BLOG STARTUPS, VENTURE AND THE TECH BUSINESS

November 4 2011
by Todd Hixon

Occupy Wall Street: No Whining!

Rush Limbaugh might see justice in the early snow that descended on the tents of the Occupy Wall Street (“OWS”) protesters last weekend. He told his radio audience “When I was 10 years old I was more self-sufficient than this parade of human debris calling itself Occupy Wall Street.” More temperate observers criticize OWS for lacking a clear set of aims and characterize the protesters as politically-active yuppies, not representatives of the economically deprived segment of U.S. society.

I think a fairly coherent set of OWS demands has emerged, basically a modern take on populism. OWS wants redistribution of income from top earners to people like themselves funded by increased taxation of the wealthy; 25 million new public jobs with union wages; less corporate influence on politics; trade barriers to keep jobs in the U.S.; guaranteed quality health care, college education, and pensions for all; and bail-outs for mortgage holders and student loans. They refer to themselves as “the 99%”, meaning representatives of mainstream America, not the 1% of top-earners who have garnered the largest share of economic growth in the last thirty years (more).

OWS protester in Zucotti Park does the "human megaphone". Photo Credit: David Shankbone via Wikipedia

In the picture I see a crowd that is mostly young and white, with some diversity. Surveys indicate that about 15% of OWS protesters are unemployed (versus 9% average in the U.S.), 52% have been politically active before, 98% support civil disobedience and 31% support violence to achieve their aims. This is not the top 1%, but it strikes me as not the bottom 50%, either (more). OWS reminds me of the student-led protests of 1968.

OWS’ economic agenda is basically whining: in other words, becoming a nuisance to get something you haven’t earned. The OWS protesters are clamoring for a comfortable middle class lifestyle, but I can’t find anything that states what they’ve done to earn it. In this era of global competition, more and more, we all need to earn our lifestyles by competing against the most able people in the world, including billions of smart, educated, highly-motivated Chinese and Indians. It’s getting tougher, but no amount of complaining will change it. Likewise, people who borrow money to buy a house or go to school need to be accountable for that decision: can they earn enough to service the loan? Banks and auto companies were bailed out, yes, but most of the CEOs got fired and shareholders lost most of their money. That’s a form of accountability.

Crying out for protectionism is whining, too, because it’s selfish: a few would benefit at the expense of most. The U.S. needs to export more to have a health economy; starting a trade war will make that harder. Protectionism protects a few good jobs for a while. However, the studies I’ve seen say trade barriers will not create more jobs in the U.S., but they will reduce our real standard of living by taking away access to competitively-priced products.

OWS is not whining when it raises issues that I should care about already. Rigged outcomes in the finance industry for one: as a venture capitalist I’m part of the finance industry, and I am acutely away of the potential for financiers push the edge of the legal/ethical envelope and to enrich themselves at the expense of their clients. Financial services needs watchdogs.

Corporate influence on politics is another good issue. The banking industry has spent billions lobbying to shape the Dodd-Frank Act more to its liking. And campaign finance is a septic pool. I’m with OWS on this one. But don’t forget that unions influence politicians, too: e.g., the teachers’ union is among the largest political donors. Treat unions and PACs the same.

And, [although some will disown me for saying so] I think we do need to transfer some income from the rich to shore up key safety nets in order to have a healthy society. I don’t want to live in a country that does not provide decent health care to all of its citizens, regardless of their level of achievement. The elderly need care and often there is no family there to provide it, likewise poor children.

Like most things the merits of OWS are not simple. They point to problems I think we all should care about. But let’s stay real here too: it takes far more than camping out and shouting loudly to get what most people want in life.

This article was originally posted on Forbes.com: http://blogs.forbes.com/toddhixon/.

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