OWS: Simple as You Want It to Be

Posted by: Dan Beucke on November 16, 2011 at 3:30 PM

At the tail end of a long interview with Betty Liu on Bloomberg TV today, AIG Chairman Steve Miller was asked what he thought of Occupy Wall Street’s criticism of bailouts given to AIG and other financial firms. (Fast forward to the 10:35 mark on the video above.) “The understanding of the Occupy Wall Street crowd of what makes our country work is probably fairly limited,” Miller says. “It’s a very simplistic view of things. No one will ever know what would have happened to our country and our whole global financial system if AIG had been allowed just to go down.”

To give Miller his due, he does narrow his critique at one point to the “long weekend” in which Henry Paulson and his Treasury team scrambled to save the U.S. financial system:

“It’s lost on them,” he said. “They think, ‘Why are you bailing out Wall Street and not Main Street?’ You have to have a view as to what would have happened if Wall Street had been allowed to just implode. I think it would have been devastating for our whole economy and that would have been far worse for Main Street than what did happen.”

Let’s grant Miller that the subsequent disaster would have been far worse for “Main Street” if there was no bailout of the banks. But in making a more general criticism of the protesters’ “understanding” of how the economic system works, Miller seems to reveal a shallow — shall we say, simplistic? — understanding of the movement’s take on Wall Street and Washington. Let’s examine two common themes in OWS signage:

“Banks Got Bailed Out, We Got Sold Out”

This is one of the most frequently seen messages in the U.S. protests, showing up in the march on Park Avenue bank headquarters, in Zuccotti Park, and elsewhere. A popular variation makes the point that banks got bailed out and then foreclosed on homeowners; another links bailouts to the massive buildup in student debt.

The point may be simple, but it’s not unsophisticated. Washington has avoided a direct bailout of homeowners for three years; now a growing number of economists, financial experts, and politicians believe that only a permanent reduction in mortgage principal will revive the housing market. Among them: Martin Feldstein, economist and chairman of Reagan’s Council of Economic Advisers; Bill Clinton; and hedge fund luminary Greg Lippmann. My colleague Mark Gimein argues that a student loan bailout isn’t far away, either.

“The Money Given Wall Street Flows to K Street”

If we expand Miller’s time horizon — say, to the 10 years leading up to Hank Paulson’s lost weekend — it’s easy to see how the Wall Street/Washington lobbyist connection led to the relaxation of financial regulations. That in turn allowed for the rise of “black box” financial products that were so “unsimplistic” that even bank executives later admitted they didn’t understand the risks they were taking on — for the banks and for taxpayers. If protesters want Washington freed from Wall Street influence, they have another great fan of simplicity on their side: Paul Volcker.

ows_sign_450.jpg

On a lighter note, no one ever argued that a protest movement needs to spout complex arguments to be taken seriously. Effective messaging, in fact, would argue for the opposite. But if Miller or anyone else is looking for more sophisticated OWS signage, the example to the right shows there has been some of that, too.

Update: I have tweaked the language above; no, B, Bill Clinton is not a financial expert.

(Photographer: Ben Furnas)

Reader Comments

B

November 16, 2011 4:29 PM

I'm confused, is bill Clinton an economist or a financial expert now?
"now a growing number of economists and other financial experts believe... Among them...Bill Clinton"

Neither description, much like your interpretation of the OWS movement, seems accurate in even the loosest definition.

Sort of undermines your credibility on recounting the facts when you are allowed to espouse your viewpoints as fact.

Mr. X

November 16, 2011 5:40 PM

On the topic of Bill Clinton, it was under his watch that Glass-Steagall was repealed--an event that had a direct effect on what would happen in September 2008

Parker East

November 16, 2011 6:21 PM

Here is one of my contributions to the movement.... so far. Pass it along.

http://www.youtube.com/watch?v=h6xrMZwnS-o

Worth watching... subscribe if you like it.

http://www.youtube.com/user/MrParkerEast

huiee

November 16, 2011 8:36 PM

The Occupy movement is starting to adopt an anti-corruption platform that will garner much more respect. An Occupy member's page http://owwc.gu.ma , supporting a business owner who lost millions of dollars to a corrupt officials seems to illustrate this adaption.

Inside job

November 17, 2011 12:50 AM

Maybe aig shouldn't have insured sub-prime toxic assets from Goldman and co. Maybe instead of creating CDOs for investment banks to bet on they could have done what was right. No kidding miller doesn't like the occupy crowd, he's just as guilty as any of them.

Doug Guillory

November 17, 2011 9:21 AM

It's more Orwellian by the moment, an AIG official calling the OWS understanding of the economy simplistic. Who needed a $180 billion bailout? Not OWS.

Boarat of NYC

November 17, 2011 10:05 AM

It is the condencing attitude of failed bankers the really get people angry. On one hand they cry for a bailout and on the other hand demand bonuses and slap the average working stiff around by denying refinancing for their mortgages. The financial system is not working at creating jobs or wealth for this country. Maybe if bankers spent more time looking at their core mission and less time engage in casino capitalism this country would be in better shape.

Lugus

November 17, 2011 10:18 AM

“The understanding of the Occupy Wall Street crowd of what makes our country work is probably fairly limited.”

Maybe Mr. Miller's understanding of what is meant by the phrase "..what makes our country work..." is even more limited!

Brent in NJ

November 17, 2011 11:10 AM

Hey Steve Miller (aka "Space Cowboy") three words: "Pot, kettle, black".

Shut up and pay back the government money. Nobody wants to know your opinion. AIG is a failed enterprise.

Johnathan

November 17, 2011 12:34 PM

So AIG is criticizing a grass roots movement against corporate greed on the basis they do not understand how the world works.

Well, AIG had no idea how the world worked either. They had no idea how the financial world worked and got themselves burnt thoroughly for it. As the chairman of a failed enterprise that by all measures absolutely personifies an epic fail so large they might never pay the government back what the people are owed, I am stunned at the arrogance.

They take the public money whine about miniscule increases in regulation that they themselves lobbied to re-write to their own desire and then criticize the public that bailed them out of bankruptcy.

You would think a complete douchebag like this would just shut up and chill until he got his company back from the brink and had his own bills paid up.

gmorfy

November 17, 2011 1:08 PM

This is precisely because they DO understand how the country works that the OWS crowd is doing what they do.

It's heads I win, tail you lose

Heads: AIG and others have twisted and toned down regulation so much they were allowed to create new sources of growth and profit almost out of thin air. Sure enough they did hire some PhDs to come up with winning formulas. It brought them tremendous wealth while everyone else was stagnating. In the mean time, said accumulated wealth was used to seize more assets and influence.

Tails: The monster that financial theorists had engineered blew up in their faces. Instead of winding down and reversing course on many of the abuses of the boom years, the financial industry simply said "save me or else". While doing that, the same economy wreckers crippled any attempt at regulation while claiming their bonuses. They have put tons of bad assets on the USofA's balance sheet, including tens of trillions of dubious derivatives (thank you BAC!) and are now menacing downgrades on the bloated US debt if government is not shrunk.

Don't get me started. OWS is a sane reaction from a democracy following years over years of abuse.

LT

November 17, 2011 2:18 PM

and how many billions of dollars from the tax payer were need to bail out AIG a company that knew how things worked.

SD

November 17, 2011 2:20 PM

AIG who we the tax payers bailed out is saying the 99% doesn't get it? We don't get that we bailed you out and you all paid your self huge contractual bonus's paid for by tax payers? We don't get that you almost brought down our entire financial system and then profited from it? We know what is right and wrong. We get that!

David in NY

November 17, 2011 2:27 PM

"The understanding of the Occupy Wall Street crowd of what makes our country work is probably fairly limited," Miller says. "It's a very simplistic view of things. No one will ever know what would have happened to our country and our whole global financial system if AIG had been allowed just to go down."

We know that AIG and the banks held a gun to our heads. And we're damned if they should be allowed to continue their grossly risky and even corrupt (see the sign above) practices. And we're further damned if we're going to allow them collect obscene compensation for their incompetence and corruption and then to get off with paying less for the infrastructure of this country (that helped them get where they are) than is a fair and decent share. I submit that Mr. Miller fails to understand these simple things.

i

November 17, 2011 2:47 PM

It depends on whose world you're looking at.

The AIG collapse would have devastated the world economy, which would have started recovering by now, organized much differently, and with strong regulations in place to protect the electorate. Their world would be getting better by now.

The AIG collapse would have devastated the fortunes of hedge fund managers, banks and bank management. Their world, from their point of view would have gotten worse and stayed that way.

Kenn Space

November 17, 2011 6:08 PM

President Obama said; "Failure is not an option". I agree with him except he failed to complete that sentence, I say; Failure is not an option, failure is a given".

Capitalize On This Occupation

Too big to fail;

Is failing.

Too big to fail;

Is not success.

Too big to fail;

is a failure literalized.


http://open.salon.com/topics/occupy%20america/most_recent/all/page/3

Carpio Casares

November 20, 2011 10:00 AM

To all occupy wall streeters.

If the Super Committe is unable to do what Congress was unable to do and they fail too! and the 1% win again, by the failure of the Super Committee.

Then all people should stop paying their mortgage's and maybe this will send the 1% a message by the trickle down and up effect of the money trail not being used on mortgages.

If the 1% is willing to hurt America, then we the people should be able to stop paying our mortgage's and start by claiming homesteading rights!

Or some similar idea.

guy

November 20, 2011 9:33 PM

Occupy Wall Street, should focus on the creating laws to stop corporate America from controlling the government through their lobbyist. America should wake up to the fact that the only legal obligation a Chief Executive Officer or CEO has is to show a profit to the share holders.
The pharmaceutical companies have taken this to a new level by holding vaccines and curative medicines which are developed as a function of their corporate mandate to develop maintenance drugs which relieve the symptoms but do not help in correcting any ailment.
Look at it this way if you have a researcher who develops a cure for cancer and the cure is used and distributed then the corporation gets a 1 time payment for each cure sold. Now imagine a second researcher who develops a drug which suppresses or slows the cancer as long as the person buys the prescription once a month, as a CEO you would distribute the monthly maintenance drug to support your corporations’ profit center by law.
In the 1960’s there were multiple vaccines to cure serious ailments which ailed society and using the technology of the day they create cures to stop the pain and suffering. Today we have the technology to cross a flounder “fish” with a tomato “vegetable” to create a hybrid vegetable that will not spoil if frozen but we cannot produce any cures or vaccines to relieve today’s ailments; this shows the extent of cooperate greed in America.

Wake up America and do something about it!!!

When President Bush was in office oil was 37 dollars a barrel, keeping in mind his family business is oil, when he left office oil was 132 dollars a barrel and as soon as President Obama was elected the price of oil made a vertical drop to 37 dollars a barrel the same as it was when President Bush’s tenure started.
They waited to see if the new administration would arrest anyone for price fixing but upon discovering President Obama’s only concern seem to be flying around the world making nice and taking his family along for the multiple “vacations” the oil industry slowly started ratcheting up oil prices to what it is today. They now have no fear of being prosecuted for storing bulk oil as they had been caught doing overseas and price fixing.
The new concept is charge for fuel by the BTU output of the fuel. Diesel use to be an inexpensive fuel but now it is higher than gasoline. Speaking of gasoline; research and find out how much gasoline is actually in a gallon of gas. You will be disappointed if you think it is a gallon, it is more like a quart with the rest being additives and alcohol. So how does this fuels price get adjusted by inflated crude oil prices, it’s called corporate greed and America has not pressured the oil industry to correct yet another injustice.


Wake up America and do something about it!!!

Richard Wilhelm

November 21, 2011 12:27 AM

Whoever saw old age that did not applaud the past and condemn the present?

Kurt Plötner

November 29, 2011 10:43 AM

Thousands... Kiss the book''s outside who ne''er look within.

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"The Wealth Debate" is a running discussion of wealth, poverty, the economy and income inequality in the U.S. and the world. It was started shortly after the Occupy Wall Street movement sparked a global protest about the fallout from the financial crisis and money in politics. You can reach the editors, Dan Beucke and Mark Gimein, by email, or follow BloombergNow on Twitter to keep up with posts.

Analyses or commentary in this blog are the views of the author and or commentators, and do not necessarily reflect the views of Bloomberg News.

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