While I understand the frustration with the economy that spawned the Occupy Wall Street and other Occupy movements around the world, their protests are in large part misplaced. The movement would make much more sense if Wall Street were a monolithic institution or even a giant conspiracy that could be convinced, forced or legislated to change their evil ways. But Wall Street is not a monolith, nor are conspirators acting in conscious concert. Rather what the Occupy protestors are demonstrating against is crowd economic behavior, that is the cumulative effects of independently made individual decisions being made by hundreds of thousands of businesses, and which is virtually impossible to change or control.
The particular crowd economic behavior in question is the unwillingness of business to spend its accumulated cash to hire additional workers, or for that matter, even to pay it out to shareholders as dividends. The reason is that businesses are scared stiff of economic prospects and are unwilling to do anything that commits themselves to future expenditures. This is no conspiracy theory--each individual business has independently made this decision to hunker down and wait out a potential double dip recession. One could just as well put the blame for the current economy on consumers, who themselves are afraid of economic prospects, which itself leads to lack of spending and economic uncertainty. Nobody blames the consumer for being so skittish, and business is merely reacting in the exact same manner.
A good example of the futility in trying to affect crowd economic behavior was demonstrated right after the 9-11 terrorist attacks. World markets were closed immediately after the attacks to prevent panic selling, and remained closed for several days afterwards to let the world settle down. During that period of market closure, investors were urged by politicians not to sell their stocks when the markets reopened, as doing so would be playing into the hands of the terrorists, whose attack goals were at least in part tied to crippling the world economy. So the financial markets finally opened and stocks plunged, staying down for an extended period of time, as millions of investors each made the decision to flee to investments that were safer than stocks.
Indeed it's absolutely laughable when comparing the economic realities to some of the actions of the Occupy protestors. There was a noisy demonstration last week outside my office window with dozens of protestors gathered around the local branch of Bank of America. Bank of America is an especially good target for opponents of evil and greed since they are one of the leading mortgage lenders in California. However, a better term to describe Bank of America instead of evil or greedy is stupid, as they made the deliberate decision to acquire Countrywide Mortgage after the recent economic meltdown had begun. Indeed the real question is will Bank of America survive in the long run. Their stupidity is reflected in its stock price which has plummeted to long term lows, and which led me to post on Facebook in my description of the demonstration that perhaps the demonstrators were not from the Occupy group, but rather were Bank of America shareholders protesting the steep drop in Bank of America's stock price.
Another striking comment was made on the CBS radio network news which interviewed a protestor who explained his presence at an Occupy demonstration by the fact that he worked for American Airlines and "had not received a raise in nine years." Well those who follow the financial news know that the current speculation about American Airlines is whether they might be filing for bankruptcy before the end of the year (not likely, but still significant that the topic is even being broached), not what kind of raises they are going to give their employees.
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