The demonstrators camped out near Wall Street in lower Manhattan seem to be earning some grudging respect, due mainly to their staying power. It hasn't hurt that Bank of America, Citibank and other big lenders—as if on cue--have provoked consumer wrath by raising fees on ordinary account holders, demonstrating the heartlessness of Big Money. Now, the "Occupy Wall Street" movement is spreading to Washington, D.C., Boston, Los Angeles and other cities.
The protesters, however, are rebels who need a cause. As a number of media commentators have pointed out, there's no unifying theme to the protests, except for general discontent with corporate America. The movement's Web site says the protests are aimed at "greed and corruption," which are certainly objectionable, but also timeless, universal and endemic to the human condition. Some protesters say the villain is capitalism, which admittedly has its flaws but also helped produce the Macbooks, smartphones and social networks that are a mainstay of the movement. And random criticism of banks, the Federal Reserve, the government or the Wall Street traders who pass the irate sign-wavers each day while commuting to their jobs suggest that the protesters don't quite understand the system they're attacking.
Meanwhile, there are plenty of genuine economic problems that desperately need attention. So for earnest protesters in need of a rallying cry, here are 5 bona fide problems that help explain the stagnant economy and the simmering frustration that many Americans feel:
Income inequality. Since the early 1980s, the top 20 percent of earners has banked an increasing share of total income, while the bottom 60 percent has earned considerably less. This is a complex problem that's not due to any single factor, but to the evolution of our economy into one that rewards well-educated technical and "knowledge" workers more, and those with limited skills (or the wrong skills) less. There's no "right" level of income inequality, but many economists feel that the tilt today has weakened the middle class, made upward mobility harder, and generated an unhealthy level of class resentment.
What to do about it: For starters, resist sound-bite solutions and recognize that the wealthy aren't necessarily the bad guys. While they're capturing a larger share of national income, it's important to remember that national income isn't fixed, and it can grow (or shrink) along with the nation's overall prospects. Improving the fortunes of the middle and working class will require stronger growth than most economists forecast, so that the whole pie gets bigger. It will also require relentless efforts to help more workers get the cutting-edge skills needed in the 21st century. Perhaps most of all, workers must learn to adapt to an economy that changes faster than ever and sometimes requires adjustments that might be uncomfortable.
Craven politicians. The deeper our problems get, the more petty and parochial the politicians in Washington become. There are no painless solutions to mounting problems like chronic joblessness, the mushrooming national debt or tougher competition from powers like China. But there are solutions. The catch is, they require mature decision-making, compromise, and a bit of sacrifice by everybody. Over the last decade, politicians have cut taxes and boosted spending without even thinking about how to offset new revenue or added cost, except for borrowing the money and passing the debt onto future generations. Now, Republicans and Democrats can barely accomplish basic business like funding the government's everyday operations.
What to do about it: Take the protests to the White House and the U.S. Capitol, and insist that politicians abandon nonsensical absolutist positions, such as some Republicans' refusal to ever raise taxes on anyone. Demand bipartisan efforts to address the jobs shortage, the national debt and declining American competitiveness. Don't expect miracles, but don't accept gridlock either.
Billions in campaign funding. Nearly every politician at the national level is captive to money raised by corporations, interest groups and wealthy donors, who pour billions of dollars into every campaign cycle. The problem isn't so much money given to candidates themselves, but funds donated to soft-money issue groups that can raise unlimited amounts and spend it supporting--or attacking--any candidate they wish. This perverse political arms race has clearly put the focus on big contributors instead of voters, perhaps one of the biggest reasons politicians today seem so clueless and unresponsive.
What to do about it: The 2010 Supreme Court decision in the Citizens United case affirmed the right of corporate donors to give virtually unlimited amounts of money to political advocacy groups. But that decision did the leave the door open for stronger disclosure rules that could eliminate anonymous donations. If every donation by corporations, interest groups and wealthy individuals became public, it might make donors themselves more accountable, and less politically active.
Derelict boards of directors. Just about every corporate meltdown involves a board of directors that's supposed to rein in reckless behavior by the CEO and corporate officers--but fails to. Why? Directors are often hand-picked by the CEO. Many are eminence grises who owe their success to the establishment and are reluctant to challenge the status quo. That makes many boards little more than a rubber-stamp machine that does the CEO's bidding. During the 2008 financial meltdown, this was a big part of the problem at Bear Stearns, Lehman Brothers, AIG, Merrill Lynch, Citigroup, Bank of America and many other faltering firms. Hewlett-Packard is the latest example of a big company whose board seems inept; the tech giant is now on its third CEO in 15 months, with a stock price that's down more than 50 percent over that time.
What to do about it: Become a shareholder activist. Buy shares in a few firms that interest you and join others who insist on more outside directors, better oversight of CEO pay and other types of accountability. Don't be surprised if you find yourself aligned with hedge funds, short sellers and other types of investors who frequently gamble that companies will make dumb decisions--one way the market helps keep companies honest.
Economic illiteracy. Republican presidential candidate Rick Perry seems to lack a basic understanding of what the Federal Reserve does. Michele Bachmann and many Tea Partiers thought it would be harmless to push this past summer's debt-ceiling negotiations to the brink of default. President Obama and other Democrats have exploited basic misunderstandings regarding Social Security and Medicare to imply that these popular programs could be decimated by short-term wrangling in Washington. Many voters absorb favored propaganda instead of learning basic facts about the national debt, the Federal Reserve and the reasons companies hire and fire. That makes them vulnerable to whatever fibs politicians find most expedient. And of course, many eligible voters don't even turn out on election day.
What to do about it: Educate yourself and insist others do the same. The global economy is complicated, but digestible books such as Tyler Cowen's The Great Stagnation or Michael Lewis's The Big Short will help answer many questions. The New York Times's Economix blog frequently breaks down complex subjects into understandable niblets. There are many other resources, for every persuasion. Find a few, then sharpen what you learn into a genuine cause. There's no shortage of those.