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The Siege of Wall Street

by THOMAS H. NAYLOR

The most compelling take away image from a visit to Zuccotti Park, home of the burgeoning Occupy Wall Street movement, is the almost unbelievable amount of global energy emanating from such a tiny plot of real estate.  How is it possible for the ideas of so few people camped out in a nondescript park in lower Manhattan to spread to hundreds of towns and cities in dozens of countries worldwide giving rise to an international revolt against Wall Street, Corporate America, and the American Empire in just one month?  What has happened there is truly amazing!

What is at stake is nothing less than the fate of two intertwined world class lies – the myth of American exceptionalism and the myth of global capitalism.

“We are the greatest nation in the world,” so say most Americans, “the home of the free and the land of the brave.”  But the message from Liberty Plaza is, “What about the materialism, the greed, the inequality, the unemployment, the poverty, the environmental degradation, the racism, the cronyism, the corruption, the militarism, and the violence?”

The Occupy Wall Street movement is the moral equivalent of the complete and utter denunciation of the myth of American exceptionalism.  The message is loud and clear, “The emperor truly has no clothes.”  It’s all a big lie!

That this message has gone viral on the Internet should come as a surprise to no one.  The only surprise is why it took so long to do so.

Not only is the American dream under attack by OWS but the entire American way of life as well.  America’s image abroad has taken a huge hit.  It was not by chance alone that President Barack Obama recently announced that all U.S. troops will be withdrawn from Iraq by yearend.

Also under siege by the OWS movement is the myth of globalization.  Globalization refers to the integrated international system of mass production, mass marketing, mass distribution, mass consumption, mega financial institutions, and global communications.  Such a network of markets, transnational companies, and information technologies effectively eliminates the need for national political boundaries, since money, capital, goods, services, and people flow freely across national borders.  Political and economic power are transferred from nation-states to transnational megacompanies accountable only to themselves.

Not surprisingly, Wall Street and Corporate America have declared that globalization is good.  Economists justify globalization on the basis of the so called “trickle down effect,” in which the benefits of global trade to the superwealthy are said to eventually trickle down to the poor.

To support globalization and to minimize public scrutiny, government regulation, and the possibility of prosecution Wall Street created a Frankenstein-like monster financial system.  It consists of a complex, ingenious, international network of hedge funds, derivative contracts, credit default swaps, and exchange-traded funds all based on sophisticated mathematical models.  This greed driven maze is supported by a network of interconnected financial institutions linking every country to every other country and everyone to everyone else.  So complex is this unwieldy behemoth that literally no one understands how the separate components fit together. So long as it worked and Wall Street was enjoying unprecedented prosperity, no one complained.  But once the system was broken, neither Wall Street, the Federal Reserve Bank, nor the Treasury knew how to fix it.  As the Federal Government began pumping hundreds of billions of dollars of bailout funds into the system, no one wanted to acknowledge that it was simply too big, too complex, too inflexible, and too conducive to mismanagement and fraud.

Wall Street protestors and their international collaborators have also figured out that the trickle down effect of globalization is a sham – a fantasy given academic legitimacy by University of Chicago economists and vigorously promoted by the last five U.S. presidents starting with Reagan.  The problem with this remarkably oversold, egregious system is that the rich get richer worldwide and the poor get poorer.  It also encourages the dehumanization of labor and Wal-Mart like race-to-the-bottom wages and fringe benefits.

By exposing the fraudulent nature of American exceptionalism and globalization and broadcasting it to the rest of the world, the Occupy Wall Street movement has taken on a life of its own.  Could it become the American equivalent of the Polish Solidarity movement or the Czechoslovak Velvet Revolution?

It is hardly surprising that the protestors have been denied access to Wall Street itself by the New York Police Department.  One can only imagine the international impact of several thousand demonstrators in front of the New York Stock Exchange, the icon of global capitalism.  Such an event has the potential to spawn the moral and political equivalent of the fall of the Berlin Wall in 1989.  Just as the collapse of the Berlin Wall signaled the end of communism, so too could a group of Wall Street demonstrators completely destabilize global markets sending a chilling effect through the entire international financial system by temporarily blocking the entrance to the New York Stock Exchange.  It would matter not that the Exchange has backup facilities elsewhere.  The symbolism would be truly monumental in scope.

What started with a bunch of scruffy, New York hippies sleeping in an obscure park and ridiculed by most of the media, has evolved into what could become a global game changing force.  OWS is no longer kid’s stuff, and no one understands this better than New York Mayor Michael Bloomberg.  The real question is what happens when the White House and the Congress figure this out too?

Thomas H. Naylor is Founder of the Second Vermont Republic and Professor Emeritus of Economics at Duke University; co-author of AffluenzaDownsizing the U.S.A., and The Search for Meaning.

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