It is significant how widely the Occupy movement spread (even, briefly, to Creston) and how tenacious the occupiers have been in some towns and cities.
Now, after two months, two sorts of reactions seem to have become the most prominent. There are distinct signs in many places of growing public sympathy and even, in some cases, increased participation. At the official municipal level, however, annoyance and condemnation are spawning more and more attempts to bring occupations to an abrupt end.
Sooner or later, these crackdowns may drive the Occupy movement off the front pages. But I think it would be a mistake to think that it will disappear for good.
Remember how it started: Occupy Wall Street was, in a narrow sense, a protest at the way some of the U.S.A.’s major banks and other financial institutions had undermined economic stability at home and abroad through insupportable lending practices, to the point where they had to be bailed out by government handouts, all the while going on giving huge bonuses to their top executives.
More broadly, however, I think it was a statement of anger about the economic inequality that has been growing in most Western countries, especially in the U.S. There, by one calculation, one per cent of the population earned 10 times more than the rest of the population in 1980. By 2006, however, the figure was 20 times.
There is an innate obscenity in these figures. But they might be less distasteful if the growth in inequality was occurring as one aspect of a general rise in incomes. Unfortunately, while the incomes of the other 99 per cent, as a group, did rise slightly during the period in question, for too many people there was an actual decline in their real incomes.
What’s more, one of the major responses to an economic crisis, such as the one in 2007-2008, is to cut government spending to compensate for reduced tax revenues. However, the cuts invariably affect most severely programs that directly or indirectly benefit the poorest in the land.
When this is accompanied by tax cuts for the wealthy, as happened in the last few years in both the U.S. and Canada, resentment about the basic fundamental of income disparity can easily — and understandably — turn to outrage among those who suffer most. No wonder some of them decided to Occupy Wall Street.
If the fragile “economic recovery” solidifies, bringing a decrease in unemployment in the U.S. and Europe and the restoration of programs that assuage poverty, the Occupy movement may indeed fade into the shadows for a while.
But we shouldn’t assume that it will disappear for good. Our economic history tells us that every boom sooner or later ends in a bust. And the combination of the next bust and the continuation of income disparity is likely to revive the Occupy movement, by that name or another, and probably in an angrier form.
That’s why there is concern among some economists and others who see the inherent threat to social stability in our existing system. That’s why Warren Buffet, the U.S.’s second-richest man, is giving away billions and urging his fellow billionaires to do likewise.
Clearly, our existing system is broken. So, how should we fix it?
Not by casting it aside and adopting a new one. The principles on which our system is founded, especially that of competitive free enterprise, are fundamentally sound. The trouble is that they have been abused, mainly by unrestricted greed. And since it would be naive to think that we can eliminate greed, the sensible alternative is to curb its excessive expressions.
In the financial area, one approach that needs consideration is the Tobin tax or one of its variations. Proposed in 1972 by the American academic James Tobin, it would impose a levy of .05 per cent on overseas financial transactions. Ideally, such a tax should also be applied to deals within national borders but limited there to speculative stock trading.
Although there is still resistance to the idea in some countries, support seems to be growing. So is recognition that banks should be regulated by requiring them to maintain cash reserves equivalent to a designated percentage of their outstanding loans. Canadian banks are subject to this restraint, which is why our economy was less battered by the 2007 meltdown than that of the U.S.
Overcoming resistance by the financial industry to the imposition of such regulations where they don’t now exist will take some political courage. Reforming other harmful aspects of the economy — say, by imposing higher taxes on wealth, by putting a ceiling on executive bonuses or even on annual salaries, and by ensuring meaningful competition within industrial categories — will take more, especially without agreement on such steps among the major industrialized countries.
Nevertheless, effective action to reduce income inequality and the accompanying unequal influence of the wealthy on political decision-making must come if the resurgence of the Occupy movement in a more violent form is to be prevented. This means that some politicians must take the lead in demanding rational but substantial reform of our economic system — and that we ordinary citizens must support them in the media, in the streets (peacefully) and, above all, in the polling booths.
Peter Hepher is a retired journalist who lives in Creston.