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Portland, Oregon, Nov. 17th; one of many demonstrations in the U.S. as Occupy Wall Street reached the two-month mark. (AP photo)

Looking ahead: A handbook for Occupiers on winter days

ASK THIS | November 18, 2011

With cold weather coming, Henry Banta says Occupy Wall Street may want go indoors for town hall meetings to push on issues that politicians would rather ignore, such as income inequality, the financial crisis, financial reform, taxes, spending, and unions. Sort of like the Tea Party did, but getting beyond the hostility, and if possible, the expert obfuscation.

By Henry Banta

Since the police have turned nasty and winter is coming it might be worth considering adding some indoor activities. Like going to public town hall meetings – the kind that the Tea Party got so much press for misbehaving at. 

This is not to suggest an imitation of the Tea Party tactics even though hurling witty bumper sticker slogans can be effective.  Remember “death panels?” But getting beyond firing up ignorant hostility takes much more. The trick is to confront the political leadership with the real questions they’d rather avoid. It may also be a good idea to keep the confrontation focused on facts and avoid ideological conflict. Getting to the facts is hard enough without trying to bring the other guys to some kind of spiritual epiphany.  

It is not so much a matter of asking questions in the usual “press conference” sense, but rather using questions to open up issues in a way that could force political leaders into substantive discussions that none, Republican or Democratic, really want to have. Politicians have learned that they can trust the press corps to stick to simple questions and issues – who’s up, who’s down; did Rick Perry lose ground when he forgot the Energy Department – rather than what does the Department do and should it be abolished? For the substantive stuff politicians know they can get away with canned answers, simple slogans that they know will not be seriously challenged. (For example, when Mitch McConnell tells David Gregory that “the stimulus created no jobs,” he knows that Gregory will not tell him that such a statement is utterly stupid.) When worse comes to worst, politicians are very adept at not hearing questions they do not want to answer and sticking to their talking- points. The counter to this is to force them into the wholly unfamiliar world of honest discussion. 

Politicians should not be underestimated. They have years of practice at obfuscating, muddling and evading these kind of issues. Their very political lives depend upon their ability to dance around them. They have shamelessly aided and abetted the shift of wealth and income to the top. They are very good at denying any responsibility.

1.  Income inequality

By now we all have a pretty good idea of the numbers. Twenty-five years ago the top 1% took 12% of the nation’s income; it now takes nearly 25%. It controlled 33% of the nation’s wealth; now it controls 40%. These numbers are skewed even further when we look at the top 0.1%.

These numbers represent the most massive shift in income and wealth in the history of any advanced industrial nation. We are now at a third world level in terms of the distribution of our wealth and income. 

The questions for every political leader are:

Q. Do you consider this level of inequality acceptable?

Q. What were you doing while this was going on? Were you in favor of it? Did you support it? How? Did you oppose it? Try to stop it? How?

There are a lot of ways to duck this. The easiest is to deny the data – that is to claim that it didn’t happen. It did. The Congressional Budget Office in a recent report (Trends in Household Income Distribution 1979 and 2007, October 26, 2011) demonstrated it happened and the data are right.

Another is to claim that there is a lot of turnover in the top brackets. Wrong, there is less and less mobility in our economic system than in the supposedly stratified Europe, again according to the CBO report cited above.

Another is to blame “globalization.” (This is usually done in a very condescending way – “if you knew anything about it you wouldn’t be bothering me with your stupid question.”) The counter is to point out that whatever bad effects have come from globalization, the kind of inequality we are talking about here is not one of them. We are not talking here about manufacturing workers whose jobs have gone to China.  The compensation of the top 0.1% is not a matter of globalization. 

Q. What do you propose to do about it now?

The favorite dodge of both Democrats and Republicans is to offer better education as a solution for income inequality. This is safe – nobody can favor worse education, but it’s also insanely irrelevant. The top 1% do not owe their wealth and income to being better educated. As Paul Krugman noted, high school principals are generally far better educated than corporate CEOs.  Education or its lack may explain the differential between construction workers and computer programmers, but it tells us nothing about the difference between the top 1% and all the rest of us. The primary cause of the dramatic increase in inequality is the explosion in management compensation.

2.  The financial crisis.

Q.  What happened in 2007-8 that sent the economy into a nosedive? 

This is a trick question. There is no way most Republican or even many Democrats can give an honest answer. They have lied so often they cannot now back off from it. They have consistently claimed it was all because of the government’s efforts to promote home ownership for people who couldn’t afford it and didn’t deserve it, i.e., Fannie Mae, Freddie Mac and Barney Frank did it.

This is a really Big Lie. It went unchallenged for a while but now numerous studies, particularly reports by the Financial Crisis Inquiry Commission and by the Senate Permanent Subcommittee on Investigations (this report was joined by the Republican members of the Subcommittee) have exposed it. But there is now no way the conservatives can back off of it without admitting that it was the private financial sector that got us into trouble.

So, make them lie.

Of course the real answer is fairly straight forward. It was caused by the irresponsible behavior of the financial sector: reckless lending, excessive leverage, inadequate capitalization, fueled by insane compensation incentives. All of which was facilitated by the deregulation that was fiercely promoted by the financial sector itself.  

3.  Financial Reform.

Q. Can you explain what is meant by “too big to fail?” Do you think that financial firms should be permitted to be that big? What should we do about firms that big?

This is an easy one. Most politicians would rather walk through hot coals than answer it. It makes them choose between offending their contributors or most voters.

Q. Do you think that firms that are “too big to fail” should be permitted to play by the same rules as other firms? Should they be permitted to take the same risks? Shouldn’t they be subjected to much more stringent regulation?

Q. Over the past few decades the financial sector has been the fastest growing part of the economy. What has it done for us? Is there any hard evidence that the growth of this  sector has produced any benefit other than for itself.

It is worth remembering Paul Volcker’s (former chairman of the Federal Reserve Board) observation that the only useful innovation to come out of the banking industry in the last 30 years was the ATM machine.

Q. Where were you when Glass-Steagall was repealed? (November 12, 1999.) Did you support repeal? Oppose it?

Glass-Steagall was a law passed in the aftermath of the Great Depression (1933) aimed at preventing investment banks from using depositors money in speculative ventures. Its repeal was part of the Gramm, Leach, Bliley Act of 1999.

Q.  Can you identify any benefits that came from the financial deregulation that preceded the financial collapse?

Q.  The chairman of the CFTC recently said that prior to 2008, “Swaps added leverage to the financial system with more risk being backed by less capital.” Do you agree?

Q. The chairman also recently said that “The U.S. swaps and futures markets approximate $300 trillion and $40 trillion notional amount respectively – that’s more than $22 of derivatives for every dollar of goods and services produced in the U.S. economy.” Can you seriously claim that a market that large with such an awesome potential for damage needs less regulation? Seriously?

Q. Can you explain what a $300 trillion derivative market does? 

Q. Isn’t the function of financial institutions – banks, investment firms, etc. – to provide “intermediation?” That is, they are supposed to provide the link between people who have savings to invest and business that need capital.  Can you explain what derivatives contribute to this process?

Q.  Do you believe that Dodd-Frank should be repealed? If so, what would you do to insure bank solvency, liquidity and adequate capitalization?

4. Tax Reform.

Q. Do you believe in a progressive tax – that is, should the very wealthy pay a higher tax?

(We all know what most of them think; it’s just worthwhile to make them say it.)

Q. Do you believe that the tax code should be used to mitigate the enormous inequality between the top 1% and all the rest of us?

Q. Didn’t inequities in the tax code contribute to the inequality in the first place?

Q. Do you think income from investments should be taxed at a lower rate than income from labor?

Q. Do you favor a financial transaction tax?

There are two good reasons for such a tax. First, it would raise a lot of money from the financial sector that has become far too big and wealthy. Second, it would dampen speculative trading which serves no useful purpose. 

Q. Would you repeal the tax provisions that encourage corporations to move jobs overseas?

Q. Which ones?

Q. How do you explain the ability of multinational corporations like General Electric to avoid altogether or substantially avoid US taxes?

5. Government spending, the debt, and getting out of the recession.

Q. Can government spending create jobs? 

It is an absolute ironclad article of faith for the Republican Congressional leadership that government spending cannot create jobs. (Therefore Obama’s stimulus was a total failure.) But the very same folks are screaming that cuts in defense spending will cost jobs. Why are they screaming? If they were right that the government can’t create jobs, then how can a cut in spending cost jobs? 

Q. Is it only defense spending that can create jobs?  Explain the economic theory behind this.

Q. Can government spending in your district create jobs? Have you ever claimed otherwise? Have you ever asked for government spending in your district?

A “no” answer is almost certain to be lie. Virtually every member of Congress asked for stimulus money for their district on the grounds that it would create jobs. Yet at the same time many claim that the Administration’s stimulus package created no jobs. Where’s the truth?

Q. Can’t we conclude from all this that an overall nationwide stimulus program could put idle workers and resources back to work and paying taxes? And get us out of this recession?

6. Labor legislation.

Q. Would you support legislation that would help revive American labor unions and facilitate union membership, and help rebuild the middle class ?

In the period after WWII the strong growth of the middle class was supported by a strong labor movement. The decline of the middle class tracked the decline of the labor movement.


Posted by bluebluesdancer
11/18/2011, 09:24 PM

Brilliant! I hope they have aprinter so that they can take this with them!

Posted by Ted Reynolds
11/19/2011, 03:51 AM

Excellent and succinct. Every candidate, of every party, should have to answer these questions publicly in order to run for congress. Instead, they're let off easier than my fifth-grader.

Retired journalist/legal assistant, OWSer
Posted by Rita Walpole Ague
11/19/2011, 10:25 AM

Thank you so much, counselor. You've counseled us excellently on i.d.ing the questions. Good critical thinking boots away MSD (manipulation, spin, distraction).

Parent educator
Posted by Earlyyrs
11/19/2011, 10:44 AM

Excellent, thoughtful questions. Journalists sand reporters should be asking them as well. They need to stand up to their network bosses and ask the real questions along with OWS!

Posted by Brad Byers
11/19/2011, 12:11 PM

As I admire the younger, braver souls who carry on the Occupy movement, I am comforted by a single line from Milton’s sonnet, “On His Blindness”: “They also serve who only stand and wait.” For the memory of that line, I am indebted to a high school English teacher of more than 60 years ago. So, what place is there for me, and others of similar circumstance, in this bold attempt to change our government into a democracy of the people? Must we only stand and wait?
At this moment, I can try to make a mild improvement in the only political party that shows concern for the 99 percent. I am pushing for a pledge by the House and Senate campaign committees to stop giving financial support to those Democrats who oppose the President’s American Jobs Act. Chief among these is Sen. Ben Nelson of Nebraska, who votes against the 99 percent most of the time and is up for reelection next year. I hope you will join me in signing a petition to this effect. It needs your support, and it needs for you to send it to as many friends as possible. You will find it at
http://signon.org/sign/democrats-must-support?sour ...

President/Dream Catcher Films, Inc.
Posted by Holly Stadtler
11/19/2011, 01:24 PM

Thank you for this thoughtful, educational and well written piece! I'll share it on my FB page.

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