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    This diary is a sampling and response to The Occupy Handbook, a collection of essays on Occupy Wall Street -- its history, current state, and possible futures -- from some of America's best thinkers.  Hopefully you will get some idea from this report as to whether you might want to buy it, or ask your local library to get it.

     How do you write a 500-page book on a leaderless, locally varied social movement that flowered just a few months ago?  Nonhierarchically.  Janet Byrne got sixty-seven authors to contribute fifty-five essays for this book, including a large number of the names you see in news reports as the idea generators and policy makers surrounding the Occupy movement: Paul Volcker, Paul Krugman, Emmanuel Saez, Ken Rogoff, Nouriel Roubini, Barbara Ehrenreich, Brad DeLong, and many more.

     Having the ideas presented in a series of essays means the book is well-organized for subway or lunchtime reading.  Although there are overarching themes -- the three sections are on how the crisis developed, analysis of its current state, and suggestions for action -- the essays are basically independent.  Those that are not recipes for action can still inform your efforts to come up with one.  Opinions will vary on which are the most useful; I include a sampling of my reactions below to give the reader a sense of the book's contents as well as my personal selections of the best ideas.

The second essay is "The Widening Gyre: Inequality, Polarization, and the Crisis," by Paul Krugman and Robin Wells.  It is a discussion of the causal connections (over a cool century) between political polarization and income inequality.  The "widening gyre" (besides being a pessimistic Yeats shout-out) is an image of a feedback loop, where economic inequality magnifies political influence to the benefit of those who have benefited from the economic inequality, who then use this political influence to increase the conditions which caused the economic inequality, which increases their political power, etc., until crisis hits (the Depression, in the 1930s, and possibly Occupy now).

Although this essay was not directly prescriptive, I took from it a clear call to decrease the influence of wealth on the political system.  I know, just typing that sentence sounds ridiculous to me.  The wealthy have always been influential.  But not as influential as they are now, and the situation must be rectified.  It needs to be made not impossible to think that influence can be unyoked from wealth.

What kind of negative feedback can be built in to a campaign system that would magnify the influence of those with less economic power, and strengthen as that inequality grew?


Philip Dray draws a line between separate, small-scale sit-ins, and the movement that achieved the Civil Rights Act.  One of the key moments seems to me to have been the Raleigh conference, which gathered respected activists from many of the individual sit-ins across the country to exchange ideas and agree on a focus for their action, creating the Student Nonviolent Coordinating Committee.  If Republicans in fifty state legislatures have their ALEC, is someone willing to organize (and get money to fund) a Raleigh conference for Occupy?


John Cassidy, in one of the longer essays, "What Good is Wall Street?", discusses the growth of finance relative to the rest of the economy and asks just how much of the watermelon is rind.  Especially large banks may play a necessary role as a utility, one that allocates capital instead of electricity or water, but their rent-seeking activities now probably far outweigh any societal good they perform, and should be curtailed.  Another problem with this growth is the inefficient allocation of talent; when a third of Harvard's graduating class is going in to finance, it is a good sign that there is a lot of smarts going to waste shuffling money around when there are needs for insights that could improve lives.

Among the open questions he describes that still need to be addressed: if proprietary trading (arguably an unconscionable risk to clients) is to be curtailed, how shall it be distinguished from market making (arguably a valuable service)?

Something I took away from this essay: trading is tempting.  It generates substantial profits per dollar of asset compared to other activities in which a bank might be engaged with greater social value.  The Volcker rule is an attempt to make some such activities illegal; an alternative that makes them less profitable might be a financial transactions tax, and repealing the capital gains preference.  Anything that alters the risk-return calculation toward greater social utility is something that a government can legitimately look in to.


Raghuram Rajan seems to think the employment problem is structural (skillsets) and that stimulus is likely to create an "illusion of normalcy."  I'd say you could skip this short essay, unless you wanted to engage it critically.


Acemoglu and Robinson give an example of a successful anti-corporate movement in American political history that took on the political influence of wealth and won: the thread that started with the Grange and the Populists and became the Progressive movement of the early twentieth century, with Roosevelt, Taft, and Wilson taking on the robber barons and the trusts.  They passed, and used, laws like the Sherman Anti-Trust Act and the federal income tax to substantially decrease the concentrated power of wealth.


Reinhart and Rogoff.  Dude.  Reinhart and Rogoff.  And in fact, their essay is "a nutshell version of the analysis of banking crises found in [their] book This Time is Different: Eight Centuries of Financial Folly."  It is the academic analysis of the contribution of loose financial regulation to the crisis.

In addition to liberalized regulation and the resulting hot capital flows, a more subtle point they make is about the rise of indebtedness, which I think should make a useful focus for Occupy-motived prescriptions.  At the moment, the U.S. can issue debt at very low interest and hence, in addition to increased taxation, borrowing in order to spend stimulatively seems like a good tradeoff.  Since total (public plus private) debt can be problematic, it seems to me like a takeway here is that wise debt-fueled spending would seek to decrease private indebtedness -- such as the aftermath of the mortgage crisis.


Several of the radical viewpoints espoused in the first few essays of the second third of the book, "Where we are Now," made me a bit uncomfortable.  But then, it takes that kind of radicalism to go out and live in a park.  I don't think that will ever be my role in a movement, or that it can ever be the whole of a movement, but for the situations that take that kind of spark, I'm glad it's there.  Read what the anarchists have to say and digest it for yourself.


Pankaj Mishra studies the middle class and the anti-globalization movements in India and China.  Western-style democracy, Western-style capitalism, human rights, and growing middle classes don't necessarily all lead to one another, nor is their interplay simple.

There are essays on the indignados of Spain, the student movement in Chile, the Israeli cottage cheese boycott, Tahrir Square.  As we address capitalism's excesses in our democracy in the name of the middle class, keeping examples from outside our own orbit in mind is probably a good idea.


Although Robert Zaretsky's primary topic is the construction of the French social support system by the same souls who energized the Resistance against the Nazis, it's his description of the livre à bas prix, the format of Stéphane Hessel's Indignez-vous! (Time for Outrage, in the American edition) that drew my attention: books under 100 pages, dirt cheap and stocked next to the cash register in bookstores, in the spirit of Voltaire's comment that it is "small books that cost 30 sous which are to be feared."

I currently live in Portugal, where I have observed a similar phenomenon, not just in bookstores but in grocery stores: cheap, slim books written on serious questions (Should the death penalty exist?  How much social welfare is healthy for a state?), aimed at a broad audience and encouraging circulation, printed by the Fundação Francisco Manuel dos Santos.  I will take a moment away from discussing OWS to point out that I think this sounds awesome.

Where is the company willing to make a difference in the American discourse -- at some risk, certainly, but with the possibility of becoming a household name, possibly as a nonprofit -- by publishing short, serious works by informed experts on topics of immediate interest, available from a little rack in grocery stores, CVS, newsstands, and Starbuck's?  Kos is great, MoJo is great, the NYTimes is great, but it's the rare event when any of them can devote 50 pages to a focused topic.  Magazines reach subscribers; Kos reaches, well, Kossacks.  Both tend to speak to believers, even when they make efforts to reach out.  A bite-size book, available to a struggling young mother, a fry cook, a teenager with a couple of bucks and an interest in knowing something -- this could reach people, and it seems to have been doing pretty well for itself in at least two countries in my experience so far.


Amy Goodman and Denis Moynihan talk about the media and OWS, giving a scathing critique of both some early media response, and police treatment of press at protests.  "Jailing journalists" should not be a phrase associated with America.


Barbara and John Ehrenreich offer commentary on the real elite versus the right-wing scarecrow of the "liberal elite," and talk about the tension that still exists between blue-collar workers, or the poor, and the academic or managerial middle class.  "Drum circles, consensus decision making, and masks remain exotic to at least the 90 percent.  If the '99 percent' is to become ... a force to change the world, eventually we will have to confront some of the class and racial divisions that lie within it."


The last third of the book, "Solutions," discusses ideas that can be called for and implemented.  The broad selection of many of these ideas is already widely known: reregulate finance, tax more progressively, tax capital gains more like labor income, etc. But here the rationales and the mechanisms are laid out -- exactly what many people will want to buy a book like this for.


Peter Diamond and Emmanuel Saez (of Saez and Piketty) explain the case for a 50 percent (or higher) top tax rate.  If you have an even remotely open-minded acquaintance arguing against letting the Bush tax cuts expire or increasing the capital gains tax because these reduce the incentive to work and invest, see if they'll read this essay.  It calmly and clearly works its way through the "equity-efficiency tradeoff" in the optimal income tax problem, discussing both reduction in rich people's labor (very little, it turns out -- in fact, with so many executives ridiculously overpaid, increased taxation of their golden packages would tend to reduce their incentive to influence their own compensation and thus increase the ratio of the value they provide to the amount of their compensation) and the fairness consideration.  There are actual equations.  American public discourse needs more equations, although I could just be saying that because I'm a mathematician.

Why is it that we have the Nobel Prize-winning economists on our side and Paul Ryan is still taken seriously?  (Yes, being elected matters in a democracy.  But he spent that down a long time ago.)


Martin Wolf's "Reforming Western Capitalism" lists a number of the discrete components of the current crisis, and policy responses that address each.  Some are broad, such as sustaining domestic demand (i.e., Keynesian stimulus), and the need to address transnational problems globally.  Others, however, read like a checklist of things we should be demanding Congress set up: increasing required equity levels in financial institutions, special resolution authorities for large institutions in financial trouble, separating basic credit provision for small businesses and households from investment banking, and other basic, clearly explainable, politically implementable ideas that effectively address parts of the problem.


Joel Bakan talks about the first experience of our nation with corporate personhood, in the process giving us a good phrase to know and deploy: the "Lochner era," in which the Supreme Court decided in the late 1800s to begin treating corporations as persons with rights guaranteed by -- get this -- the Fourteenth Amendment.  He continues with calls for regulations (and regulators) with teeth and with principles, and for bringing social responsibility from ad campaigns into the structure of corporate law: demanding as a condition of their charter that a corporation consider not only profit but also value to the community which grants it the charter.  Why should society grant such a valuable status for free?


A number of authors discuss addressing student loans as the next worrisome pile of debt in America.  Eliot Spitzer lays out the format of the "income-contingent loan" -- a student loan repaid with fractions of income for years after graduation.  You're automatically able to pay, the lending institution gets an interest in seeing you succeed, and it's progressive by definition.  It was even proposed first by Milton Friedman, in case your neighborhood conservative is leery of it.

A quick Google suggests this program is already in place for some federal student aid -- perhaps he's calling for it to be put into wider use?


Tyler Cowen and Veronique de Rugy of the Mercatus Center tell us that the problems OWS should be concerned with are more along the lines of healthcare and education, in which the current American systems aren't market-based enough and need more privatization and competition.  Also, we should stop spending so much money on the elderly.

I suppose the book had to include someone who was likely to say something like that.

The essay is interesting enough, in a museum sort of sense.  You might read it just to see what they think OWS' major factual claims are.


Jeff Madrick suggests we focus on Medicare for All, and public campaign financing.  I like the former, although without a repeal or substantial cutback of Citizens United I doubt the latter would have much force anymore.  Daniel Gross tells us we should make a mental and policy habit of acting countercyclically, which is exactly right, if never the sexiest politics -- which is the point.  (Hey, I'm unsexy.  Maybe I'd make a good legislator.)


Felix Salmon talks mortgage modification, and how banks are making decisions that are against their financial interest, seemingly out of a desire to punish laggard homeowners.  There aren't a lot of ideas OWS likes that banks are likely to be receptive to, but as ideas go, ones that offer the possibility of salvaging some profit out of what would otherwise be a write-off seem like they'd have a chance.


Michael Hudson suggests the interesting idea of the post office bank, following the example of Japan.  Such a low-fee, low-interest institution, offering basic check cashing and transfer services, would represent a competitor to private institutions, which is why the idea would face monumental opposition in America; on the other hand, the Postal Service is in financial trouble of its own and could use a steady side business that would give people another reason to pop in to a local post office, a place many people in small, isolated (Republican-leaning) communities are often fond of.


There are a lot of ideas and viewpoints here, and the book is extensively footnoted, giving lots of jumping-off points for further investigation.  If that's what you're looking for, here it is.  If you want a more focused book from a single author, I would say that you can't do better than Paul Krugman's "End this Depression Now!", but then I'm a raving Krugman fanboy so take that as you will.

If you've read this book and thought that one of the essays I haven't mentioned here had a point that deserves wider dissemination, report on it in the comments below!

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