While I completely agree with Mr. Bennâ€™s characterization of Occupy Wall Street in his column last week as a disorganized movement lacking a clear purpose and direction, I am particularly infuriated by one particular sentence in his column. Chiefly, â€œAlso, Iâ€™m pretty sure the statute of limitations on protesting the bailouts is over.â€
Last time I checked the Constitution, there was not a statute of limitations on free speech. The fact of the matter is that Wall Street investment bankers took excessive risks that brought our economy to the brink of collapse, while cleverly ransacking the bankâ€™s capital reserves, in order to pay themselves lavish bonuses worth hundreds of billions of dollars.
In a normally functioning capitalist system, those banks would have been allowed to fail, and the bankers who made poor investment decisions would have been out on the street looking for work, like millions of fellow Americans. But what happened?
The US government and the Federal Reserve spent trillions backstopping bad loans and derivatives exposure, in order to prop up a failed system, at the expense of the American middle class. In a free market economy, many New York City investment banks would have failed, and their employees would have had to find more productive lines of work. More importantly, all of the bad loans would have been written off the books, and the economy would have had a fresh start and begun to prosper.
Instead, we have an economy where unemployment and inflation are rising, food stamp usage is at a record high, and Wall Street bankers are again taking home near-record bonuses. Worst of all, their is no mechanism in place that guarantees that large banks will not be bailed out again at the expense of the Middle Class.
The fact that the broader economy is still suffering â€“â€“ despite the trillions used to backstop the financial system â€“â€“ lends strong evidence to the claim that many of the large banks do little to help the real economy grow, but essentially function as wealth-extracting parasites that place a tax on productive economic activity.
That tax comes in the form of lavish compensation for bank employees and shareholder profits.
The government should have let the banks fail, thereby removing this tax on economic activity, as banker compensation would have necessarily decreased. Instead, we are stuck with a dysfunctional financial system, a lobbyist-infested federal government and an unaccountable Fed that have virtually guaranteed future bailouts and generous subsidies for Wall Street.
If the Occupy Wall Street Movement wants a single, focused goal that will create real change and save the economy in the long run it should be this: pass a Constitutional amendment ending all federal bailouts of all businesses and institutions not directly connected to national defense.
Tim Erickson is a CSU grad student.