Wages of Fear: Lockdown and the IMF on Occupied Wall Street

Published: Monday 26 September 2011  Nation of Change

by Richard (RJ) Eskow

“It was an experiment: Had Mayor Bloomberg and the forces of ‘security’ hidden the demonstrators so effectively that they couldn’t be found, even if you went there specifically to look for them?”

I walked around lower Manhattan for a long time last Friday looking for the #OccupyWallStreet protests. It was an experiement: Had Mayor Bloomberg and the forces of “security” hidden the demonstrators so effectively that they couldn’t be found, even if you went there specifically to look for them?


But Wall Street was “oc­cu­pied” any­way. Tourists, lo­cals, and Stock Ex­change em­ploy­ees were herded by po­lice and bar­ri­cades into tiny fun­nels of foot traf­fic. They shuf­fled down Wall Street and New Street and Broad Street as slowly as pris­on­ers bound by ankle chains.

Wall Street is oc­cu­pied … by fear – of the pub­lic and of its anger.

Cat­tle call

If we were herded like cat­tle, there was a cer­tain rough po­etry to that. Wall Street has never needed less from or­di­nary peo­ple to gen­er­ate its wealth, which is why cor­po­rate prof­its are so high dur­ing a pe­riod of mas­sive un­em­ploy­ment and a de­cay­ing mid­dle class.     

But it still needs us a lit­tle. Our labors and debts are still the raw ma­te­r­ial that Wall Street slices, lay­ers, bun­dles, and sells for its fi­nan­cial in­stru­ments.

Our house­hold fi­nances are to Wall Street de­riv­a­tives what cows are to ham­burg­ers.

Twist of Fear

The mar­ket had con­ducted one of its usual plunges the day be­fore, after the Fed­eral Re­serve an­nounced a minis­cule pro­gram called “Op­er­a­tion Twist” that will do lit­tle for our bro­ken and bleed­ing econ­omy. The mar­ket may not be all-know­ing. But it knows when a pro­gram is too weak to change our cur­rent pic­ture of on­go­ing eco­nomic mis­ery for mil­lions, or to hold off the in­creas­ing prob­a­bil­ity of an­other se­vere eco­nomic shock.

That’s why we saw a sharp down­turn after John Boehner and Barack Obama agreed on their aus­ter­ity pro­gram a few months ago. The mar­ket knew that wouldn’t stop the on­go­ing pain of a stag­nat­ing econ­omy and mas­sive un­em­ploy­ment.

Wall Street is oc­cu­pied … by doubt.


But the heads of our largest banks can’t stop pay­ing their ser­vant-class of Wash­ing­ton politi­cians to kill any pro­grams that might rekin­dle the econ­omy. They know what’s needed, but they can’t stop them­selves from keep­ing their own taxes as low as pos­si­ble for as long as pos­si­ble. That forces them to fight gov­ern­ment spend­ing when it’s most ur­gently needed.

And it dri­ves them to fight against the reg­u­la­tions that could pre­vent them from cre­at­ing an­other dis­as­ter. (Have you heard of ETFs yet? You will. Re­mem­ber, there was a time when you hadn’t heard of credit de­fault swaps, ei­ther.)

They won’t lend money to peo­ple to buy homes or start busi­nesses, be­cause these new and com­plex fi­nan­cial in­stru­ments are so much more lu­cra­tive. Bank­ing isn’t lu­cra­tive enough to in­ter­est bankers any­more. It’s not clever enough. From William Blake:

“… the water wheel that raises water into cis­terns (was) bro­ken & burned with fire …

Article image

to per­plex youth in their out­go­ings …”

You know why oth­er­wise smart hedge fund man­agers say crazy things, why they call them­selves “a per­se­cuted mi­nor­ity” or react to the sug­ges­tion that they pay the same tax rates as a fire­fighter by com­par­ing it to the in­va­sion of Poland?

Be­cause they’re ad­dicts. Junkies, even the smart ones, say crazy things to get their next fix. Es­pe­cially the smart ones.

Wall Street is oc­cu­pied by … ad­dic­tion.

A rights-free zone

The fear could be seen in the bar­ri­cades across Wall Street. And the greed could be seen in a bar­gain-hun­gry mar­ket that came roar­ing back that day, hop­ing to find gems among Thurs­day’s ruins.

But where were the demon­stra­tors? They want to cre­ate an Amer­i­can Tahrir Square, but when it comes to pub­lic demon­stra­tions Michael Bloomberg isn’t as de­mo­c­ra­t­i­cally in­clined as Hosni Mubarak. He proved that dur­ing the 2004 Re­pub­li­can con­ven­tion, when his po­lice force en­gaged in mas­sive vi­o­la­tions of civil lib­er­ties.

Mass ar­rests of demon­stra­tors and “in­no­cent by­standers” alike (aren’t they all in­no­cent until proven guilty?), spy­ing on non­profit groups, il­le­gal de­ten­tions … Mayor Bloomberg’s an­ti­de­mo­c­ra­tic skills were honed be­fore #Oc­cu­py­Wall­Street came along.

“Peo­ple have a right to protest,” said the Mayor, “and if they want to protest, we’ll be happy to make sure they have lo­ca­tions to do it.” The city found a lo­ca­tion — well away from Wall Street and the Stock Ex­change. That’s straight out of the George W. Bush play­book, where “free speech zones” were set up –where the demon­stra­tors couldn’t be seen.

Think about it: We cher­ish the rights of Tea Party demon­stra­tors so much that they’re al­lowed to bring guns into a Pres­i­den­tial rally. But these demon­stra­tors, whose cri­tique of Wall Street speaks for a vast ma­jor­ity of the pub­lic, must be herded away from our ti­tans of fi­nance and their del­i­cate senses.

Here’s some­thing Mr. Bloomberg should know: We al­ready have a “free speech zone.” It’s called “the United States of Amer­ica.”

The politi­cians don’t know, but the IMF un­der­stands …

Along comes the In­ter­na­tional Mon­e­tary Fund, the IMF. For decades the IMF has been seen, usu­ally cor­rectly, as the en­forcer of the de­vel­oped na­tions’ bank­ing in­ter­ests in Third World coun­tries. I’ve seen it in ac­tion my­self, in dozens of na­tions.

The IMF may be many things, but it is not ad­dicted – and it’s not fear­ful. It can see what Wall Street bankers can’t see, and it can say what Wall Street bankers can’t say: The aus­ter­ity eco­nom­ics which it pro­moted for so long has gone too far. Aus­ter­ity is no longer just abus­ing the pop­u­la­tions that give fi­nance its raw ma­te­ri­als. It’s de­stroy­ing them. it’s not thin­ning the herd any­more. It’s slaugh­ter­ing it.

When Chris­tine La­garde be­came the IMF’s Pres­i­dent there was wide­spread fear that she would end the some­what more pro­gres­sive poli­cies of her ac­cused pre­de­ces­sor, Do­minique Strauss-Kahn. But she’s in­tel­li­gent and ar­tic­u­late and un­able to avoid stat­ing the clear and ob­vi­ous, even if she needed to cloud it in in­di­rect lan­guage.

Here’s what she told a meet­ing of the G20, the IMF, and the World Bank while I was among the pedes­tri­ans being herded like cat­tle down Wall Street: “Very quickly the United States must re­duce its fis­cal deficit, par­tic­u­larly for the medium and the long term. It must deal ur­gently with un­em­ploy­ment and it must re­lieve pres­sure on overly in­debted house­holds.” (Reuters)

The Peo­ple’s IMF

Sev­eral weeks ago she was con­sid­er­ably more spe­cific. She said that “fu­ture con­sol­i­da­tion” (deficit re­duc­tion) first re­quired “poli­cies that sup­port growth and jobs today … growth is nec­es­sary for fis­cal cred­i­bil­ity.” She added, “Who will be­lieve that com­mit­ments to cut spend­ing can sur­vive a lengthy stag­na­tion with pro­longed high un­em­ploy­ment and so­cial dis­sat­is­fac­tion?”

In other words, we need jobs now, or we might have British-style riots and so­cial un­rest later. La­garde went on to sug­gest “more ag­gres­sive prin­ci­pal re­duc­tion pro­grams for home­own­ers, stronger in­ter­ven­tion by the gov­ern­ment hous­ing fi­nance agen­cies, or steps to help home­own­ers take ad­van­tage of the low in­ter­est rate en­vi­ron­ment.” (via Matt Ygle­sias)

Chris­tine La­garde isn’t a rad­i­cal pop­ulist. She’s say­ing we must be res­cued for the sake of the en­tire fi­nan­cial sys­tem. That’s the same rea­son they helped Wall Street. But they won’t do it for us.

Ironic, isn’t it? The leader of this of­ten-un­de­mo­c­ra­tic in­sti­tu­tion is call­ing for poli­cies that are widely pop­u­lar among De­moc­rats, Re­pub­li­cans, and in­de­pen­dents, but which are con­sid­ered “un­re­al­is­tic” by the lead­ers and opin­ion mak­ers in our “de­mo­c­ra­tic” sys­tem.

Some­thing’s bro­ken.

Look­ing for Lib­erty

Mean­while, back in lower Man­hat­tan, I was try­ing to find a place I’d never heard of in all my years of work­ing there: Zuc­cotti Park. That was where the demon­stra­tors had been penned in by po­lice, where they weren’t vis­i­ble to of­fend the del­i­cate sen­si­bil­i­ties of Wall Street’s most ef­fec­tive preda­tors.

Some quick Googling told me why I’d never heard of it. It was called “Lib­erty Plaza Park” when I worked here, but pri­vate in­vestors re­built it after 9/11 under the lead­er­ship of ex­ec­u­tive Robert Zuc­cotti.

The name “lib­erty” had been re­placed by the name of an in­vestor. Per­fect.

Wheels in Mo­tion

The #Oc­cu­py­Wall­Street demon­stra­tors are ex­press­ing the frus­tra­tions of the ma­jor­ity, hop­ing to chan­nel them into Arab Spring-style change. That’s the work of our time. It’s the same work we’ll be dis­cussing at next week’s Take Back the Amer­i­can Dream con­fer­ence.

The work is ur­gent and the time is now. Un­em­ploy­ment is still high. In­come in­equal­ity is higher in this coun­try than it is in Egypt. For those lucky enough to have a job, wages are stag­nated and op­por­tu­ni­ties for ad­vance­ment are few. Those wheels of William Blake’s con­tinue to spin, bind­ing the youth of the coun­try to:

“grind & pol­ish brass and iron, hour after hour, la­bo­ri­ous task, kept ig­no­rant of its use; that they might spend the days of wis­dom in sor­row­ful drudgery to ob­tain a scanty pit­tance of bread”

As for Mayor Bloomberg, and the men of women of Wall Street, and those who pass by with­out see­ing the demon­stra­tors a few blocks away, they’re des­tined to

“view a small por­tion & think that All, and call it Demon­stra­tion, blind to all the sim­ple rules of life.”

And to stay that way, un­aware of the changes hap­pen­ing all around them. They’ll find out some­day, hope­fully be­fore it’s too late.

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By Published On: September 26th, 2011Comments Off on Wages of Fear: Lockdown and the IMF on Occupied Wall Street

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