Tuesday, July 24, 2012

The Failure of Occupy Wall Street

There are a lot of people out there who identify with the Occupy Wall Street movement and range from mildly annoyed to secretly fuming over its demise. And make no mistake, Occupy failed spectacularly in the hopes of certain parts of the media to become the Democratic answer to the Tea Party.

Both the Tea Party and the Occupy movement began out of frustration. People felt frustrated over the way that their country and their own personal situations had changed. And they wanted a way to express their anger. But the reason why one movement succeeded (as a political movement) and the other one failed is mainly an issue of demographics.

Contrary to the media narrative that the Tea Party is a movement primarily of old, angry men, it's actually pretty representative of the population at large in terms of gender and age, although it does skew Republican and independent.

Accurate demographic polling for the Occupy movement isn't publicly available, but I think it's safe to say that it is mostly a young person's movement. An internal pollster for the Democratic party surveyed 198 people from the actual movement at Zuccotti Park and found that about 28% of the Occupy movement are over the age of 40. In contrast, 50% of the Tea Party movement are over the age of 50 or older while 47% of all American adults are over the age of 50.

With that in mind, it becomes easier to see why the Occupy movement failed. Because most of its supporters are young, a much larger percentage of their formative years were established during a time of turbulent financial distress. The internet bubble, the Enron and Worldcom accounting scandals, the financial crisis of 2008 and its aftermath, all of that created a negative perception of the financial sector.

They also spent a larger portion of their life under President Bush (43), who cut taxes for everybody, but the media spent most of the time denouncing the cut in rates at the top brackets. For much of their lives, media coverage of the financially well off and Wall Street was decidedly negative. So when the Occupiers took to the streets, they directed their anger at the rich and Wall Street.

Unfortunately for the Occupiers, the real world doesn't work like politics. You can't wait for an election to throw the rich and the bankers (largely synonymous in their eyes) out of power. The United States was founded mainly to protect the property rights of the citizen, and you simply can't vote a new class of plutocrats and bankers in.

Most people in the Tea Party grew up when President Reagan was in the White House. And for 8 years, they listened to the media excoriating Reagan for cutting taxes, shrinking government (except for defense spending), despite the fact that the economy under Reagan boomed and real household income and wealth increased for the first time in a decade. Nostalgia makes the heart grow fonder and most adults who lived through the Reagan era remember it very fondly.

It's been no secret that Federal spending has skyrocketed since 2008. So the Tea Partiers, in an attempt to revert back to the Reagan status quo, advocated the things that Reagan advocated. That meant smaller, less intrusive government.

The Occupiers weren't so lucky. In an attempt to revert back to the Clinton status quo, they excoriated the rich and Wall Street. But the problem is everybody else didn't share their opinion on the 1%.

In the average American's heart of hearts, he knows that he needs the rich. That he needs Wall Street. That he needs all the symbols of American power and dynamism. Because, despite what most people will tell you, the average person in America lives a life of extraordinary prosperity. Although the average American can't quite place their finger on what the golden goose is, they know that they have the golden goose. And they want it kept alive at all costs.

That's why the public furor over the bailouts of the financial sector didn't ignite until after the economy was in the clear. They want to preserve their way of life. A life that they instinctively know is much better than the vast majority of people in the world live.

The young idealists of Occupy Wall Street railed against the American 1%, because they wanted a better life for themselves. But the older realists of the Tea Party had a feeling that they were part of an economic elite that had to be protected at all cost.

And when individual income of 50k USD per year really does put you in the global 1%, it becomes less about excoriating the richest of the rich, and more about the failure of the most powerful American institution on earth: the Federal government.

1 comment:

  1. Good points. The Occupy Wall Street movement always reminded me of an episode of the West Wing where they want the rich to pay more taxes.
    Henry, last fall, every time your boss got on the stump and said, "It's time for the rich to pay their fair share," I hid under a couch and changed my name. I left Gage Whitney making $400,000 a year, which means I paid twenty-seven times the national average in income tax. I paid my fair share, and the fair share of twenty-six other people. And I'm happy to 'cause that's the only way it's gonna work, and it's in my best interest that everybody be able to go to schools and drive on roads, but I don't get twenty-seven votes on Election Day. The fire department doesn't come to my house twenty-seven times faster and the water doesn't come out of my faucet twenty-seven times hotter. The top one percent of wage earners in this country pay for twenty-two percent of this country. Let's not call them names while they're doing it, is all I'm saying.

    What a lot of occupiers didn't realize was that a guy making $400k/year pays $140k in taxes every year. While a guy making $35k/year only pays about $5k/year. So the 1% that they were protesting against actually pay a lot more in taxes than the 99%.