Today, Explained - Blame Capitalism: The 99%

Episode Date: September 22, 2023

Two wildly different political movements — Occupy Wall Street and the Tea Party — emerged from the Great Recession. They forever changed the way Americans think about capitalism and democracy. This episode was produced by Avishay Artsy, edited by Matt Collette, fact-checked by Laura Bullard and Serena Solin, engineered by Rob Byers and Patrick Boyd with original music by Jon Ehrens, and hosted by Noel King. Additional editorial support from Miles Bryan, Jolie Myers, and Miranda Kennedy. Transcript at vox.com/todayexplained Support Today, Explained by making a financial contribution to Vox! bit.ly/givepodcasts Learn more about your ad choices. Visit podcastchoices.com/adchoices

For a long time, regular Americans didn't talk very much about capitalism. Vox wasn't publishing think pieces about Frog and Toad being anti-capitalist icons. And the rap on Jack Welch, who we talked about in our last episode, great CEO, in on the joke. If you need to pass some eye water, I'll be happy to go out and get you some weakness tissues. No, I'm not crying in front of Jack Welch. But during the great financial crisis, capitalism broke for everyone. And instead of uniting us, it divided us. The rage then was like one of those summer wildfires that burns so intensely it makes its own weather.

It whipped up a political storm on the right. President Obama, are you listening? And on the left. We're very angry at Wall Street. It's the heart of capitalism, American capitalism especially. That's why we're here today. And that's why we're here today on Today Explained. We've identified the moment we all started talking about capitalism. Coming up, a financial crisis and two wildly different but lasting responses to the problems with American capitalism. Get groceries delivered across the GTA from Real Canadian Superstore with PC Express.

Shop online for super prices and super savings. Try it today and get up to $75 in PC Optimum Points. Visit superstore.ca to get started. It's Today Explained. I'm Noelle King. On Fridays in September, we've been telling the story of American capitalism and why so many of us blame it for so much. Last week, we covered the 1980s when General Electric CEO Jack Welch turbocharged shareholder capitalism and other CEOs followed him. Greed was good. Capitalism was on steroids. Government was limited. Regulation, not so much. There was a neoliberal consensus, however you want to put it. It all led to a financial crisis that was so complicated, even economists couldn't figure out what the hell had happened. The invisible hand was once again elsewhere.

And then, as Washington was trying to figure out how to respond to the financial crisis, Americans elected a guy who promised the exact opposite of invisible hand limited government. The change has been forced on us. No, not John Maynard Keynes. But this guy also had a plan, and it involved some very visible hands. The plan I'm announcing focuses on rescuing families who played by the rules and acted responsibly by refinancing loans for millions of families in traditional mortgages who are underwater or close to it. In this speech in Arizona, President Barack Obama was saying he was going to bail out the little guy, the homeowner. And the day after Obama's announcement

in February 2009, a CNBC personality named Rick Santelli put out a call for a certain type of angry American. We're thinking of having a Chicago tea party in July. All you capitalists that want to show up to Lake Michigan, I'm going to start organizing. Rick Santelli has this televised rant on the floor of the Chicago Stock Exchange, and he is articulating the sentiments of many Americans, not just conservatives, which were like, you know, these people took out mortgages they can't pay for. Why are we paying for, and these are Santelli's words, not mine, the losers' mortgages? The government is promoting bad behavior. I'll tell you what, I have an idea.

Why don't you put up a website to have people vote on the internet to see if we really want to subsidize the losers' mortgages? So he, in this burst of feeling, urges everyone to join him in creating a new Tea Party. I'm Dr. Rachel Bloom. I'm an assistant professor at the University of Oklahoma, where I teach in political science. If there was no Rick Santelli, we still would have had a movement that was reacting to the Obama presidency, if nothing else.

It just wouldn't have been called the Tea Party. So I think what we can really credit him for is getting on national television and using this phrase that for people who fancy themselves as a certain type of constitutional patriot had a history of principled resistance to government overreach. For months, we've been hearing stories that, oh, GM made a bunch of bad financial moves and business moves, but we're going to bail them out. We're going to make sure all of the stockholders are made whole. And most of the people who pay taxes in this country were in my situation, are more like me than they were like the people who run Goldman Sachs. My name is Bill Hennessey, and my day job is mostly in technology, a design engineer.

My son actually sent me a text message with a link to a story about Rick Santelli's rant on CNBC. This is America. How many of you people want to pay for your neighbor's mortgage that has an extra bathroom and can't pay their bills, raise their hand. We had just been through some really rough economic times for about three, four years. As a technologist, I was doing very well leading up to Y2K, and then the dot-com bubble popped. And so my situation went downhill, and we had a fairly large family with five kids. I was working 80 hours a week, barely able to make ends meet, very tired of having to tell my wife and kids we can't do that. We just don't have the money. So when Rick Santelli said we're going to have a tea party here in Chicago, he turned us from victims to advocates for ourselves. So people jumped on that and began announcing local tea parties all around the country.

And I had a blog that was mostly popular in the St. Louis area at the time. And I offered to hold a St. Louis tea party. But I had no idea what I was doing. I'd never organized anything like this. And, you know, we got as much publicity, the local publicity, as we could. The anomaly of conservatives protesting caught people's attention. Since the original Tea Party involved dumping tea into Boston Harbor, we decided to have people bring loose-leaf tea and dump it into the Mississippi. It had no connection to what was going on, what the problem was,

but it was a great media draw. And then it just took off. They're spending our money, our children's money, our grandchildren's money, and they're going to just continue to push this country into debt and they're going to destroy the economy of America. You know, if media's not doing its job, if government is just taking over every single thing that it can, and we now have an unfettered liberal, the radical left has got control of the process. Among Tea Party activists, capitalism was a heroic word. It was one that they celebrated being called a capitalist. It indicated that you were part of wealth creation in society,

that you were a contributor to wealth creation in society. I believe in free enterprise. I believe in capitalism. My name is Brayden King, and I'm a professor of management at Northwestern University's Kellogg School of Management. The Tea Party movement was supposed to represent the people who were trying to get out from under the government so they could create more wealth. So in a sense, the Tea Party activists used capitalism as a way to motivate people to get involved because anybody who saw capitalism as good, they argued, should be a Tea Party activist. Now, this is where the distinction between what the masterminds or the funders wanted the movement to be and what it became. Americans for Prosperity and Freedom Works and other Koch affiliate organizations give a lot of materials to the fledgling Tea Party groups, right? Everyone gets a copy of anything Milton

Friedman wrote that they ever wanted to read, anything from Friedrich Hayek. So people are learning about this. And most of the activists I spoke to were like, I'm not a communist, but I never knew about all this. And they were excited about learning about the capitalism angle, but they couldn't go very far into it. So once they regurgitate to me the talking points that they learned from some training or some speaker, they would veer off course very quickly. Those people weren't economic purists so much as they were reactionaries, right? Reacting to the cultural change and economics was part of that,

but it wasn't the only thing. So in my years interviewing tea partiers and going to their events, I heard much more conversation about cultural you know, cultural decline, racist dog whistles, anti-immigration, anti-Muslim sentiment, and a lot of conspiracy theorizing that I think most people weren't aware of until QAnon made that kind of thing more mainstream. There are many Americans, including many in the Tea Party, who think Obama was not even born in the United States. He was born Muslim. He was raised Muslim. He was born in Kenya. I've never seen any evidence of his Christianity. In official terms, the Tea Party name stopped being used very much after 2014.

The House Freedom Caucus, which forms in 2015, doesn't use the name, even though it's very clearly affiliated with people who were part of the Tea Party. In the electorate, the activist base of the Tea Party mobilized and was a big part of helping elect Donald Trump. The Tea Party people are incredible people. These are people that work hard and they love the country. And then they get just beat up all the time by the media. It's disgusting. And you will be surprised how big you are. You don't know how big you are. You don't know the power that you have. I mean it. So, like, where did it go? I think it went from being this outsider insurgent faction

to being the party, or at least a very powerful part of the party. I don't think you would have the populism of the Trump era without the Tea Party movement to kind of pave the way for how to do it. The idea that Trump picked up on and really used that anyone who wasn't on board with his agenda was the enemy, even if they were Republican, that's very Tea Party. The Tea Party also helped change the parameters of what is acceptable to say out loud in public. They were full of kind

of anti-Black and Brown, anti-immigrant, anti-anyone who wasn't part of the heterosexual, Christian, white, mainstream mold. And that rhetoric did creep into the public consciousness. So it's kind of hard for me to imagine that Trump would have been as immediately successful with that rhetoric if the Tea Party activists hadn't been priming the pump for a while. The people who got behind Donald Trump with a large number of crossovers from the Democratic Party, huge support from organized labor, rank and file of organized labor. Those were exactly the same people who came out to the Tea Party. Many of them rarely voted prior to 2016. They believe that Trump was the only hope to give them a voice against the system that had been built against them.

So I think that is the, you know, good or bad, however that falls out, that was the ultimate culmination of the Tea Party. So this was the first response to the great financial crisis and the failure of capitalism. Rage at the people who got bailed out, the losers who got mortgages that were too big. The Tea Party used the language of capitalism and free markets as a cudgel to beat those people up and to beat up a government that was helping them. So why did Americans turn on each other like this instead of turning on the banks or the bankers? Well, the Tea Party was never as grassroots as it seemed. It had the backing of the billionaire Koch brothers,

who kept their influence a tightly guarded secret. The Kochs wanted capitalists in office, but they aren't kings, they're just billionaires. They needed the grassroots, so they mobilized the grassroots. The irony here is that the man the grassroots elected never liked the Kochs, he never needed them, because he already had so many of us. Donald Trump surveyed the scene, saw glimpses of how angry and divided we were, then took his gaudy golden crowbar and wrenched that door open wider and maybe forever. Coming up, we go back to the second response to the big failure of capitalism. Support for Today Explained comes from Ramp. Thank you. the end of every month. And now you can get $250 when you join Ramp. You can go to ramp.com

slash explained, ramp.com slash explained, R-A-M-P.com slash explained. Cards issued by Sutton Bank, member FDIC, terms and conditions apply. BetMGM, authorized gaming partner of the NBA, has your back all season long. From tip-off to the final buzzer, you're always taken care of with a sportsbook born in Vegas. That's a feeling you can only get with BetMGM. And no matter your team, your favorite player, or your style, there's something every NBA fan will love with BetMGM. And no matter your team, your favorite player, or your style, there's something every NBA fan will love about BetMGM. Download the app today and discover

why BetMGM is your basketball home for the season. Raise your game to the next level this year with BetMGM. A sportsbook worth a slam dunk. An authorized gaming partner of the NBA. BetMGM.com for terms and conditions. Must be 19 years of age or older to wager.

Ontario only. Please play responsibly. If you have any questions or concerns about your gambling or someone close to you, please contact Connex Ontario at 1-866-531-2600 to speak to an advisor free of charge. BetMGM operates pursuant to an operating agreement with iGaming Ontario. The second response to the failure of capitalism came two years after the Tea Party was founded. 2011 was a crazy year.

There were huge protest movements in Spain, in Israel, and of course, all across the Arab world. It was bound to come to America, and it did. The year before, in 2010, the Democratic Party had been walloped in the midterms, thanks in part to a little group called the Tea Party. And all of a sudden, President Obama was in the mood to compromise. You know what he starts talking about instead of justice or about progress? He talks about the deficit, the deficit, the deficit. Most of us already agree that to truly solve our deficit problem,

we need to find trillions in savings over the next decade. This is David Meyer. I'm a professor of sociology and political science at the University of California, Irvine. Where's the spark? Where's the spark? Adbusters, a lefty activist magazine, calls for an occupation and they say, let's all go to Wall Street. Let's all assemble there, agree on one demand and not leave until that demand is satisfied. The first time I went to Zuccotti Park to check out Occupy Wall Street, I went by myself out of curiosity. My name is Sunny Singh.

I am a musician, a popular educator of sorts, and an activist of sorts. I brought my trumpet with me, and I really liked the vibe and the spirit of what I saw happening. I saw, I mean, I did see mostly youngish white folks, but I saw a mix of folks of color in the mix as well. And I saw a pretty welcoming vibe and it felt like so many things to be a part of Occupy Wall Street and to be there. But I think more than anything, it felt exciting. And in particular, something that I hadn't really seen up until that point as an activist was such a serious critique of capitalism becoming mainstream, almost becoming cool among a generation of young people.

Occupy started bringing that critique of capitalism and sort of normalizing anti-capitalism as not only a legitimate stance, but one that made a lot of sense, given the harms that capitalism was creating right in front of us. We saw a bunch of people hanging around, occupying this rather small park in downtown Manhattan

that was fairly unremarkable otherwise, and that was Occupy in its very embryo. My name is Ruth Melkman. I am a professor of sociology and labor studies at the City University of New York. My name is Yotam Marom. I am a group facilitator for social movement organizations. People were just coming out of the woodwork. They were getting off buses, off trains, coming to this place. All kinds of different people from all kinds of different

places and people were walking out on their jobs. I hadn't seen anything like that before. We assumed, as the participants did at the time, that this would not last very long because typically in New York City, when something like this breaks out, the police swoop in and make everybody leave. But for some reason, they did not do that in this case. I joined the direct action working group and we did a lot of planning for actions to keep up momentum and to keep the narrative going. My name is Sandy Nurse, and I am the city council member for the 37th district in Brooklyn. It was just an explosion of people. There was daily marches down to the stock exchange. Different unions came down to the park and did

rallies or led marches from it. We had celebrities come down. Lupe Fiasco gave us speakers. Kanye showed up. Al Sharpton, Charlie Rangel, Russell Simmons showed up. I mean, it became a place to be and be seen at if you were someone wanting to be associated with progressive or left movements and politics. You know, October 15th was, I think we ended up with something like 80,000 people in Times Square.

You couldn't move. It was huge. And there was this moment that we all started to sing this little light of mine. And we had handed out sparklers and people were lighting the sparklers and singing. For the 99! For the 99! And right around then, I think it was the CNN building, it has like a ticker that shows you the headlines, and the headline was Occupy Wall Street Goes Global. It was an incredible feeling.

It was an incredible moment, and I think it had real political significance. I think it was one of the first times that people in my political generation felt powerful. The participants said that they had been victimized by the financial crisis of 2008. And meanwhile, Wall Street got bailed out. They got sold out. That was one of the slogans. And I think that really resonated with folks in the aftermath of 2008. The conversation around capitalism was an everyday, all-day thing. We even had a chant from Spain that was just singing anti-capitalist. I mean, it was the thing. It was an anti-capitalist movement.

You know, the slogan was, we are the 99%. This did unify people and it provided a kind of laser focus on the system of capitalism and what its consequences were. And it became, you know, a kind of touchstone for people's discontent very quickly. I think one of the major contributions that Occupy Wall Street has made that has outlasted Occupy is the framing of the 99%. I think that's a major contribution to help people think and see in terms of class on a mass level. And I think that's because Occupy had anti-capitalism really baked into it. Occupy had difficulties as anything more than a holder of figuring out next steps. To be sure, in some places, people had coherent plans for what to do next, how to focus on student debt, how to focus on housing accessibility. But Occupy no longer unified all of these things. Some of the people who came out of Occupy

wanted to do electoral politics. Some of the people wanted no part of electoral politics. So this is a problem. What does Occupy stand for? I definitely think Occupy Wall Street has a lot to do with a growing popularity in socialism and a growing popularity of anti-capitalism or a strong critique of capitalism. You know, when I think about our social movements, when I think

about this country's sort of political trajectory over the last few decades, I do see Occupy as a turning point in bringing those ideas to a much, much wider audience. You know, for example, Democratic Socialists of America was an organization that long preceded Occupy Wall Street, but was not a very popular organization, right? Was not a very serious player in our political ecosystem. And today it very much is, right? Like a DSA is a force to be reckoned with in a beautiful and powerful way.

And I think that turning point that Occupy created, I think has a lot to be reckoned with in a beautiful and powerful way. And I think that turning point that Occupy created, I think has a lot to do with even the popularity of a political candidate like Bernie Sanders. I think there's a sort of through line from Occupy, Bernie Sanders, Black Lives Matter, and DSA. They're sort of like these movement moments that have built upon one another in ways that I think we'll still see what the impacts are in five, ten years. What I remember being surprised by at the time was hearing interviews on the media with people who said, well, I really like Bernie Sanders, but if that doesn't work out, I'm going to vote for Trump. And vice versa. People who said, I'm a Trump supporter, but I really like Bernie Sanders. And in my head, this didn't make any sense at first. Like, how could they like both of these people? But the reason was that both

of them did articulate the sense of grievance that ordinary people who felt left out of the neoliberal order or whatever you want to call it, felt. They felt that. And both those candidates in very different ways spoke to that sense of betrayal. They had completely different agendas, obviously, but they both appealed to the same people, or at least some of the same people. So capitalism broke, and there were two responses. One was anti-big government, pro-capitalist. The other was deeply grassroots, progressive, anti-capitalist. And they both led us to the same outcome. President Donald J. Trump, a politics of grievance,

and a sense that everything has failed, democracy and capitalism both. It's all gone goofy. And that's opened a door for people who propose changes to capitalism that once upon a time, I promise you, would have been unthinkable. Next Friday on our last episode of Blame Capitalism, should we throw the entire system out? Trigger warning, Neolibs. We're going to talk degrowth. Thank you. Kennedy. Laura Bullard and Serena Solon are our fact checkers. Our engineers are Patrick Boyd and Rob Byers. Special thanks to Martin Wolf of the Financial Times. You should check out his book, The Crisis of Democratic Capitalism. It's really very good. I'm Noelle King. It's Today Explained. Thank you.