November 13, 2011
We All Want the Same Thing
Have you noticed how much the Tea Party and Occupy Wall Street have in common? Both movements are about disenfranchisement and distrust of those in power. You would think they’d be working together, but they don’t. Why? The reason has to do with their divergent views regarding the government’s role in our lives. While the Tea Party believes government invariably fails and is best when it leaves people alone, Occupy Wall Street sees government as having a role in regulating and leveling the economic playing field.
When I was working for Lehman Brothers, both the U.S. and U.K. governments deregulated their financial sectors in a way that many believed would result in a “Big Bang,” an explosion of availability to cheap sources of capital. One aspect of the U.S. version was the dismantling of Glass Steagall, which had been in place since the Great Depression and was meant to separate depository institutions, such as banks, from securities firms. The reason for Glass Steagall was to protect deposits (and depositors) from the high-risk and highly leveraged businesses that investment banks practice.
The result of this deregulation was apparent in the bailout taxpayers were required to endure when the nation’s biggest banks teetered on the verge of bankruptcy. The effort was deemed necessary when depositories were in jeopardy of sustaining significant losses. The choice we had was to payoff depositors through the FDIC insurance fund, or bail out the institutions that held the deposits. Either way, taxpayers were going to fit the bill. Clearly there had been a role for the government that was missed through deregulation.
The Tea Party’s desire to drown the federal government in a bathtub will lead to increases in the wealth and influence of the rich and a new Gilded Age. The history of the Gilded Age was one in which politicians were bought, public resources were sacrificed for the gain of a few, and the interests of the many were trampled upon. Do we really want to go back to that? Without a return to sanity, the alternative will be economic collapse, or violent revolution.
It’s my greatest hope that people forming the two movements making the most headlines today realize that, in many respects, they want the same thing. Furthermore, I hope they learn to work together to make government (perhaps a smaller government) more responsive to the needs of people, rather than to the interests of corporations, which are amoral and self-interested constructs and not people, at all.
Posted by Alan Bahr