Occupy Economics: Is the system broken?

The Occupy protestors know one thing: the economy is not giving them what they want. Can bankers and billionaires say the same thing?

It depends on your perspective

"There's something happening here... "What it is ain’t exactly clear..."

That Buffalo Springfield anthem from another protest era reminds us that all this stuff about Occupy Wall Street protesters being unfocused is a load of folderol. That’s the way popular movements start. There’s no rule book. The songs and manifestos and leaders come later. 

The OWS crowd have noticed something. The economy isn’t working. It needs fixing.

You might say, "That’s obvious," and move on.

But if it is so obvious, perhaps you’d better look at how our leaders in business and government have responded to the economic events since 2008.

Perspective is everything

To the people in charge of our banks and governments, our economic system isn’t broken, it’s just going through a bad patch.  A few hundred billion dollars in taxpayers money to this set of banks, a few hundred billion to that set of banks, and everything will be all right.

Bank presidents will continue to get their multimillion-dollar pay packages. Our money, for those who have it, will be safe. The world will sail on in its right and proper course.

Their idea is that "if it ain't broke, don't  fix it." But as thousands of young people gathering to occupy various streets and towns around the world will tell you, whether you think it’s broken or not depends on who you are.

The odd thing is that the inexpert and unfocused anger of the OWS movement has an irritating ring of truth.

'The people have abdicated their responsibility for understanding and managing the economy. And we in the media may have been part of the problem.'

Why are billionaires building new mansions while ordinary people are being kicked out their homes? Why should captains of finance earn millions a year while some quarter of the population can’t get a decent job? Why are retail sales growing fastest for luxury brands when average spending power is falling?

The answer reminds me of a skit in the irreverent British TV show Little Britain where comedian David Walliams, in the character of Carol Beer, types at a terminal in a desultory way before telling the frustrated customer: "Computer says no."

In the case of the Occupy protesters, the bully that spits out its arbitrary answer is not "Computer" but "Economics."

"I would like to own a house someday," says the protester. "Let me see," says the comedian in drag. And, after a pause: "Economics says no."

The modern convention is that the market forces of the economy are a miraculous calculating machine that weighs and judges the worth of each of us and spits out a correct answer. 

Do we deserve $10 million because we are a bank executive? Do we deserve minimum wage for part-time work? Only the economy knows for sure.

Economics and business are not the same thing

A more important question might be who is the interpreter of economics? Who is the Carol Beer behind the computer? 

I've said it before but I am convinced that Canadians and other people around the world have abdicated their responsibility for understanding and managing the economy. And we in the media may have been part of the problem.

Too often we only offer economics to you from the perspective of business and from within a traditional business mindset.

Buy low, sell high, the markets are right and the government wrong, people deserve to keep what they make because they earned it fair and square, profits now are better than profits later.

In the popular mind, business is economics and economics is business. With rare exception, the economists we hear from are in the business of business. The most regular contributors are employed by banks. Others are from think-tanks sponsored by business. Others are from business schools.

Economics is much more complicated and fascinating than just business, but perhaps that’s why it is so difficult to cover in popular soundbites. 

But if the conversation about economics is only a conversation about business, no wonder it seldom strays to the issues that worry the OWS crowd. You don’t have to imagine a conspiracy.

When the Hockey Parents Association is in charge, don’t expect a lot of money left over for ballet.

So was it a good idea to spend $800 billion in taxpayer cash to bail out the U.S. banks? Is it a good idea for the Europeans to do it all over again now? 

In a world where the rules of economics are set by bankers, the answer is obvious.

Keeping existing banks on their feet, avoiding bond losses, keeping the stock markets from falling. Those things are a priority.

But is it really a solution to our current problems to cut business taxes to the bone and keep taxes for the rich low?

Ask the right questions

As corporations use cash piles to buy their own shares and as rich-poor gulf widens, it is reasonable for people to ask if that really is the right answer. It may indeed be the right answer, but when the people who benefit are in charge, the answers are suspect. 

If the rules were set by people who didn't have stocks, people about to lose their jobs or homes, people who did not run banks and corporations, the answer might be very different.

That being said, I must say that that some of the voices coming out of the current demonstrations are frankly worrying.

Even in its current state, the market economy is a pretty amazing thing. It brings food to your table and creates strange and miraculous devices like my new low-flush toilet and Apple iPhones. 

Even if you don't like iPhones and low-flush toilets, food is awfully useful. Banks and markets and finance perform valuable roles that keep the world's billions alive.

The idea of smashing them without understanding how they work seems like vandalism. But there are thousands of ways that economics affects us that have nothing directly to do with business, too many to address in a single column — do I hear a book begging to be written?

And there are many ways the economy could be fixed, short of smashing, that could well make the world a better place. And  oddly enough, those changes would benefit business in the long run.

I have heard many complaints that the Occupy demonstrators are unable to list their demands, that each protester has a different agenda,that they propose no solutions.

But the Occupy protesters know one thing: the economy is not giving them what they want. Can bankers and billionaires say the same thing? It is time to occupy economics.