Galston and Gitlin on Occupy Wall Street
Having warned its liberal readers not to get too close to the crazy radicals of Occupy Wall Street, the New Republic has posted a series of responses on its Web site. Todd Gitlin — who, as a former president of Students for a Democratic Society, knows a thing or two about protest movements — expresses disappointment at TNR’s Beltway scrupulosity:
TNR’s editorial clucking at Occupy Wall Street suffers from weak sociological imagination compounded by wrongheaded stuffiness. Stamping your foot and demanding that the world conform to your standards—cram its demands into the formula you prefer, dress as you prefer, enunciate as you prefer, curb its radicals as you prefer—before you go out to play with it may be, to use the buzzword du jour, “understandable,” but it’s neither adequate to the situation nor helpful. In fact, it’s counterproductive. You do politics in the society you have, not the society you wish you had.
William Galston, a frequent TNR (and Commonweal) contributor, considers it a mistake to focus on the worthiness of Occupy Wall Street as a vehicle for discontent with the financial industry. It is, he argues, the discontent itself we ought to focus on instead — and the possibility that it might be channeled toward useful reform. The OWS protesters remind us of something that Rawlsian liberals and leftist radicals ought to be able to agree on: that the privileges enjoyed by the elite are intolerable if they come at the expense of the general welfare. Of course, radicals would say they usually or always do come at the expense of the general welfare; Rawlsian liberals would insist that they needn’t and often don’t — that the poor may be less poor in a society with some wealth inequality than in a society with none. But both sides agree with a majority of Americans that in the last decade at least the elites have failed the nonelites: for the most part, only the rich have become richer while many of the nonrich have become poorer. It is no longer enough for those at the top to assume that whatever makes them more comfortable will end up helping everyone else, too; they must demonstrate this. Galston puts it better:
Every community of any appreciable size has an elite—often more than one. Elites are tolerated, even respected, if the rest of the population sees them as using their wealth, power, prestige, and talents on behalf of the community’s interests, as well as their own. Elites are not expected to be saintly altruists, but they are expected to care about the rest of society, not just themselves.And that is the nub of today’s populist revolt.
It is very difficult to find anyone outside a couple of Manhattan zip codes who believes that the financial sector has added value to America’s economy and society over the past two decades. Financial “innovations” ended up expanding risk, not opportunity; the Masters of the Universe redivided the pie without noticeably expanding it. While wages stagnated, financial elites became untethered from the real economy and sailed off into the stratosphere of nine and ten-figure wealth. A capitalist economy loses credibility when its results diverge too far from public sentiments about decency and fairness.[...]
In 2009, at a time when one might have expected maximum feasible humility from financial leaders, Lloyd Blankfein opined that Goldman Sachs was doing “God’s work.” While he was limning a previously unnoticed theological equivalence between himself and Mother Theresa, Brian Griffiths, vice chairman of Goldman Sachs International and also chairman of the Archbishop of Canterbury’s Lambeth Fund, was invoking John Rawls’s Difference Principle. In a 2009 discussion at St. Paul’s Cathedral, he had this to say about compensation in the financial sector: “We have to tolerate the inequality as a way to achieve greater prosperity and opportunity for all.” And so we would, if it did. But where is the evidence that it does? I’m not even sure that Griffiths’ proposition was intended as a statement of fact. It seems, rather, like a ritual incantation designed to ward off evil spirits. If so, it has lost its protective powers.
Andy Xie, (an American, I think, MIT grad, with a PhD in economics from that institution), and was a superstar economist for Morgan in Shanghai. now lives there as an independent economist, has an interesting and depressing piece in the October 19 South China Morning Post (Hongkong). Here’s the link, though I think you have to be a subscriber to read it:
http://www.scmp.com/portal/site/SCMP/menuitem.2af62ecb329d3d7733492d9253a0a0a0/?vgnextoid=b8451ab6ad613310VgnVCM100000360a0a0aRCRD&ss=Asia+%26+World&s=News
He’s very much in favor of the OWS movement in the US, even suggesting the the US is gearing up for a revolution by the destruction of the middle class, thanks to those who make the rules to benefit themselves rather than society. Rather the same point Charles Morris made in a recent issue of Commonweal, as have others as well. Here’s Xie’s summing up at the end of his piece:
“In the two decades since the fall of the Berlin Wall, a self-appointed elite, best represented by the Davos crowd, has ruled the global economy through financial games, taking money from the masses through power and covering up their acts by creating bubbles. The real problem that plagues the global economy is that this ruling elite wants to keep the game going rather than make an exit. The people of the world must revolt and rid these parasites for good.”
(Though I rather wonder how he felt when he was helping Morgan build up its wealth in Shanghai until a few years ago. )
Two days ago, a rep of Goldman Sachs was scheduled to address a group of students in the business program at the U. of Vermont on the attractions of careers in finance. What a bone-headed topic to choose at a time like this! — though it’s comforting to know that there are others besides the Vatican who live in bubbles, impervious to the realities in the outside world. At the last minute, G-S canceled the talk for fear that some non-business students might use the occasion to a protest. Whether the scheduled speaker agreed, I have no idea.
George Lakos, the liberal theorist, is also supporting OWS. He thinks its appeal should be kept general, emphasizing that the issues are moral ones with specifications to be determined. He contrasts the Tea Partiers and the OWS saying that the Tea Partiers tout individual responsibility while the OWSers rightly require both individual and group responsibility. He also makes a plea for civility as necessary if the problems are going to be solved.
http://www.readersupportednews.org/opinion2/275-42/7970-a-framing-memo-for-occupy-wall-street
Two counter-intuitive observations re inequality that won’t be popular at OWS:
“Support for redistribution, surprisingly enough, has plummeted during the recession.”
http://www.scientificamerican.com/article.cfm?id=occupy-wall-street-psychology
“Is economic inequality the source of our macroeconomic malaise? Many people think so — and I’ve written a lot about the evils of soaring inequality. But I have not gone that route. I’m not ruling out a connection between inequality and the mess we’re in, but for now I don’t see a clear mechanism, and I often annoy liberal audiences by saying that it’s probably possible to have a full-employment economy largely producing luxury goods for the richest 1 percent.”
Paul Krugman (NYT, October 12)
http://krugman.blogs.nytimes.com/2011/10/12/i-am-not-your-mirror-image/
That the stock market is now moving DOW 200+ points up one day and down the next tells me that a new kind of money making trading bubble has arrived. Programed micro-second trading is a prime example of money making money without any jobs being created except for coffee cup runners, living on tips. Get a Greek minister to say something positive one day or next day something negative and make a fortune. And we need the best and brightest to play this game? phew..
Well, I’m glad that Krugman fellow has finally come around to my way of thinking. If he keeps this up, he may win a prize some day.
Hi, Ed, 200 points does seem like a lot. But if (to keep the numbers nice and round) the Dow is at 10,000, a 200 point swing is a 2% swing. When I began my illustrious career (not), the Dow was at (again, rounding to keep the math easy) 800. A 2% swing in those days would have meant a movement of 16 points.
Meanwhile, from the Department of You’ve Got to Be Kidding, it appears Pres. Obama, while hammering Wall St. is also doing a lot of sweet talking to them, at least from the cash flowing in.
http://www.theatlanticwire.com/politics/2011/10/obama-has-actually-raised-more-money-wall-street-romney/43892/