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Eye on the News

Fred Siegel
The Same Side of the Street
Financial elites and their Occupiers share a belief in big government.
1 November 2011

The titans of Wall Street and the leaders of Occupy Wall Street have much more in common than is generally assumed. The lords of finance deal in abstraction; leaving the homeless and hangers-on aside, Zuccotti Park is overstocked with media and public-relations professionals, experts at another kind of abstraction. And both are backers of big government. The main difference between them is that the Wall Streeters understand that fact. The Zuccotti Parkers, perhaps unsurprisingly, have been slower to figure out that they and their ostensible opponents are actually on the same side of the big-versus-small-government question.

Since 2008—the first year since 1980 that the so-called FIRE industries (finance, insurance, and real estate) contributed more money to Democrats than Republicans, according to opensecrets.org—financial services has hitched its cart to big government. No wonder, then, that as financial journalist Charles Gasparino notes, some of the biggest names on Wall Street have kind words for the occupiers. BlackRock CEO Larry Fink asserts, “We should not turn our backs on these protests,” because they provide “some balance” to the Tea Party. (BlackRock, it’s worth recalling, was picked by the feds to unwind Bear Stearns after it went belly-up, reaping a windfall.) Mohamed El-Erian, the CEO of the huge investment managing firm PIMCO, says that the demonstrations reflect “the desire for greater justice and fairness.” GE chairman and president Jeffrey Immelt, who works on the side as President Obama’s “jobs czar,” volunteers that given the high rate of unemployment, “it is natural to assume that people are angry and I think we have to be empathetic and understand that people are not feeling great.” (Immelt wants the U.S. to match Germany in exporting prowess, which would mean that exports would account for more than a third of the nation’s economic output, compared with 13 percent today; even approaching that goal would require vast government subsidies for domestic firms.)

Another noteworthy comment about the protesters comes from Citi CEO Vikrit Pandit, who says, “Their sentiments are completely understandable,” and adds that he’d “be happy to talk to them anytime.” Citi has particular reason to be open to big government. Though it just paid a token $95 million fine to settle SEC charges that it had bet against the securities it sold to investors, it was effectively kept from collapse by $50 billion in direct government aid and hundreds of billions more in promises of government money to absorb potential losses.

Writing at The Blaze, Tiffany Gabbay asks, “With key Democrats consistently blasting the financial services industry while showing support for the Occupy movement, will the substantial Wall Street dollars now cease to flow into Democratic coffers?” The answer is certainly no: successful politicians know how to play a double game, openly criticizing big banks while simultaneously crafting rules that coddle them. A prime example is Congressman Barney Frank of Massachusetts, who leads the lower house in campaign contributions from the financial-services sector. Shortly after announcing his support for Occupy Wall Street, Frank attended a fund-raising dinner with Wall Street power players. Questioned about the apparent hypocrisy, Frank—who played a key role in protecting the financial sector from congressional scrutiny in the run-up to the financial meltdown—answered: “If you take money from them, but you don’t vote [for] the things they want, how does that put you in conflict?”

There is a movement in America that has pushed for a smaller, simpler government, less susceptible to regulatory capture, and friendlier to the interests of Americans trying to generate new wealth rather than feed at the government trough. This is, of course, the Tea Party. With the banks, the administration, and now the occupiers aligned against it, it could be the loneliest movement of all.

Fred Siegel, a contributing editor of City Journal, is scholar in residence at St. Francis College in Brooklyn.

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