By Steve Mintz on October 21, 2011
At the Value Voters Summit on Oct. 7, Rep. Eric Cantor, R-Va., said he is “increasingly concerned” by the Occupy Wall Street demonstrations that began in New York and spread to other major cities. Cantor used part of his address to attack the protests, and he condemned political leaders who are supporting them.
“This administration’s failed policies have resulted in an assault on many of our nation’s bedrock principles,” he said. “If you read the newspapers today, I, for one, am increasingly concerned about the growing mobs occupying Wall Street and the other cities across the country. And believe it or not, some in this town have actually condoned the pitting of Americans against Americans. But you sent us here to fight for you and all Americans.”
Cantor, like so many Republicans, has misread what the protests are really about.
I add my voice to the protests and truly believe the underlying motivation is to speak out about what is the true cause of the economic decline in the U.S., the financial difficulties facing our nation, high unemployment and the general malaise that exists on Main Street about the future of our country.
It is the greed that infected corporate America in the 1990s and early 2000s by the Enrons and WorldComs. It is the fraud and corrupt policies of these and other companies, and institutions such as Fannie Mae and Freddie Mac.
It is the hyped securitized mortgages that were sold off by financial institutions to unsuspecting investors. It is the ill-advised mortgages made by commercial banks, which ignored homebuyer ability to repay the mortgage, because the banks sold off these mortgages along with the related risk of default. It is the Ponzi-schemers such as Bernie Madoff who played fast and loose with his clients’ money. I could go on, but you get the point.
If there is a class warfare that has developed in the U.S., it is because the selfish policies of these institutions caused the financial meltdown, economic recession and massive loss of jobs — all through no fault of those of us who play by the rules. The unemployed didn’t cause the crisis. Sure, some people overspent and got too deeply in debt, but that was due in part to the belief fostered by the actions of these institutions that the good times would keep rolling along. Instead, the bubble burst and it was the average American left holding the bag.
The Republicans attack “over-regulation” in the form of Dodd-Frank and Sarbanes-Oxley that, they claim, have created an uncertainty and unwillingness to expand economically by the very companies being regulated. That may be so and there is no denying it is a problem. However, the Republicans need to look in the mirror of those being regulated to see the face of who created the need for more regulation.
Our free-market capitalistic system is based on the notion that by acting out of self-interest, businesses will create a better economic climate for all Americans. Well, it is just not working out as intended by Adam Smith.
According to a survey by salary.com, the average salary and benefits paid to the CEOs of the Standard & Poor’s top 500 companies in 2010 was $11.4 million. The average CEO earned 343 times more than typical workers.
Very little has been said this election year cycle about how much the financial crisis has cost the average American in lost wealth. Well, hold on to your chairs as you look at the data provided by The Pew Charitable Trust that covers the period between 2008 and 2009:
• $100,000: The cost to the typical American family in combined losses from declining stock and home prices.
• $5,800: Average household income loss resulting from declining economic growth.
• $14,200: Average household loss in wealth caused by plunging real estate prices.
• $66,200: Average stock market losses for households from July 2008 to March 2009.
• $2,050: Average household cost to pay for the Troubled Asset Relief Program, or TARP, the bank bailout program designed to shore up the economy.
Oh, and Rep. Cantor’s net worth went from $2.2 million to $7.6 million between 2008 and 2009. He ranks as the 60th wealthiest member of the House.
• Steve Mintz is a professor of accounting in the Orfalea College of Business at Cal Poly San Luis Obispo. He blogs about business issues at www.ethicssage.com and www.workplaceethicsadvice.com. Contact him at [email protected]