Occupy Wall Street

OK, fans, I know you're all dying to read what I think about Occupy Wall Street, so here it is.

The rage that I share with the protesters can be summed up this way:

Once there was a healthy economy.  Then a few things happened, in this order:

1. The financial system was deregulated to a great degree, and what regulation there was was poorly enforced. 
2. Wall Street bankers used these rules to take enormous risks using irresponsible amounts of leverage, while everyone in the industry assured us they knew what they were doing.
3. The result was a huge real estate bubble that allowed the banks to make enormous profits, far greater than the industry had ever made before.
4. In spite of these profits, the general economy didn't benefit much at all.  There was virtually no wage or job growth for the middle class during the aughts.
5. When the bubble burst, the taxpayers were forced to step in and bail out the industry.  This was necessary to save us from another Great Depression, but was structured in a way that returned banks to profitability almost immediately.  They are already back to record profits, while the general economy continues to suffer.
6. The banking industry is now firmly opposed to any regulation of any kind, and has withdrawn support from the Democratic party for suggesting it.  The industry seems to have no particular plan to avoid a repeat of 2008, since they don't want anything to change.  This apparently means that their plan is to go back to the good old days, and when the next disaster happens, we get to bail them out again.  It's "heads I win, tails you lose".

So yeah, some of us are kind of angry with Bankers.  OWS is expressing that rage.  I'm hoping it builds into a movement that throws a scare into them and moves regulation of the banking industry along with progressive tax policy in the right (or left) direction.  It's easy enough to find nut cases in the crowd (as it certainly was with the Tea Party rallies), but here's hoping it develops into something constructive.

Lessons from Recent Disasters (posted by DT)

The oil spill in the Gulf of Mexico, on the heels of the coal mine disaster in West Virginia, makes me think about government regulations. I think this also applies to Wall Street regulation to some degree.

Businesses hate government "red tape". Workers hate red tape. I work in a (state) government-regulated facility, and I hate the government's red tape. It is incredibly inefficient, forcing businesses everywhere to jump through often silly hoops to show the regulators that they're safe in some way.

Of course, we all feel we work for organizations that are fully incentivized without government help to avoid a major catastrophe. If someone dies in my facility because of our negligence, we would be in huge trouble, and we don't need government regulations to show us that. Similarly, mine owners and oil well owners probably argue that they don't need so many regulations to keep their facilities from killing workers or destroying a region because they care about quality too.

But then we get these two disasters, and we need to step back and remember that this is why governments throw up so much red tape. How many mine workers are alive and well thanks to "red tape" that forces them to have safe rooms and fans and gas detectors? How many oil spills have been avoided thanks to governments forcing drillers to put in redundant safety features that stop wells from blowing out?

This Gulf spill is a complete catastrophe for the region. 1000 miles of coastline may be destroyed for years to come. The fishing industry may be completely wiped out. So the next time an oil company complains about too much bureaucracy making it too hard to create jobs, we have to remember this- all that bureaucracy protects us, and we cut corners at our collective peril.