Let’s Occupy Common Ground

The Occupy Wall Street movement is already showing signs of being commandeered by the great Main Street street fight between “left” and “right” -- also known as “us” versus “them.” Don’t fall for the distraction: The 99% really need to occupy common ground; there’s plenty of it to occupy.

Wall Street deserves universal wrath. In 2008, financial companies like Goldman Sachs (NYSE: GS  ) , Citigroup (NYSE: C  ) , AIG (NYSE: AIG  ) , and Bank of America (NYSE: BAC  ) privatized profits and socialized losses when they received a monster public bailout. Not only did they show no remorse or humility, they still believed they deserved whopping big salaries and bonuses.

Forget arguments about “capitalism” or “socialism.” That behavior exemplified some other “ism” -- probably financial cannibalism. Of course, we can’t just blame them. Politicians enabled the outcome, so the powerful political class is a huge part of our current problem.

The American people got mugged and then were left to suffer the consequences for years since. Having gained nothing but a horrible economy and a terrible case of post-traumatic stress disorder is a legitimate reason to be angry. However, hopefully most of us 99%ers can find some common ground with one another and keep our reason despite our anger.

This is not pro-market
Certain folks want everyone to think that the “free market” is about big corporations making big profits, regardless of how they make them.

Somehow, folks who oversimplify this line of thinking tend to start believing other irrational things, too. For example, that it makes perfect sense for CEOs to make 350 times the salary of the average worker, even if they’re not very good at their jobs. Or that corporate welfare in the form of subsidies, artificially low tax rates, and other big-corporation goodies is somehow “free market” policy.

Such behavior is not pro-marketplace, it’s pro-big business, and there’s a major difference. For example, for all the howling about the Solyndra scandal and “green energy subsidies” (the horror), I have a funny feeling the screamers are failing to address the fact that Big Oil has gotten plenty of government help.

For example, in May, the Senate voted down an attempt to cut $21 billion in tax-break-related subsidies for giant oil companies like ExxonMobil (NYSE: XOM  ) to produce oil in the U.S., recoup the costs of paying foreign taxes, and write off certain drilling and development costs.

Giving any industry a “break” over others actually doesn’t reflect a fair marketplace; it distorts the marketplace. And let’s not even get started on regulatory capture. These are ways the powerful always win.

This is not pro-worker
Certain folks want everyone to think big corporations are always evil. For example, now that the unions are involved in Occupy Wall Street, the dialogue could skew in that direction. However, let’s not forget all those “evil corporations” actually employ an awful lot of people here in the U.S.

Unions serve a great purpose: pointing out true worker abuse. They’re also awesome watch dogs for issues like out-of-control CEO pay.

However, unions have a negative tendency. They sometimes detach from economic reality in their zeal to ensure workers get the goods. Remember the old “killing the goose that laid the golden egg” fable? Consider how close the U.S. post office is to bankruptcy; that’s a prime example of the damage union demands and expectations can do over the long term.

That’s not pro-worker, that’s pro-economic nihilism.

Furthermore, the word “profit” is not necessarily a dirty word. Ultimately, “profit” is simply the difference between business success (solvency) and failure (bankruptcy).

Your favorite mom-and-pop establishments are trying to turn a profit; are they evil? Are they even more evil because they often can’t offer worker benefits, and Starbucks (Nasdaq: SBUX  ) spends more on employee health care than it does on coffee?

Pro politics is the problem
The current political scene spreads rancor and enables the imbalance of power and situations where only some people are treated “fairly.” Those who are advocating taking the money out of politics are on the right track.

Dylan Ratigan has started an effort to “Get Money Out” of politics. Starbucks’ founder and CEO Howard Schultz has also appealed to CEOs to cut off political donations until Washington gets its act together. Although that’s a great idea, maybe Cypress Semiconductor’s founder and CEO T.J. Rodgers gave the most righteous response; he was already “on the Schultz plan” because he doesn’t give to political candidates in the first place.

Shareholders can help by supporting resolutions demanding corporations disclose political spending. Some of the companies that fielded such resolutions this year included Northrop Grumman and AT&T (NYSE: T  ) .

Along these lines, though, for all the outrage about the Supreme Court’s Citizens United decision, let’s not forget another massive campaign contributor: unions. The Center for Responsive Politics’ top 10 list of highest contributors from 1989 through 2010 only included one corporation (AT&T). The rest were unions and special interest groups.

Common ground
Let’s hope “the 99%” will stop fighting with each other and start fighting the power on all sides of these issues. It’s time to start agitating for ethics and fairness, and fight corruption and injustice on all sides instead of constantly taking sides. As long as the people are distracted by arguing with one another, the people in power always win.

Let’s try to occupy some common ground.

Check back at Fool.com for Alyce Lomax's next column on environmental, social, and governance issues on Wednesday, Oct.26.

Alyce Lomax owns shares of Starbucks. The Motley Fool owns shares of Northrop Grumman, Bank of America, Starbucks, and Citigroup. Motley Fool newsletter services have recommended buying shares of Starbucks, AT&T, and Cypress Semiconductor. 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 (26) | Recommend This Article (50)

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 12, 2011, at 4:44 PM, cattywampus wrote:

    If passion drives you, let reason hold the reins ~ Benjamin Franklin

    I have enjoyed your articles on responsible investing.

  • Report this Comment On October 12, 2011, at 6:00 PM, DJDynamicNC wrote:

    One thing I like about Occupy Wall Street - I wind up talking with people who agree wholeheartedly with my social democratic positions, and then I also wind up having wild (and invigorating) debates with people who are passionate about Anarcho-Capitalism or Objectivism, and everything in between.

    We don't all agree on solutions; we don't even all agree on demands, which is why there isn't a comprehensive list of them. What we DO all agree on - and what we're fighting for - is that the system is broken. We know, to the depths of our souls, that we can do BETTER than this, as a nation and as a civilization.

    That's worth fighting for. Together.

  • Report this Comment On October 12, 2011, at 7:37 PM, devoish wrote:

    "Consider how close the U.S. post office is to bankruptcy; that’s a prime example of the damage union demands and expectations can do over the long term" - Alyce Lomax

    ? What if that is not true. Theoretically common ground is going to require some truth. If someone is lying to you, to serve their own agenda, there should not be any common ground except you standing on top of the ground they are lying under.

    You seem to have been convinced that unions have taken too much from the income of the USPS and therefore they have destroyed it. That seems to be "common knowledge", but sometimes there is uncommon knowledge too.

    "But many postal workers say the much-touted crisis facing the U.S. Postal Service is not what it seems. They argue the greatest volume of mail handled in the 236-year history of the postal service was 2006. They also point to a 2006 law that forced the USPS to become the only agency required to fund 75 years of retiree health benefits over just a 10-year span, and say the law’s requirements account for 100 percent of the service’s $20 billion in losses over the previous four years, without which the service would have turned a profit."

    CHUCK ZLATKIN:" Well, It’s become a crisis but we feel it is a manufactured crisis because the Postal Accountability and Enhancement Act, which my union opposed, which was supposed to prepare the Postal Service for the 21st century, has actually created this crisis."

    So get back to me on common ground.

    And yes, I would like to be on common ground, but not with liars.

    So if Tom and Dave have your retirement benefits already fully funded out to 2086, then maybe the union claim that the USPS is under extraordinary pressure is wrong. But if it is right, maybe it is under pressure from thieves trying to steal post office property by way of a manufactured bankruptcy. And maybe some political partys and their politicians are helping that happen. I know I read in TMF investment advice once upon a time that real estate carried on the books at the purchase price from 200 years ago was a hidden gold mine in investing opprtunitys.

    So if all thats true, if somebody has sent scum into Government to force a USPS bankruptcy in an attempt to steal valuable real estate from Americans in a bankruptcy fire sale then I have common ground with the other 99%.

    Best wishes,

    Steven

    PS, I like your post, I would like to find common ground, but I am struggling to.

    .

    Here is a link to HR6407 the postal accountability and enhancement act and section 801-803 is the relevant legislation. But I would suggest that it says that if jimmy is twenty years old and the post office hired him, they have to set aside the benefits he will get when he is 95 years old. I am pretty sure that Fed EX is allowed to assume 8% growth in investments and also to put money away tomorrow for their obligation to the 20yr old that earned a deferred benefit today.

  • Report this Comment On October 12, 2011, at 10:46 PM, Melaschasm wrote:

    "They also point to a 2006 law that forced the USPS to become the only agency required to fund 75 years of retiree health benefits over just a 10-year span, and say the law’s requirements account for 100 percent of the service’s $20 billion in losses over the previous four years, without which the service would have turned a profit."

    The above quote is essentially true. This should be the law for all defined benefit retirement plans including social security and medicare. If defined benefit plans were fully funded at the time they were earned, we would have avoided many major financial problems including the recent auto bankruptcies and the pending disaster with ss/medicare.

  • Report this Comment On October 12, 2011, at 11:19 PM, wolfman225 wrote:

    +1 rec. Well written and balanced, without being preachy to either side. Nice Job. Common ground is the most valuable real estate of all.

  • Report this Comment On October 13, 2011, at 6:47 AM, devoish wrote:

    melaschasm,

    As long as a company is in existance it used to be obligated to pay it deferred compensation obligations. In the event it failed, its obligations were paid by the PBGC.

    Best wishes,

    Steven

  • Report this Comment On October 13, 2011, at 8:07 AM, Bert31 wrote:

    Thank you for one of the most sensible articles I have seen on The Motley Fool about OWS.

  • Report this Comment On October 13, 2011, at 5:57 PM, DJDynamicNC wrote:

    Devoish: +1

  • Report this Comment On October 14, 2011, at 5:35 PM, TMFLomax wrote:

    cattywampus,

    GREAT quote. Thank you for sharing it!

    DJDynamicNC,

    Love that -- yeah, I also agree with a lot of the people that supposedly are on the other side of my beliefs. I think we all usually have a bit more in common than we think!

    devoish,

    I was going with the data that I had heard about the post office's fiscal situation; things like the fact that labor makes up 80% of its costs, there are union-mandated no lay-off policies, etc. I think unfunded pensions are a huge potential problem but perhaps the law you refer to (which thank you for sharing that, I am not aware of it) may be too onerous. Is there something in between, I wonder?

    And I didn't mean to overly beat up on the post office either. They really do an amazing job with delivery and I always enjoy their services when I use them. They are very competitive in terms of service; first class mail does generally make it in about a day, which is pretty incredible. I'm also a fan of sending hand written cards on occasion. I wish more people did. However, it does seem as if it's a decent example of unions sometimes needing to be a little more understanding about the economic factors at hand, like in this example, that paper mail has been disrupted pretty heavily by electronic communication.

    Thanks for all the comments everyone!

    Alyce

  • Report this Comment On October 15, 2011, at 1:09 PM, Bert31 wrote:

    First of all Piers Morgan wrote about phone hacking to get stories in his 2006 memoir. Yet this is a huge scandal for Murdoch now? Why? Because it is a political WITCH HUNT!! Second of all, Murdoch quickly shut down the offending newspaper. Rather promptly in my opinion. Seems like decisive executive action to me. Something the U.S.A could use. My opinion, OWS needs to set up camp about 230 miles south west at 1600 Pennsylvania Avenue.

  • Report this Comment On October 15, 2011, at 1:19 PM, Bert31 wrote:
  • Report this Comment On October 15, 2011, at 1:29 PM, TimothyVR wrote:

    It's much too late for these sentimental notions. Have you seen the violent mobs in Rome? It is now around the world.

    The radical left has taken over - surprise - and the sweet idealism has already gone. It didn't take long.

    The vast majority on this site have overwhelmingly supported this movement. I wonder if there might be second thoughts now, and it is only beginning.

  • Report this Comment On October 15, 2011, at 1:37 PM, Bert31 wrote:

    List of Warren Buffet's, Left Wing Hero, holdings

    JNJ - Guiness book of Recalls

    KO- pushing poison sugar water causing a worldwide obesity epidemic

    MCO- selling subprime under the label AAA triggering the financial crisis

    Don't forget the loans to GS where he profited from bailouts, and his loan to BoA just DAYS before they began raising fees on debit cards usage (maybe he knew something, maybe he didn't).

    Looks good, no scandals to uncover there.

  • Report this Comment On October 15, 2011, at 1:52 PM, Bert31 wrote:

    Oh and I just checked, NWS is outperforming the S&P by 18.2% since going public, and that's not including the dividends. Its also outperforming BRK.B by about 3.6% over the same time period, again not including the dividends. Obviously shareholders have a lot to complain about.

  • Report this Comment On October 15, 2011, at 2:00 PM, JackCaps wrote:

    After the suggestion that "Shareholders can help by supporting resolutions demanding corporations disclose political spending.", I had expected a similar suggestion to union members and their unions' political spending disclosures. Especially since the next paragraph noted that: "The Center for Responsive Politics’ top 10 list of highest contributors from 1989 through 2010 only included one corporation (AT&T). The rest were unions and special interest groups."

    Was this an oversight?

  • Report this Comment On October 15, 2011, at 2:10 PM, Bert31 wrote:

    Now we have violence in Rome as Timothy VR pointed out. I sure hope that the MF editoriral board puts out a strongly worded, clearly written statement, against the use of violence to advance the OWS agenda, whatever it may be.

  • Report this Comment On October 15, 2011, at 2:19 PM, WikiCPA wrote:

    Great post, balanced and eye-opening. Best part about reading Fool articles are finding the statistics and facts like they are:

    "Your favorite mom-and-pop establishments are trying to turn a profit; are they evil? Are they even more evil because they often can’t offer worker benefits, and Starbucks (Nasdaq: SBUX ) spends more on employee health care than it does on coffee?"

    Astounding

  • Report this Comment On October 17, 2011, at 9:02 AM, JonROrcutt wrote:

    Often times if you question the banks and the bailouts you are told you are not a capitalist. I am a capitalist to the core. I think people should look at the definition of capitalism and ask if many of the banks pracitces were capitalism at its finest. I was raised to believe that capitalism meant if you worked hard and were willing to assume the risks then things could pay you back in a big way. What the banks did was find a way to reap the rewards of the market (specifically real estate) and then pushed much of the risk off on to others. That is not capitalism. Lets not forget the S&P who made pushing the risk off on to others easier by rating the MBS' AAA.

  • Report this Comment On October 17, 2011, at 1:16 PM, tizer21 wrote:

    Great article filled with a lot of common sense. Unfortunately those two items are very difficult to find in main stream press these days.

  • Report this Comment On October 19, 2011, at 3:24 PM, DJDynamicNC wrote:

    I certainly don't endorse violence, and I am certain nobody on this site does.

    On the other hand, it's interesting that nobody considers the forcible eviction of families and the witholding of resources from those most in need in order to preserve tax cuts for the wealthy and defense spending to be "violence."

    As long as you only destroy lives through financial mechanisms, I guess it's ok.

  • Report this Comment On October 20, 2011, at 9:31 AM, devoish wrote:

    Oops, no link.

    http://www.govtrack.us/congress/bill.xpd?bill=h109-6407

    http://www.ftc.gov/os/2008/01/080116postal.pdf

    Honestly this reminds me of the marketing campaign to destroy GM and blame its demise upon its union benefits during the twelve months between when its union had contracted to remove those obligations from GM and into its own care, and the date that contract was to be fulfilled. Once the union agreed to be responsible for those benefits, GM became more valuable, and the financial industrys publicity campaign to drive its stock price down began in earnest on CNBC and the World Wide Web. You could not escape it. Every time a union rep spoke some free marketeer called them cheats and liars. Hundreds of financial advisors repeated what they had heard about union costs (just as you did about the post office) without investigating details for themselves. Such a campaign might have kept people smoking cigarettes long after it was learned they will kill you.

    Free speech is valuable Common Ground in the United States. Beware of thieves in the land.

    Best wishes,

    Steven

    Thats how I saw it. In 2007 when the transfer was agreed to by union leaders, union employees felt that the funding was a handout to GM, because they were forced to accept newly issued stock in GM as funding. notes;

    The 2007 agreements deliver financial gains to our active and retired members, and also protects top-quality health care coverage for both groups. As has been widely discussed, we secured lifetime health care for current and future UAW retirees, including every seniority worker who was on the active rolls on September 14, 2007.

    We accomplished this through the creation of VEBAs or Voluntary Employee Beneficiary Associations at each company.

    We originally proposed the VEBA in 2005, when we took the step of negotiating, mid-contract, modified health care for retired workers at GM and then Ford.

    Given the current state of our industry and the current state of the America’s flawed health care system, there is no risk-free way to guarantee lifetime health care coverage. Not for active workers. Not for retired workers. Not for anyone.

    That’s a disgrace, because every other industrialized nation manages to guarantee health security for its citizens at a far lower cost than we pay here in the U.S. Retiree health care will be paid for by an independent VEBA trust, with funds that can only be used for that purpose. In the long run, that is more secure than a promise of health care from a company.

    The independent VEBA trusts will be funded by tens of billions of dollars in cash, stock and other securities contributed by our employers. It is the largest transfer of assets from capital to labor, ever, in the history of the United States.

    Because the trusts are pre-funded, Chrysler, Ford and GM can remove projected retiree health care costs from their books, which will improve their financial positions.

    But we bargained hard for sufficient funding, and the independent trusts will receive up-front funding and begin earning interest right away. So we are confident the VEBAs will provide high-quality health care benefits for our retirees for the next 80 years.

    http://www.uaw.org/articles/remarks-uaw-president-ron-gettel...

  • Report this Comment On October 23, 2011, at 9:10 PM, wasmick wrote:

    "On the other hand, it's interesting that nobody considers the forcible eviction of families to be violence."

    Which families are these? Those who didn't pay their mortgages and thus lost the right to remain in the home?

    The reason many don't consider that violence is because it's not violence.

  • Report this Comment On October 24, 2011, at 7:31 AM, rtichy wrote:

    I think your article addresses a couple of the issues that "Occupy Wall Streeters" are thinking about, but not even all the reasonable ones. They are probably reasonable when they suggest Glass-Steagall be put back in force, for example.

    However I think that the biggest issue remains somewhate unvoiced: what people really want is more equality of opportunity. Right now the unemployed and the young have almost no opportunity. The young adults have spent money and time to go to college, and there is nowhere to apply that education that will pay for the education loans.

    This is a big problem and it will become an even bigger problem when they focus their energies on older workers out of frustration. It'll be the people who are older than their parents but not quite as old as their retired grandparents.

    Another great bailout is coming, and it's going to have to do with the ability of people to shed their education loan debts in bankruptcy or else the education loans are going to have to be forgiven. There is no likelihood of these loans being re-payable at all, with the employment market crippled for years to come.

  • Report this Comment On October 24, 2011, at 5:59 PM, DJDynamicNC wrote:

    "Which families are these? Those who didn't pay their mortgages and thus lost the right to remain in the home?"

    A) Families evicted from their apartment when a delinquent landlord is removed.

    B) Families evicted because they were unable to pay the mortgage after the subprime loans they were sold by the financial experts they were told their entire life they should trust went belly up.

    C) Families foreclosed on by banks that don't even have the deed to the property in question (and may not even know where the deed resides) but without the resources or knowledge to fight the bank on the foreclosure.

    D) Families foreclosed on by banks who refuse to offer refinancing terms; sure it's legal. It's also despicable, and an inefficient allocation of economic resources.

    And yeah, I'm a bleeding heart liberal who thinks that people are imperfect and should get more than one chance if they screw up, so go ahead and throw in E) people who didn't make all their mortgage payments on time. Can you legally kick them out of their homes? Sure. Is it the best economic policy? Doubtful. In either case, it should be a last resort, not a first resort.

  • Report this Comment On October 25, 2011, at 10:55 PM, devoish wrote:

    DJDynamicNC,

    I would add in people who qualified for lower interest fixed rate mortgages but were steered into more costly subprime loans by lenders seeking to sell higher commission loans.

    It would kind of be like a mechanic finding a loose battery cable and selling you a new starter anyway.

    Or as i call it, stealing.

    Best wishes,

    Steven

  • Report this Comment On October 26, 2011, at 2:46 PM, DJDynamicNC wrote:

    Devoish,you're absolutely right, thanks for correcting my oversight. :)

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