Wednesday, October 19, 2011

On the Wall Street Protests and Herman Cain's Misguided Critique

More tents have sprouted up at Zuccotti Park overnight and their donations have apparently increased significantly in the past 24-48 hours (to around $435k from $300k raised in the first 30 odd days since they started). The rain is expected to be quite heavy today and that's not exactly prime camping weather under the best of circumstances - it's got to be miserable for those who are staying there.

That leads me to the next point. Republican candidate for president and current frontrunner, Herman Cain mentioned yesterday during the debates that he thought that the protesters had the wrong target in mind for protests. When asked about the OWS movement, Cain thought that they should be protesting the White House for $1 trillion in failed stimulus and other failed economic policies, but he ignores that the economic troubles began before the stimulus package was envisioned, and before the TARP plan.

It began when Wall Street businesses engaged in highly speculative and risky repackaging of securities and no one had a clue as to their value, particularly when the real estate bubble collapsed.

That's not on the White House exclusively. That's on government (including Congress) failure of oversight to reign in the risks - and some of the blame falls on those who engaged in those transactions. That includes the so called masters of the universe on Wall Street who had no problem with these transactions and the credit ratings agencies who kept up the facade that all was well with these repackaged transactions until it was obvious to anyone with a pulse that they were worth less than junk bond status.

Protesting Wall Street may not accomplish anything other than raising awareness of the inequities inherent in the existing economic system, but that's still significant. Change has to come through voting in candidates who are committed to improving the system, not a wholesale dismantling of the system we have and floating economic policies that are a joke on its face (like Cain's 9/9/9 plan).

There is need for serious reform of the business oversight on Wall Street to avoid future meltdowns such as occurred during 2007-2009. That requires tackling both political and business issues. Neither is exclusive of the other because of the incessant flow of money into politics from the very businesses that are regulated by government.

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