Wednesday, Apr 26th

Last update:08:37:56 AM GMT

You are here: C. W. Prather A Critical Mass
There are bonfires in Oakland. Property violations in Boston. Arrests in Atlanta. And in New York City’s Zuccotti Park, the activists who started it all are pitching tents in preparation for a long, harsh winter.

One month ago, the 33,000 sq. ft. plaza was overcrowded with people, clothes, posters and makeshift workstations. At any given moment, there were several competing points of interest: people gathering, arguing, marching or performing. It was difficult to walk across the park without stepping on sleeping revolutionaries.

But things have changed. A haphazard pile of books has been shelved to create a small library, where interested visitors can borrow or donate reading materials.

Wooden crates filled with apples once obstructed the pathways, but now there is a well-stocked food station under the cover of blue tarps. A mountain of discarded clothes has been organized into a donation center, enabling the occupiers to dress in layers as the temperature drops. High-profile visitors have come from nearby and abroad to give speeches, clarifying the movement’s place in history.

In Boston on October 22, famed linguist and historian Noam Chomsky addressed a welcoming crowd at Dewey Square. There were audibility problems. Chomsky held two microphones to his face, and when  listeners in the back began to chant for higher volume, he laughed. “You can’t hear me? I don’t know what to do about it. These [microphones] are in my mouth.”

Despite technical difficulties, he commended the protesters for their efforts. “If the bonds and associations that are being established in these remarkable events can be sustained through a long, hard period ahead—because victories don’t come quickly—it could turn out to be a really historic and significant moment in American history.”

*
Protester Brian Harris has been working as an organizer at Zuccotti Park since day one, and he’s exhausted. “It’s incredibly difficult to organize this. Every person is an autonomous activist,” he explained. “Here’s how it all works: the decision-making process is based off the General Assembly, which is made of components of working groups. Information, outreach, labor, internet, finance, comfort—there are tons of different groups, meeting twice a day. They all report back to the General Assembly every night at 7:00.”

And what is all this hard work for? “This is such a complex system that there needs to be a lot of goals,” Harris said, “and a lot of people working toward different goals.”

Mary Topper, who occupied the plaza for seven days, didn’t seem so sure. “I came because I think the people on Wall Street should be held accountable for what they have done to the people in this country,” she said. “But I think this has become a really left-wing festival. I’ve come to realize that there are a lot of really different goals, some of which I don’t agree with, and some that I do. I don’t really feel that much is going to be accomplished, aside from media attention. It’s a media circus. No offense.”

The circus came to town on September 17, but the real starting point was back in July. That’s when the Canada-based magazine Adbusters published a call to action on its blog, encouraging readers to “flood into lower Manhattan.”

Kalle Lasn, editor-in-chief of Adbusters, is modest about his involvement. “We were the people who catalyzed this thing behind the scenes,” he said, “but that’s all we did. Then the people took over in New York and organized the meetings, and they had this magical way of running Zuccotti Park that caught everyone’s imagination. Those are the real heroes.”

The heroes may lack a clear mission, but Lasn wouldn’t have it any other way. “In a strange, messy, somewhat crazy way, we have launched this huge conversation about the future of America. So you cannot deny that it’s been hugely successful,” he said. “I think a lot of the people who are criticizing it for not having clear demands…that is the old vertical way of looking at things. This young generation grew up in the internet age. They’re horizontal people, and they’re quite happy with the messier way of doing things. And I can assure you that over the next few weeks and months, some very crystal-clear objectives will emerge.”

*
Not everyone at Zuccotti Park is there to protest Wall Street. Last month, two young men in suits went down to the plaza holding signs proclaiming, “We are the 1%.” Instead of using sharpies on cardboard, they presented their statement in clean black type on an iPad screen.

Though they asked to remain anonymous in print, these counter-protesters had no qualms about showing up in person at the scene of the protest. They took to the streets, spoke to participants and passerby, and were eventually offered some protection from the New York City Police Department. “The police have been very kind to us; the other day they created a cage for our safety,” they told The Suit. “It’s nice to have a separation so we can comfortably express our views. There are some crazy people here.”

The counter-protesters claimed they were there to preserve the status quo. “We’re perfectly happy with the current state of affairs,” they said. “This is America, and we’ve got the American dream. Why would they want to take that from us?”

It’s hard to gauge the true intentions of these two young men, but there are plenty of people across the country who agree with those basic sentiments. Billionaire hedge fund manager John Paulson had some well-targeted criticisms, which he released in a public statement. “Instead of vilifying our most successful businesses, we should be supporting them and encouraging them to remain in New York City and continue to grow,” he said. “The top one percent of New Yorkers pay over 40 percent of all income taxes, providing huge benefits to everyone in our city and state. Paulson & Co. and its employees have paid hundreds of millions of dollars in New York City and New York State taxes in recent years and have created over 100 high-paying jobs in New York City since its formation.”

This is partly due to the fact that New York State has one of the most progressive tax codes in the country. In terms of state taxes alone, it’s one of the least profitable places to be rich. And if that’s the case, should the protesters turn their attention elsewhere?

*
For input on specific objectives for the movement, The Suit spoke with Mike Lapham. He’s the project director of Responsible Wealth, which is one division of an organization called United for a Fair Economy (UFE). “Our goal is to call attention to the growing income and wealth gap,” he said, “and the dangerous consequences of that on our society and our democracy.”

In terms of straight dollars, Paulson is right: New York millionaires and billionaires pay much more money to the state than do average citizens. But a look at these payments as percentages of income casts things in a different light. “I think it would be really helpful if more people knew how taxes work,” said Lapham. “For example, at the state level, taxes are regressive. Lower-income people pay a higher percentage of their income in state and local taxes than upper-income folks in every state in the nation.”

A 2009 report released by the Institute on Taxation & Economic Policy states that even in New York, which has one of the most balanced tax codes nationwide, the richest one percent pay 7.2 percent of their income in state and local taxes after federal deduction offsets, compared to the 9.6 percent paid by those in the lowest income bracket.

Those numbers are arguable, since it is difficult to calculate exactly how much people pay in sales and excise taxes over a given year. But looking beyond New York at the national averages, the tax rate inequalities are very clear. The report estimates that in 2007, the lowest-earning fifth of U.S. citizens paid about 11 percent of their income to state and local taxes, while the highest earners paid little more than five percent.

Ending regressive tax codes nationwide is one of Lapham’s missions as the director of Responsible Wealth, which is an organization of affluent individuals across the country. They write letters and articles, make media appearances and lobby the government, asking to have their taxes increased as Warren Buffet famously did in a New York Times op-ed this August. In 2009, Lapham and his colleagues successfully effected change in New York, which may be why Paulson today shares so much of his income with the state.

“A couple years ago, about 100 of our Responsible Wealth members in New York got together and signed a letter to the governor and the legislature saying, ‘Tax us more,’” Lapham said. “No one was willing to say that until those individuals stood up, and suddenly the politicians and the media were all over it. And that’s what happened. They were able to pass new surtaxes that raised about $5 million per year and reduced the regressivity of the state’s tax system. And I think that needs to happen at the federal level.”

Federal taxes are more progressively structured than those of states and localities, but even they have been trending in a regressive direction since the 1960s.  Thomas Piketty and Emmanuel Saez published a 2007 report on the history of the U.S. federal tax system in the Journal of Economic Perspectives, noting that tax rates for the highest earners have fallen dramatically. This is due largely to conservative policies implemented in the 1980s under Reagan and in the early 2000s under Bush. “For example,” wrote Piketty and Saez, “the top .01 percent of earners paid over 70 percent of their income in federal taxes in 1960, while they paid only 35 percent of their income in 2005.” So although billionaires like Paulson pay a substantial sum to the government each year, they actually enjoy one of the lowest federal tax rates in American history.

Not only are the wealthy paying less—they’re earning much more. As Piketty and Saez found, “the share of income going to the top 0.1 percent of the income distribution has grown tremendously since the late 1970s; the share of total income received by the top 0.1 percent was around 2.5 percent of total income in the 1970s and reached a peak of above 9 percent of total income in 2000.” The gap between the rich and poor today has grown to a level unprecedented since 1929.

To shrink this gap, Lapham suggests we take a closer look at tax codes for capital gains, since most of the wealthiest Americans’ income consists of capital gains in the stock market. “If there was one specific fact I would love more people to understand,” he said, “it’s that capital gains are taxed at 15 percent. That income—making money from money—should be taxed at least as much as ordinary income.”

At his speech in Boston, Chomsky voiced similar concerns about income inequalities. “It could continue like this,” he said. “And if it does continue, this historic reversal that began in the 1970s could become irreversible. That’s where we’re heading. And the Occupy movements are the first real major popular reaction that could avert this.”

*

The people at Adbusters also offer some guidance to steer the protesters’ efforts. They send out tactical briefings via email and update their blog regularly, highlighting issues of interest and helping to organize gatherings around the world.

Lasn himself had some thoughts on what the protesters might achieve. “There’s really a lot,” he said. “One big thing: I think that down the road, this movement will ask for the reinstatement of the Glass-Steagall Act.”

He may be right; this idea been percolating at Zuccotti Park and other gathering spots across the country. Glass-Steagall was implemented in 1933 during the Great Depression, and its basic function was to divorce commercial banking from securities and speculation. It dramatically restricted the extent to which banks could take risks with their depositors’ funds, protecting the general public but also hampering banks’ ability to turn big profits and compete globally. When the act was repealed in 1999, banks were once again able to merge with other entities—including insurers and investment brokers—and to take greater risks with customers’ money. Some critics of the repeal call it the primary cause of the subprime mortgage crisis and massive bank failures of 2007 and 2008, arguing that a reinstatement of Glass-Steagall would achieve some much-needed regulation.

But if we are to effect policy changes like this, Lasn added, the first step is to end corporate influence in politics. “Above all,” he said, “I think [the protesters] will demand an end to this corruption that goes on every day in Washington, with the big corporations bribing our democratic leaders to get their way with laws that are passed. I think that will be one of the really big fruits of the movement.”

Lobbyist expenditures, for instance, still follow a pattern of incredible growth despite the recession. The Center for Responsive Politics reports that lobbyist spending has more than doubled over 10 years, reaching $3.51 billion in 2010. The spending itself is not necessarily unethical; entities as diverse as major banks, small credit unions, labor groups and even nonprofits get through to Congress via K Street. But such a large infusion of funds into our public policy machine strikes many as a cause for concern.

That’s why Lapham thinks the occupiers are right to set up camp on Wall Street instead of on Capitol Hill. “Wall Street are the folks who are making those political contributions that ultimately resulted in us loosening banking resolutions, which led to the crash in 2008. Wall Street has an outsized political influence, and that’s not fair or sustainable for us as a country.”

*
Tax policies, capital gains, banking regulation, lobbyist influence—none of these are simple issues. And that may be why the Zuccotti Park occupiers have yet to be clear about their goals. As things progress, protesters like Harris are content to wait for a consensus to emerge. “I would really love for this movement to be a wakeup call for working people,” he said. “And obviously that’s going to manifest itself in unknown ways—multiple ways.”

Lasn agrees, and he tries to walk the fine line of inciting the protestors without taking on a leadership role. “I have absolutely no advice for them!” he said with a laugh. “But you know, I’ve been a student of revolutions all my life, and I can tell you that revolutions come and go, and sometimes they change things. But ultimately, revolution is known for how it changes culture. These kinds of deep-down everyday life cultural changes are what revolution is ultimately about.”
We recommend:
“You make your money on the buy, not the sale.”
Sidney Torres, “The Deed,” CNBC. Who is Sidney Torres? He says he’s an entrepreneur who’s dr
Children’s Hospital Association Launches National Photo Exhibit
Capturing Hope, Compassion & Resilience of Child Patients & Their Health Care Providers
Penny Parasites: Wall Street Institutions & Regulators
Class Action Suit: Cause of Action Number Three. Did you see the 1999 comedy "Office Space"? It desc
The Quiet Rise of Deluxe Corporation
Everything was going fine between banks and their customers for years. Sure, things became routine