The New York Nutty Left Times on the protesters

Here, with my commentary, is the Times editorial supporting the “Occupy Wall Street” / “Occupy America” movement, which appeared in its October 9 issue.

Protesters Against Wall Street

As the Occupy Wall Street protests spread from Lower Manhattan to Washington and other cities, the chattering classes keep complaining that the marchers lack a clear message and specific policy prescriptions. The message—and the solutions—should be obvious to anyone who has been paying attention since the economy went into a recession that continues to sock the middle class while the rich have recovered and prospered. The problem is that no one in Washington has been listening.

At this point, protest is the message: income inequality is grinding down that middle class, increasing the ranks of the poor, and threatening to create a permanent underclass of able, willing but jobless people. On one level, the protesters, most of them young, are giving voice to a generation of lost opportunity. [LA replies: First the Times says that “protest is the message.” Which is on the same level as Marlon Brando’s riposte in The Wild One when a local in the town Brando’s motorcycle gang has invaded asks him, “What are you rebelling against?” and Brando says, “What have you got?” Then the Times says that the problem is income inequality. Then the Times says that the problem is unemployment. This is contradictory. If the problem is unemployment, then the solution is to liberate economic activity which in turn will generate jobs. But if the problem is inequality, then all the measures designed to increase equality will reduce economic activity and makes unemployment worse.]

The jobless rate for college graduates under age 25 has averaged 9.6 percent over the past year; for young high school graduates, the average is 21.6 percent. Those figures do not reflect graduates who are working but in low-paying jobs that do not even require diplomas. Such poor prospects in the early years of a career portend a lifetime of diminished prospects and lower earnings—the very definition of downward mobility.

The protests, though, are more than a youth uprising. The protesters’ own problems are only one illustration of the ways in which the economy is not working for most Americans. They are exactly right when they say that the financial sector, with regulators and elected officials in collusion, inflated and profited from a credit bubble that burst, costing millions of Americans their jobs, incomes, savings and home equity. As the bad times have endured, Americans have also lost their belief in redress and recovery. [So we’re back to blaming evil investment bankers for the finance crisis of 2008, with no mention of what drove the investment bankers to their irresponsible schemes, namely the government’s pressure on banks to provide subprime loans for mortgages in order to achieve racial equality of home ownership in America. In the usual leftist manner of turning reality on its head, a crisis generated by a utopian push for equality is blamed on the selfish rich, and the solution to this leftist-created crisis is … a more extreme leftist push for equality.]

The initial outrage has been compounded by bailouts and by elected officials’ hunger for campaign cash from Wall Street, a toxic combination that has reaffirmed the economic and political power of banks and bankers, while ordinary Americans suffer. [LA replies: In place of this editorial, why doesn’t the Times just have a huge cartoon of a fat capitalist in a top hat, grinding the poor working man under his feet?]

Extreme inequality is the hallmark of a dysfunctional economy, dominated by a financial sector that is driven as much by speculation, gouging and government backing as by productive investment.

When the protesters say they represent 99 percent of Americans, they are referring to the concentration of income in today’s deeply unequal society. [LA replies: But since the 1990s liberals have celebrated America’s wonderful Clinton-generated prosperity and talked about how everyone is happy now and how work has become much more fulfilling because of greater flexibility in hours and working conditions and greater ability to express one’s personality on the job. Yet now we’re suddenly a “deeply unequal society.” The Times is thus taking a temporary economic problem and turning it into an indictment of the free market, or, more precisely, an indictment of America’s partly free, partly regulated economy, which liberals want to turn into an entirely statist economy.] Before the recession, the share of income held by those in the top 1 percent of households was 23.5 percent, the highest since 1928 and more than double the 10 percent level of the late 1970s.

That share declined slightly as financial markets tanked in 2008, and updated data is not yet available, but inequality has almost certainly resurged. In the last few years, for instance, corporate profits (which flow largely to the wealthy) have reached their highest level as a share of the economy since 1950, while worker pay as a share of the economy is at its lowest point since the mid-1950s.

Income gains at the top would not be as worrisome as they are if the middle class and the poor were also gaining. But working-age households saw their real income decline in the first decade of this century. The recession and its aftermath have only accelerated the decline.

Research shows that such extreme inequality correlates to a host of ills, including lower levels of educational attainment, poorer health and less public investment. It also skews political power, because policy almost invariably reflects the views of upper-income Americans versus those of lower-income Americans. [LA replies: Let’s assume for the sake of discussion that the increasing gap between the rich and others over the last several decades—and particularly between the salaries of executives and of working people, which is the issue most often harped on by the left—is bad for society. That problem is a result of organic changes that have taken place across the economy, and needs to be addressed in those terms, not in terms of evil rich people getting an “unfair” advantage” over everyone else, a quasi-Marxist, class-warfare approach that can only lead to society’s ruin. In any case, as I said before, inequality is a different question from joblessness, and people who are primarily concerned about reducing inequality will demand reforms that will harm the economy and increase joblessness.]

No wonder then that Occupy Wall Street has become a magnet for discontent. There are plenty of policy goals to address the grievances of the protesters—including lasting foreclosure relief, a financial transactions tax, greater legal protection for workers’ rights, and more progressive taxation. The country needs a shift in the emphasis of public policy from protecting the banks to fostering full employment, including public spending for job creation and development of a strong, long-term strategy to increase domestic manufacturing. [LA replies: Of this list of goals, let’s just address “lasting foreclosure relief.” What this means in practice is that all people in America simply have a right to own their own home, and that banks simply have an obligation to provide them with the money to buy their own home. For the banks to serve such a function, they would have to be taken over by the government and become in effect an arm of the government, just as under Obamacare the government takes effective control over the healthcare industry.

It is not the job of the protesters to draft legislation. That’s the job of the nation’s leaders, and if they had been doing it all along there might not be a need for these marches and rallies. Because they have not, the public airing of grievances is a legitimate and important end in itself. It is also the first line of defense against a return to the Wall Street ways that plunged the nation into an economic crisis from which it has yet to emerge.

- end of initial entry -

Paul K. writes:

The New York Times rails against income inequality, but income inequality is, to a large extent, the product of a racially diverse society whose members have significantly different levels of marketable skills. One way we could lessen the income inequality in America would be to stop admitting millions of Mexicans who are expanding our underclass. If the New York Times wants to see less poverty in the United States, may I suggest we stop importing it?

LA replies:

I’m trying to imagine how a member of the NYT editorial board would respond if you met him and in conversation made this point to him.

Paul K. replies:

I’m sure a member of the NYT editorial board would tell me that I’m a very bad person, as would members of the editorial boards of the Weekly Standard and National Review.

Posted by Lawrence Auster at October 11, 2011 10:16 AM | Send

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