Why Occupy Wall Street?


Originally, I thought this protest situation was just another activist group on Wall Street that would be forgotten about in a matter of days, but after about a month of protesting, it looks like this group is here to stay.  I think it is important to look into the concerns and demands of these protesters to understand why they are occupying Wall Street.

Some of the main points that the protesters are against are corporate greed, economic inequality, and the functionality of these banks, but what actually is corporate greed?  It is well-known and often disputed that large banks on Wall Street use other people’s money to bet and earn money for themselves.  However, this is well-known and people involved in these deals are aware that the banks will be using their money.  What they don’t necessarily know is how it will be used and the problems arise when banks become too greedy with other people’s money.  People often refer to the epic failures of Lehman and other financial firms, thinking that all banks are doing the same thing, but most of these things were actually illegal!  I hope that with the stricter regulations put in place, banks would not even be allowed to do these illegal things anymore.  Perhaps more transparency into the banks would help America to be more at ease with their work.

For years, the most profitable industry in America has been one that doesn’t design, build, or sell a single tangible thing.

Another concern is the economic inequality where traders earn substantially more money than doctors and cancer researchers.  It makes society question our morals that traders, who do not create a tangible product, are more highly rewarded than those that are working to better our population.  As a company though, these banks are able to make much larger profits than a hospital or lab is able to make.  The financial institutions have been able to grow this big and create the opportunity to have higher salaries for employees and dividends for shareholders. Milton Friedman would approve of the large financial institutions on Wall Street because they are taking a stakeholder approach.  The banks are looking to increase profits for their shareholders and in turn, increase their own salaries.

With all of this hate, What Good is Wall Street?  Banks have allowed people to borrow money, but it seems that the banks of today are of a different breed.  Although they do help to finance operations such as Google and Apple that have created growth and jobs in our economy, they also take part in trading, using other people’s money, whether it be their shareholders or on behalf of a fund.  This is where the risky business comes into play, so perhaps Professor Gruver is right that all of the financial firms should be privately held.  This would force them to be more careful, spending their own money.

With all of this in mind, the problem that ultimately bothers me is how our society morally ranks these careers.  Who should be making the most money? Should it be doctors, engineers, researchers, professional athletes, movie stars, or bankers?

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10 Responses to Why Occupy Wall Street?

  1. mike cardinute says:

    I feel like compensation should be performance based regardless of the job. If your the lead actor in a top movie and the movie does $200m in deals, then one should be nicely compensated for their efforts. If one is a trader and bring in over $100m in revenues to the company, then that person should be nicely compensated for their successful trading that year. I do not believe that jobs should be ranked by prestige or who makes the most impact on society. In other words, you get out what you put in.

    • Alyssa Haglund says:

      Are those careers actually bringing anything tangible to society? This summer someone was citicizing my friend because he is an engineering major that wants to go into finance. His point was that and engineering degree is extremely practical in creating something, so why go to a career in finance where nothing is actually physically created?

      • Alyssa Haglund says:

        criticizing*

      • mike cardinute says:

        No they are not bringing anything tangible to society, but I do not think that should be a deciding factor to judge whether a certain amount of compensation for a job is okay or not based on that criterion. If you want you can think about it this way..traders, advisors, etc. are like financial surgeons of their clients money, future, portfolio or whatever.., they either make them rich. happy, and healthy or miserable, dead, and broke ( I say that because I have heard of many people actually committing suicide after they have lost everything)..To answer your question maybe your friend decided he had a change of heart and wanted to explore finance and use his quantitative mind and analytical skills to take on a new challenge. Do the person criticizing your friend think just because something tangible is not created in society from a specific job, it is wrong?

      • Alyssa Haglund says:

        It is a very good point that they are “financial surgeons” and I agree with this, but I believe that the reason he was criticizing my friend is because he thinks it would be a waste for him not to be an engineer. Wall Street is seen as a very sexy job, mainly because of the money. However, a cancer researcher would do more to benefit society, especially if the financial position leads to risky trading like we have seen in the past.

  2. I watched an hour-long special on the news yesterday that discussed how banks are actually making money in this crisis while the average American is suffering. I understand that these banks, in Friedman’s argument, are providing to their immediate stakeholders in providing jobs and salaries to their employees; however, I can’t help but think about how their customers, the people whose money they are using in their operations, are affected. Aren’t the customers stakeholder to the banks as well? What about the banks’ responsibility to them?

    • Alyssa Haglund says:

      The customers are absolutely stakeholders to the banks and if the banks are not making money for the clients, they will leave and switch to another firm. It is not only the banks’ responsibility to make them money, it is actually their purpose and duty to the clients. I believe that we will all be suprised to find that these banks are actually not making money during this crisis… It will be interesting to see the next quarterly reports from these large financial firms.

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  4. Jordi says:

    Well, since you asked… Should it be doctors, engineers, researchers, professional athletes, movie stars, or bankers?
    1) Doctors
    2) Engineers
    3) Teachers (I assume you mean k-12)
    4) Researchers
    5) Bankers
    6) Everyone else
    7) Movie Stars

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