Protesters Occupy Irony on Reliance on Markets

Brett McMahon

10/28/2011 2:34:00 PM - Brett McMahon

Of the convoluted, often silly, raft of demands, communiques, and babbling out of the Occupy Wall Street public relations campaign, perhaps no intellectual conflict is more intriguing than the central thrust against bankers’ profiting greatly through complicated financial instruments.

While it’s hard to nail them down on their demands, OccupyWallStreet.org claims the movement is “fighting back against the corrosive power of major banks and multinational corporations over the democratic process, and the role of Wall Street in creating an economic collapse that has caused the greatest recession in generations.”

Thus, it’s fair to say a central complaint of the Occupiers is the legacy of mortgage-backed securities, which were cut up, bundled, and sold in batches with little or no transparency about the underlying quality of the assets. For many, this has been a source of complaint, either ideological or practical as it impacted the home market.

And it’s certainly easy to be sympathetic to complaints about complicated financial instruments and their relative role in the United States economy … unless, of course, you supported the economically disastrous cap and trade scheme, as so many environmentalists like those occupying Occupy Wall Street have.

In fact, it wasn’t so long ago that it was Wall Street bankers who were sending armies of lobbyists up to support cap and trade, which was estimated to create a market worth as much as $2 trillion in five years.

Of course, that wasn’t terribly popular with Americans. As William O’Keefe wrote:

The American people have had enough of convoluted, indecipherable financial schemes and the opportunists who exploit them. The public is understandably angry about Wall Street's exploitation of Main Street, and yet our political leaders are setting the stage for another complex trading market, ripe for corruption. The future Enrons and Bernie Madoffs of the world would like nothing better than to see the U.S. impose a new market for carbon emission trading.

He added this interesting tidbit that should have given everyone pause:

Enron executives—before their well-deserved fall—did little to conceal their lust for cap-and-trade. In 2002, the Washington Post reported that "an internal Enron memo said the Kyoto agreement, if implemented, would do more to promote Enron's business than almost any other regulatory initiative outside of restructuring the energy and natural gas industries in Europe and the United States."

So the Occupiers can’t have it both ways—if they are serious about complaining about Wall Street types, they should publicly disavow ideas like cap and trade. If not, they are tacitly admitting they are for Big Government and Big Banks so long as they are driven toward “progressive” efforts to control the economy.

And therein is the key difference between the Occupy protests and Tea Parties: the former is fine with using the coercive power of government to make life “more fair” whereas the latter wants to get government out of the economy, to stop picking winners and losers, to make it actually more fair.

Still, we probably shouldn’t hold our breath waiting for an #OWS committee communique standing up for intellectual integrity.