Why I Will Occupy Wall Street

Hi Francine,

I was really wondering where student protesters were right after the financial crisis, and I too am generally in support of them — having attempted to raise red flags on the crises from two mega bubbles directly with both policy makers and leaders in finance and business- and ignored, it became frustratingly obvious that the desire didn’t exist. I refused to participate in either and witnessed just enormous abuse–and inevitable crumbling–very painful life changing experience one can see in my work if looking close enough–major motivator. One can speculate why, but it matters not to me — any such position is failed leadership and any such person should be removed from leadership, whether in a private company, regulator or public agency. That would have been almost all by the way.

The debt issue really started to cause long-term problems on the backs of the S&L crisis– (some to include me have argued actually back to the new deal era for policies that set the national debt trajectory), the moral hazard created regionally and in industries during that time was severe– now we have it on a national and international basis. Here in Santa Fe I run into very smart young folks (most graduates from leading universities, and some are senior professors and national thinkers) who now think they should just be able to take what they want–that everything is subsidized, nothing is fair, and so on. I’ve never in my life seen so many anarchists (and yes I did live through the 1960s– some are rich kids some have been homeless-similar) –indeed we have community and wealth sponsored activist programs now trying to create new global systems deep in idealism and completely void of pragmatism–that’s the type of herding that empowered the housing bubble and bust, which attacked precisely those they were attempting to help–many while getting personally rich, of course. I still run into people pushing subprime mortgages– it just amazes me. Moral hazard is something to avoid– but so too are well meaning ideologies–that empower terrorists of the type you describe.

This is why I warned often — there seems to be very little understanding of the difference between theory and reality, what such a transformation would bring in a world with current levels of population. One MIT graduate recently told me essentially –who cares, it can’t get any worse than this. Actually it can get much much worse, not just for the wealthy but also for him and everything he cares about. Dangerous thinking, very bad influence on others who look up to him. Scary actually.

While few have been harder on the culture of finance and policy makers who enabled if not determined this mess, I have also been personally ashamed at the level of greed more recently in our public sector — I worked pro-bono with many for years while they made far more money than I did, and yet now when the country is in this situation boy no one will voluntarily take a dime less. Actually a few did, which was smart as it deflected some of the heat, but it’s very sad to witness. I have friends and family in the post office, teachers, and federal agencies — my father was a lifer– they have it much better on a far more massive scale than almost anyone else in the U.S. save the very few at the top, but still demand more and refuse any sacrifice — how about those who saved their entire lives–tens of millions that really represent the core supporting our system for decades, did not borrow too much, and have for years now lived off of dwindling savings in retirement due to historically low interest rates– that are absolutely being bought down by their government… punished for doing precisely the right thing, while so many are rewarded for doing the wrong. Most people don’t understand until they have a few assets that net worth, liquid wealth, and steady income are rarely found at the same time. Should we talk risk?

Indeed at the federal level–no one speaks of it, but the benefits and pension guarantees place them at today’s comparable rate of return in similar risk programs to be worth several million dollars–yes, multi-millionaires in our labs, agencies, and military– all senior level people have the equiv of several million in treasuries. I also know many professors who are very wealthy– used their offices to leverage internal talent, secure salary and benefits, and run tech businesses on the side, books, speaking, licenses–I’ve seen first hand the negative impact this has had on struggling students and post grads deep in debt. Should we talk admins in public schools, universities, cities, and states? — huge problem here in NM on double dippers and state government fraud– I’ve never seen this level of fraud anywhere in NA and EU — Greece has nothing on NM — while the really necessary services starve for dollars. As you suggest– how’s that for service? Should we talk surgeons? A non-profit hospital my family gave big to instead of a vacation home, travel, or luxuries– even scholarships for next gen– they are paying just huge sums to docs– some of the wealthiest people in the entire region are rev engines for the hospital –while raising huge sums of ‘charity’. Take a hair cut! I have many times, often voluntarily working for free for extended periods– grow up! This all needs to be cleaned up before we’ll see even the type of justice you and I grew up in, even if far from perfect– the next generations do deserve a much better system. I just hope they take away the right lessons learned, and become builders of better systems, not just tear downs.

What I hope will emerge from these protests, but have not seen it yet, is a non-partisan effort in support of accountability, fair systems, transparency, much more efficiency, and sustainable economics– we must realign the incentives and remove many of the disincentives. Frankly what I see most these days are well meaning people in both major parties being exploited to keep the status quo in power– not individuals, but institutions and ecosystems of lobbyists, professionals– most of which we simply can’t afford as a nation anymore due to macro economic and competitive issues– even without huge debt we would be facing massive change due to the opening up of Asia. I have friends on both extremes– it’s pretty amazing how I will read emails or see posts on occasion where if I were to share it anonymously, no one could tell which party they are in. We need to stop the duopoly strategy and tactics. Very very few have been served by either party, and I would argue none in the long-term– assets are at risk, guarantees are at risk, pensions, unions, small business, government– there is much more risk than most realize still. 

Finally, I studied the macro economics carefully for many years, engaging one on one with quite a few of the big names we see everyday– I am confident that neither side has it right, and I am bothered by the populist columns of some. We’ve got to become very specific in removing the barriers that have built up for small business over decades— they are still expanding today. Most of my peers just want gazelles for their own selfish reasons– that won’t resolve this problem– some make it worse– we need massive strength in small business to rise out of this gutter. Until we do, I don’t a sustainable economic path–either politically or economically. 

Have fun at the park and try and stay out of jail!  .02 — MM