Streetwise Professor

October 17, 2011

Occupy This

Filed under: Economics,Politics,Regulation — The Professor @ 3:33 pm

The Occupy [Insert Location Here] crowd has to be the most inarticulate, inchoate, and incoherent protest movement in history.  A decidedly motley collection of progressive types, heavily laden with aging Boomers pining for their Glory Days of the ’60s protests and younger clueless wannabes.  Hard-core leftists are disproportionately represented.  Its basic messages, to the extent that it is possible to distill any, are that banks are bad and people should get more free stuff paid for by The Rich 1 Percent. The cluelessness about the way this stuff is actually created is breathtaking.

There is definitely reason to criticize and protest the unseemly nexus between business (and finance particularly) and government, but for the most part the #OWS types seem to be completely unaware of the fact that their calls to enhance government power will only strengthen and deepen the nexus.   Corporatism needs two players: corporations and the government.  Because of its monomaniacal focus on corporations, and its call for increasing the power of government, if it were actually to succeed Occupy Whatever would actually bolster the corporatism its members deplore.  Libertarian and even anarchist criticisms of the prevailing system are largely coherent and internally consistent: Occupy is notable for the complete disconnect between its diagnosis and proposed cure.

What is most interesting is that the entire Obama administration–starting at the top–is aligning itself  with this movement.  The Washington Post reports that “President Obama and his team have decided to turn public anger at Wall Street into a central tenet of their reelection strategy.” But this is particularly cynical, given the joined-at-the-hip relationship between the administration between the administration and companies like GE and Monsanto.

Moreover, key figures in the administration have come out and expressed their sympathies with the movement.

Figures like Timmy! Geithner. You know, the former head of the NY Fed, which just happens to be deeply enmeshed in the Wall Street banking establishment which Occupy identifies as the locus of evil in the universe, and formerly of the IMF, which is also a linchpin in the current finance-government web. 

Or like Bill Daley, Chicago corruptocrat extraordinare, famous intermediary between big corporations (like JP Morgan and SBC and Merck and Fannie Mae) and the government: note well that his corporate jobs have been with companies that are heavily regulated.  Not a creator.  A rent seeker: the operator of a protection racket.

One’s jaw drops at the chutzpah of people like Daley and Geithner going all populist given that they are made men in the corporatist system.  They are avatars of the incestuous relationship between government and government regulated corporations.

So what explains Obama’s decision to align himself with such a cretinous assemblage?  I can think of several, not mutually exclusive, alternatives:

  • Given the objective economic conditions, Obama feels desperate politically, and knows that he cannot win using a conventional campaign.  So he is throwing in with a disruptive force that could upset conventional political dynamics and calculations.  A go-for-broke, put himself at the head of the mob strategy.  These strategies can work, but they are very risky–and often end up devouring the would-be leaders–for once destablizing forces are unleashed, they are extremely difficult to control. [Update: I note that the pivotal moment in Obama’s 2008 victory was the Lehman collapse and subsequent panic. He was fading before that, but the crisis propelled him to victory.   He benefited from chaos in 2008: why not create his own in 2011-2012?]
  • A realization that the ultimate result of a success of this movement would be to strengthen the government’s power–and not coincidentally strengthen the corporatism from which the Daleys etc. profit.
  • A recognition that this is a way to shakedown Wall Street for campaign contributions which have been less forthcoming than in 2008.  Remember Obama’s “my administration is the only thing standing between you and the pitchforks” remark in 2009?   Translated: pay up or I’ll get out of the way.

2012 was already shaping up to be an ugly and angry campaign.  By going all in for a class warfare, us against them, strategy, Obama is making it all the uglier.  One interpretation is that he is choosing the Sampson option:  If I go down, I’ll bring everything down with me.

There will be immediate economic consequences of this as well.  Just as FDR’s attacks against “malefactors of great wealth” contributed to the regime uncertainty that retarded recovery in the Great Depression, Obama’s strategy will contribute to intense volatility over the next 13 months, and this volatility will hardly be conducive to hiring and investment.

For the past three years, I’ve wondered aloud whether we are going to relive the ’70s or the ’30s.  It’s looking more like the ’30s all the time.  And as bad as the ’70s were, that’s not a good thing.

Update.  UH student Steven Ray Christopher wrote a very similar analysis in the Daily Cougar last week.  Very nicely done: give Steve’s piece a read.

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  1. If it is going to be the 30’s again, let’s hope Marx’s addition or extension of Hegel is true. Hegel remarked that history has a tendency to repeat itself. Marx added that the first time as a tragedy, the second time as farce. From the “14th Brumaire (sic) of Louis Napoleon” I think.

    Seriously, these kinds of farces can be bloody, and the shilly shallying of Bloomberg and Company are not helping: the NYPD is over 30,000 strong with over 1/2 given very comprehensive riot training. The real problem will be outside the US and NYC. the seeds of it’s own destruction is the speed to which the rats are climbing up on this ship, as you note. I hope the American electorate will look at this and use its sense of smell.

    Comment by Sotos — October 17, 2011 @ 4:05 pm

  2. I’m with you, Sotos. Demagogues think they can control these things, but they tend to operate according to their own logic–or illogic. They quite often tend to turn and those that would lead them. You are right re 18th Brumaire: and the first time Marx was referring to was the French Revolution which devoured all those who thought they were leading. I too hope that there are enough people with common sense, and not driven by envy; if there are, this will indeed be Obama’s undoing.

    The ProfessorComment by The Professor — October 17, 2011 @ 4:11 pm

  3. Kubler-Ross would have loved the Occupy protests. When a class of citizens allowed to live off the productive efforts of another class realizes the gravy train has reqached the end of the line, one has to expect a refusal to accept reality.

    Those with a vested interest in the continuation of government to march toward socialism meets those determined to end the march of government toward socialism, conflict is inevitable. I have no doubt those involved in the Occupy protests are mostly non-voters. Obama could make the resolution of the confict at the ballot box the centerpiece of his 2012 campaign. Or, he could fan the flames of protest and promote class warfare. Why am I not surprised he is fanning the flames?

    Comment by Charles — October 17, 2011 @ 4:31 pm

  4. @Charles–since ’09 I have believed that the country is in a pre-revolutionary condition. These recent developments are strengthening those beliefs. Interesting, isn’t it, that he was elected as a uniter (by the delusional, but that’s how he presented himself)? If he is re-elected–or if he isn’t–it will be as a divider. Yes. Pre-revolutionary.

    The ProfessorComment by The Professor — October 17, 2011 @ 4:43 pm

  5. OWS will not prostitute itself to the Democrats, like the Tea Party did with the Republicans.

    Comment by Sublime Oblivion — October 17, 2011 @ 5:43 pm

  6. @S/O: prostitute, useful idiots: distinction without a difference.

    The ProfessorComment by The Professor — October 17, 2011 @ 6:10 pm

  7. It doesn’t seem that OWS is any one thing other than protest – there is no unifying positive ideology as of now that is clear to any outsider. To call them anarchists insults anyone at the level of a Bakunin(and that is pretty low). Anarchists generally have had a clear executable program whatever its long term prospects for success – See Catalonia under the P.O.U.M. as per Orwell, far ahead anything the OWS as OWS has. Therefore, there being no one thing it is hard to see it prostituting itself, since it as an it doesn’t exist.

    Using terms like prostitution for any unorganized or loosely organized tendency is the lowest form of ad hominem attack: if prostitution occurred, what was the pay, what was sold?

    As regards the tea party prostituting themselves, the tea party is not a party but a tendency though one much more organized intellectually than OWS, however – some support certain candidates, some don’t. For example Scott Brown made the right noises in his election, got some but not universal tea party support, but his current votes have alienated a lot of the Massachusetts’ Tea members and a lot have said they will sit this one out. This sounds like ordinary politics of attraction and then alienation. In Delaware and Nevada they were accused of excessive zeal – nominating candidates that wouldn’t compromise and according to conventional wisdom could not win (they didn’t). Hard to see any organized sale of flesh here, though I am sure individual deals might have been made.

    Comment by Sotos — October 17, 2011 @ 7:49 pm

  8. @Prof- I disagree with your revolutionary view in that we have a civil option for revolution, that being the ballot box. Why spend years prosecuting a violent revolution when we prosecute a coup de etat in a day next November?

    I wonder whether collectively we are ready to call and end to the progressive march of socialism. Next year, federal spending is set to grow at 5% when inflation is 0%. When do we end the shift of resources (and power) from the private sector to the government? Hopefully in 2012.

    Comment by Charles — October 17, 2011 @ 8:16 pm

  9. The US is far richer than it was in the 1930s. There will be no revolution.

    Comment by So? — October 17, 2011 @ 8:35 pm

  10. […] Streetwise Professor » Occupy This […]

    Pingback by Assorted Links (10/18/2011) at Jim Garven's Blog — October 18, 2011 @ 8:44 am

  11. There’s been a lot of talk about “class warfare,” but I think the ubiquitous class structure labels (lower, middle, upper) are losing their usefulness (especially considering the incredible shrinking middle class) for helping us understand our economic differences and conflicts. I suggest we try these class categories: Dependent, Working, Rich, Crazy Rich. Right now the Crazy Rich are making the deserving Rich look bad. I explain further at

    Comment by WiseFather — October 18, 2011 @ 1:21 pm

  12. @WiseFather. Your taxonomy sounds about right. Thanks for the link. Interesting post.

    The ProfessorComment by The Professor — October 18, 2011 @ 4:20 pm

  13. Loathed by the left and threatened by the right.

    It has come to pass. S/O (i.e. myself) predicted it.

    Comment by Sublime Oblivion — October 18, 2011 @ 7:53 pm

  14. We are so beyond Crazy Rich. Shrinking the middle class has been Our objective all along. And the good Professor’s Chicago School has greatly facilitated Us in this endeavor.

    Comment by a — October 19, 2011 @ 3:58 am

  15. I’d always welcome a real Class War, the kind they had in Finland’s Civil War of 1918. The numerically superior working-class socialists were soundly beaten by the right wing because they didn’t have 1.) a standing officer corp, 2.) leadership that believed in constitutional precedence, 3.) money and wealth, and the knowledge of how to make that work.

    If the left brings about a class war here in America, then it is a war they will most certainly lose. Who knows, we might also have an opportunity to exterminate many of them… like Finland did.

    Comment by Finnpundit — October 19, 2011 @ 2:56 pm

  16. “Who knows, we might also have an opportunity to exterminate many of them… like Finland did.”

    Oh, FinnPundit, We certainly hope so!

    There is nothing like a good decimation to break a working class! We have unions down to representing a trivial fraction of the US labor force, and a good decimation now will decisively show them who is who, what is what, who can do what to whom, that they are in debt bondage to Us, and have no choice but to do as We direct, for a wage We decide upon!

    All for Ourselves and nothing for other people!

    Comment by a — October 19, 2011 @ 6:14 pm

  17. a, I’m glad you agree.

    Comment by Finnpundit — October 20, 2011 @ 11:37 am

  18. “Just as FDR’s attacks against “malefactors of great wealth” contributed to the regime uncertainty that retarded recovery in the Great Depression,”

    So true, good Professor, so true. by 1934, the US GNP had only grown from $56.4 billion to $66 billion, and to only $73.3 billion by 1935. If Coolidge had still been president, I’m sure that the GNP would have exceeded 1929’s $103.6 billion by 1935 at the latest.

    The length of the Great Depression had nothing to do with the fact that the US GNP had declined from $103.6 billion to $56.4 billion between 1929 and 1933. Nothing at all.

    And anyone who says it did will be blotted out of Our Christmas card list!

    Comment by a — October 20, 2011 @ 3:26 pm

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