen (and apprehended) the tremendous possibilities of capitalism in the creation of bountiful wealth but he also saw (and explained in minute detail) the reasons for a tendency for a relative impoverishment of the largest part of the population, and how that constituted an obstacle in the further development of further creation of wealth for all.
      Although, on a personal level, he had a very lousy character, he was also a true Humanist; and so, the young Karl Marx that seems to have tried to get everyone else as enthusiastic as he was about the future possibilities for Mankind… He soon realized that things are a bit more complicated than he expected them to be, when he was still in his thirties.
      Later on in life he had occasion to explain to Engels, the reason for his later moderation with a simple Latin sentence «Fortiter in Re, Suaviter in Modo» (i.e. «strong or strenuous in the objective but gentle in the manner»…
      Interestingly enough, he did not elaborate on a specific «crisis theory» (as noted by several commentators) but his «crisis theory» is imbedded, implicit and spread throughout his whole analysis.

    • Guilherme da Fonseca-Statter
      October 26, 2011 at 4:31 pm

      On Point Two – You are quite right. I did not explicitly acknowledge or «recognize twentieth century developments in the understanding of logic, language, the nature of linguistic communication and the necessity of error detection and correction (i.e.morality)».

      Before addressing that issue, let me clarify what I mean by the «Labor Theory of Value» (in the context that it is not the same as what may probably mean by your expression «value of labor»).
      The «labor theory of value» (as opposed to the «price theory of Marginalism»), «capital» (i.e. machinery, technology, built structures, etc…) is also valued (or «valorized»…) according to the accumulated labor of previous generations, whose expression in prices goes up or down according to current developments (e.g., the DVD has devalued Betamax or VHS tapes in a similar manner that automobiles have devalued horse-drawn carriages…)
      Also, and still on this issue, Marxian analysis uses methodological holism (even if one could also argue – as I do – that in fact Marx could also be considered as a methodological individualist…)
      Using methodological holism, Marx considered two basic factors in the equation of «value production»: «accumulated labor» (inherited from previous generations and which we call «capital») and «current/living labor» (which we call «labor»).
      Both these two factors were to be considered in abstract, as two systemic factors and at the level of the global system as whole: «humankind trying to use/adapt/change/transform gits of Nature».
      In other words, each individual human being of a «capable age» (a worker, an executive, a scientist, a nurse, a farmer, a fisherman, a carpenter, any one that «works»…) participates in that factor «living labor»; this Marx called «variable capital».
      As a result of these premises (the definition and ambit of the concept «labor»), the fact that any particular individual may be «dishonest» (lazy or simply less competent or lacking in skills…) is very relevant at the micro level of (re)distribution, but – at the system level – it simply contributes negatively (or less positively…) to the overall aggregate average productivity of the system as a whole.

    • Guilherme da Fonseca-Statter
      October 26, 2011 at 4:36 pm

      Still on Point Two and regarding your sentence:
      «twentieth century developments in the understanding of logic, language, the nature of linguistic communication and the necessity of error detection and correction (i.e.morality)».

      As I have said you are right.
      I did not address that.
      Current and ongoing developments in «Fuzzy Logic» as well as ongoing developments in Agents Based Modeling and Agents Based Computational Economics (see Leigh Tesfatsion site on this…) are critically important developments which, of course, Marx and Engels could not have used.
      But my point is that THESE APPROACHES WILL HAVE A LOT TO GAIN if, for example, when programming «methods» (of «agents» and «classes» – using Java-like programming languages…) the authors of these developments were to include in the motivation factors of particular types of «agents» the «search for and maximize profits» using the formula derived from Mark and that expresses the search for maximum profits and the emergent phenomenon (at a systemic level) of an oscillating rate of profit.
      for example, an instruction like this:
      «go on investing if at Time N+1, the global rate of profit is at least equal to the rate of profit prevalent at Time N; else slow down investing».
      This is precisely one of the things that we are trying to do with one rudimentary project at the «MSc and PhD Programs in Complexity Sciences» of ISCTE – Lisbon University Institute.

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