November 27, 2011

Withdraw from Wall Street

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Occupy Wall Street protesters believe they have numbers on their side. Their movement, like any populist crusade, has constructed a narrative in which the common sense urges 99 percent of Americans to throw off the political chains of the 1 percent. Statistically, it’s impossible to deny that income inequality has widened in recent decades, but it is worth asking whether growing inequality is the foremost cause of our society’s problems. The Occupy Movement assumes the answer to be “yes.” In the given narrative, the disproportionate affluence of the 1 percent is, in and of itself, the cause of America’s dysfunctional politics and economic stagnation. But what if inequality isn’t a cause, but a symptom of subtler, more distressing problems?

For the Occupy movement, uniting the 99 percent in “solidarity” against the 1 percent requires constructing an image of the 1 percent as faceless and homogenous. Despite their emphasis on numbers, the Occupy movement didn’t choose for its symbolic target the region of the United States with the most billionaires per capita: Silicon Valley. Nearby occupations of Oakland, San Francisco and Berkeley have been among the most passionate, but these protests haven’t focused on occupying the Google-plex and have instead expressed solidarity with those occupying Wall Street. This is not a coincidence: To most Americans, Silicon Valley’s innovative engineers and entrepreneurs seem to earn their fortunes by adding tremendous value to our society, while Wall Street, with its bubbles, bailouts and endless string of scandals, seems to remove value. Many occupiers would likely agree with this distinction, especially as they use their iPhones — with Twitter and Facebook — to expand to other public spaces.

In mixing solidarity with social networking, the Occupy movement takes advantage of  the unquantifiable benefits of the same faceless one-percenters they claim to oppose. The widely shared belief that the system rewards hard work is likely why, before the Occupy movement, so few Americans protested in the streets over inequality itself, despite the fact that is been growing increasing steadily over the past several decades. It is the unfairness of only some kinds of inequality that rouses the fury of many Americans, not its overall existence. Impassioned outrage arises when banks receive bailouts while equality of opportunity shrinks and so many Americans struggle to find work.

Unlike the injustices that motivated protests against the Vietnam War or the Civil Rights Movement, the causes of American inequality are much more difficult to pinpoint. The Occupy movement rightfully implicates the increasing role of political campaign contributions, but hardly touches the perverse underlying incentives that reinforce dysfunctional American politics. National interest groups have procured benefits for themselves through manipulation of policy, ensuring that the costs of their concentrated benefits are quietly dispersed to everyone else. This system benefits large political contributors, but not necessarily just groups representing the 1 percent. Through their cozy political relationships, both Wall Street and the pensions of public employee unions have been insulated from the periodic risks of true capitalism through the backing of taxpayer dollars while still reaping the rewards of market surges. Of the top 20 political contributors from 1989-2011, 12 are unions and two are Wall Street firms.Conflicts of interest, revolving doors and politicizations of Wall Street undeniably distort American policymaking. Libertarians have long pointed to the hazards of crony capitalism and how these hazards are softened in markets free from politically-motivated meddling. Whenever markets appear to fail, self-interested politicians tend to respond in ways that make matters much, much worse. The type of inequality decried by the Occupy movement is in large part caused by political distortions that shift wealth away from those who truly add value to society.

Whereas the Occupy movement has not completed or agreed upon a single set of solutions, libertarians — who have long opposed the cronyism of mass politics — propose solutions which seek to correct the perverse incentives of our current system. Instead of trying to eliminate political contributions from the 1 percent, effective reforms would address the underlying motivation for contributions in the first place by restraining the ability of policymakers to manipulate markets and hinder competition. By diminishing the distortions of national interest groups, policymaking would become more transparent and phrases like “equality of opportunity” would be more than just campaign rhetoric. On issues like taxes and income inequality, public conversation needs to move beyond the political bickering of left and right to focus more on what exactly is wrong with the current system’s incentives.

It’s hard to have this conversation within the constraints of the Occupy Wall Street narrative. Despite not having a unified list of demands, the movement has been a magnet for those already dedicated to causes deeply associated with the American political left. Furthermore, Cornell’s own branch of the Occupy  movement claims to work toward free and open discussion on campus, even though their recent disruption of a Work on Wall Street event occurred before they had made substantial attempts to actively engage within the normal channels of political discourse on campus. When asked at a General Assembly why they had decided to protest before pursuing discourse or debate with existing groups, one occupier replied that they “would figure out what they believe by acting.”

And that, we think, is exactly what is currently wrong with American politics.

Kasey Ashford is a senior in the College of Arts and Sciences and the President of the College Libertarians at Cornell University. She may be reached at [email protected]. Jacob Arluck is a sophomore in the College of Arts and Sciences and the Public Relations Officer of the College Libertarians at Cornell University. He may be reached at [email protected]. Guest Room appears periodically this semester.

Original Author: Jacob Arluck