Money, Politics, and Occupy

The American Federal Reserve has recently published the figures on the income development of the households in the fourth quarter of 2011. According to its report, US citizens recorded an increase of 0.3 percent for the first time since 2009 – even if this is a small one. Good news? Only at first glance. The increase is solely based on the rising prices in capital markets. The rising stock prices have more than compensated for the continuing price decline for residential properties. However, most Americans do not have their assets invested in the stock market. 90 percent of the funds invested in securities and pension funds belong to the wealthiest ten percent of the citizens. The richest one percent owns 38 percent of these property assets. In the meantime, the predominant majority of Americans have invested their savings in residential property – which is continuing to lose its value. Real estate prices have fallen by one-third since 2006.



While this means that the assets of the American households displayed an appreciation of 1.46 trillion dollars in the last quarter of 2011, 1.3 trillion dollars went to the richest ten percent and 555 billion to the wealthiest one percent. Residential properties have decreased in value to the tune of 367 billion dollars. 141 billion of this is attributed to individual homeowners, who primarily belong to the middle class. This makes it clear that the huge gap in asset distribution has become even larger. The 400 richest Americans now own more capital than the 150 million people at the bottom of the scale. In view of America’s urgent problems – ranging from decaying schools, bridges, and streets to pension and public health fund deficits and the growing national debt – it certainly seems like the time has come to impose a special tax on the super-rich.

Political Power

The richest of the rich are currently just paying an average of 17 percent of their income in taxes. But the millionaires, billionaires, and top managers invest vast sums of money in donations to political parties and lobbying in Washington – not just because they love their country but to achieve even lower rates of taxation and further deregulations for corporations. Yet the taxes on assets and top income are already as low as hardly ever before. Experts expect that the current election campaign for the White House and Congress will cost a total of six billion dollars. The bulk of these funds will come from conservative billionaires such as the brothers Charles and David Koch, who have made a considerable contribution to the financing of the Tea Party movement. The lobbies of the corporations and super-rich have also used their money for the purpose of rescuing Wall Street companies with trillions of dollars from public funds and through generous loans from the Federal Reserve while millions of homeowners have lost the roof over their heads or at least had to accept dramatic losses in value.

When considering this background, it becomes apparent that the Occupy movement at least has the central message that our democracy is endangered by the increasing concentration of income and assets at the top of society: Money has political power. Since the constitutional court rule on the case of Citizens United vs. Federal Election Commission in 2010, this is also completely legitimate. Companies organized as “corporations” are now considered “individuals” with an unrestricted right to make donations for political purposes. But when totally normal people without money gather in Occupy settlements and express their discontent about these circumstances, they are told that the First Amendment to the United States Constitution regarding the right to freedom of speech and peaceful assembly does not apply to them. In extreme cases, the state responds to them with teargas and batons. It is therefore extremely important to defend the rights of students and simple citizens who are not “corporations.”

Foundations of Democracy

The right to freedom of speech and assembly makes our life complicated and uncomfortable. This suggests the temptation to restrict it. But without freedom of speech and assembly, democracy is not possible. This insight already motivated students at UC Berkeley in 1964 when they came together to join forces on behalf of civil rights for blacks in the American southern states and against the looming war in Vietnam and the poverty in our country. These types of fundamental issues of social justice are also facing us today. And this is why we must stand up for the right to freedom of speech and assembly with all of the powers that are available to us.

Young people are now facing different problems. Access to higher education is becoming increasingly unattainable and the income concentration at the top of society even robs us of the means to maintain the quality of the general school system, which is what makes equal opportunities possible. This means that we are threatened with losing a cornerstone of our democracy. There are obviously people who say: We can no longer afford adequate education and a social safety net for the poor, old, and weak. But how can this be true if we are the richest nation on Earth? Our gross national product has doubled during the past thirty years, but the average salaries have hardly increased. Where has all of this money gone? To the top of the society! Thirty years ago, a CEO in the USA earned thirty times as much as a worker. Now he collects three hundred times as much. We do not intend to demonize the rich. But they have also gained increasingly more political power along with their growing amounts of money. And people like the Koch brothers are undermining our political system with their money. But what can we do when there are no longer any boundaries for corporations and the rich, who corrupt our democracy with their money?

Ambiguity Is a Part of It

This is why I am so proud of the Berkeley students, who have joined the Occupy movement. This is how they are responding to the crisis of our democracy and championing the principles of social justice. They are patiently willing to spend long hours at general meetings for this purpose. And Occupy has already had a tremendous effect: The issues of income distribution and the political power of money are now on the agenda in America. But quite a few of the Occupy supporters are asking: What do we actually want? What are our goals?

I can only ask them to be patient. Every social movement of the past fifty or more years began with moral outrage – grievances existed in the country. The development of concrete paths for dealing with these grievances required time. The Occupy movement has its source in moral outrage. The days of apathy are over! This movement can no longer be stopped.

Let me conclude with a personal story. People know that I am short in stature and was obviously even shorter as a schoolboy. I was therefore constantly beaten. But I did what the weak do to defend themselves: I searched for and found a strong protector. His first name was Mickey, and Schwerner was his last name. In 1964, he went to Mississippi to advocate for the voting rights of the blacks there. Racists brutally tortured and murdered Michael Schwerner. My protector had fallen into the hands of violent criminals, who were many times worse than the bullies at our school.
This deeply shocked me. I felt that a change was not only necessary for America, but also for me. We must not allow powerful people without scruples to have a free hand in our country. We must join together to protect the powerless. And we must give a voice to those in America who have no voice. Because Occupy does this, I am grateful to the movement and its members.

After studying at Dartmouth College, Oxford University, and Yale Law School, Robert Reich worked for the governments of Gerald Ford and Jimmy Carter. Reich was appointed Secretary of Labor under his college friend Bill Clinton. He taught at the Harvard and Brandeis Universities, and has been at the University of California, Berkeley, since 2006. Reich has published 14 books, the most recent of which is Aftershock: The Next Economy and America’s Future (2010). His involvement also includes opinion pieces and analyses in the major American media. Reich blogs at: www.robertreich.org.