Two weeks into Occupy Wall Street protests, movement is at a crossroads

Fair enough, I misrepresented the degree to which [intent] matters to your ethical calculations and retract that misrepresentation. (Noun inserted---T)

The obvious flaw in your argument is that banks throughout the modern world behaved very much as did those you so confidently condemn on Wall Street. Are the French and German national banks which lent so progfligately to Greece and are now so dangerously exposed to its looming fiunancial collapse subject to the same condemnations?

The same story (even worse) was repeated in Ireland, Latvia, and in Spanish caja retail banks, but with respect to consumer loans. That Greece was cooking the books in its financial reports to the EU, and that a bubble in real estate and consumer loans was developing was likely fairly well known within the major banks involved in Europe.

Should they all "be brought to heel"? How?

Today's news includes reports of the 11 year sentence given to Galleon Group (Hedge Fund) founder Raj Rajaratnan as a result of his conviction for insider trading and wrongful use of purloined information. We can likely agree that he was knowingly pursuing what he believed to be his short term interest. However, does it follow he knew that a bad result for his company and investors would follow?

I don't think so. It is much more likely that he (foolishly as it now appears) thought he could get away with it, despite the now evident fact that his methods and unusual results were becoming more evident every day and the discoverable evidence against him was growing with it.

In short humans, at all levels, are very susceptable to the illusion that they can or will escape otherewise predictable bad consequences associated with their actions. Moreover, this observable trait doesn't lend itself to being readily limited by regulations, however well-intended -- as the Galleon case so amply demonstrates. I would be very interested to learn of any contrary lessons you have learned in your "... thorough study of himan history in such events".

You are being very intellectually dishonest Cyclo. I have never made this claim, or anything like it. All I said is that there is no evidence for your extraordinary claim. This does not mean that I am making a claim that is the exact negative of yours.

It's idiotic. Attack the politicians, they are the ones who can change things and don't. They are the ones who let the scapegoating of bankers hide that the problem is systemic. So instead of blaming the system small minds get to fixate on human villains.

You are erroneously assuming that a decision to go forward with risky actions implies a misunderstanding of the consequences of failure. It does not. It merely implies poor judgment and poor moral character.

Cycloptichorn

Cycloptichorn wrote:

You are erroneously assuming that a decision to go forward with risky actions implies a misunderstanding of the consequences of failure. It does not. It merely implies poor judgment and poor moral character.

Cycloptichorn

I made no such assumption, Instead my central point was that human beings at all levels have amply demonstrated the inclination to succomb to the illusion that they will somehow excape otherwise predictable bad outcomes associated with their actions. Indeed I believe the truth of this proposition is very amply demonstrated by human history.

You are free to call that poor judgment and poor moral character, but the fact is these are common human traits - found in great concentrations among bankers, criminals, politicians, and even progressive reformers - as the Solyndra case clearly demonstrates.

Robert Gentel wrote:

My argument was against portraying them as the singular cause of the economic crash when the problems were (and still are) systemic.

That misses the point. Of course the problems are systemic---because America's financial elites managed to have the system rigged in their favor. Our neighbor Canada, by contrast, hasn't had these systemic problems, because they left their system unrigged and properly regulated. It's the pressure from the bankers to rig the system, and the political class's bipartisan choice to give in to it, that merits a populist backlash.

The obvious flaw in your argument is that banks throughout the modern world behaved very much as did those you so confidently condemn on Wall Street.

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Should they all "be brought to heel"? How?

<snip>

In short humans, at all levels, are very susceptable to the illusion that they can or will escape otherewise predictable bad consequences associated with their actions. Moreover, this observable trait doesn't lend itself to being readily limited by regulations, however well-intended -- as the Galleon case so amply demonstrates. I would be very interested to learn of any contrary lessons you have learned in your "... thorough study of himan history in such events".

Are the French and German national banks which lent so progfligately to Greece and are now so dangerously exposed to its looming fiunancial collapse subject to the same condemnations? [. . .] Should they all "be brought to heel"?

How?

The only difference is that you seek to keep one class - bankers and wall street executives - immune from investigation, prosecution, or even moral condemnation for their actions, while being all too ready to apply these to those who you ideologically oppose (as you have amply proven in this last post).

Cycloptichorn

But the protesters’ affection for Jobs isn’t necessarily a sign of bad faith or ignorance. Rather, it could be a healthy discernment, however poorly articulated. The point is not that Jobs was “this different, quiet billionaire,” as one protester put it, but that he lived by the rules through which free-market capitalism should work. When Apple released a product that people rejected, such as the Apple III or the Lisa in the early eighties, the company suffered the consequences. Apple could not expect tens of billions of dollars from the U.S. Treasury or from the Federal Reserve to save it from its own mistakes. Apple was not too big to fail. Before the iPod, the company was struggling. Apple had to make itself too good to fail—and that’s exactly what it did.

Contrast the capitalist world in which Jobs lived with “capitalism,” as the U.S. government has applied it to the big banks against which the Zuccotti Park crowd is—imperfectly—protesting. If you’re a bank or an insurance firm, and you create a product that your investors and your regulators can’t understand in a crisis, you aren’t punished, as Apple was when it released products too complex for its customers. Instead, you get rewarded with bailout money. It’s hard to argue with the Zuccotti protesters’ manifesto on this point: “They have taken bailouts from taxpayers with impunity.”

In the past few years, surviving banks have “succeeded” not by giving people needed or wanted products, as Apple did, but through their ability to hold the entire global economy hostage. Imagine if Apple and Microsoft executives, instead of competing against one another, had banded together to deliver taxpayers an ultimatum: give us tens of billions to stay afloat, or else we’ll blow up the whole economy. Does anyone think that strangers would be leaving flowers, photos, and bitten fruit?

If this is capitalism, we should all be protesting it. The good news is that it’s not. We’re in this mess—with unemployment holding at 9.1 percent—because the capital markets are utterly broken, and have been for some time.

Who broke the markets? Both parties in Washington. Republicans and Democrats treated financial firms as a class protected from capitalism for years, so long as the banks would keep feeding debt to American homeowners and consumers. To maintain their protected status, large financial firms fed some of the spoils right back to the politicians, in the form of campaign contributions and revolving-door jobs. The Dodd-Frank law, an attempt by the Obama administration and Congress to ensure that massive financial bailouts are a thing of the past, only tied Washington and Wall Street even more closely together. It hasn’t solved the problem any more effectively than the protesters have.

Politicians of both parties should be wary about painting the Occupy Wall Street protesters as “dangerous” or as wagers of “class warfare,” as Mitt Romney did earlier this week. They should be careful, too, in confusing the hard-core, overnight campers in Zuccotti Park with people who go to work every day but share the protesters’ post-TARP alienation. Tom Dematteis, a pizzeria owner and Navy veteran, told the Wall Street Journal Tuesday that “it was his first time protesting and he didn’t plan to camp out,” but that “he believes the financial system . . . doesn’t work for average Americans.” One of President Obama’s rivals might do well to address the fear and anger expressed in the protests. After all, on Thursday, Obama said: “The American people understand that not everybody has been following the rules; that Wall Street is an example of that.” If that’s still true more than a year after Obama signed Dodd-Frank, then the president is accountable.

In the long term, what’s far more “dangerous” than a motley group of civil dissidents—and far more expensive than a few million dollars in NYPD overtime—is a bipartisan policy of pretending that the financial crisis and the enormous harm that it has done to America is somehow over and done with. The financial crisis, and government’s response to it, remains with us, as does the debt that spurred the crisis. Ignoring it won’t make it go away.

Nicole Gelinas, a City Journal contributing editor and the Searle Freedom Trust Fellow at the Manhattan Institute, is the author of After the Fall: Saving Capitalism from Wall Street—and Washington.

Cycloptichorn wrote:

The only difference is that you seek to keep one class - bankers and wall street executives - immune from investigation, prosecution, or even moral condemnation for their actions, while being all too ready to apply these to those who you ideologically oppose (as you have amply proven in this last post).

Cycloptichorn

That's not true. I applaud the conviction and imprisionment of The leader of Galleon Group and believe he was justly convicted of securities fraud. I note also that the former heads of AIG, Bank of America and many other financial institutions have lost their jobs and much of their investments. I don't advocate imprisionment for the DOE and White House officials who knowingly pursued foolish loans of public money to an obviously failing company, pursuing a market that couldn't exist without subsidies. However, I do advocate their removal (by election) from public office for their misguided pursuit of such foolish, illusory goals. I am generally judicious about applying moral condemnations to others whose inner motives I don't know.

I don't agree with Thomas' implied proposition that Canada's financial system is permanently rigged in favor of prudence, while ours is so rigged (history demonstrates that both have been susceptible to excesses).

I believe Canada was fotuitous in avoiding the collapsing debit bubble in 2007 largely as a result of their wise and prudent actions five years earlier in limiting dangerous levels of public and private debt five years earlier. Had that earlier near crisis not been effectively dealt with by them they too would likely have been caught up in the world crisis 0f 2008.

SIDE NOTE: How to you quote someone's post with that box around it?