What Occupy Wall Street Is Really About

The Republican response to the Occupy Wall Street movement is one of shallowness and misunderstanding. It’s hypocritical in nature. Instead of seizing on the anger that is clearly driving OWS as well as the Tea Party, conservatives are maligning the motives of individuals and missing the entire point which is that people are sick and tired of having to play on an unlevel field. The middle class of America is beginning to see the effects of corruption and crony capitalism on their ability to live a normal life. The level of anger is rising in this country as it seems more and more like one’s ability to get ahead is cut down by the politicians and crony capitalists who line their pockets with money.

It is easy to mock the individuals of any movement as there are always the fringe who latch on to a movement in hopes of championing their favorite pet causes. The Tea Party has no shortage of bigots and racists, elements that see the idea of less government implemented as a reversal of Civil Rights or maybe a huge fence around the American border. OWS has people who want to forgive all debt or make sure everyone gets a free college education. All of these people are equally loony and should be ignored as it relates to the particular movement. Instead, movement enemies on both sides of the aisle seize on these individuals as representative of the movement as a whole. Liberals paint the Tea Party as racist movement. Conservatives paint OWS as typical liberal big government handing out free lunches. Both miss the point that these movements are not about individual desires but about a growing anger in the country as people begin to realize America has become an oligarchy controlled by the financial elite and the politicians they have bought. It is this feeling of having the chips stacked against them that drives the movements and both parties fail to see the endgame in a large angry population within their midst.

The American people are beginning to understand how badly they have been betrayed over the past 10-15 years. Income inequality is growing continually and mobility between classes is being reduced. The strong interplay between the financial elite and their ability to use their money and influence to control financial reform legislation is hampering the ability of this country to rebound from a lost decade of economic failure. The fact that not a single banking official has been prosecuted for what is widely seen as widespread fraud especially in the mortgage industry is telling. Until the darkness that is at the heart of the financial collapse of 2008 is brought out to light and investigated, nothing can be done that will improve the system. We are only kicking the can farther down the road until it ends up in the middle of a highway where we will be crushed by some random event.

When Republicans look at OWS and see a tattooed, lazy youth movement too blase to effect change, they miss the underlying frustration in a large swath of the middle class with their inability to affect change in their own lives. They have been told all along to get a college education, work hard, save for old age, and everything will be fine. But none of that is true if you can’t get a job and you can’t save any money because interest rates are effectively zero. All the while, they watch the rich financial elites who seem to have been completely unharmed in the last 3 years and who continue to make exorbitant amounts of money. This anger isn’t class envy. It’s not class warfare. It’s the feeling that the rules are constantly being broken by certain segments of the population with no repercussions. Americans have long worshipped success and wealth. But they hate cheaters and as Taibbi points out in the link above, that cheating is what is driving OWS, the feeling that people are cheating at the highest levels and not only not being punished but that they are in fact being largely rewarded.

Republicans and conservatives should be able to seize on that anger. Conservatives claim to want nothing more than to go about their lives without interference. But when the financial economy and the political world are controlled by people who seem to have no understanding of how to drive the system, all our lives are negatively affected. When banks can borrow billions from the government at zero percent interest and loan it right back to the government at three percent while the average citizen tries to pay down a 25% credit card, anger will grow. When the Lloyd Blankfeins and Jamie Dimons of the world receive huge bonuses for taking that government money and loaning it back while the average middle class homeowner loses his house because of a robosigned mortgage document, the anger will grow. Eventually, that anger will escalate into something most likely violent and uncontrolled.

Of course, the real problem is that both parties at the highest levels are corrupted and controlled by the financial elite. One’s ability to get elected to public office in this country has ceased to be about ability or leadership. It is tied directly to how much money you can raise. That money largely comes from the financial elite who have a strong vested interest in the status quo. Without substantial political and campaign finance reform, the oligarchy will continue to control the power. Anger in this country will continue to grow. We had the opportunity in 2008 to reshape how the financial world interacts with everything else and instead, we gave them a free pass for almost singlehandedly destroying the world’s economy. It will be even harder now to create that change but putting it off by ignoring the anger that is driving OWS and the Tea Party will only create a situation more explosive and difficult to control later on.

Fall Tomatoes

I never get them planted early enough it seems and this year was no different. They need to be in the ground by June 30th and while I was two weeks earlier than last year, I still didn’t get them planted until right around the middle of July this year. The brutal summer stunted some growth it seems throughout August and into September. I also picked out a crappy looking plant along with two decent ones at Home Depot, too lazy at the time to drive to my local nursery. However, the two good plants really turned on the growth mid-September and are now 3-4 feet high. They don’t have many tomatoes on them and with only 30 days left in the growing season, it doesn’t look like I’m going to get a great harvest.

I dumped 2 gallons of diluted fish fertilizer on them this morning which will hopefully increase the yield a little bit. It had the unfortunate effect of turning a beautiful 58 degree morning in the garden into a scene from Cannery Row. Hopefully the dog doesn’t decide to lick the plants.

We got three quarters of an inch of rain early this week which kept the rain barrels full. The ones that got rebuilt this summer are holding water but there is a small leak in one that keeps it at about half full even after a rain. Probably a project for this weekend. The garlic and fava beans have not germinated yet so I’ve got my fingers crossed.

Changing of the Seasons

I pulled up all the black-eyed peas today along with quite a few weeds and some Mexican Heather that was amazingly well rooted. I planted 41 cloves of garlic evenly divided between Russian Red and plain old white from the grocery store. I still have several heads from this summer’s harvest, just haven’t done that much cooking around here. I felt bad pulling up the Mexican Heather since the bees have still been very active but there’s enough other plants blooming in the garden to make up for it. Plus I don’t have any plants for the fall that need pollination and the 3 heathers were taking up a good chunk of the main vegetable bed.

In place of the peas, I planted 5 rows of fava beans using seeds from last year. I have no idea if they’ll even germinate, they accidentally spent half the summer in the garage which can’t be any good for them. I didn’t get a harvest of fava beans this year as the unusually cold winter killed off all the plants. Hopefully, that doesn’t happen this year though they are such a pain in the neck to shell that I always wonder if it’s worth it. It’s easier getting the liver and the chianti than it is the fava beans.

I don’t plan on having any other fall/winter vegetables, didn’t get any of the cole crops planted in time. I may do a cover crop but will probably just mulch the beds. There are three fall tomato plants but they aren’t producing much of anything. The okra continues to put out 5-10 pods a day seems like which is a lot of okra for one man to eat. Also got 30 or 40 jalapenos yesterday with another 30-40 on the remaining plants. Guess I’ll have to do some canning soon.

We got 7/8ths of an inch of rain last night which is certainly a blessing. It looks like we’re going to get mostly missed by the front that is coming through though central Texas is getting a good chunk of rain and they’ve certainly needed it.

The hummingbirds seem to have migrated, I haven’t seen them in the back yard any. This summer, there were often 4-6 of them between my neighbor’s and my feeders. It was fun to watch them. I expect the goldfinches to show up soon. I left the thistle feeders out all summer, not sure if I’ll have to clean them out or not. Last year, I went through more than 40 pounds of nijer seed for the gold finches.

The Endgame

Here is a simple description of what is driving the markets. It is basically a counter party risk situation involving the biggest banks in the Western financial system. If you keep this in mind most of the things that are happening will be more clear, even though the mind of the status quo rebels against it. People will believe what is in their best interests, long perhaps after it is beyond repair.

I think the endgame is well underway, and the outcome is not saving the public, but managing the transition to a new system, while hopefully keeping the same ruling class. That will not be disclosed while ‘the players’ jockey for advantage and position, ‘turf’ and the privilege of rents, if you will, well ahead of the crowd. –Jesse “Currency Wars: European Debt Crisis and the Next Phase of Global Finance

In the game of chess, the endgame is the stage of the game when few pieces remain on the board, when the end is in sight but its implementation is still unknown. Quietly, it seems we have entered the endgame of the current financial disaster we have been unknowingly involved in over the past few years. We cannot know exactly how it will play out but the best odds seem to be a market collapse in Europe which, because of Wall Street’s exposure to French and German banks, will roar across the Atlantic to the US. The ruling class is likely doing everything it can now to protect and ensure its continued survival in the coming years. The general public will be left to fend for itself.

Most of that same public has no idea how tightly we are tied to the ongoing disaster in Europe. Most Americans would probably say to let Greece default and be punished for their apparent financial sins. Unfortunately, because we stood by in 2008 and did nothing of meaningful reform to the financial industries in the US, we are practically tied to the hip of the European crisis. How is that possible? In the same way that we were nearly destroyed by the Lehman and AIG crises of 2008, the lowly derivative.

Currently, according to the BIS, Wall Street banks have lent Greece a mere $7 billion. In the grand scheme of things, that’s chump change. As recently as September 6th of this year, Ben Bernanke has said that the US exposure to Greek banks is small. Unfortunately, none of that is exactly true. Or more correctly, while that is true, it tells only a fraction of the story. The real issue is that while Wall Street banks haven’t lent much money to Greece directly, they have lent enormous sums to German and French banks. Guess who stands to lose the most if Greece defaults? If you guessed German and French banks, you win the $64 prize. Wall Street has total exposure to the eurozone at around $2.7 trillion and more than half of that is owed by German and French banks.

To make matters much worse, most or all of that total is likely insured in the same way that the mortgage backed securities were largely insured, e.g. through the use of derivatives. Because of this, Wall Street can say they have minimal exposure but as you likely recall, when the bill comes due at the insurance agency, if the bill can’t be paid, chaos happens. This is exactly what we had in the 2008 crisis and unfortunately, nothing has changed because we allowed almost all the players to escape scot-free at the expense of the taxpayers in America.

The French and German banks are scrambling to free up assets as the market starts to realize the Greek bonds they own are likely worth 50 cents on the dollar. If Wall Street has lent large sums to these banks that is insured through derivative contracts and if one or more of those banks goes under or starts to crack, the effects on our economy will be huge. This is why the US Administration is pleading with the Europeans to bailout their own banks.

All of this is possible because nothing was done to deal with the moral hazard of banks being let off the hook during 2008. Hardly anyone went to jail. Practically no banks failed. We didn’t take the opportunity to either better regulate or flat out nationalize the banks. So now, we have a situation where the banks rightfully think that nothing they do can hurt them since it comes with the implicit guarantee from the US taxpayer that we’ll bail them out. We have kicked the can down the road until we entered a dead end alley. The can can’t get kicked any farther and unless the Europeans suddenly find a way out of a particularly tricky mess, we’re going to have more chaos on our hands, possibly much worse than 2008. We have fewer tools at our disposal this time around and the effects could be much greater. Predicting how this will end is almost impossible but the chance for an orderly and fair solution is rapidly shrinking.

Further reading:
Robert Reich: Follow The Money
New York Times: European Banks Face Huge Losses