Occupy Wall Street shifts from protest to policy phase


Occupy Wall Street shifts from protest to policy phase by Michael Hiltzik is an analysis from outside the movement, I believe.  However, I think this analysis gets many things right.  Just a small sample follows below:

Progressives plainly hope that Occupy Wall Street will help give concrete form to a political narrative that so far has remained abstract in the public mind: That the financial industry has so far gotten a pass on its responsibility for the 2008 crash and escaped sufficiently stringent regulation, while government assistance to banks and Wall Street firms has left consumers in the dust.

For one thing, the concerns of the protesters are considerably more focused than their critics acknowledge. They involve the extreme inequality of wealth and income that has hobbled the U.S. economy over the last few decades, the imbalance between the government assistance given big banking institutions and that offered the homeowners who are their customers, and the failure to implement meaningful reform on elaborate financial strategies and instruments.

Implicit in the protests is the idea that the banks have resumed their old practices with barely a hiccup, while pleading that the modest regulatory changes that have been passed have somehow hobbled their ability to do business. How do we know this plaint is a sham? One only has to look at the handsome resurgence of profits in the financial industry since 2008. According to the government’s bureau of economic analysis, those profits reached an annualized $438.9 billion in the second quarter this year, up from $122.2 billion in calendar 2008.

More telling, they accounted for nearly 32% of all U.S. corporate profits in the second quarter, up from 13.4% in 2008. That’s important, because it documents an unhealthy domination of economic activity in the U.S. by financial transactions, many of which, as we’ve come to learn, contribute little to economic productivity. That ratio is not only too high, incidentally, it’s way out of line with the historical norm, which is closer to the range of 8% to 12%.

 

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