Last week, I was fortunate to be in New York to attend the Bastiat X Prize awards dinner. Needless to say, a visit to Wall Street was called for. I found Occupy Wall Street protesters busily sweeping the pavements.
“Hey hey! Ho Ho! This Wall Street dirt has got to go!”
The chant was catchy, certainly. Marching down the narrow shadows of Wall Street, a few dozen protesters sprayed soap and scrubbed the pavement. One hopes nobody slipped and broke an ankle after Occupy Wall Street had made whatever point it was making, but it was entertaining.
A local I met in a simple Irish pub where I stopped for lunch told me numbers had dropped markedly since an unexpected spot of snow on Halloween weekend. However, he added that fewer protesters didn’t make it any clearer what exactly they wanted. It appears to be a motley assortment of entirely random anti-establishment causes: organic foodies, homoeopaths, crystal-gazers, radical feminists, climate doom-mongers, vegans, and hardcore communists all drumming upon the cosmic consciousness. It’s all very colourful and, like, full of love, man. The man at the bar, like the brokers and bankers outside, went about his business with an indulgent smile.
And right they are, to be condescending. Clues about what’s wrong with the economy – let alone what to do about it – seem to be in short supply among Occupy Wall Street protesters. There are no leaders among the collectivist crowd, so it isn’t clear who might speak for the group.
All I could gather from a few random conversations were some vague notions about how unfair it is that bankers issue loans, or expect them to be repaid, or worst of all, both. Also, they get paid a lot. I had to hand it to the big fellow with the gold chains who said this: it was a fair allegation, judging by the suits and the cars and the imposing porticos. Also, banks get bailed out instead of just failing and taking everyone’s unpaid debt with them. (It didn’t seem to occur to my interlocutors that banking crises used to cause runs on banks by depositors, not drumming parties by student debtors.)
None of the protesters I met got even close to the core of the issue, let alone offering proposals for what, exactly, they thought should be done.
It doesn’t help their contrived, self-conscious image as “the 99%”, that even the poorest Americans, living as they do in a relatively free, capitalist society, would find themselves in the top quartile of a global income distribution. The world’s 99% don’t hang out in Manhattan.
As one wit put it in a satirical Twitter message: “@OccupyFS: We desperately need iPhone chargers at the smash capitalism demo… Drop them off at Starbucks please”.
That makes the protesters amusing, but not necessarily wrong. They’re rightly dissatisfied with the global economy. Who isn’t? The question is at whom they direct their justified anger. They’re as confused about that as those who marched with Julius Malema two weeks ago. They, too, misunderstand the meaning of “economic freedom”.
The rather shoddy clean-up crew moved briskly along, obediently following the instructions of half dozen police officers. Ironically, the only occasions on which protesters have run into opposition weren’t when they yelled at bankers. It was when the police had enough of them, as happened in Oakland, California, or when they got too close to government institutions such as the Houses of Parliament in London, England. While I doubt the protesters are all innocent lambs who’d never dream of provoking a policeman, governments are the ones responding to the protests the only way they know: with violence.
Scrubbing Wall Street: protesters make a song and dance about “cleaning up” New York’s most famous financial street.
This ought to be a hint as to who the real enemy is. Occupy Wall Street attacks the easy targets – bankers who merely took advantage of the central bank’s cheap credit and government’s implicit loan guarantees. Surely, not all bankers are entirely innocent in this debacle, but by focusing on them, protesters give their hope-and-change politicians a free ride.
The Wall Street Journal has a great list of alarming quotations from politicians who were sure they could manipulate the market without causing a crisis. My personal favourite quote is from Barney Frank, chairman of the House Financial Services Committee, who said: “I want to roll the dice a little bit more in this situation towards subsidised housing…”
The Occupiers don’t want to vote them out of office, of course, which shows that they have no idea how it all got to this.
By contrast, the Tea Party has been largely coherent in its message. Like the Occupy movement, it is angry about the credit crunch, high unemployment, stimulus excess, and banking bailouts. However, instead of just ranting about it, it points fingers. It blames easy money for undermining savings and encouraging reckless borrowing, it blames bankers for exploiting the perverse regulatory incentives that reward risky lending, it blames government for using “stimulus” as an excuse to fund pet projects and special interests, and it blames the Federal Reserve for bailing out the banks that were guilty of the excess.
They understand that bubbles are created by the government, and that as sure as night follows day, a crash must follow a bubble. This, no matter what private fraud and greed characterised the boom, remains the fault of the government policies that caused the boom in the first place.
They distrust corporate lobbying, and believe, like the Occupiers, that the private sector has to an alarming degree captured regulators and politicians for their own ends.
The difference is that the Tea Party blames the government that lets itself get bought when it was elected to serve the people, instead of blaming the companies who are only serving shareholders and customers – as they ought to – when they lobby for regulation that benefits them and harms competitors.
Ron Paul, the leading intellectual light of the Tea Party revolution, has made the distinction between corporatism and a free market very clear. Bailouts, loan guarantees, cash-for-clunkers programmes and stimulus funding are hallmarks of state-corporatism, not of the free market he advocates.
Tea Party protesters object to crony-capitalists and politicians of both parties. Thanks to consistent messages from Paul and others who predicted the housing bubble and the subsequent crash (see Don’t blame those who saw it coming), know at least in principle that they ought to reject inflationary monetary policy (quantitative easing and low interest rates), counter-cyclical deficit spending (stimulus), and the dogmatic belief in a mythical Keynesian multiplier.
They probably read the journalists whom I met that evening, which brings me back to my reason for visiting New York. The International Policy Network flew me over and put me up as one of the finalists for the Bastiat X Prize. The prize is awarded annually to journalists who support free markets and individual liberty, and who, like the economist Frédéric Bastiat, can explain apparently complex issues in clear language. The people I met at a swanky dinner at the Four Seasons stood in stark contrast to the confused socialists I spoke with in the morning.
Occupy Wall Street protesters could do worse than read the winners. Joint first prize went to Virginia Postrel of Bloomberg and the Wall Street Journal, and Tom Easton of the Economist. Second went to Jeff Jacoby of the Boston Globe, and third was awarded to Salil Tripathi, of the Mint in India and the National in the UAE. DM
Tom Easton’s winning article:
Virginia Postrel’s winning articles:
Jeff Jacoby’s winning articles:
Salil Tripathi’s winning articles: