Don’t trust me on this; that’s what Standard and Poor’s says in a report published on August 5. And S&P doesn’t mention human privation, stalled opportunity, justice, or any other kind of moral or political concern. Rather, S&P claims that extreme economic inequality is bad for economic growth. The simple story is that rich people spend a smaller share of their income on stuff (goods and services) than the less rich. There’s only so many haircuts, restaurant meals, or private plane rides that one can use. This means insufficient demand to keep the economy chugging along.
This isn’t a new argument based on new data or research. French economist Thomas Piketty got the rock star treatment earlier this year when he visited America to promote his new book, Capital in the 21st Century, and he was telling that story–armed with equations and graphs, and boatloads of data easily available on his website. Former Labor Secretary Robert Reich made a similar argument, less encumbered with math, in his recent book, Aftershock.
It was also not that long ago that Occupy (everywhere) was protesting economic inequality–among other things–but focusing more on justice than inadequate demand.
Occupy as a whole didn’t develop an instrumental political strategy (as Tea Party groups did) to get what its activists wanted. Rather, people turned out to voice their demands, operating as if they could change the culture and the priorities of others. Even as the occupations were cleared out across the United States, some of the ideas were picked up by others, not least of them the president, who certainly didn’t agree with the activists on everything–or maybe much.
And that’s how political influence works. When movements make gains, it’s partly because others take up their issues and add different arguments, sometimes dismissing the initial ones offered by those in the streets.
Is there some chain of influence running from Zuccotti Park to S&P’s offices a few blocks away? Minimally, did the cacophony of protest encampments alert journalists, or even the public, to pay a little more attention when the word “inequality” appears in a sentence or a French economist visits?
It’s a nine minute walk from Occupy Wall Street to S&P’s corporate offices on Water Street in Manhattan.