This blog has been silent on this ongoing protests about Wall Street Practices at NY’s Zuccotti Park as have been preoccupied with so many things.
Came across two terrific articles on the same.
First by L. Gordon Crovitz of WSJ (gated one) who says why the protesters picked this park? It might appear a random choice to most but it is an intelligent pick. It is one of those quasi public parks whose ownership is not well-defined. Hence, the police etc could not really evict the paraders in the park.
The park was itself a result of crony capitalism. US Steel built this tall skyscraper called One Liberty Plaza and wanted to add nine more floors. The government allowed it but asked it to build a public park by the building’s side. Though the Park is currently owned by Brookfield developers (who owns the building) but because of this quasi ownership structure, there is not much clarity on who can do what. The developers blame the government and government blames the developer. The author says best way to protest against Wall Street is to leave this park at the first place.
In a related article Nicole Gelinsa says the protesters are themselves becoming too big to fail. By camping in such parks, it gives open licence for others to camp in public spaces as well. This behavior is just like Wall Street firms piled on risk seeing others piling on without much damage leading to too big to fail firms.
Now, these protesters are becoming too big to fail. There are many Zuccotti like parks in NY and homeless people might want to make them their homes:
By now, the Zuccotti squatters have become too big to fail, too. New York mayor Michael Bloomberg worries that enforcing the rule of law at Zuccotti Park would cause too much chaos and pain. This time, the pain wouldn’t come in the form of economic injury in the form of years’ worth of double-digit unemployment, but in potential injury to protesters as well as to police, bad publicity for the city, and lawsuits. And just as Paulson and his successor at Treasury, Timothy Geithner, have treated financial institutions randomly, Bloomberg’s approach is similarly unpredictable: one day, he’s going to force the protesters to leave on a firm deadline; a few hours later, he backtracks, citing mysterious, unseen forces.
Coddling banks has had unfortunate unintended consequences. Thanks to its government subsidy, the financial industry is likely still bigger than it needs to be—to the detriment of other industries trying to compete for capital and talent. Coddling squatters will also have negative unintended consequences. New York City is home to dozens of parks, public and private. People live and work just yards away from them. Now, other would-be squatters can observe what’s going on at Zuccotti and draw their own conclusions. What’s to stop homeless people, for example, from pitching heated tents in Central Park?
In both cases the problem is not with Wall Street firms or the squatters. It is the government which allows these things:
In both cases, whom should people blame for government’s failure to enforce the law? The protesters make a common mistake in blaming the banks. But the banks are simply exploiting Washington’s weakness. The protesters should hold elected officials, not bank executives, accountable. Likewise, the protesters aren’t to blame for Bloomberg’s failure to enforce public order and private-property rights. The protesters are taking advantage of the mayor because he’s letting them. It’s understandable that Occupy Wall Street garners public sympathy(and donations). People feel disenfranchised, and they just want somebody, somewhere, to do something. But the nation can’t combat the failure to uphold the rule of law with more of the same.
Here’s a simple prescription: banks shouldn’t be too big to fail, and people shouldn’t live in public spaces.
Fascinating stuff all this…