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Occupy Wall Street and the Next Economy: Clamoring for Solutions

Garvin Jabusch, Green Alpha Advisors, LLC
October 18, 2011  |  43 Comments

The Occupy Wall Street movement (OWS), now in its fourth week, is getting a lot of media attention. Opinions are divided. By and large, conservatives represent the protesters as "a mob" (a notable exception is former governor of Louisiana and current GOP presidential candidate Buddy Roemer, who said on MSNBC that "politicians need to listen to these young people, it could change America"). Meanwhile, progressives view them as a justifiable, if not inevitable, reaction to the social inequity that results from a system rigged in favor of the ultra-wealthy.

In their foundation document, the Declaration of the Occupation of New York City, OWS protesters say (among other things) that they object to the monetization of the American political process, where money talks and everyone else — the 99 percent — walks, even if that results in policies with horrific consequences for everyone but the wealthiest one percent.

And, of course, that is the true state of affairs in America. These "kids" are absolutely right. The U.S. has always been to some degree subject to the overreach of its richest citizens and, from time to time, the resulting inequity has become so egregious that the less-moneyed have taken to various acts of protest to register their indignation and to work for change. And in case you weren't aware, inequity is presently at an all-time high in this country. Nobel Prize-winning economist Joseph E. Stiglitz summed it up last May, in his seminal Vanity Fair piece "Of the 1%, by the 1%, for the 1%":

The upper 1 percent of Americans are now taking in nearly a quarter of the nation's income every year. In terms of wealth rather than income, the top 1 percent control 40 percent. Their lot in life has improved considerably. Twenty-five years ago, the corresponding figures were 12 percent and 33 percent. One response might be to celebrate the ingenuity and drive that brought good fortune to these people, and to contend that a rising tide lifts all boats. That response would be misguided. While the top 1 percent have seen their incomes rise 18 percent over the past decade, those in the middle have actually seen their incomes fall. For men with only high-school degrees, the decline has been precipitous—12 percent in the last quarter-century alone. All the growth in recent decades—and more—has gone to those at the top. In terms of income equality, America lags behind any country in the old, ossified Europe that President George W. Bush used to deride. Among our closest counterparts are Russia with its oligarchs and Iran. While many of the old centers of inequality in Latin America, such as Brazil, have been striving in recent years, rather successfully, to improve the plight of the poor and reduce gaps in income, America has allowed inequality to grow.

In their Declaration, the Occupy Wall Street protestors have rightly placed the blame for all of this on "corporations" (I would amend this to "some corporations with the aid of their bought congresspersons," and I bet most of the OWSers wouldn't disagree) and included a long list of grievances against them. For me, three of the charges are especially relevant.

1. "They determine economic policy, despite the catastrophic failures their policies have produced and continue to produce,"

Corporations do determine economic policy, mostly via their nearly complete control of policymakers. Leading economists believe that "skyrocketing inequality… is the result of public policies that have concentrated and amplified the effects of the economic transformation and directed its gains exclusively toward the wealthy. Since the late 1970s, a number of important policy changes have tilted the economic playing field toward the rich." The catastrophic failures, as in 1929, speak for themselves.

2. "They have donated large sums of money to politicians, who are responsible for regulating them."

This one, of course, was immeasurably exacerbated by the Supreme Court's 5-4 ruling, in Citizens United v. Federal Election Commission, that money is speech and therefore may be used as freely, and also that corporations are people, and therefore may exercise their right of free speech (cash) without limit. Further, via super-PACs and 501(c)(4)s, donations of any size can be made and spent anonymously. (I've been thinking that Green Alpha should run for governor of Colorado to see whether our company would, in fact, be definable as a "person.")

It's not-quite-amusing to note that former House majority leader Tom DeLay was this year sentenced to three years in a Texas prison for making large corporate donations that would today be legal. Citizens United gave corporations whatever remaining leash they needed to make sure Congress stays bought. An amount like $10 million, for example, is relatively small in the world of business (on a good day that buys maybe a small condo complex?) but in Congress it's enough to ensure the votes of every policymaker you need to make sure that, say, Big Oil gets billion-dollar subsidies or that coal companies can continue to remove whole mountaintops and poison West Virginia. Which brings me to my next point.

Using the levers derived from these actions and policies,

3. "They continue to block alternate forms of energy to keep us dependent on oil."

Here again, of course the OWS Declaration is right. How else to explain that a majority of the comfortably profitable public solar companies that we follow are presently trading at valuations less than the free cash they have in the bank?

How else can we explain that the main story around energy corruption in America is focused on the relatively small amount of money loaned to solar firm Solyndra? Pure political donation-driven kabuki. Or as Jeff Goodell put it in Rolling Stone:

…we're in the middle of a concerted campaign to demonize clean-tech entrepreneurs, one that fits into the grand narrative that fossil fuel apologists and shills have been pushing for several decades now: that America as we know it and love it runs on oil, gas, and coal, and that anyone who says otherwise is a liar, a communist, or a criminal. House Republicans are already using Solyndra's failure as an excuse to slash federal loans to clean energy start-ups, as well as plotting a carnival of hearings and investigations that will keep this story in the news for months.

It comes down to what FDR said, as he battled the inequalities of the Gilded Age that brought about the Great Depression: "We had to struggle with the old enemies of peace: business and financial monopoly, speculation, reckless banking, class antagonism, sectionalism, war profiteering. They had begun to consider the Government of the United States as a mere appendage to their own affairs. We know now that Government by organized money is just as dangerous as Government by organized mob." We're up against greed, self-interest, and a tax code that's not fair — where you and I pay more than the largest corporations. No, not just a higher percentage, more dollars. General Electric famously paid $0.00 in taxes for 2010 after earning net income for the year of $11.6 billion. The system is so rigged, that even if GE wanted to pay its fair share, say even  five percent, to do so (or even to lobby to close the loopholes that allow it not to pay) would put it in an actionable position for acting against the financial interests of its shareholders.

It's pretty clear that we have to both change the tax code and get private money out of politics. Only then can true and free capitalism emerge. Only then will dollars chase companies with the best ideas and products, rather than those with the best connections and the largest political donations.

OWS, in short, is right. And we agree. That's why Green Alpha Advisors practices investment management with a transparent process. We make our reasons for our portfolio positions clear, and we don't play games with synthetic assets such as credit default swaps or with computer tricks like high-frequency trading. We only buy companies whose business models both disrupt business-as-usual and represent the next, green economy. With the exception of a small percentage of speculative positions, we focus on companies with proven, profitable businesses (as opposed to nascent green tech that we wish would do well). We still believe in buy and hold, and reject the notion that the true value of good companies changes ten percent or more each day. That is, we're doing the job that investment managers are "supposed to be doing, i.e., making sober investments in job-creating businesses and watching them grow." (Quote from Matt Taibbi's advice to OWS.)

We believe investment management can be fair, clear, and work to promote rather than stifle a global economy that works in tandem with the world's ecology. Further, we believe that next-economy finance is the only path forward that won't result in both economic and ecological collapse (to the extent that those are even different), and that as such it is also the best long-term economic bet for investors, offering the best chance for competitive returns in an increasingly resource-scarce, warming, populous, and unequal world.

At Occupy Wall Street and around the country, people are clamoring for solutions. The rise of the solutions must surely follow.

This article was originally published on AltEnergyStocks.com and was republished with permission.

43 Comments

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BUCK SHAW
BUCK SHAW
October 25, 2011
Wooooh! Help me Mr. Wizard. Time for this one to go home. I thought I was back at "Peoples Park" again.... Buck.....
William Fitch
William Fitch
October 24, 2011
Hi:

John, I would be inclined to throw you a rope out of some sort of human decency, but I don't think anyone makes a long enough one to save you...

.....Bill

.....EOL
John Bronson
John Bronson
October 24, 2011
Hi Bill,

You probably like this slogan too:

"From each according to his ability, to each according to his need" - by some guy

That was written on one of the protestor's signs. I'm pretty sure most people know who wrote it. Another one read:

"Anarchists For Big Government" LOL

I too enjoy Madcow and the other clowns at MSLSD. FOX has moved too far to the left. Check out WND:

http://www.wnd.com/index.php?fa=PAGE.view&pageId=354765
William Fitch
William Fitch
October 24, 2011
Hi:

"Those sleeping with dreams of wealth and power will suffer the most when the alarm clock goes off."

LOL... I like that, simple but effective.....

Yes, there are those of course, that don't want the curtain pulled back. I was watching Maddow on MSNBC Thursday night and I guess the Koch brothers decided to pick on one of her producers by name, etc.. She through down the gauntlet to them rather nicely... gutsy girl.. made for good entertainment if nothing else...
Stephen and John... anything good on Fox news these days....??

.....Bill
Thomas M
Thomas M
October 23, 2011
Posted something earlier then deleted it. Now it doesn't seem so bad. I referenced the use of the term "survival of the fittest"...what does this imply? That only the strong survive?
This is the problem, too many bullies who think they can push others around and get their way, believing that this will ensure their survival and all bloodlines will be traced back to them.
But as in most species, there is that dominant one who thinks he/she is the only one passing his/her genes around. But while he/she is away, busy bullying others, or satisfying the smitten opposite sex, the rest are out mating, making sure the species as a whole propagates fairly.
Most of the Human species needs to wake up, and see life for what it is, just as every other species has done, and protect, respect and use wisely our environment. Those sleeping with dreams of wealth and power will suffer the most when the alarm clock goes off.
Obviously, John B has no bio associated with his profile so it is hard to tell his/her backround and reasons for his/her positions. Sounds all to familiar. Anonymous S.
John Bronson
John Bronson
October 23, 2011
Will wrote:

"That means finding real solutions to the spreading poverty and unemployment and growing inequalities, the unsustainable environmental consequences of fossil fuels, the unsustainable trade deficits and tax holidays for the rich."

One of the popular left wing talking points is that the rich don't pay taxes. In fact, it's the bottom 46% that don't pay federal income taxes.

http://www.huffingtonpost.com/2011/06/28/46-percent-of-americans-e_n_886293.html
John Bronson
John Bronson
October 23, 2011
OWS hypocrisy nicely captioned:

http://www.powerlineblog.com/archives/2011/10/down-with-evil-corporations.php?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+powerlineblog%2Flivefeed+%28Power+Line%29
John Bronson
John Bronson
October 23, 2011
Hi Bill,

It sounds like you are enjoying the benefits of free market capitalism, and private property ownership - good for you.

Will,

Marxism/Socialism is still very much alive, and is causing the sovereign debt problems in the EU. Interestingly, the American Communist Party, and the American NAZI Party, are firm supporters of the anti-capitalist OWS movement. There are many Marxists in the US, including at all levels of government. The problems with manufacturing in the US are from left wing policies, and ironically, from Marxist countries like China adopting some free market principles.
Will Wilkin
Will Wilkin
October 23, 2011
Hi John, you're the only one thinking of Marx, you are the ideologist here. You seem more interested in fighting the cold war than unemployment and poverty. You continue to fight straw men instead of looking squarely at the country's problems and considering solutions pragmatically according to the real interests of our people (particularly the 99%) and future. That means finding real solutions to the spreading poverty and unemployment and growing inequalities, the unsustainable environmental consequences of fossil fuels, the unsustainable trade deficits and tax holidays for the rich. Considering how this means bringing back American manufacturing and prosperity and democracy itself I think it describes the true conservative position, if you must label it. Giving to the top 1% virtually all the gains of the past 30 years of market fundamentalism and free trade, while more and more people in every town and city are losing all economic ground to stand on --that is the radical position, and it is wrecking our country.
William Fitch
William Fitch
October 23, 2011
Hi:

This time next year my tracking PV will be online with an end result of double the production of what I currently use, and I am all electric thru geothermal and solar thermal today.
My surplus will be used to power future electric cars which will relegate my gas usage to the very infrequent long trip, cutting grass and blowing snow. In short my petro usage will be cut 80%. As for Monsanto, as soon as the people in the USA demand GM marking on food packaging (Like Europe), I will avoid those as well. Currently I am localizing my food sources a bit more every year.... so hypocrite, I don't think so... How about you...?? OH WAIT, I forgot, you are for all that, destroying ourselves etc.. thru non sustainable processes...

.....Bill
John Bronson
John Bronson
October 23, 2011
Hi Bill,

Sorry, I missed Avatar. But I'll bet you buy gas from those same oil companies. And many other products from the companies you have listed. That makes you a hypocrite. I suggest you put down Marx, and pick up Darwin. "Survival of the fittest" is reality. It's you who needs to wake up.
William Fitch
William Fitch
October 23, 2011
Hi #31:

http://www.huffingtonpost.com/2011/02/24/muammar-gaddafi-us-business-lobby_n_827769.html

'Some of the biggest oil producers and servicers, including BP, ExxonMobil, Halliburton, Chevron, Conoco and Marathon Oil joined with defense giants like Raytheon and Northrop Grumman, multinationals like Dow Chemical and Fluor and the high-powered law firm White & Case to form the US-Libya Business Association in 2005. The members of its executive advisory council each pay $20,000 in annual dues to the group, which is managed by the National Foreign Trade Council, a coalition that seeks to facilitate international opportunities for U.S. companies. Most of the group's members have lobbied the U.S. government since 2004 to protect their investments in Libya or to iron out business problems with the regime. Bilateral trade with Libya totaled $2.7 billion in 2010, compared to practically nothing in 2003 when sanctions were still in force.'

You and people like you have your heads up your AH. It is the Western and capitalist countries including the EU that make these dictators and put them in power to brutally control these countries so the multi national corporations can extract the resources. Whether it is an oil company or Monsanto the game is the same, be it Muammer Gaddafi or the Shaw of Iran.
When Avatar was released there was much discussion as to whether it was a pro green film. The reality is that is was a statement about how our species treats itself and anything else with profit being over EVERYTHING ELSE...

WAKE UP!!!!!

.....Bill
William Fitch
William Fitch
October 23, 2011
Hi:

Check out this link:
http://www.treehugger.com/files/2011/10/proof-global-domination-few-corporations.php

The Top 50 Control Holders*

1. BARCLAYS PLC (GB)
2. THE CAPITAL GROUP COMPANIES INC (US)
3. FMR CORP (US)
. AXA (FR)
. STATE STREET CORPORATION (US)
. JPMORGAN CHASE & CO. (US)
LEGAL & GENERAL GROUP PLC (GB)
THE VANGUARD GROUP, INC. (US)
UBS AG (CH)
MERRILL LYNCH & CO., INC. (US)
WELLINGTON MANAGEMENT CO. L.L.P. (US)
DEUTSCHE BANK AG (DE)
FRANKLIN RESOURCES, INC. (US)
CREDIT SUISSE GROUP (CH)
WALTON ENTERPRISES LLC (US)
BANK OF NEW YORK MELLON CORP. (US)
NATIXIS (FR)
THE GOLDMAN SACHS GROUP, INC. (US)
T. ROWE PRICE GROUP, INC. (US)
LEGG MASON, INC. (US)
MORGAN STANLEY (US)
MITSUBISHI UFJ FINANCIAL GROUP, INC. (JP)
NORTHERN TRUST CORPORATION (US)
SOCIÉTÉ GÉNÉRALE (FR)
BANK OF AMERICA CORPORATION (US)
LLOYDS TSB GROUP PLC (GB)
INVESCO PLC (GB)
ALLIANZ SE (DE)
TIAA (US)
OLD MUTUAL PUBLIC LIMITED COMPANY (GB)
AVIVA PLC (GB)
SCHRODERS PLC (GB)
DODGE & COX (US)
LEHMAN BROTHERS HOLDINGS, INC. (US)
SUN LIFE FINANCIAL, INC. (CA)
STANDARD LIFE PLC (GB)
CNCE (FR)
NOMURA HOLDINGS, INC. (JP)
THE DEPOSITORY TRUST COMPANY (US)
MASSACHUSETTS MUTUAL LIFE INSUR. (US)
ING GROEP N.V. (NL)
BRANDES INVESTMENT PARTNERS, L.P. (US)
UNICREDITO ITALIANO SPA (IT)
DEPOSIT INSURANCE CORPORATION OF JP (JP)
VERENIGING AEGON (NL)
BNP PARIBAS (FR)
AFFILIATED MANAGERS GROUP, INC. (US)
48. RESONA HOLDINGS, INC. (JP)
49. CAPITAL GROUP INTERNATIONAL, INC.(US)
50. CHINA PETROCHEMICAL GROUP CO. (CN)

*according to the scientific paper The network of global corporate control.
as to #31, you think Gaddafi was a Marxist, to use your Pigeon holing?? continued below.....
John Bronson
John Bronson
October 23, 2011
Hi Bill,

It sounds like you have a firm understanding and belief in Marxism. However, I'm afraid your current OWS proletariat uprising is embarrassing at best. Kudos to the Libyans though. It looks like they're making some of the other Marxist dictators a little nervous.
William Fitch
William Fitch
October 22, 2011
Hi:

The whole free market concept is non sense in a purest form. The end goal of capitalism without a single check or balance is slavery. The most powerful people would emerge from the species and enslave those with lesser capabilities. This creates the perfect market system, allowing for no labor cost, expenses are only needed to keep alive the slaves and the wealthy can have anything they want through top bartering among themselves.
This has happened in history many times before. It is simple human reality that those that can emerge with more wealth and power (terms in their broadest sense) see no lateral value in their fellow humans except as a "tool" to acquire what they (Top) want. This is the direction that is being achieved by the current far right who hold the money strings for both parties. This path has been in structure for 50 years in the USA. It is pure class warfare, simple in goal, merciless in execution.... and it is the inhumanity of them, particularly in the endgame, that ultimately determines its cure...

.....Bill
John Bronson
John Bronson
October 22, 2011
Hi Will,

Do you support having your tax dollars squandered away so people can live as "adult babies"?

http://www.washingtontimes.com/news/2011/oct/18/man-living-as-an-adult-baby-is-cleared-of-social-s/
Will Wilkin
Will Wilkin
October 22, 2011
You fight a lot of straw men?
Thomas M
Thomas M
October 22, 2011
As mentioned in an earlier post, a reduction in money leads to a reduction in power so....1. Get rid of money. 2. There would be no taxes. 3. No budget to balance. 4. No union dues, no money for lawyers and no payouts for other's ideals. (OSHA) 5. No trade is unfair. (since it has no monetary value) 6. Imprison those who love and support money. 7. No rent for all, just like every other species on this planet. (Free world)

Just some food for thought with regards to a free world, Who is the original owner and who has the origial receipt? Makes you wonder how anything that comes from the planet can be sold for paper and metal that comes from the earth also.
Will Wilkin
Will Wilkin
October 22, 2011
John, you forgot 6. imprison all adults not working between 9 am and 4pm and 7. euthanize all seniors unable to pay their rents.

Also I edited my #20 above, hopefully you'll like that one better (always looking for ground we can agree on, there's gotta be something!).
John Bronson
John Bronson
October 21, 2011
Solutions - 1. Stop giving away free money. 2. Tax sales, not income. 3. Require a balanced budget, so interest rates can be raised. 4. Get rid of anti-productive forces, e.g. unions, lawsuits, OSHA regulations, etc. 5. Take action against unfair trading partners - China, OPEC, etc.
Jay Lindberg
Jay Lindberg
October 21, 2011
John seems a little too condescending to anyone that is not rich or Jewish.

The real issue for this group is whether or not we can afford to buy solar components from American Manufacturers paying good middle class wages. I not only believe that we can with a minimum markup for retail installation but we must.
Will Wilkin
Will Wilkin
October 21, 2011
Hi John, I retreat from the Israel discussion on this forum, considering how off-topic it is from the article we are supposed to be discussing. So let's get back to that, do you contest the stats cited by Mr. Stiglitz in his Vanity Fair article, quoted by Mr. Jabusch in this article? And finally, more generally, I must observe that you seem completely insensitive to the mass unemployment, growth of poverty, and widespread insecurity and hardship all around us. I'm curious what solutions you recommend for the unemployment, trade deficits, growing inequality and poverty spreading throughout the United States?
John Bronson
John Bronson
October 21, 2011
Hi Will,

With regards to Israel, one only needs to look at a map to see how much land is controlled by Jews, vs. how much land is controlled by Arabs/Muslims. The Jews are really not asking for much, IMO.

With regards to gains for the top 1% over the past 30 years, (or since Reagan), this is total left wing garbage. The top 1% have controlled the wealth since wealth was invented. And will always control the wealth. Even if you were to 'redistribute the wealth' of Wall Street to the 'occupiers', (which appears to be the goal of the occupiers), they would squander it away in short order.
William Fitch
William Fitch
October 21, 2011
Hi:

AIPAC go home and take the rest of "K" street with you....

http://www.lrb.co.uk/v28/n06/john-mearsheimer/the-israel-lobby

.....Bill
Will Wilkin
Will Wilkin
October 21, 2011
Hi John, Re: Israel: Criticism isn't hate, its a cry for JUSTICE. How come Israel's treatment of the Palestinians isn't also being called 'hate'? Is it only Israel subject to irrational prejudices of others? Israel has acted with callous disregard for the Arab population of Palestine from the start. The continuous Israeli illegal military occupation and continued settlers expansion/land-theft are given Orwellian explanations of 'self-defense' and facilitated with US dollars and caterpillar tractors for home destruction. Is this what you want us to get behind?

I want to see Israel find peace with its neighbors and all in the region prosper. I wish the Arabs and the Israelis would find the peacemakers on both sides and satisfy the legitimate interests of all people there. My hope is most people --here, there, and everywhere-- also do. Getting the political process to produce that is the challenge because extremists on both sides seem to have a lot of influence. And the fundamentalist Islamists, from Iran to Hamas and Hezbollah and the elders of the Muslim Brotherhood, are the scariest, with open speeches or documents inciting genocide against Jews; read the Hamas charter, for example, or:

http://www.iranholocaustdenial.com/views/iranian-leaders-doing-away-with-israel-2.htm

So its very important for the good people on all sides to put forward their best leaders and make peace so as to marginalize the extremists wherever found.

Re: #16: Sure its the politicians' fault because they make the rules that have allowed the 1% to take all the gains of the past 30 years and externalize all the costs to the rest of us. Too simplistic? Yes, but more true in essence than any defense of Wall Street will ever approach. Don't have time to write the books that would nuance these perceptions, luckily Matt Taibbi is already writing them.
John Bronson
John Bronson
October 20, 2011
Hi Buck,

Here's your OWS crowd in action:

http://www.committeeforisrael.com/
BUCK SHAW
BUCK SHAW
October 20, 2011
Thanks for the advise but I'm out here in Califonication Land. Where the Energy Companies have a strangle hold on anything to do with energy.

By the by you should write an article now and then...

Hank Williams Jr. might want to debate the Nazi comparison issue. Don't you think?
Jay Lindberg
Jay Lindberg
October 20, 2011
Actually protesting Wall Street will work but it has to get a lot bigger. We need at least 5 million in the streets. We are probably getting close to 250,000 now totally.

We have a system that is fundamentally flawed and if left in its present state will lead to catastrophic failure. Our defense budget is being used as repression training to secure resources on a global scale. When the global economy cannot use American weapons systems to loot the planet, they will invest again in America. At the same time, our investments in a war economy reduce our tax base and eliminate infrastructure investments. This is an equation for bankruptcy and Balkanization if not corrected.

We need to shut this corrupt circus down. We can't do it without huge numbers of protesters in the streets.
John Bronson
John Bronson
October 19, 2011
Hi Will,

Protesting Wall Street and rich people certainly won't solve anything. The problem is our political leaders, and that's who we should be protesting. The policies of heavy regulations on US business, combined with a free flow of imported products is what is destroying the middle class.

The OWS crowd is protesting corporations (private business), i.e. capitalism. The alternative is to have the government run everything (socialism), which would be 1,000 times worse than what we have now. Be careful what you wish for.
Jay Lindberg
Jay Lindberg
October 19, 2011
Great Article. It really is amazing how little really changes in the grand scheme of things.

I'm a systems analyst and author. A little history lesson.

It was the NAFTA debate and 3 strikes legislation in 1994 that pushed me out of my comfort zone and back in the war zone. In case you were not aware, the first 3 strikes legislation and NAFTA were passed in a 2 week time frame.

I was in David Drier's district back then and went to his office to discuss my concerns with NAFTA and the long term impact of sending out industrial base to the third world. I was told, and this is a quote, the middle class has had it in America. I told my representative, you are going to need "Three Strikes" because many in the middle class manufacturing sector will end up in the Black Markets to survive (And that's what happened).

What we need now is a new economic order. Can it happen without blood on our hands? I doubt it.
Will Wilkin
Will Wilkin
October 19, 2011
I don't see much comparison between the Occupy Wall Street protests and the Nazi Holocaust. Instead of worrying about what is right or left, or what is socialist or capitalist, why not just be pragmatic and look squarely at the problems, which include tens of millions unemployed in USA, disappearance of living wage jobs, rusting empty industrial brown fields and huge trade deficits with stores full of cheap imports. Free trade is screwing the ordinary worker while making global commerce more profitable to the 1% at the top, who are "paying" historically low tax rates during historically high income inequalities, after 3 decades of all gains going to the very top. I don't care how you label the solutions, I'm just interested in what will work. More of the same is definitely NOT it. And we're just talking about economy, the environmental consequences of corporate rule (fossil fuels so central) threaten to be even more profound. We need a political system that will respond to these social and environmental problems instead of ignoring them for short-term gains at the top.

If you don't like the OWS criticisms of Wall Street and the political system, then how would you identify the problems and what solutions would you propose?
John Bronson
John Bronson
October 19, 2011
The rich make a great scapegoat - just like the Jews did in Nazi Germany. And isn't it great that the left has introduced a bill to have the government hire all the unemployed, and pay them $40,000/yr? I'll bet the OWS crowd will vote for that! Because we all know capitalism doesn't work, and socialism is a utopia. That's what we learned in college (and nothing else). Which is why we can't pay back our student loans, nor should we have to.
Will Wilkin
Will Wilkin
October 19, 2011
By the way, posts 8-11 were mostly not my words, but I lost the original source of the text that I came across about 4 years ago online. I have edited it slightly but make no claims to original thought there, just championing what the OWS protests might trigger if American politics were to become sensitive to the needs of the people.
Will Wilkin
Will Wilkin
October 19, 2011
The specific change would be simple: add 26 words to corporate law and thus create a 'Code for Corporate Citizenship.' Just add the following clause. Directors and officers would still have a duty to make money for shareholders,"... but not at the expense of the environment, human rights, the public safety, the communities in which the corporation operates or the dignity of its employees."

This simple amendment would effect a dramatic change in the underlying mechanism that drives corporate malfeasance. It would make individuals responsible for the damage companies cause to the public interest, and would be enforced much the same way as securities laws are now. Negligent failure to abide by the code would result in the corporation, its directors, and its officers being liable for the full amount of the damage they cause. In addition to civil liability, the attorney general would have the right to criminally prosecute intentional acts.

Compliance would be in the self-interest of both individuals and the company. No one wants to see personal assets subject to a lawsuit. Such a prospect would surely temper corporate managers' willingness to make money at the expense of the public interest. Similarly, investors tend to shy away from companies with contingent liabilities, so companies that severely or repeatedly violate the Code for Corporate Citizenship would see their stock price fall or their access to capital dry up.

Corporations exist only because laws allow them to exist. Without these laws, owners would be fully responsible for debts incurred and damages caused by their businesses. Because the public creates the law, corporations owe their existence as much to the public as they do to shareholders. They should have obligations to both. It simply makes no sense that society's most powerful (and artificial) citizens have no concern for the public good.
Will Wilkin
Will Wilkin
October 19, 2011
Lack of corporate director responsibility in the current system is a fundamental problem with corporate economy.

Under federal securities laws, directors are held personally liable for false and misleading statements made in prospectuses used to sell securities. If a corporate prospectus contains a material falsehood and investors suffer damage as a result, investors can sue each director personally to recover the damage. This provision grabs the attention of company directors. They spend hours reviewing drafts of a prospectus to ensure it complies with the law. Similarly, everyone who works on the prospectus knows that directors' personal wealth is at stake, so they too take great care with accuracy.

That's an example of how corporate behavior changes when directors are held personally responsible. Everyone in the corporation improves their game to meet the challenge. The law has what we call an in terrorem effect. Since the potential penalties are so severe, directors err on the side of caution. While this has not eliminated securities fraud, it has over the years reduced it to an infinitesimal percentage of the total capital raised.

Corporate law should be changed in a similar manner--to make individuals responsible for seeing that the pursuit of profit does not damage the public interest. To pave the way for such a change, we must challenge the myth that making profits and protecting the public interest are mutually exclusive goals. The same was once said about profits and product quality, before Japanese manufacturers taught us otherwise. If we force companies to respect the public interest while they make money, business people will figure out how to do both.
Will Wilkin
Will Wilkin
October 19, 2011
In the end, the natural result is that corporate bottom line goes up, and the state of the public good goes down. This is called privatizing the gain and externalizing (socializing) the cost.

We must remember that corporations were invented to serve mankind. Mankind was not invented to serve corporations. Corporations in many ways have the rights of citizens, and those rights should be balanced by obligations to the public.

We can make corporations more responsible to the public good by amending the law that says the pursuit of profit takes precedence over the public interest. This might be achieved by changing corporate law to make directors personally responsible for harms done.

Of course a better solution than just holding corporate officers personally responsible would be to also revisit the definition of a corporation as a 'legal person'. Corporations are not people and money is not speech. If only individuals have political speech we can take the money out of politics and finally get policies that reflect the public interest.
Will Wilkin
Will Wilkin
October 19, 2011
Many social ills created by corporations stem directly from corporate law, which actually inhibits executives and corporations from being socially responsible. Corporate law does this by defining the purpose of the corporation as simply to make money for shareholders. By law, the people who run corporations have a legal duty to shareholders, and that duty is to make money. Failing this duty can leave directors and officers open to being sued by shareholders.

No mention is made of responsibility to the public interest. This is why corporations find social issues like human rights irrelevant--because they fall outside the corporation's legal mandate. It is also why executives behave differently than they might as individual citizens, because the law says their only obligation in business is to make money. Directors and officers know their jobs, salaries, bonuses, and stock options depend on delivering profits for shareholders.

Companies believe their duty to the public interest consists of complying with the law. Obeying the law is simply a cost. They have no incentive to offer ideas that would advance the public interest unless they increase profits. Projects that would serve the public interest--but at a financial cost to the corporation--are considered naive.

Corporate law thus leads corporations to actively disregard harm to all interests other than those of shareholders. When toxic chemicals are spilled, forests destroyed, employees left in poverty, or communities devastated through plant shutdowns, corporations view these as unimportant side effects outside their area of concern. But when the company's stock price dips, that's a disaster. The reason is that, in our legal framework, a low stock price leaves a company vulnerable to takeover or means the CEO's job could be at risk.
Will Wilkin
Will Wilkin
October 19, 2011
Thomas your comment is empowering, a refreshing improvement over the frustration, futility and fatalism all around us. There is a touch of counter-culture in your vision because our economy and society have become so dominated by the corporations that extend around the world and have cash flows greater than the GDPs of small countries. I share your sentiments, we market our company not only as Made In USA but also as local owner-operators more proud of our work than disgruntled employees of large companies evaluating their installers by watts-per-day-installed (encouraging shoddy work). Farmers markets, local banks, small businesses and local contractors --its a beautiful thing and the heart of America, but because of the complexities and huge division of labor in things like mfr of automobiles and many other products, large organizations will inevitably continue to throw big weight in the economy and therefore in politics and society as well. That is why I champion reforms in the ways corporations are chartered and governed, to make them more sensitive to the interests of all those affected by their operations.

Thus my next post.
Thomas M
Thomas M
October 19, 2011
All we have to do is deny them like they deny us. If a polictician or corrupt civil servent comes in your store or business, refuse them service. Take your money out of large corporate banks and support locally owned banks. Stop purchasing from large corporations and buy locally from small entities. Purchase RE systems that disconnect you from your local utilities....etc. etc.
If money is power, then the lack of money reduces this power. It is up to all of us to make the right choices in life in order for there to be fairness and equality. Shutting off the elite and all their income should be easy enough if we all band together and support each other instead of them.
Will Wilkin
Will Wilkin
October 19, 2011
Well Buck, if you're in CT our company would love to propose building for you a stand-alone PV system of all American-made components.

Made In USA Solar LLC

www.madeinusasolar.us
Bob Belick
Bob Belick
October 19, 2011
Garvin, I applaud you for getting this message out. You have articulated the issue so very well while correlating it to the frustration and futile feeling so many people in this country now have.

The challenge for all of us in the emerging "clean energy" economy is getting this message out to the 99% beyond the "choir" that reads Renewable Energy World or AltEnergy Stocks.

That message gets heard when companies like Green Alpha Advisors and ours put people to work with good paying, sustainable, clean energy jobs while having a positive environmental impact for future generations.
Will Wilkin
Will Wilkin
October 19, 2011
Thank you Garvin Jabusch for your thoughtful and incisive article above. Your list of what ails us is correct: monetization of politics (captive to the 1%), extreme income inequality (worsening), and the environmental and social destruction that comes from the policies made by monetized politics. The Occupy Wall Street protests are an inspiration, a source of hope that our country won't forever be captive to the socially-destructive interests of the ultra-rich.

The USA has unsustainable patterns in militarism (750+ bases on foreign soil & multiple undeclared wars), loss of mfg and trade imbalance ("free trade"), fiscal crises (tax holidays for the rich), unemployment and, above all, an earth threatened by climate change and ocean acidification thru fossil fuels. Wall Street and its Congress will never fix any of it, they keep piling on more of the same.

We need RADICAL CHANGE. With a comprehensive vision of what we want 21st century USA (and earth) to become, we can create solutions that address all these issues together. Transition from a militarized economy to a civilian economy. Scrap the so-called "free-trade" policies that wrecked us, and use trade, tax and investment policies to bring full employment at living wages in revived manufacturing (and R&D), starting in sustainable energy technologies (solar, wind, wave, geo, tidal) including electric cars.

Mr Jabusch, I appreciate how you separate Green Alpha Advisors LLC from the ruinous business-as-usual Wall Street cabal so justifiably besieged by the protestors. Despite my protectionist and socialistic tendencies, I very much see the merits of capital markets and entrepreneurship as well. It is dangerous when ideologies become more important than empirical and humane pragmatism to regulate economies so that markets will be bring prosperity without allowing the rich to run rampant over the rest of us.
William Fitch
William Fitch
October 18, 2011
Hi:

Gee, do ya think....
I think that killing off 1/2 the worlds population, especially since it will be mostly the poor half, is a believable agenda for the top 1/100 of the 1% (1 in 10,000).
A classic Hollywood line that comes to mind is in the movie, "Titanic". When standing by the life boats and the ship is sinking, Rose (Kate Winslet) says to her mother, "don't you realize that half the people on this ship are going to die!!... Wealthy, - Hockley's (Billy Zane) response is, "not the better half". I see such an attitude as being very much real. After all, the world does have to many people and since man can not control his own population, what better way is there to have "blameless" climate change filter the endgame... and make a few thousand tons of money in the process...

.....Bill

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Garvin Jabusch

Garvin Jabusch

Before co-founding Green Alpha Advisors, Garvin was the Director of Forward Sustainable Investments, a business unit of Forward Management, LLC. There his duties included supervision of and responsibility for all aspects of the management...
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