Bernanke Speaks On The Protests

The wall street protestors are having some success at gaining recognition from key policy makers like Ben Bernanke who responded to a question yesterday about the protests to the joint economic committee . He claimed to sympathize with the protests by saying that, “Like everyone else I am dissatisfied with what the economy is doing right now. Certainly 9% unemployment and a very slow growth rate is not a very good situation – which is what they are protesting.” However, while I am sure that no one is celebrating the sluggish growth of the US economy, I really don’t think that is precisely what is driving the protests.

I think people are more likely protesting excessive profits on wall street. They are appalled by bonuses distributed to executives of insolvent institutions and there is general feeling that wall street has profited at the expense of the broader population. People though seem to have differing opinions as to the exact message behind the protests. Bernanke´s past solutions to what he interprets to be the cause of the protests (high unemployment and weak growth) has been to increase monetary stimulus and quantitative easing. Unfortunately for the protestors, these policies tend to be ones that might stimulate growth but mainly through the financial sector at the expense of the middle class. Instead of persuading the Fed to temper monetary stimulus, the protests might inadvertenly influence him to step on the accelerator.

A friend of mine suggested on a current events forum that the protests, even without a clear message would, “capture the world’s attention and allow for the change-agents, policy guys, the lobbyists and lawyers to step in and use the moment to direct peoples’ attention towards legitimate structural, legal, economic change.” Unfortunately, as I pointed out to him, policy makers are already aware of the huge economic problems and that just reinforcing this awareness wouldn’t add anything useful to the general discourse. This seems to be what is happening as Bernanke believes that the protests are reflecting his own positions when I imagine they were intended to change them.

Barack Obama, who should be pretty influential in setting policy in the United States, wasn’t even able to push through small revenue increases as part of the budget plan necessary to raise the debt ceiling a couple months ago. If Obama can´t pass such a reasonable and simple request through Congress, it seems unlikely to imagine that the protestors will make any progress with a message that seems convuluted to many people. I think for the protests to be successful, they are going to need a clear and unified economic message that someone like Bernanke won’t be able to mistake. He is obviously not going to spend a lot of time listening to the protestors to formulate his understanding of the economy, so the message that trickles through needs to be consistent and unmistakable.


Today I headed down to LaSalle St, center of Chicago’s financial activity, to see the OccupyWallSt presence in Chicago and see what I could learn about them.

There were probably a hundred people chanting, banging on drums, and holding various signs outside the Chicago Board of Trade and the Federal Reserve Bank of Chicago. A good amount of cars honking in support.

I spoke to this family who had come in from an hour and a half out to take part. The mom felt a little bad about taking the son out of school, but she said that since he’s supposed to be learning about democracy anyway, what better place to be than in the thick of things? The son, for one, was loving it (especially the drumming) and wore on his back a sign that read “I’m 10 and will never see Social Security – I am the 99%”.

The protesters held a “general assembly” while I was there, giving everyone the opportunity to raise any issue or concern. It was mostly logistics, sharing tactics from OccupyWallSt New York, and morale-raising. Afterward, I spoke to two guys, one of whom more or less led the discussion. They had both been there off and on for a few days and felt like it was their responsibility to be there.

I tried to probe and figure out what specifically they were aiming to accomplish and what had brought them down in the first place. I can’t say that I got a firm sense, but they were both very much leftists who were angry with the current situation and institutions in place. They weren’t against the bailout in theory, but how it was used to rescue private interests without nationalizing the banks. They dismissed any substantial overlap with Tea Party anti-establishment sensibilities. The problem seemed not to be power and centralized authority in general; corporate power is overwhelming and government power incorrectly utilized. They certainly seemed sincere.

Others I talked to wanted to abolish the Fed, massively overhaul monetary policy, or do away with capitalism in general. One guy really just wanted to complain about City Hall.

Overall, I think the day cemented my belief that there are legitimate grievances (it’s hard to be in favor of crony capitalism), but the idea of protesting not for anything in particular seems weak. There has been a lot of varied media attention, most not positive. Are there protests in your city? What are your impressions?

One additional note:

I didn’t know about Jonathan Hoenig until I read his article on the Wall St protests, and I suppose that it shouldn’t be surprising for the Managing Member of Capitalistpig Asset Management LLC and frequent contributor to Fox News to sit comfortably in the political commentary niche he’s made for himself, but there is at least one thing to correct:

There is no right to disrupt traffic or occupy other people’s property, no matter if it’s one lunatic individual or the 99% of the public protesters claim to represent. What’s so lamentable about “Occupy Wall Street” isn’t even their collectivist goals but the means by which they go about to achieve them: force and intimidation.

It’s a little unclear whether he’s specifically talking just about NYC, but for the record there was absolutely no “force and intimidation” on display, and I can’t imagine that the half dozen police keeping very close watch would have let any slip by. The protesters went out of their way to insure that a lane for pedestrians remained open at all times. They also were not in the road, so were not disrupting traffic, and were on no property but the public sidewalk.

The only moment I witnessed over a couple hours that could have led to a heated exchanged was when a businessman walked through the protesters’ general assembly meeting and called out “profit is healthy!”. I may agree with him, but if there were a moment for “force and intimidation”, that would have been it. Needless to say, nothing happened.

By the way, if you want to buy Nazi coins, you can do so on Hoenig’s site.

The mom said that the family was just there for the day, and tomorrow it would be back to school for the son. He groaned and asked if he had to. Of course, the mom replied, laughing, “not everything can be a democracy.”


Today was Day 13 of the Occupy Wall Steet protests. Thousands have taken part, including several famous faces. What do they want? According to their website:

Occupy Wall Street is leaderless resistance movement with people of many colors, genders and political persuasions. The one thing we all have in common is that We Are The 99% that will no longer tolerate the greed and corruption of the 1%.

Main Street Venting Blues deals with many of these issues. In our interview with The Story, we were asked about this song as a modern-day protest song. The comparison makes sense, but the big difference that I see between social anger during the Vietnam War and today is that back then there was a clear goal: ending the Vietnam War. Today, what is the unifying goal? Is there one?

This memorable poster for the Occupy Wall Street event is clear in stating that there is no single unifying demand or movement behind the protests. If they were primarily concerned with changing the legal structure or opposing the bailouts, it would make more sense to be protesting the White House, Congress, or even the Federal Reserve. These organizations make the rules and decide where to allocate bailout and stimulus funds. For decision-making, the buck stops there.

Perhaps the protesters themselves are unsure as to what precisely they are protesting. That there is a general sense of anger is indisputable and understandable. But when dealing with such a complex crisis as the Great Recession, actor identity and motivation are hard to parse.

Is anyone on the ground in NYC that wants to share what they see?