Wonkbook: What does 'Occupy Wall Street' want?
By Ezra Klein,
Two weeks ago, I was walking through New York when I stumbled on a crowd chanting angrily at a mass of police. "They're arresting them," someone said to me. "Who?" I asked. "The Occupy Wall Streeters," he said. Someone else held up a cell phone camera. "The whole world is watching," he shouted.
Participants in a march organized by Occupy Wall Street make their way up Broadway in New York on Sept. 24. Marchers represented various causes both political and economic. Photos: Confusing, chaotic scene on Brooklyn Bridge
The protesters are also gaining institutional support. MoveOn.org is sending e-mails about "an amazing wave of protest against Wall Street and the big banks has erupted across the country." They're planning to join with organized labor to march to the Occupy Wall Street site on Wednesday. A live videofeed from the protests will kick off the liberal Campaign for America's Future annual conference, and Van Jones's 'Rebuild the Dream' coalition is staging a "virtual march."
The Occupy Wall Street protests are explicitly inspired by, and modeled on, the Tahrir Square protests in Egypt. And though that's a tough act to follow, it's clear the Occupy Wall Street protests are catching a fire all their own. The question now is what they do with it. The jockeying has already begun to suggest an agenda to the protesters -- see these proposals by Mike Konczal and Nick Kristof -- and, in the embrace of the activist left, to join the protesters to an agenda that already exists, much as happened with the Tea Party and the conservative movement.
We'll see, over the next few weeks, which, if any of these paths, tempt the protesters. Up until now, the organizers have seemed to view the decentralized, inchoate nature of the protests as a strength for the nascent movement, not a weakness. The unifying idea has been drawing attention to "the 99," not offering a concrete policy agenda. The New York Times quoted a a pep talk a woman gave to a new protester. “It doesn’t matter what you’re protesting,” she said. “Just protest.”
An ‘Occupy Wall Street’ primer
These links also appear elsewhere on Wonkblog — namely, in the post titled ‘An Occupy Wall Street Primer’ -- but it seemed worth adding them to Wonkbook, too.
- The official -- or perhaps just mostly official -- ‘Occupy Wall Street blog’, and in particular, the blog’s forums. Here, for instance, is the movement’s ‘Declaration of the Occupation of New York City.’
- The moving ‘We are the 99’ tumblr.
- Nathan Schneider’s ‘Occupy Wall Street FAQ’.
- ‘Understanding the theory behind Occupy Wall Street’s approach,’ by Mike Konczal. Also see his post, ‘15 definitions of freedom from Occupy Wall Street.’
- ‘Occupy Wall Street is a church of dissent, not a protest,’ by Matt Stoller.
1) The "Occupy Wall Street" protests are escalating, reports Robin Harding: "A controversy erupted on Sunday over the policing of anti-Wall Street protests in which the New York police arrested over 700 people. Police said that they made the arrests on Saturday afternoon after demonstrators ignored warnings and entered the roadway of Brooklyn Bridge, stopping traffic. But protesters claimed that police had entrapped them by leading them on to the vehicle section of the bridge. The arrests have drawn worldwide attention to Occupy Wall Street, an inchoate protest movement modelled on the Tahrir Square demonstrations in Egypt this spring, which has been building up in downtown New York since September 17...The movement is fuelled by continuing anger at the profitability of Wall Street following government bail-outs in 2008 and 2009...But the goals of the demonstrations are vague."
2) Republicans are telling allies not to expect a big supercommittee deal, report Manu Raju and John Bresnahan: "A month into the supercommittee’s term, Senate Republicans are telling K Street that they don’t believe the powerful deficit-cutting panel can reach a 'grand bargain' agreement, sources familiar with the negotiations say. In a closed-door meeting with Republican lobbyists late last week, senior policy advisers representing both Senate Minority Leader Mitch McConnell (R-Ky.) and his chief deputy, Jon Kyl (R-Ariz.), who sits on the special deficit panel, said the issue of tax increases may be an insurmountable obstacle in the secretive talks. The two top Senate Republicans don’t think such a grand bargain style plan...could succeed because all of the existing proposals contain tax increases they consider 'significant' and are, therefore, politically untenable, officials say."
3) The US recovery depends on what happens in Europe, reports Neil Irwin: "The political intrigues in Brussels and Berlin over Europe’s debt crisis are as foreign to most Americans as the languages spoken there. U.S. exports to Europe don’t even amount to a fiftieth of what Americans produce. And American banks have at best a modest toehold in the European countries facing possible default. But the waves of anxiety caused by the European debt crisis are taking a significant toll on the United States -- not just palpitations in financial markets but darkening prospects for the broader U.S. economy. That’s because developments in Europe, like never before, are influencing the judgments of key decision-makers in the U.S. economy: executives deciding whether to add workers or build a new plant, investors deciding where to place their money, even consumers deciding whether to take the plunge on a new house or car."
4) This year's Supreme Court docket is full of big cases, reports Robert Barnes: "The Supreme Court convenes Monday for what could be the most significant term of Chief Justice John G. Roberts Jr.’s six-year tenure, with an agenda that both reflects the nation’s political landscape and offers the potential to reshape it. The dominant theme is the one that has divided the country and fueled the debate between tea party Republicans and President Obama since the 2010 election: the extent of the federal government’s power. The justices are being asked to decide the constitutionality of the landmark health-care act, the ability of states to enforce strict immigration laws and whether the government can continue to monitor the airwaves for indecency. The court could also reopen the question of affirmative action in college admissions, rule on the rights of gay adoptive parents and decide whether the blindingly fast pace of modern technology has reshaped Americans’ notion of privacy."
5) Obama is submitting a number of trade deals for final passage this week, reports Elizabeth Williamson: "President Barack Obama could send trade pacts with South Korea, Colombia and Panama to Congress for approval early this week, setting the stage for final passage of the agreements in mid-October after five years of political combat. Together, the pacts could boost U.S. exports by $13 billion annually--the Korea pact alone is worth $11 billion--though there would also be more imports and a wider array of foreign services available in the U.S. All three deals are expected to benefit U.S. agriculture by lifting or reducing tariffs on exports of U.S. commodities, machinery and chemicals, even as they present new challenges to the U.S. textile, electronics and floral industries. The U.S.-Korea agreement will double U.S. farm exports to Korea, to $3.8 billion annually...the U.S. International Trade Commission has estimated."
1) The Senate's anti-China trade bill will do some good, writes Paul Krugman: "To be fair, there are some arguments against action on China that would carry some weight if the times were different. One is the undoubted fact that inflation in China, which is raising labor costs in particular, is gradually eliminating that nation’s currency undervaluation. The operative word, however, is 'gradually': something that brings the United States trade deficit down over four or five years isn’t good enough when unemployment is at disastrous levels right now. And the reality of the unemployment disaster is also my answer to those who warn that getting tough with China might unleash a trade war or damage world commercial diplomacy. Those are real risks, although I think they’re exaggerated. But they need to be set against the fact -- not the mere possibility -- that high unemployment is inflicting tremendous cumulative damage as we speak."
2) "Occupy Wall Street" needs more specific demands; here are some suggestions, writes Nick Kristof: "Impose a financial transactions tax. This would be a modest tax on financial trades, modeled on the suggestions of James Tobin, an American economist who won a Nobel Prize. The aim is in part to dampen speculative trading that creates dangerous volatility. Europe is moving toward a financial transactions tax, but the Obama administration is resisting -- a reflection of its deference to Wall Street. Close the 'carried interest' and 'founders’ stock' loopholes, which may be the most unconscionable tax breaks in America. They allow our wealthiest citizens to pay very low tax rates by pretending that their labor compensation is a capital gain. Protect big banks from themselves. This means moving ahead with Basel III capital requirements and adopting the Volcker Rule to limit banks’ ability to engage in risky and speculative investments."
3) Foreclosures are literally deadly, write Craig Pollock and Julia Lynch: "Foreclosure is not just a metaphorical epidemic, but a bona fide public health crisis. When breadwinners become ill, they miss work, lose their jobs, face daunting medical bills -- and have trouble making mortgage payments as a result. But that is only part of the story. A growing body of research shows that foreclosure itself harms the health of families and communities. In our 2008 survey of 250 people undergoing foreclosure in the Philadelphia area, 32 percent reported missing doctor’s appointments and 48 percent said they let prescriptions go unfilled, significantly higher rates than others in their community. A paper released last month by the National Bureau of Economic Research found that people living in high-foreclosure areas in New Jersey, Arizona, California and Florida were significantly more likely than those in less hard-hit neighborhoods to be hospitalized for conditions like diabetes, high blood pressure and heart failure."
4) Antitax orthodoxy could lead to higher taxes, writes Tyler Cowen: "IN a debate in August, Republican presidential candidates were asked whether they would support a budget deal that bundled $10 of spending cuts for every $1 of tax increases. All said no. They rejected any deal that involved raising taxes. Curiously, though, if this approach actually were to become government policy, it would have a surprising effect: it would surely lead to higher rather than lower taxes. Consider the example more closely. Cutting $10 in spending for every $1 in tax increases would result in $9 in net tax reduction. That’s because lower spending today means lower taxes tomorrow, and limiting the future path of government spending does limit future taxes, as Milton Friedman, the late Nobel laureate and conservative icon, so clearly explained. Promising never to raise taxes, without reaching a deal on spending, really means a high and rising commitment to future taxes."
5) Keynes' theories are facing their biggest test yet, writes John Cassidy: "Why didn't the Obama administration's 2009 stimulus package usher in a true recovery? Keynes would have pointed out that, with households and firms intent on paying down debts and building up their savings in the aftermath of a credit binge, large-scale deficit spending is needed merely to prevent a recession from turning into a depression. With interest rates already close to zero, Keynes would have argued that the economy was stuck in a 'liquidity trap,' greatly limiting the Federal Reserve's scope for further action. He would also have noted that the stimulus was--especially compared with the devastation it meant to address--rather small: equivalent to less than two per cent of G.D.P. a year for three years. Even this overstates its magnitude, given that much of the increase in federal spending was offset by budget cuts at the state and local levels."
Pop punk interlude: The Thermals play "St. Rosa and the Swallows" live.
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Still to come: California's bolting foreclosure talks; the recession is bad for your mental health; the administration is encouraging teacher training reforms; the Energy Department is charging ahead with renewable energy loan guarantees; and an Italian baby rocks out to Zeppelin.
California is the latest state to bolt foreclosure talks, reports Brady Dennis: "California Attorney General Kamala Harris on Friday backed out of the 50-state coalition negotiating a settlement with the nation’s largest banks over shoddy foreclosure practices, further complicating the yearlong effort to compel serious changes in the industry and secure $20 billion in aid for troubled homeowners. 'Despite your diligence and our good-faith effort to reach reasonable terms with the banking industry, there now exists a proposed settlement that is inadequate for California homeowners,' Harris wrote in a letter to the two officials heading up the talks, Iowa Attorney General Tom Miller and Associate U.S. Attorney General Thomas Perrelli. 'I have concluded that this is not the deal California homeowners have been waiting for.' Rather, Harris said she intends to pursue an 'independent path' by pressing forward with investigations into the abusive mortgage practices that contributed to the housing crisis."
Economists are skeptical of Herman Cain's tax plan, reports Sandhya Somashekhar: "Conservative economists say Cain’s reform plan is a good one — in theory. They say it would prevent the government from hindering growth by picking and choosing who gets a tax break. But they are skeptical it would get much traction in Congress, and they warn that the country could open a Pandora’s box by introducing a national sales tax. Currently, only states can charge sales tax. Liberal economists say that the plan would end up shifting more of the burden to lower- and middle-income families, who are the beneficiaries of so many of the regulations and deductions that complicate the tax code."
The IMF is trying to expand its lending power, reports Ian Talley: "The International Monetary Fund, looking to assure markets that it has the financial firepower to deal with deepening problems in Europe and also crises elsewhere, is exploring how it can have at least $1.3 trillion in lending power, according to officials involved with the discussions. The IMF currently has about $630 billion in usable resources; about two-thirds of that could be lent under IMF rules. Under the plan be considered, the fund would need to make permanent a $590 billion temporary lending facility that was put in place in response to the 2008 financial crisis. The IMF is also counting on member nations to finally enact a doubling of IMF member country dues, totaling $750 billion, which have already been approved in principle. Approvals by national parliaments are expected in early 2012."
The US is getting serious about importing shoppers, reports Ylan Mui: "For the first time, lawmakers, businesses and even White House officials are courting consumers from cash-rich countries such as China, India and Brazil to fill the nation’s shopping malls and pick up the slack for penny-pinching Americans. They are wooing travelers with enticements such as coupons, beauty pageants and promises of visa reform. The payoff, they say, could be significant: 1.3 million new jobs and an $859 billion shot in the arm for the economy over the next decade. The trend underscores the depth of the United States’ reliance on countries once considered to be at the bottom of the global totem pole. The nation already counts on China and other countries to manufacture its goods, creating a $45 billion trade imbalance that is paid for with money borrowed from their coffers. Now officials are encouraging foreign travelers to buy some of those products back -- and a growing number are happy to oblige."
China is picking up the US's trade slack, reports Michelle Quinn: "While Congress and the White House focused on foreign wars and a stagnant economy, shunting free-trade pacts to the sidelines, Latin America made a new best friend: China. Hungry for natural resources, China has overtaken the U.S. as the chief trading partner in Brazil, Chile and Argentina. It’s poured money into new ports and roads and used free-trade pacts to make Chinese brands like Lenovo computers and Chery automobiles widely available to Latin American consumers. China’s next step? A move into the region’s service sectors -- for example, banking...'America is ceding its customers and relationships in Latin America, which is in our own backyard,' Rep. Kevin Brady (R-Texas), chairman of the House Ways and Means Subcommittee on Trade, told POLITICO."
An SEC report details misconduct at rating agencies, reports David Hilzenrath: "Regulators said Friday that they found reasons for concern during reviews of 10 credit-rating agencies responsible for grading corporate bonds, U.S. Treasury securities, insurance companies and the like. At one rating agency, a key analyst might have helped rate a company in which the unidentified analyst was an investor, according to a report by the Securities and Exchange Commission staff. Another rating agency might have told some people about rating actions before the potentially market-moving information went public. One of the larger agencies issued ratings that were inconsistent with its own methodologies and then apparently neglected to disclose or correct the errors in a timely fashion, the report said...But, in a report mandated by Congress, the SEC staff withheld details and chose not to name the rating agencies where it found problems."
German domestic politics is making the Eurocrisis worse, writes John Lanchester: "What’s roiling the markets is the fact that the governments of the richer European nations, especially that of Chancellor Angela Merkel, in Germany, have been putting the domestic unpopularity of bailouts ahead of their evident economic necessity. This might be only a piece of theatre, taking the crisis right to the brink before the need for action becomes so apparent that its political cost is lowered. (Merkel is facing reëlection in 2013.) German politicians seem to have a block about making clear to their electorate just how much the country has benefitted, and continues to benefit, from the euro, mainly through its enormously helpful effect on Germany’s strong export economy. That could turn out to be a historic failure of leadership."
Rise of Skynet interlude: A surgical robot peels a grape.
Unemployment is damaging the nation's mental health, report Michelle Hirsch and Eric Pianin: "Joel Sarfati, a counselor for the Washington area’s long-term unemployed, has seen it all: Foreclosures, substance abuse, family battles and - worst of all - widespread depression that some experts say has reached startling proportions since the recession. About 9 percent of Americans were defined as clinically depressed in data released last year by the Centers for Disease Control and Prevention in Atlanta, compared to an estimated 6.6 percent in data collected in 2001 and 2002...When people lose their jobs, they often are optimistic as they embark on a search for a new one, according to Ronald Kessler, a professor of health-care policy at Harvard Medical School and an expert on psychiatric disorders and data. 'But after a while they get worn down and discouraged, and that’s when you start to see the mental health problems. And for the U.S., that time is now.'"
The White House's stance on a Supreme Court case is endangering health reform, writes Pema Levy: "In one of its many attempts to get its budget deficit under control, in 2008 California decided to cut its reimbursement rates to medical providers for poor and disabled persons enrolled in the state’s Medicaid program...Numerous lawsuits were filed against the state to reverse the cuts, and they are now consolidated into Douglas v. Independent Living Center of Southern California, the first case the Supreme Court will hear today...Douglas is no longer about Medicaid rates or 'meaningful access,' but whether Medicaid beneficiaries and providers have the right to sue the state to enforce federal Medicaid statutes--and, in a surprising move, the Obama administration has sided with California...But the Obama administration’s position is a big mistake. Not only would rolling back such private rights endanger patients and providers, it could also impede the administration’s own agenda."
A mix of Obamacare and Ryancare could serve the country well, writes Steven Pearlstein: "One can imagine a system in which all workers and nonworkers are required to buy insurance from the government-regulated exchanges being set up in each region or state under the Obama health-care reform plan. In lieu of the tax exemption for employer-paid health insurance that benefits the rich and encourages lavish coverage, everyone would get a voucher to help pay for policies offered at the exchange, which could range from low-premium, high-deductible policies to cover 'catastrophic' illness to high-premium policies that cover virtually everything...In time, Medicare and Medicaid could offer their own vouchers, using exchanges and managed-competition to replace current programs. If this sounds broadly like a shotgun marriage between Obamacare and the plan offered by Paul Ryan, the Republican chairman of the House Budget Committee, that’s because it is."
New anti-lobbying rules would do more harm than good, write Mark Renaud and Robert Walker: "Tightening the rules for gifts to government employees from lobbyists and their employers might be justifiable if there were a history of problems in such interactions and if the proposed remedies related to such problems. The OGE, however, has offered no examples or history to justify its proposal, except that President Obama enacted similar restrictions for political appointees through a 2009 executive order. Of course, the specter of Jack Abramoff hovers, but no one has suggested that the Abramoff scandal reached down to the level of career government employees. And any suggestion that the proposed gift ban for the executive branch tracks similar restrictions Congress imposed in 2007 on lobbyist gifts to legislative branch officials and employees is misleading."
Higher ed is broken, writes Kathleen Parker: "One of the most damning indictments of higher education came this year with a book, 'Academically Adrift: Limited Learning on College Campuses,' by Richard Arum of New York University and Josipa Roksa of the University of Virginia. It’s a dense tome that could put Ambien out of business, but the authors’ findings are compelling. Just two examples: Gains in critical thinking, complex reasoning and writing skills are either 'exceedingly small or nonexistent for a larger proportion of students.' Thirty-six percent of students experience no significant improvement in learning (as measured by the Collegiate Learning Assessment) over four years of higher education. Undoubtedly, critics of Arum and Roksa will find reason to diminish their findings. But Americans know that something is wrong with higher education, and the consensus is growing that young adults aren’t being taught the basic skills that lead to critical thinking."
Adorable children rocking out interlude: The world's youngest Led Zeppelin fan.
The Energy Department is charging ahead with solar loan guarantees, report Joe Stephens and Carol Leonnig: "The Energy Department defied Republican critics Friday by announcing that it had committed an additional $4.7 billion in loan guarantees toward four big-dollar clean technology projects just hours before the program’s funding expired. The announcement marked a dramatic ending for the $18 billion loan guarantee program, which has been central to the administration’s push to create jobs and promote green technology. Simultaneously, the program has come under fire for its handling of a half-billion-dollar loan to Solyndra, a solar company that collapsed in August. The program’s congressionally approved funding expired at midnight Friday as the federal fiscal year ended. The effort to commit money before the books closed came at a delicate time for the Energy Department, which for weeks has battled allegations that it erred by rushing to extend a guarantee to Solyndra."
The Solyndra scandal is raising questions about Energy Secretary Steven Chu's abilities, reports Darren Samuelsohn: "Energy Secretary Steven Chu faces questions over whether his laboratory smarts and Silicon Valley background have undercut his ability to operate inside the Beltway. Chu has kept a very low profile during the Solyndra affair, traveling to China and Vienna in September and speaking almost exclusively on other topics within his domain as questions pile up from Congress about the lost $535 million loan guarantee. White House spokesman Jay Carney said Friday that Chu has 'the president's full confidence.' But Chu, the Nobel laureate praised last year for spending weeks in a Houston control room brainstorming up engineering ideas that ultimately helped cap the Gulf of Mexico oil gusher, is not out of the woods. 'Just because you are a Nobel Prize-winning physicist doesn't mean you'd be a good orthopedic surgeon,' said one former Bush Energy Department official."
Closing credits: Wonkbook is compiled and produced with help from Dylan Matthews and Michelle Williams.