by Eric Shierman
Entry into the 1% is not determined by how much money you make but by how much responsibility you take.
In the last recession I was laid off from my dream job. I started a hedge fund with only $150,000 in assets to draw a management fee from, paying me far less than the minimum wage. I loaded FedEx trailers on weeknights and stocked Target’s shelves on the weekends to pay my student loans and my mortgage. Ten years later I manage enough assets to pay my bills but I still probably make less than Warren Buffett’s secretary – yet I am the 1%. I aspire to greatness. I work hard. I take responsibility for my life, blaming none of my troubles on anyone else let alone the top 1% of income earners.
There is someone out there trying to become the next Steve Jobs as a college dropout working at Wal-Mart trying to design the next “killer app” in his living room. He is the 1%. An aspiring actress out there dreams of winning an Academy Award while waiting tables in LA. She is the 1%. An unpublished author tries to write the great American novel while tending a bar. He is the 1%. An undiscovered rock star works as a cashier at Winco while she writes songs for her garage-band. She is the 1%. Somewhere in downtown Portland someone has a plan to become a celebrity chef but is currently working a popular food cart to get by. He is the 1%. Intel, a giant multinational corporation that happens to be Oregon’s best employer, has recently hired a college graduate with a degree in electrical engineering. She made the right move in her freshman year, changing her major from sociology to electrical engineering. She wants to be the CEO of Intel some day. She is the 1%.
Even if they never reach the top percentile of income earners, these people and countless others will remain the 1%. Entry into the 1% is not determined by how much money you make but by how much responsibility you take. Even during this recession, America remains great because we 1%ers remain in a firm majority. The day the 99%ers become a majority is the day America stops being America and becomes Greece.
When I say Greece, I don’t just mean our contemporary Greece that is collapsing from its own welfare state weight. I mean ancient Greece and prehistoric Greece. That is to say the 99%ers seek to turn back the clock of human progress itself. There has been a steadily compounding return on capital long before Louis Blanc coined the term Capitalism. Finance has been at the center of human progress, but human progress did not really take off until finance was set free. The 99%ers would have us treat bankers today the way Shakespeare depicts the treatment of Shylock, sacrificing the goose that has been laying our golden eggs upon an altar of envy.
Ever since a couple of fellas started trading stock certificates under a buttonwood tree on May 17, 1792, people with savings have been able to finance people with ideas in a way that has created more prosperity and lifted more people out of poverty than any other economic system in human history, and thus we all live in the top 1% of human historical income earners – even the people protesting where that tree once stood. Since our species emerged 50,000 years ago, demographic anthropologists estimate that there have been approximately 106 billion human lives lived. How many of those lives have enjoyed the prosperity of an $8.50 an hour worker in America today? Indeed even our lowest wage earners consume resources that Alexander the Great would envy, considering himself impoverished by comparison.
This prosperity would not exist without the very economic system that the Occupy Wall Street kids denounce. As late as a few centuries ago, eating a banana was an unreachable luxury to even to the upper class. Luis XIV had greenhouses growing oranges during the summer. The lowest of the poor in America can buy them now at Winco for 70 cents a pound all year long. A homeless shelter in America smells better and has less rotting teeth than the court of Henry VIII. This simply would not be the case if America had lived the way the 99%ers dream we should.
If they want to protest the bailout, Okay, but why wait until now? Why didn’t they stand with the Tea Party two years ago? The House Republicans nearly killed TARP. They voted it down the first time Nancy Pelosi brought it up for a vote, but President Bush twisted enough arms for it to squeak by the second time. The Tea Party was less of a reaction against Obama as it was a reaction against Bush, demanding an end to the era of big government conservatism.
If Occupy Wall Street’s timing is off, their targeting is even worse. Last week Occupy Chicago marched outside the Chicago Board of Mercantile Exchange, an institution that had nothing to do with either the financial crisis nor benefit from the bailout. Meanwhile Fannie Mae and Freddie Mac, who actually caused it, sponsored a $1,000 dollar a plate dinner party for the Mortgage Bankers’ Association a few blocks away at the Hyatt Regency Hotel, with Obama’s chief political strategist David Axelrod as a guest speaker. What does Axelrod know about the mortgage business? Well perhaps he was able to explain to party goers why Dodd-Frank leaves the two primary inflators of the real estate bubble alone.
Wells Fargo’s Portland office is only a couple of blocks away from Occupy Portland’s barricade, making it a popular thing to shout at. The US Bancorp tower is further away, but the occupiers like to march on down to it as well. Do these protestors even care that both of these banks managed their risk well and tried to opt out of receiving TARP money? The government forced them to take it so weak banks would not be stigmatized from accepting assistance.
Wells Fargo and US Bank paid the money back as soon as they were allowed to do so, but Fannie Mae and Freddie Mac continue to bleed the US Treasury. Dodd-Frank slaps a heavy price of regulatory compliance on two well managed banks but lets the two institutions most at fault conduct business as usual. Where is the outrage? This is not just an issue of misdirected anger; when you look at the actual policy prescriptions these protestors demand, they seek to punish legitimate success to finance more crony capitalism.
While untimely and untargeted, Occupy Wall Street will be temporary. We have seen this movie before. Thirty years ago the United States faced a recession far worse than the one we face today. In 1980 the Alamo in Texas, the statue to the Roman god Vulcan in Alabama, and a coal mine in Pennsylvania were all occupied by long-term protests inspiring a short-term surge in activism. Long before Facebook, they were able to form The Revolutionary May Day Committee which organized May Day marches in every major city in the United States. Portland has held a march for the ideologically purest progressives on May first ever since.
The May Day march has served as a barometer of how the revolutionary left has waxed and waned ever since. The quick recovery from that recession’s 1982 peak hurt the movement, but not as bad as the collapse of Communism in 1989. In the 1990s they did not even get enough of a turnout to require a permit. The great renaissance of the Anti-Capitalist mentality came when the 1999 protests against the WTO in Seattle gave radical socialism a post-Cold War identity as the Anti-Globalization movement. In 2003 this morphed into an anti-war movement only to become an immigrant rights movement by 2006.
It is remarkable how weak progressive politics in America have been. With an opponent of the Iraq war in the White House, anti-war activists seem to shrug their shoulders at the fact Obama was the first American President to violate the War Powers Act. I, being no progressive, but as a big believer in immigrants rights myself, have marched with them for the past two years and made a lot of friends along the way. The free movement of labor is of course a pro-globalization position. The intellectual dominance of Neo-Liberalism is evident in the fact it has taken until now for any serious political challenge to emerge from the Democrats’ left flank.
Real progressive movements have not been able to gain traction for two reasons. First, they eventually begin to eat their own. This is most evident at these “general assembly” meetings which are truly creepy things to watch. From the French Jacobins to the Red Guards of China’s Cultural Revolution, a tight group of ideological radicals tries ever so hard to maintain the illusion of a leaderless movement while attempting to take power away from rival factions. Watch this video to see how they plant organizers in the crowd to move the agenda along.
Isn’t that remarkable? In this case they prevent one of the most progressive members of Congress from speaking because they believe the “democratic process” is threatened by a larger than life individual. When your quest for equality is so quixotic that you prevent a civil rights hero from speaking BECAUSE he is a hero, you might be an extremist. This movement won’t be doing Obama any favors either.
The second reason these movements fail is that the economy eventually begins growing again. From the perspective of the organizers in 1983 and 2003, everything was going great until the economy recovered. When college kids begin to worry about their late nights at the office rather than late Capitalism, revolutionary socialism fields less people to events than UFO clubs. Occupy Wall Street and their predecessors wait for the great uprising of the multitude, but all they get is a great party, pot smoking, amateur music, and eventually a job. They can’t help it. They live in America. They are the 1%.
Eric Shierman is a partner at Creative Destruction Investment Partners, writes for the Oregonian under the pen name “Portland Aristotle” on the My Oregon blog, and is the author of the forthcoming book: A Brief History of Political Cultural Change. His articles can be read at: http://connect.oregonlive.com/user/PortlandAristotle/posts.html