Occupying Wall Street Is Serious Business

Editor's note: A previous version of this article referred to allegations of fraud against US Bancorp. We regret the error.

"What do we want?" "500 different things!" "When do we want it?" "Nowish!"
 -- @TheTweetofGod

Thousands of people are occupying the Wall Street area as I type this, and have been for many days. The simplest way to describe it all is that masses of people are protesting the status quo, specifically the behavior of corporate America. The message has been compelling enough to keep drawing new people, and it's spreading to cities across America and the world. But many are mocking it, or at least chuckling at it all. Fair enough. There's some cause for head-shaking. But don't write the protests off: There's a lot of truth behind them.

The grievances
One criticism is that the movement has been disorganized. Well, that's not surprising, especially as it snowballs into something bigger than initially expected. Organization is happening, though, and the NYC General Assembly recently issued a "Declaration of the Occupation of New York City," listing many grievances and a few calls to action.

There's no doubt critics will find something objectionable in it. For example: "[Corporations] have held students hostage with tens of thousands of dollars of debt on education, which is itself a human right." This strikes me as silly, because students with debt knowingly took on that debt, much as homebuyers opt for mortgages.

The truths
Despite the quibbles one might raise, there are plenty of hard-to-refute truths at the declaration's core:

  • "They have taken our houses through an illegal foreclosure process, despite not having the original mortgage." It's true that many people took on mortgages they couldn't afford, but it also appears that banks encouraged this, and that banks such as Bank of America (NYSE: BAC  ) used document-processing mills that allegedly engaged in fraud to expedite foreclosures and eject people from their homes.
  • "They have taken bailouts from taxpayers with impunity, and continue to give Executives exorbitant bonuses." It's true that banks such as Goldman Sachs took bailout money and paid out many millions in bonuses to its bigwigs. Columnist Matt Taibbi has noted that in 2009, Goldman reported $13.4 billion in profits and paid out $16.2 billion in compensation and bonuses.
  • "They have continuously sought to strip employees of the right to negotiate for better pay and safer working conditions." A report from the advocacy organization American Rights at Work found that corporate opposition to unions has intensified over the past 20 years. It has accused companies such as Verizon (NYSE: VZ  ) of illegally targeting union supporters. FedEx (NYSE: FDX  ) has been accused of classifying as independent contractors workers who seem to be proper employees, in order to avoid various labor laws.
  • "They have donated large sums of money to politicians, who are responsible for regulating them." Visit OpenSecrets.org and you'll see that among the top political contributors from 1989 to the present are AT&T (NYSE: T  ) , Altria (NYSE: MO  ) , and United Parcel Service (NYSE: UPS  ) , as well as many other well-known companies and associations, including unions. AT&T has contributed more than $41 million, overall.

These are just a few of many grievances, and just a few examples of many things that don't seem to make America a better and stronger nation.

Capitalism isn't evil
But all is not lost within a system of capitalism. In many ways, it serves us quite well, offering entrepreneurs and workers the chance to build businesses and to prosper.

And while many things seem to get worse from year to year, such as outlandish executive compensation, some things actually get better. For instance, not so long ago, investors were mostly at the mercy of traditional "full-service" brokerages, which charged arms and legs per trade and offered financial guidance that was often compromised by conflicts of interest. Enter the discount brokerages, which offer very inexpensive trading commissions and gobs of free research and guidance to help investors make the best decisions.

Even the severely problematic initial public offering process has been improved upon a bit, with some companies, such as Google, bucking the standard operating procedure and going public via Dutch auctions. By contrast, the standard operating procedure is good at making banks many millions of dollars -- and in some cases, such as LinkedIn's recent debut, seems to really fleece the company going public.

Be inspired
Don't dismiss the protesters. They're making lots of good points, and I think that most of us would agree that our current system leaves at least some room for improvement, if not a lot of room.

Don't let the protesters' efforts be wasted on you. Be inspired. Hope for a better future and consider what role you might play in making it so. You can vote your conscience on proxy ballots for the companies in which you own stock. You can vote with your wallet, too, when you see companies doing things you don't like. You can remind companies you're interested in that they can actually make good money by doing the right thing.

And you might even join the protesters -- on Wall Street and in many cities besides New York.

Be an informed citizen and investor: Read up on corporate governance issues and corporate hanky-panky via our own Alyce Lomax's articles.

Longtime Fool contributor Selena Maranjian owns shares of Google and Verizon Communications, but she holds no other position in any company mentioned. Click here to see her holdings and a short bio. The Motley Fool owns shares of Bank of America, Google, FedEx, Altria Group, and United Parcel Service. Motley Fool newsletter services have recommended buying shares of FedEx, Google, and AT&T. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (24) | Recommend This Article (24)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 06, 2011, at 11:18 AM, ifool100 wrote:

    Thanks Selena. The police brutality is terrible. The "white shirts" remind me of scenes from third world countries. The OWS group, by it's nature, is not centralized. It seems to be mainly students, but is now being supported by several unions and a wide range of people. They are not necessarily anti-corporation. They are anti-corruption, which stems from the huge amounts of money corporations are pouring into the political system for their own gains. This is not an affront to capitalism. It is a response to the contamination of capitalism. When the US Supreme Court declared that corporations are people, they demonstrated the extent to which our nation has descended into self delusion. When 1% of the nation owns 90% of the wealth it is no longer a nation for the people, by the people. It is a nation for the 1% reinforced by the laws passed to benefit the 1%. I'm all for making money, but not at the expense of our nation's future. When we have only corporations battling for our nation's future, we're in big trouble.

  • Report this Comment On October 06, 2011, at 11:39 AM, GordonsGecko wrote:

    They are protesting in the wrong place. They should be in D.C.; protesting the law makers and the government. It was that group that relaxed the rules which lead to Wall Street firms running wild, leveraging up and playing both sides of deals.

    Look to Washington to find the source of the greed. Career politicians pandering to whomever puts money in their pockets instead of working FOR the people they are supposed to protect.

  • Report this Comment On October 06, 2011, at 11:39 AM, jdmeck wrote:

    ifool100 - It's people like you that make me worry about the future of our country.

  • Report this Comment On October 06, 2011, at 11:43 AM, jdmeck wrote:

    BTW - the comment about USB, is not accurate. It's one of the banks they bought (at the feds urging) that was causing some problems. USB buying the bank saved many jobs as well as very much money for taxpayers.

  • Report this Comment On October 06, 2011, at 11:46 AM, mhonarvar wrote:

    jdmeck - so you think 1% SHOULD own 90%...and anyone that questions it is a danger to the future of the country?

  • Report this Comment On October 06, 2011, at 12:09 PM, nickbarger wrote:

    Old saying -- those who ignore history are condemned to repeat it. Socialism was a consequence of income disparity becoming extreme. We have extremes today. The middle class is broke. The government is broke cutting off basic services just at the time when people need them most. There are (and sadly today is) no Jobs any more, youth unemployment is at its highest level. Yet, corporate balance sheets are stacked up and so are the coffers of the 1 percent.

    Why can't the corporations and the 1 percent take more responsibility. Subsidize healthcare, finance schools, build bridges, retrain the jobless, this is the best long term investment they could make. These protests are a cry for help more than anything else. It is time that the "rich" corporations and the 1 percent take more responsibility, or they hurt themselves as these and other kinds of protests spread all over.

  • Report this Comment On October 06, 2011, at 12:49 PM, Tygered wrote:

    Great article and it is people like you that give me hope about the future. I also agree with nickbarger about a sort of Noblese Oblige. The 1% should give back to the community and the country that gave them so much. It not only is owed to the rest of us, but it's simply the right thing to do. It is the taxpayers and the workers that built and paid for the roads, schools, bridges and buildings they make use everyday to make their billions.

    Instead they sit in their ivory towers and tell the rest of us to "eat cake." These corporate tycoons could learn a lot from Marie Antoinette.

  • Report this Comment On October 06, 2011, at 1:02 PM, djemonk wrote:

    I'm a capitalist. I made a not-insignificant portion of my income through Wall Street and the rest through a corporation.

    However, capitalism must serve the people and not the other way around. Capitalism is a tool that we put in place to make the lives of Americans better, not an unquestionable religion handed down from On High. Capitalism is a means to an end and not an end in-and-of itself.

    So is socialism, by the way. Some people get way too uptight about labels and miss the forest for the trees and I would say that THOSE people are a bigger threat than capitalism, socialism, communism, or any other -ism could ever be.

  • Report this Comment On October 06, 2011, at 1:08 PM, Gator626 wrote:

    Mildly hypocritical of this movement to accuse Wall Street of cripping unions' ability to negotiate collectively for workers rights, yet arguing that some donate large sums of money to politicians. Unions are most of the largest political lobbyists in this country in regards to sums of money donated.

  • Report this Comment On October 06, 2011, at 1:27 PM, Bert31 wrote:

    I think the violence being advocated should really be given more attention. People are talking about behading Wall Street bankers and hanging them. The signs are full of vulgarity and the street cinema is crude at best. I am angry as well about corporations taking advantage of the situation. As layoffs increase more and more work is heaped upon fewer and fewer employees. But these people are focusing on one sector of the economy unfairly and are being co-opted by those with ideological objectives intentionally skewing the facts. No one forces you at gunpoint to go work at GM, Verizon, or Fed-Ex unless you want to. I am not interested in being included in the 99% when they are talking about violence and revenge.

  • Report this Comment On October 06, 2011, at 2:09 PM, nickbarger wrote:

    Agree with SoundTrading, no violence. The 1 percent have families and loved ones too. If you follow Gandhi and now Anna Hazare in India protesting against corruption, millions gathered and marched together with no violence at all.

    But people also work in exploitative situations when they have no choice. The 99 percent are not valued. They are cost items on the corporate or national income statements, or counts on a census.

    The real crisis is leadership. What if Goldman was to fund the tuning of 20 schools, GE build 3 bridges, Apple run 1 hospital in each state for free treatment, do that for 3 years or 5 years till things heal and recover. We all loved America for what it stood for and became -- a true role model. Sadly it is not any more and before it all goes away, the ones with the money have to show leadership and kindness. Or they destroy capitalism and all it's benefits.

  • Report this Comment On October 06, 2011, at 2:22 PM, mzumtaylor wrote:

    I agree with much of what you say, Selena. I think that people should take the Occupy Wallstreet protests seriously. Our capitalism isn't broken, per se, but there are some aspects that need to be tweaked.

    I do disagree with one point: your dismissal of the people protesting about student loan debt.

    Yes, it's true that sudents knowingly took out student loans to fund their education, but I would argue that they did not fully understand the implication of those loans at the time they accepted them. 18-year olds know much less about what loans and debt mean for them than do people buying even their first house (as the second group is often in their mid-to-late 20s and has been in the working world for a while).

    Granted, this is a financial literacy issue, in part, but the poor economy and the downsides to acruing (on average) $25-30K in debt before you even have a job are causing a lot of problems for college graduates who might otherwise be bolstering the economy with their buying power.

    I don't know about anyone else, but when I went off to college, all anyone told me was "Get a Bachelor's degree... doors with open for you that would otherwise be shut!" True enough, but....

    Is the student loan situation and its attendant issues worth protesting? I think so. Is it worth protesting on Wall Street? Maybe, maybe not. But I don't think the concerns of people with overwhelming student debt should be so easily dismissed.

  • Report this Comment On October 06, 2011, at 2:59 PM, FutureMonkey wrote:

    Student loan debt falls into two categories - affordable and unaffordable. The Pell Grants and other federal student loans are provided at a reasonable interest rate. Some private banks are screwing students into the ground with insanely high, non-competitve rates -- sometimes as high as short term credit.

    No Capitalism is not evil. But some corporations do evil things and defend it as capitalism. Just because you can legally rob people blind doesn't make it right to do so.

    FM

  • Report this Comment On October 06, 2011, at 4:07 PM, TMFSelena wrote:

    Thanks for the kind words, supporters, and those who disagree with me, thanks for taking the time to object. Lots of good points have been made above. :)

    Selena

  • Report this Comment On October 06, 2011, at 4:52 PM, rmat86 wrote:

    I think there are definitely changes to be made in the financial sector and I'm glad that people are finally not being so apathetic. My only criticism is that I think a lot of this anger must be directed at Congress and the Federal Reserve for facilitating and actually encouraging the financial sector for taking those huge risks that have caused our economy so much trouble, for example, forcing lenders to issue sub-prime loans and then allowing firms which invested heavily in the MBS which contained these loans to become so over-leveraged. Keeping the interest rate so irregularly low for so long didn't help either. Yes, Wall Street and the financial sector were the hands that directly screwed it up, but they were working within the parameters of a government policy which kept pushing them despite the enormous and obvious risks.

  • Report this Comment On October 06, 2011, at 6:22 PM, 441Nabets wrote:

    The rally in Cleveland kicked off today in front of the Free Stamp Statue. The biggest message I got out of it was for a strong economy there needs to be buyers as well as sellers. Corporations need to get off their butts and hire people with all the money they are hoarding. All they are doing is waiting for an administration change to hire.

  • Report this Comment On October 06, 2011, at 6:32 PM, xetn wrote:

    Free-market capitalism is the most equatable system ever conceived. But crony-capitalism, like socialism is just plain bad. What we have now is a combination of crony-capitalism, various forms of socialism such as the Fascist take-over of Chrysler, GM etc.

    People have become dependent on the government and over half the citizens receive some sort of check for unemployment, social security, medicare, food stamps, etc.

    Almost half pay no taxes but expect others to pay for their wants and needs. I seems to me that we have seen the general population believing that they are owed a living, free health care, free housing, free food all from the "government". Few, it seems, are willing to take responsibility for their own actions and survival.

  • Report this Comment On October 06, 2011, at 7:18 PM, greyone99 wrote:

    They should be in DC not occupying Wall Street.

  • Report this Comment On October 06, 2011, at 8:01 PM, moneyman35 wrote:

    Nothing happens in DC unless the money from Wall Street says it can. So DC is a sentimental gesture but means absolutely nothing.

    You say that people depend on the government but what is the government doing in the US to even let people to depend on them. The largest banks in the world depended on the government in 2008 if you recall...

    How amazing would it be if the business you were running was going bankrupt because you knowingly made awful, horrible investments but right before it did you called the Government and said hey could i get a few billion dollars? And bam there it was, enough money to continue your business and pay your self a bonus at the end of that same year!!!!!

  • Report this Comment On October 06, 2011, at 8:10 PM, 07070 wrote:

    Look what's happening... Due to Occupy Wall Street, we're having a CONVERSATION. A conversation that is long-overdue and is much needed.

    OR

    Do nothing and don't regulate the financial system in this country and continue to allow other, smarter, better regulated investors from other countries buy up what's left of American stock and businesses.

    2008 - Twenty-five U.S. Banks failed

    2009 - ONE HUNDRED and FORTY U.S. Banks Failed

    2010 - ONE HUNDRED and FIFTY-SEVEN U.S. Banks failed

    2011 - Seventy-four U.S. Banks failed (So Far)

    2008 to 2011 - Canadian Banks gain dramatic market share in the U.S.

    "Canada’s banks are generally ranked as the safest and soundest in the world, and their non-politicized banking system could provide a model for banking reform in the United States. Moving towards the Canadian banking system could go a long way towards stabilizing our mortgage, credit, and housing markets and make us less vulnerable to financial shocks in the future."

    - Mark J. Perry is a professor of economics in the School of Management at the Flint campus of the University of Michigan, and a visiting scholar at the American Enterprise Institute.

    R E G U L A T I O N People.

  • Report this Comment On October 07, 2011, at 1:00 AM, moneyman35 wrote:

    Well said 07070. The right can bitch all they want about having a "free market" and no "government interference". The overwhelming evidence shows that if you don't regulate those in the banking system, THEY WILL TAKE ADVANTAGE OF IT!!!!!!!

    It's human nature to take the easy route to benefit oneself. Thats all they're doing and you can hardly blame them, most other people in the world would too. Although we'd never admit it...

  • Report this Comment On October 12, 2011, at 10:59 AM, TurbulentTime wrote:

    jdmeck - It's people like you that make me worry about the future of our country. This seems to me it describe you better than ifool100.

  • Report this Comment On October 12, 2011, at 6:31 PM, DJDynamicNC wrote:

    "Almost half pay no taxes" - xetn

    That's actually a false statement. You mean to say that almost half of Americans are so poverty stricken that they can't even escape the first income tax bracket.

    Those people still pay sales taxes, payroll taxes, social security taxes, state income taxes, and a variety of other levies.

    If you need help finding this or similar information in the future, you can use sites such as www.google.com or www.bing.com to search for information on the internet. :)

    Hope that helps!

  • Report this Comment On October 14, 2011, at 9:09 PM, TimothyVR wrote:

    "And you might even join the protesters -- on Wall Street and in many cities besides New York."

    -------------------------------------

    What is this dogmatic nonsense? What are your interests in pushing these protests and lecturing the rest of us who come to this site?

    This romantic and sentimental view of this anti-capitalist movement might find a place on a personal blog or a left-wing political site, but it has no relation to this site.

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