Why Occupy Wall Street will fail

This is an article from Wall Street Journal's Market Watch. But the point I want to make here is not OWS but money in politics.


HALF A BILLION campaigning dollars for a $500,000 job???
Does is make sense to you?? Surely not me.


Here you go:

BOSTON (MarketWatch) — The public has every reason to be angry at what’s going on in this country, and every reason to protest. But will the Occupy Wall Street movement succeed in changing anything? Don’t count on it.

Here are five reasons I think these protests are doomed to fail.

1. They are in the wrong place.

Why are they down in Lower Manhattan? Do they think that’s where the power — and the money — really is? Folks: When people talk about “Wall Street,” it’s just a figure of speech.

Even in the days of J.P. Morgan Sr., the real action didn’t take place in the company offices at 60 Wall St. It took place in the old man’s library. Uptown.

These days the real movers and shakers aren’t anywhere near Zuccotti Park. They’re out in places like Greenwich, Conn., home of the hedge-fund honchos.

I called the town offices there to see if they’d had any protests.

“Oh, no,” said the polite young man who answered the phone, his tone somewhat surprised. “There’s been nothing like that here.”

It’s hopeless.

If these people were on the ball, they’d at least be moving down south to “Occupy Palm Beach” for the winter.

2. They don’t have an agenda.

And they can’t have one. Talk about a herd of cats. Occupy Boston is a camp of about 100 tents, and on a brief walk through I noticed posters, placards and stickers for 9/11 “truthers,” anarcho-communists, “Jewish Labor,” “stop the marijuana laws,” “stop the U.S. war against Islam” and so on. Some quasi-Buddhists had set up a “sacred space,” and were burning incense. Elsewhere, a sign denounced a new school project out in the suburbs.

Tough to rope all this into a 10-point plan. Or a 100-point plan. Sorry, but it’s reminding me of the days watching the old University Left crowd — right down to the weird sweaters and vegan cooking.

In Boston, one man sat on a deck chair with a sign that simply declared, “Financial markets always make bubbles and crashes.” What’s that, the Hyman Minsky Front? For all I know, he was an investment manager on a lunch break. Famed Boston investor Jeremy Grantham, who’s been making the same point about bubbles and crashes for years, has his offices about 100 yards away.

You want to group these people into an agenda? How?

3. The weather’s turning.

It’s been unseasonably warm and dry out there till recently. Now the rain’s arriving. Wait until the temperature drops and the frosts move in.

According to Weather.com, the average lows drop to 42 degrees for the month of November and 32 in December. Good luck with that. How’s that tent working out?

These protesters made a couple of big blunders.

The first is that they started protesting over the summer, leaving themselves just a couple of months till the weather turns. They should have started in the spring.

They’ve been lucky so far, but it won’t last. Read more on MarketWatch’s Occupy Wall Street blog.

The second is that they made it an outside camping event. I still don’t understand it. You can hold a protest march at any time. People can show up, protest and then go home for a hot meal, a shower and a good night’s sleep in their own bed. Net result: Lots of people can take part. But how many people can — or want to — camp out in downtown Manhattan for three months?

Especially after Halloween.

When the cold and rain really come in force, a lot of these people are going home. Then the opponents of Occupy Wall Street will declare victory.

4. Money talks.

Actually, these days money shouts, and it will drown out whatever anyone else says. The 2010 Supreme Court’s Citizens United ruling has opened the floodgates to unlimited spending on elections by anybody, anytime — including, of course, any corporation.

According to the Center for Responsive Politics, there are now 156 super political action committees that have taken advantage of the ruling. Political operative Mark McKinnon told me last week that he expects them to raise about $1 billion, mostly anonymously. McKinnon, who helped run the Bush-Cheney campaigns of 2000 and 2004, called the amount of corporate spending today “absolutely pornographic.”

And no industry spends like Wall Street. The finance sector is the biggest source of campaign contributions, year after year. Politicians suck up to the banks for the same reason Willie Sutton once robbed them: That’s where the money is.

In 2008 bankers gave half a billion dollars to political campaigns — up from $350 billion in 2004.

And they are so outraged even by the toothless Dodd-Frank regulations that they have shifted the majority of their contributions to the Republicans. If they can’t stand Dodd-Frank, what’s the chance they would tolerate real reform?

We’re still a year away from the next elections, and they’ve already handed over $97 million in (disclosed) political contributions. That includes $5 million so far to Mitt Romney and $2.5 million to Barack Obama. How tough do you think politicians are likely to be on Wall Street?

No matter how much anger these protesters channel, the golden rule will prevail: Those that have the gold will make the rules.

5. We’ll forget about it.

Sure, people are paying attention to Occupy Wall Street now. But just wait till something interesting happens on the Kardashians. Or there’s a bust-up on America’s Top Pastry Chef. Or some child pretends to get trapped on a balloon.

OWS will go as stale as last month’s bread. Look! Over there! Monkeys running amok in Ohio!

Many optimists believe the new media world of the Internet and Facebook and Twitter puts more power in the hands of “the people.” I think instead we’ve sleep-walked into a nightmare world of mass attention-deficit disorder and easy distraction.

Nicholas Carr, in his 2010 book The Shallows, shows in alarming detail how the Web is rewiring our brains towards superficiality.

The information age? The democracy of media? In the age of the Internet, and “infinite media,” I see a world that is increasingly mean-spirited, anti-logical, and misinformed. (Or, to put it more bluntly: Mean, stupid and wrong).

And it’s left an open road for propagandists.

I got one of those mass circulated emails recently telling me how Lee Iacocca, the former Chrysler boss, had a “new book out” slamming Obama. It contained all sorts of brutal quotes.

The only problem? Iacocca’s book came out in 2007. His quotes were about President George W. Bush. Someone had simply doctored all the quotes and blasted out an email, that quickly went all round the Web.

For each recipient who caught the lie, a hundred won’t. Was it an amateur propagandist who sent out this email, or a professional? We’ll never know.

According to the U.S. Labor Department, there are now about 280,000 public relations managers and specialists in America. The number of reporters: Just 45,000: That’s six flacks per reporter. Good luck with that.

In six months’ time, or maybe just six weeks, everyone will have forgotten about OWS.

Do I see no positive news for these protesters? I hate to be entirely negative, so I am happy to offer some good news as well.

If you really think the banks have a free hand to make money at the expense of the rest of us, you can just go out and buy their stocks right now and make a fortune.

After all, they’ve collapsed. Bank of America’s stock (XNYS:BAC - News) has been halved since the start of the year. At $6.40, the shares are trading at a third of book value (according to FactSet Research), about where they were at the absolute lows in March 2009. (Bank of America just reported $6.2 billion net income in the third quarter, returns on average equity of 22% and Tier One capital — a measure of balance-sheet strength — up to a decent 11.5%. Make of it what you will.)

Citigroup Inc. (XNYS:C) has lost a third of its value this year.

Even the Vampire Squid itself has covered its stockholders in red ink. Shares of Goldman Sachs Group Inc. (XNYS:GS - News) have lost a third of their value this year. The stock is trading below book value.

Contrarians, ho! According to the most recent surveys, big institutional money managers are massively underweight bank stocks. They won’t touch them with a 10-foot pole. They’re terrified. This is often a contrarian buying indicator. Not always, but often.

If you really do think these guys have the government in their pocket, it should be a one-way bet.


Brett Arends is a senior columnist for MarketWatch and a personal-finance columnist for the Wall Street Journal.