OCCUPY EVERYWHERE

"Yeah, baby I need a plan, oh, to understand that life ain't only supply and demand" ~ Amos Lee

It has been notably impressive that Occupy Wall Street has spread as far as it has to numerous "Main Streets" throughout the US and beyond – to well over 1,000 US cities according to occupytogether.org – with considerable help from the media that always gives protests at least their due. Occupiers are popping up everywhere saying "We are the 99%," now in Berkeley, where a dozen or so stalwart Occupy Berkeley people have camped out "indefinitely" downtown in front of the Bank of America – a beautifully appropriate spot. Many, including me, have wondered  why it took so long to get this started. I guess we should be thankful that younger folks finally got it enough together to catch the media's attention about economic and social issues that have been gnawing away at this nation, and others, for a fairly long time.

I have a minor pedantic quibble about the Occupiers' 99 percent. Sure, it's well worth focusing on the indisputable fact that the very richest Americans (the top 1%) have hugely and disproportionately benefited during the last decade relative to the rest of us. But the tippy top of this giant group – the 99^th percenters – makes on average $815,868 per year and have net worth of $19,167,600. That the Occupiers are hoisting their "99%" flags is thus askew on its face – although the media loves it.

Are we really so concerned about these gilded 99^th percenters, a completely exclusive group that includes numerous millionaires (as well as some of the current candidates for the US presidency), that people are now occupying public places around the US? I hope not.

It's far more appropriate, though less media-centric, to talk about the economic hollowing out of a narrower, less inclusive majority of us; say the 50% of us – what we used to call the "middle class." Median US income – the 50^th percent of working people – is now $26,364, down 1.2% over the past year and the lowest since 1999. On an hourly basis, that's less than $13/hr. and less than one-thirtieth of the 99% folks' income. It's these 50%ers and below who have suffered and continue to suffer, not the 99%ers. Their real income has steadily declined since 2002, unlike the 99%ers.

Other analysts have stated the 50%ers dead center in the US income distribution had about 90% of their assets in their home. Now, after the 2007-08 popping of the real-estate bubble, between a third and a half of their total wealth is gone, unlikely to return during their lifetimes.

So why do some of us keep wondering why folks don't feel positive about the future, and willing to display their upset? Here are but two reasons: (1) because at least 50% of us are significantly poorer than we were a short time ago; and (2) because 21.6% of US children are now affected by poverty, a despicably high percentage that ranks our nation 28^th out of the 34 OECD countries. New York Times columnist Charles Blow's column, "America's Exploding Pipe Dream," centers on this and related issues.

The Occupiers are right – economic policy over the past several decades has certainly caused a huge number of folks to lose in many economic contexts – but to say that 99% of us have been screwed is egregiously wrong. If the Occupiers truly care about the distressed majority, then drop the imprudent 99% number and re-focus on the "Bottom 50%ers" who have been truly suffering. It's these folks that the Occupiers are really talking about, despite their slogan.

The Bottom 50%ers account for a mere 13% of all earned income. These people's economic standing has been steadily deteriorating (median real US income has declined since 2002). The Bottom 50%ers – including working class, lower middle-class, urban and rural poor, dropouts, unemployed and homeless people – have become increasingly unsupported either through their own actions or by federal, state, and local government programs. This is the tragedy of Republicans' all-too-successful efforts to cut education funding and government programs that provide aid to middle-class and lower-middle class people who are unemployed and untrained.

The Occupiers have been unjustly criticized as not having a single, media-friendly focus. Others say it is precisely because the Occupiers don't have a single message that they've been successful. [This judgment of success seems a bit premature to me.] Nevertheless, irony abounds that Fox and other mainstream media demand that the Occupiers make the networks' lives easier by only shouting one or two glib, 15-second sound-bite statements. OMG. It boggles my mind why the Occupiers should accede to the media's narrow demands.

The multi-hued rainbow of Occupiers is justly upset about a lot of inter-related things that have happened recently which I believe have its base on the insidious spread of crony capitalism – including income inequality (and more dramatically wealth inequality, although it's not as much mentioned as it should be), wars and conflicts around the globe, immigration policy malfeasance, political graft and duplicity, continued and devastatingly  high unemployment, unending housing crisis, education issues, and the "heedlessness of economic growth" (a quote from an Occupier in Arizona). There are a myriad more if you scan the Occupiers' protest signs (including, "Abolish Money." Huh?) Given these many legitimate concerns, are there any policy actions that can make these folks less incensed? Of course there are, but because of policy-makers' complete unwillingness to address and remedy these central issues, I wouldn't hold your breath.

In the meantime, should the Occupiers non-violently expand their presence everywhere and continue to remind everyone far and wide that our nation's priorities are way out of balance? Absolutely.

TIME AND AGAIN…

Time flies like an arrow. Fruit flies like a banana. ~ Groucho Marx

Recently, physicists reported that they may have found sub-atomic particles (neutrinos) that travel faster than the speed of light; an occurrence that if verified would be inconsistent with Einstein's theory of relativity. That could cause a fair amount of soul-searching in the physicist realm. Meanwhile, in the non-scientific world of Washington D.C. policy-making, time seems to have stopped altogether. Our elected federal representatives get stopped any time they deal with anything related to creating economic/fiscal policy. They continue talking past each other and consciously avoid creating appropriate, effective fiscal policies for our time – a time of continued macroeconomic weakness, elevated long-term unemployment (6.2M Americans have been out of work for half a year or more) and increased inequality.

How can time be so different? I have become so inured to the incomprehensible, outrageous positions politicians (mostly Republicans) have taken regarding the US economy – oh, say regarding the deficit and fiscal policy in a time of sustained unemployment – that I've started doing 2 things. First, I've stopped listening to the media's reports on "the latest" goings-on about Congress', the president's and/or the "super-committee's" macro-economic policy deliberations. It's pointless since they are merely stonewalling any movement to a rational policy due to base politics. They'd rather wait until the very last moment and pass another sub-optimal measure that at best addresses a few of the effects not the causes of our economic malaise, or produce another temporary, partial "budget," so they can pretend to be doing something useful. Nothing substantive is happening that will relieve real citizens' economic unease. And fewer people outside the Washington beltway are fooled by the politicians' empty talk. Which explains in large part why only 15% of surveyed citizens approved of the job Congress is doing; I'm surprised it's that high.

Second, I'm again wondering how seemingly bright people – the folks we've elected to manage our nation and lead its future development – can believe in such outlandish, downright short-sighted, stupid behavior. Despite no evidence of competence for resolving our on-going economic problems, there appears to be absolutely no political soul-searching on the part of Republicans or Democrats that would create more reasoned and responsible approach to getting our nation moving and growing again. Instead, it's always one more time, without any feeling, to do nothing useful except play with each other and blame someone else.

Once again, the narrowness and myopia of political discussion astounds me. What time (and place) do they think they are in? Politicians only care about their (and their funders') current, narrow self-interests. The only time they seem concerned about is today, not tomorrow or afterwards.

Economists have several tools for evaluating this inept behavior, including present value. Present value is the current worth of a future sum of money or stream of cash flows given a specified rate of return. Future cash flows are discounted at the discount rate. The higher the discount rate, the lower the present value of the future cash flows. In not acting as if tomorrow (the future) has any value, politicians essentially have a nearly infinite discount rate – not valuing the future at all – where future consequences are completely dismissed. Most non-politicians (e.g., normal adults and businesses) do place value on the future, act accordingly, and expect other folks to do so as well. Actual people's implied discount rates are often subject to debate, but probably range from 3% to 8% at this time. Thus, there is a monumental difference between the politicians' discount rate and that of the rest of us.

For me this difference in time-perspective explains a fair amount of the impending tragedy of politicians' neglectful, juvenile behavior. If they don't value the future (other than getting re-elected), have no time for serving the broader public's interests to get the economy growing again, and choose only to recite dogmatic, selfish ideology, why would they do anything except be histrionic? They're stuck in time, unable to agree to any compromise that could lead us forward and improve ourselves, because they don't care at all about the future. And who suffers most from this? We do.

Should we be surprised that our politicians have difficulty making politically-unpopular decisions in a timely manner – like reducing entitlements and reducing defense spending? Not at all, they are difficult decisions that if properly done, will initially upset many. But these decisions must be made ASAP; and aren't being made by politicians whose job it is to make them. I didn't vote for "my" politicians to merely continue the unsustainable status quo of no growth, high unemployment and growing inequality, I voted for them to look forward, solve these current problems and hopefully make things better. At this time, no politician now seems interested in doing his/her real job.

This time is not that different from others in the past – we remain in a significant recession and need to get the country growing by augmenting government spending to put more people back to work. In time and after we start growing again, unemployment will fall as businesses and consumers start to invest and consume more. [The most recent quarterly increase in real GDP was a miserable 1.3%.] What we now don't need at all is reduced government expenditures that would further prolong the recession. The Republicans' unyielding fetish in "making government smaller" and "no new taxes" at this time is wrong, fool-hardy and self-defeating. It's yet another example of politicians being "stuck in time" (by not having any interest in considering the future), thereby making our impending prospects needlessly more difficult and dour. This leads to increasingly resonant feelings that this time throwing all of them out on some sidewalk may be useful. Or maybe we should just feed them some special neutrinos to get them moving. If only.