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The first tents appeared in Zuccotti Park in September of 2011. One month later, there were hundreds of encampments springing up in cities and towns across the world, united by a single declaration of defiance and solidarity: “We are the 99%”. It was a message that resonated throughout society as an appeal to the democratic ideals of justice and equality that seemed suddenly out of reach for so many, and the Occupy encampments were a dramatic physical representation of that appeal.


The global financial collapse of 2007, the ensuing recession and the increasingly elusive recovery have revealed deep, systemic inequities in our free market economies, supported by the corrupting influence of money in politics and a judicial order that privileges the rights of corporations over those of ordinary citizens. The Occupy movement forced these realities into public discourse — both the corporate news media and mainstream political figures were suddenly talking about issues of economic disparity —  and it seemed for a moment like the whole world was watching, hopeful, and ready for change.


cover art

The Occupy Handbook

(Little, Brown & Company; US: Apr 2012)

And then the raids began. Police attacked the encampments with hand held weapons, rubber bullets and tear gas grenades. They arrested thousands of peaceful protestors in the occupied parks and public spaces throughout the United States and the rest of the world. And by winter, the movement was in danger of becoming a memory.


Now that the permanent occupations have ended, the question for many within the movement and for their supporters across the planet is: where do we go from here? The articles and essays in The Occupy Handbook address this question by situating the movement within a historical context of progressive dissent and direct action, and by offering many potential strategies for transforming the protestors’ anger into viable political outcomes. Written by a selection of prominent journalists, academics and economists, The Occupy Handbook presents a range of ideological perspectives and prescriptive actions from the revolutionary anarchism of anthropologist and activist David Graeber to the progressive tax policy solutions of economists Peter Diamond and Emmanuel Saez. Taken as a whole, the book provides a powerful testament to what the Occupy movement has already accomplished simply by inspiring these types of discussions to occur.


There has been a great deal of media criticism that the Occupy movement’s refusal to articulate a clear set of demands, its lack of leadership and commitment to consensus based decision making will prevent it from affecting any lasting and substantive change to the ruling political and economic order. However, these critiques seem to miss the point, for the demands of the movement are clear and they are made evident through the very act of occupation. By engaging in a discourse of economic justice, by organizing through principals of direct democracy, and by provoking the violent censure of the state through these peaceful actions, the movement has revealed and challenged a political order that upholds conditions of societal inequity through the threat of violence, incarceration, disenfranchisement and debt. Their demand is for a more free and equal society, governed by true democracy rather than through coercion and fear. How we get there is ultimately up to us all, and The Occupy Handbook provides many potential strategies for meeting this demand.


We Are the 99 Percent: The Demand for Economic Justice


The most salient accomplishment of the Occupy movement from its inception was the introduction of a discourse of economic justice into mainstream media and politics. The slogan “We Are the 99%” captured the popular imagination by appealing to the values of fairness and equality that are increasingly threatened by the unequal distribution of wealth and resources in society. In the US, income disparity is currently at its highest level since the Great Depression, with the top one percent of the population earning 23 percent of the income, and the top five percent controlling 75 percent of the financial wealth (Roubini, Nouriel. “Economic Insecurity and Inequality”, 152). Over the past 40 years, the share of income earned by the richest one percent has more than doubled, while income for the middle 60 percent of Americans has fallen to 46 percent, from a high of 58 percent in 1968 when the U.S. Census Bureau started collecting data (Madland, David, Walter, Karla, Bunker, Nick. “Unions Build the Middle Class”, 273.) In the years leading up the global financial collapse, from 2002 to 2007, the top one percent accounted for two-thirds of all income growth in the U.S. (Maclay, Kathleen. “Interview with Emmanuel Saez”, 311). And at the very highest levels of income, things grow even more disproportionate, with the 400 richest Americans controlling more wealth than the bottom 150 million combined (Gresham, George. “Occupy Wall Street: The First Quarter and Beyond”, 276). For the least fortunate Americans, the situation is particularly dire with an unprecedented 46.2 million people living below the poverty line, and one in seven American households unable to afford the cost of food (“Occupy Protestors Say It’s 99% vs. 1%, Are They Right” Rogers, Simon. The Guardian, 16 November, 2011).


These recent increases in economic disparity are the result of an unregulated free market economy, a reckless and mercenary financial sector, and a middle class culture of debt and consumerism. These conditions have resulted in astronomical profits for CEOs, investment bankers and hedge fund managers, while the American middle class falls further behind, burdened by mortgage debt, rising education costs and a dismal job market that has yet to show any real signs of recovery. Whereas owning a home was once a source of financial security for middle class families, and an evocative symbol of the American dream, it’s now a debilitating financial burden for many, with a quarter of current mortgage holders owing more to the banks than their homes are worth (Weschler, Lawrence. “Enough With Occupying Wall Street: It’s Time to Start Preoccupying Wall Street”, 401).


The crash of the US real estate market was the result of years of predatory mortgage lending, unsustainable levels of debt and an irrational faith in an ever-rising housing market. As the market soared through the ‘80s and ‘90s, subprime lending allowed home owners to borrow cash based on the value of their homes, while adjustable rate mortgages targeted individuals with low incomes and poor credit who would have been previously ineligible to qualify for home loans. Wall Street traders bundled together the riskiest of these loans as securities, and reaped enormous profits by betting on an ever-rising housing market. These practices combined to create a market bubble in which home values were vastly overinflated, and when the burden of debt that fueled the real estate boom rose to unsustainable levels, the entire world economy came crashing down as a result. Journalist Bethany McLean describes the situation as such: “It was a virtuous circle until it wasn’t: rising house prices led cash-constrained borrowers to extract equity, thereby causing prices to rise even more.


Or you could think about it as a giant scam, whereby people were lured into the the market until every last penny had been sucked out” (McLean, Bethany. “Your House as an ATM”, 97). The victims of this scam — the working and middle class homeowners who believed in the value of their homes as long term investments — are the ones who have suffered the most after the crash, while the perpetrators have emerged largely unscathed. The collapse of the real estate market, the rising costs of education and health care, along with fewer opportunities for employment, have left millions of middle class American faced with the threat of foreclosure, bankruptcy and poverty. 

At the same time that the middle class has seen its income stagnate, its home values crumble and its debt burden rise, the financial sector of the American economy has experienced a period of unprecedented growth. This is hardly a coincidence. In order to address conditions of rising inequality in the ‘80s and ‘90s, the US government encouraged increased lending on the part of financial institutions. The result was a rise in consumer spending despite a decline in middle class incomes, a paradoxical situation that was made possible only through rising levels of consumer debt. This increased debt provided a temporary fix for the ailing consumer based economy and added up to large profits for banks and other lenders (Rajan, Raghuram. “Inequality and Intemperate Policy”, 81).


Prior to 1980, people working in the financial sector made roughly the same income as people working in other comparable industries. By 2006, after years of deregulation and increasingly leveraged financial markets, their income was 60 percent higher than wages in other industries. These gains were made despite the fact that the profits and revenues generated by the financial sector are not based on creating anything of tangible economic value. In fact, Lord Adair Turner, chairman of Britain’s financial watchdog group the Financial Services Authority, goes so far as to describe the activity of Wall Street and other financial centers as “socially useless activity” (Cassidy, John. “What Good is Wall Street?” 60-61).


Perhaps the most egregious example of such activity is the case of proprietary trading, in which investment banks bet their own capital on movements in the markets. Although there is no social or economic justification for this activity, other than to generate massive profits for financial institutions and their shareholders, in 2007, the value of outstanding credit default swaps, a particularly volatile form of proprietary trading, was $60 trillion dollars, or four times the US gross domestic product (Cassidy, 68). This astronomic ascent of an unregulated financial industry dominated by investment banks that had grown “too big to fail” and too complex to understand, played a major role in the rising levels of economic inequity over the past thirty years, and was directly responsible for the collapse of the world economy. 


The current levels of inequality in our societies are a detriment to both our democratic values and to the functioning of our market based economies. In a 2011 International Monetary Fund study, it was found “that widening inequality leads to lower economic growth. Even aside from the issue of fairness, inequality is bad according to traditional economic ‘efficiency’ criteria (Roubini, 163)”. One strategy for immediately addressing these unsustainable levels of economic inequality is to reduce the debt burden of the middle class. This would benefit the economy as a whole because it would redirect consumer income from debt reduction to spending on goods and services (Hudson, Michael. “Debt Jubilee”, 478.)


Up to this point, the banking industry has refused to adjust the principal amount owed on mortgages to current market values, leaving millions of home owners “underwater” — owing more to the banks that their homes are currently worth. By reducing the principal amount of their mortgages, the banking industry could help home owners remain in their homes rather than falling into foreclosure and bankruptcy as a result of high mortgage payments that were set before the market crashed.


This refusal to adjust the debt burden of home owners to a level consistent with the current market values of their homes is particularly devastating to those who were the victims of predatory lending practices during the real estate boom. In “Debt Jubilee”, professor of economics Michael Hudson offers an innovative solution for alleviating the debt burden of struggling home owners by applying the New York State law of fraudulent conveyance: “This law says that if a creditor lends to a borrower without having any idea how the debtor can pay in the normal course of business, without losing property, the loan is deemed to be fraudulent and is declared null and void. Applying this law to defaulting homeowners would free the homes that are in negative equity throughout the country. It would undo the fraudulent loans that banks have made, the trick loans with exploding interest rates, balloon mortgages, and so forth (Hudson, 479).” Although it was the banking industry that created the conditions of unsustainable debt that resulted in the collapse of the world economy, it was the victims of their predatory loans who are left to bear the economic burden.


By reducing the principal amount owed on their mortgages and by forgiving debts that were acquired through fraudulent lending practices, banks could offer relief to a struggling middle class and contribute in a vital way to the economic recovery. And yet, they refuse to do so simply because it would mean writing down the value of the mortgages on their books, and showing a loss on their quarterly earnings statements (Salmon, Felix. Principal Reduction, 450). There is a direct and causal relationship between the massive growth of an unregulated financial industry, unsustainable levels of middle class debt and rising disparities of wealth in our societies. And it is ultimately the failure of our governments to uphold the democratic values of fairness and equality within our market based economies that has allowed for these inequities to occur.


Robert Alford is a writer and a critic who lives in Seattle. His work has appeared, most recently, in Paste Magazine, Bookforum.com and Real Change News.


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