Who is the "99%" Anyway? What do the OWS Protesters Mean by This?
A recurring theme of Occupy Wall Street is "We are the 99%" but what do they mean by that? Why 99%? The number is based on the well-understood distribution of wealth in America, that is, the ownership of assets.
Wealth in America can be thought of as a pie cut into three roughly equal slices. Ninety percent of us own, between us, one of those thirds, and nine percent of us own the second slice. Here's the good part: a mere one percent, one out of every hundred, gets that last entire third all to themselves. This is an investor class, which derives its income largely through dividends and capital gains. When Wall Street went to Vegas with everyone's demand deposits in the subprime mortgage scandal and lost, these are the people who got bailed out, and are still getting bailed out, by taxpayer dollars paid disproportionately by the middle class, who lack the lawyers and tax havens to get away with paying little or nothing.
Think of it as a line of 100 people waiting for pie. The first guy who steps up tears off pretty near half, leaving the other 99 people with the rest. Now does he not only want his third, he wants part of yours too, to cover his bad bets. Fair, huh?
The Washington journal Politico reports:
"A series of bailouts, bank rescues and other economic lifelines could end up costing the federal government as much as $23 trillion, the U.S. government’s watchdog over the effort says – a staggering amount that is nearly double the nation’s entire economic output for a year."
The distribution of wealth has been getting worse, more skewed toward the top, both in recent years and in the medium term since the election of Ronald Reagan. Reagan instituted an unprecedented series of tax cuts benefiting the wealthiest, based on the theory that this would assist in capital formation and spur job-creating investment. George HW Bush Sr., when he was running in the New Hampshire Republican primary against Reagan, once called it "voodoo economics."
The Center for Budget Priorities reports:
"Two-thirds of the nation's total income gains from 2002 to 2007 flowed to the top 1 percent of U.S. households, and that top 1 percent held a larger share of income in 2007 than at any time since 1928." --Center for Budget Priorities
The Rolling Stones' Matt Taibbi has made an interesting set of proposals to augment Occupy Wall Streets' current demands, which include re-instituting Glass-Steagall, repealing the Patriot Act, and a national moratorium on the death penalty, some have proposed in the name of Troy Davis. Taibbi writes:
1. Break up the monopolies. The so-called "Too Big to Fail" financial companies – now sometimes called by the more accurate term "Systemically Dangerous Institutions" – are a direct threat to national security. They are above the law and above market consequence, making them more dangerous and unaccountable than a thousand mafias combined. There are about 20 such firms in America, and they need to be dismantled; a good start would be to repeal the Gramm-Leach-Bliley Act and mandate the separation of insurance companies, investment banks and commercial banks.
2. Pay for your own bailouts. A tax of 0.1 percent on all trades of stocks and bonds and a 0.01 percent tax on all trades of derivatives would generate enough revenue to pay us back for the bailouts, and still have plenty left over to fight the deficits the banks claim to be so worried about. It would also deter the endless chase for instant profits through computerized insider-trading schemes like High Frequency Trading, and force Wall Street to go back to the job it's supposed to be doing, i.e., making sober investments in job-creating businesses and watching them grow.
3. No public money for private lobbying. A company that receives a public bailout should not be allowed to use the taxpayer's own money to lobby against him. You can either suck on the public teat or influence the next presidential race, but you can't do both. Butt out for once and let the people choose the next president and Congress.
4. Tax hedge-fund gamblers. For starters, we need an immediate repeal of the preposterous and indefensible carried-interest tax break, which allows hedge-fund titans like Stevie Cohen and John Paulson to pay taxes of only 15 percent on their billions in gambling income, while ordinary Americans pay twice that for teaching kids and putting out fires. I defy any politician to stand up and defend that loophole during an election year.
5. Change the way bankers get paid. We need new laws preventing Wall Street executives from getting bonuses upfront for deals that might blow up in all of our faces later. It should be: You make a deal today, you get company stock you can redeem two or three years from now. That forces everyone to be invested in his own company's long-term health – no more Joe Cassanos pocketing multimillion-dollar bonuses for destroying the AIGs of the world.