Tax Rascal

Occupy Wall Street Could Learn a Thing or Two from Tip O’Neill

Categories: Economy, Featured, Politics, Tax Policy
Occupy Wall Street Could Learn a Thing or Two from Tip O’Neill

The right wing Tea Party protests may ultimately pack more of a punch than Occupy Wall Street

Now that Occupy Wall Street is approaching the two month benchmark (and has even survived its first snowstorm), it has become common for pundits to draw comparisons between it and the Tea Party movement. Both were born of populist anger over the recession and government bailouts of U.S. banks and both have expressed that anger through showy protests that garnered considerable media attention.

Even our esteemed Vice President, never one to leave anything to subtlety, has made the connection between the two movements. Speaking of Occupy Wall Street he said, “Look, there’s a lot in common with the Tea Party. The Tea Party started, why? TARP. They thought it was unfair.”

The question now at hand is whether Occupy Wall Street will have an influence on politics in the year ahead comparable to the Tea Party’s in 2010.

The first challenge Occupy Wall Street has to overcome is one of message.

When they’re not busy dancing barefoot in drum circles, getting pepper sprayed by the NYPD, or displaying their genitalia to local residents, the protesters are busy painting signs and clacking away at their MacBooks, denouncing our political economy with lots of catchy, Don Draper-worthy slogans. The problem is that Occupy Wall Street’s multifarious demands refuse to resolve themselves into anything coherent.

Adbusters, the rabble-rousing Canadian magazine largely responsible for sparking the Occupy Wall Street movement, proposed back in July that the primary focus would be to “demand that Barack Obama ordain a Presidential Commission tasked with ending the influence money has over our representatives in Washington.” (Though in light of the super committee’s experience, a commission might not be the most effective way to end big money’s influence on politics).

Since the movement has gotten going, a great variety of complaints and demands have been made by each of its individuals. They express an opposition to capitalism, an insistent belief that 1% of the country is mysteriously controlling the other 99%, and a condemnation of inequality.

A banner on their main website even strikes a more radical, dare I say Marxist, tone: “The only solution is World Revolution.” The movement’s General Assembly proudly states its preference for democratic expression over unity.

One girl, epitomizing critiques of Occupy Wall Street’s demands, carried a sign that read, “Close corporate tax loopholes, tax religious groups, end the wars, legalize weed, and bring back Arrested Development” (well, at least she got her last wish).

Diversity and a lack of a central organization are not necessarily weaknesses. Many people forget that the Tea Party was, and in many ways still is, a highly diverse political movement. In February 2010, the New York Times noted:

It is an amorphous, factionalized uprising with no clear leadership and no centralized structure. Not everyone flocking to the Tea Party movement is worried about dictatorship. Some have a basic aversion to big government, or Mr. Obama, or progressives in general. What’s more, some Tea Party groups are essentially appendages of the local Republican Party. But most are not. They are frequently led by political neophytes who prize independence and tell strikingly similar stories of having been awakened by the recession.

The similarities between the two young movements are striking, even if there are demographic differences. The Tea Party is more male, older, and a little better off. As Newsweek put it, the Tea Party “is a revolt of middle-class ‘haves,’ but ‘haves’ who fear that their hold is slipping.” Almost half of Occupy Wall Street, by contrast, makes less than $25,000 and another quarter between $25,000 and $50,000.

Right-wing Tea Party protest
Right-wing Tea Party protest

There is one area, however, in which the Tea Party movement was never particularly conflicted: the end goal of a smaller government. Whatever disparate concerns drew people to the Tea Party, they were united in their belief that the government was the problem. Individual liberty and free enterprise would solve the nation’s problems.

It’s incredibly easy for conservatives to rally behind a banner of Don’t Tread on Me as a cure all for a vast range of ills. For liberals who believe that greater government intervention is necessary to counteract capitalist excess, it’s much harder to decide where, or on whom, to tread.

No taxation without representation

Tax Rascal was correct in predicting that taxation would be the defining issue of this political cycle and these two political movements are no exception. Their positions on taxation highlight the larger differences in the nature of their demands.

Tea Party politics is clear in its opposition to taxation, of any sort, for anyone. The Occupy Wall Street movement is generally unified as well behind the slogan “Tax the Rich.” According to recent polling, ¾ of the protesters support higher taxes on the rich. In the general American public that number is ⅔, suggesting that Occupy Wall Street could have some resonance.

The difficulty, of course, becomes who to tax exactly. Warren Buffet and President Obama beat the Occupy Wall Street movement to the generally popular idea of taxing the rich, but stumbled when it came to the question of who was rich.

When you stick to generalities, such as the vague idea of a taxing the rich, the proposed measures find much support. But as soon as you begin to define the cutoff for rich at a million dollars, or at $250,000, or $200,000 you are walking into a minefield.

No one is going to deny that Warren Buffet is rich, but what about a small business owner making $200,000 a year? What about a Manhattan family making $250,000. Are these people millionaires? Are they even rich?

These are questions that have been raised before and they are questions that will have to be answered if there is ever to be any practical policy outcome from all of these protests. I’m willing to bet that Occupy Wall Street has a harder time defining rich than the Tea Party did in rallying behind the banner of a lower tax burden.

Nor is Occupy Wall Street’s vilification of the financial sector as simple as it seems. It’s easy to target Lloyd Blankfein, Goldman Sachs’s chairman and chief executive officer, for earning $19 million last year, a raise of 50% from the year before. And it’s easy to vilify JPMorgan’s Jamie Dimon for making $23 million.

But Wall Street is not the land of financial milk and honey that many of these protesters seem to think it is. Wall Street is hurting too, maybe not as much as other sectors of the economy, but hurting nonetheless. A recent article in Slate pointed out the weakened state of the financial industry:

Consider the data provided in an analysis of New York’s financial industry by Thomas Di Napoli, the state comptroller. This week, he wrote that profits “declined 10.8 percent in the first half of 2011 to $12.6 billion. [This office] forecasts that profits are unlikely to reach $18 billion for the entire year.” Eighteen billion sounds like a lot! But, he notes, it is just one third of the profits the banks were making back in 2010.

Financial firms are, not surprisingly, throwing employees overboard, DiNapoli reports. “The securities industry could lose an additional 10,000 jobs” in the next year, he writes. Add that to job losses in the banking sector, and the overall industry will have eliminated one in five of its New York-based jobs since 2008. Looking beyond New York, the numbers get even worse. Bank of America is shedding a whopping 30,000 positions. Even Goldman Sachs – the same Goldman Sachs boasting about its all-time record profits 18 months ago – is shedding 1,000 workers.

I’m not saying these overpaid executives aren’t culpable. I’m sure the 1000 people now out of work wished Lloyd Blankfein were making a lot less than $19 million. Some of these laid off workers are probably now in a more precarious position than the protesters (or the parents I would guess support a great deal of them).

My point is that any attempt to vilify a broad group of people, or hold them accountable through increased taxation, is going to run into pitfalls when you have to make decisions about who exactly should pony up. It’s a lot easier to demand to be left alone than it is to demand to be taken care of.

This is precisely the problem that positive rights have had in achieving the same status as negative rights. Negative rights, which emphasize freedom from interference from others, are relatively easy to demand, but positive rights, which assert that people are entitled to certain goods and services which must then be appropriated from others, are notoriously difficult to establish and enforce.

All politics is local

Ultimately, though, even a refinement of Occupy Wall Street’s message won’t matter so long as its tactics remain estranged from the electoral process.  A recent poll of the protesters revealed that a plurality (35%) of them hope for the Occupy Wall Street movement to “influence the Democratic Party the way the Tea Party has influenced the GOP.”

Occupy Wall Street
Occupy Wall Street

Tip O’Neill’s old adage “All politics is local” suggests that unless Occupy Wall Street shifts focus, its influence on electoral politics will be limited. New York is already one of the most liberal states in the country and New York City is one of its most liberal locales. Occupy Wall Street could conceivably push the city’s politics to the left, but this would have little effect on Congressional math.

The Tea Party movement was so effective because it got its start at the local level. In 2009 loose Tea Party organizations popped up in cities across the country, forming coalitions with other conservative groups.

The same New York Times article noted that “At the grass-roots level, it [the Tea Party movement] consists of hundreds of autonomous Tea Party groups, widely varying in size and priorities, each influenced by the peculiarities of local history.” Tea Partiers convened on major cities such as Washington for marches, but, in accordance with their federalist views, they were fundamentally local organizations, willing to play local politics.

Tea Party activists showed up in force at local Republican primaries, demonstrating absolutely no remorse at cannibalizing more moderate conservatives. Part of its effectiveness was its willingness to target Republicans, such as long-time Senator Robert Bennett of Utah who lost out in the primary in no small part because Tea Party activists would physically show up at his events taunting him with jeers of “TARP, TARP, TARP.”

Such enthusiasm carried over into general elections and was one of the reasons Republicans were able to recapture the House.

Part of the problem with Occupy Wall Street is that it is protesting non-political entities. The banks are not going to implement any of the changes the protesters demand. Since executives answer to their investors and not to the public, a protest is easily ignored.

Occupying Washington, or better yet the ballot box, makes much more sense. The Occupy movement has spread to other cities, though Occupy Oakland is hardly the heartland. There is a move, though to take the Occupy movement to the Iowa caucuses. It’s action like this that give it a chance of rivaling the Tea Party.

If Occupy Wall Street moves into the battleground states that really make a difference, it might yet be able to exert electoral influence. If it wants to be successful, it needs to stop occupying Wall Street and start occupying Main Street.


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