The Street They Should Occupy
A Commentary By Froma Harrop
As "Occupy Wall Street" sweeps up attention, a smaller group is running something called Occupy K Street. If the goal is to loosen the financiers' grip over the American economy, the folks protesting on K Street are getting closer to bingo. K Street is Washington's famous boulevard of lobbyist influence, the place where money buys politicians to do money's bidding.
Occupy Wall Street and allied movements have been likened to the tea party populists associated with the right. Both rage at the 2008 Wall Street bailout. Both resent the corporate powers' lobbying Congress to rig the game in their favor -- the middle class and taxpayers be damned.
But there's a very big difference between these movements. The Occupy people want a more vigilant government overseeing financial activities. The tea partiers do not, oddly favoring a less active government. They have no solutions that, frankly, most Americans, including themselves, would want to live with.
The tea party believes that free markets will punish the wicked. It sees regulation as a weight on the capitalists' animal spirits, off whose trickle we mortals slake our thirst. It's like the tea party doesn't want the cattle trampling the flowers, but at the same time, opposes fences.
The group doesn't get why our financial system must be supervised, because it doesn't know why it nearly collapsed -- or even that it (SET ITAL) did (END ITAL) nearly collapse. Tea party honcho Mike Pence, Republican rep from Indiana, offers a peek into this alternative universe of how things work. He recently said that the House passed the bailout legislation -- after having rejected it days earlier -- because Congress had "larded up" it up in the interim. In other words, the vote changers were bought.
Millions of American stockholders have a very different recollection of that turbulent time. They remember the news channels' famous split screens. On one, House members cast votes against the bailout. On the other, the Dow Jones Industrial Average plunged with the "nays." It lost nearly 800 points that day. Facing a public already in near panic, Congress quickly reversed course and voted for the bailout.
True, had there been no bailout, the reckless financiers would have been ruined. But the rest of us would be wearing barrels.
Free markets do work, alas. They worked in 1929, when a decade of speculation, frenzied borrowing and other financial excess ended in the Great Depression.
Politicians who opposed the bailout (on the left as well as right) didn't have to deal with the consequences of letting the financial system collapse because other braver lawmakers did their duty. One can rightly complain about the details -- that the bailout left the irresponsible far more whole than they deserved -- but insisting that it could have been avoided without catastrophe shows a sad grasp of economics and history.
Where the Occupy Wall Street crowd somewhat misses the bull's-eye is its railing against "greed." Few activities are more fruitless than trying to shame the financial industry's players for wanting all they can get. Condemning them for "greed" is like condemning a wolf for eating a stray lamb or (to use a more neutral-sounding metaphor) salmon for swimming upstream. Money is how the contestants keep score. Some may be lovable people, who leave their fortunes to good causes, but money is the object of their game.
And regulation is how you keep the game orderly and nice. If one investment house is making a pile doing wild and wooly things, its competitors may feel compelled to do the same, lest their shareholders complain. So regulations also help prudent bankers avoid pressure to make unappetizing investments.
To get those regulations, you have to go to Washington. You have to find that corner where the lobbyists transfer money to politicians in return for weak or no rules of the road. You have to stop practices that destabilize the financial system. You have to prevent the fat wallets from obtaining sweetheart deals that, for example, let hedge fund managers pay taxes at a lower rate than the police who protect their estates.
We're talking about K Street. That's where the spotlight belongs. Who is delivering what checks to which politicians and for what in return? Occupy K Street could not have too many members.
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