Why did the Occupy Wall Street protests turn violent and not the Tea Party protests?

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Vikram Bath

Vikram Bath is the pseudonym of a former business school professor living in the United States with his wife, daughter, and dog. (Dog pictured.) His current interests include amateur philosophy of science, business, and economics. Tweet at him at @vikrambath1.

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125 Responses

  1. Avatar morat20 says:

    I think you’ve overthinking it:

    The Tea Party protests consisted mostly of older whites, ie “People who look friendly to a jury” aka “People who often have the money to sue”.

    Occupy Wall Street was, of course, young college kids aka “Dirty Hippies” and using excessive force against them has been an American past time since the 1960s.

    Snark aside: Demographics. I’d imagine the cops (and certainly their bosses) were keenly aware that Important People supported the Tea Party, and it consisted of ‘upstanding citizens’ whereas Occupy Wall Street was college kids, which meant it consisted of lazy stoners and socialists and basically unimportant people that only the ACLU cares about.Report

  2. Avatar Sam says:

    The answer here is the same as always: because the rules that govern the treatment of aggrieved white conservatives are very, very different than the rules that govern the treatment of literally anybody else.Report

  3. Avatar NewDealer says:

    I’m all about number 2. I can think of numerous incidents from International History where left-wing and right-wing populist movements sprung up at the same time and the police always came down much harder on the left-wing movement. This is not to say that all police are inherently right-wing or authoritarian but they do often seem to dislike popular accountability to generally left-liberal reform movements. This is the Thin Blue Line. This is constantly defending Stop Frisk.

    Balko is right about the militarization of the police being a grave danger to civil liberty.Report

    • Avatar NewDealer in reply to NewDealer says:

      Or I am largely about number 2. There are also the fact that Occupy generally protested against Wall Street and Private property over the Tea Party going against the government.

      Occupy was generally younger and less likely able to afford legal representation. Easier to bully, etc.

      And I would consider the Tea Party to be generally authoritarian.

      http://www.salon.com/2013/10/06/tea_party_radicalism_is_misunderstood_meet_the_newest_right/Report

      • Avatar Glyph in reply to NewDealer says:

        To me, “younger” is a key element, regardless of their likely recourse to representation. Younger people are probably more likely to pick (and/or fail to avoid) a fight, than are older people.

        Plus to police, the optics of dragging anyone who looks like they could be someone’s grandma off to jail is to be avoided at all costs (not to mention, they may generally actually feel more kindly disposed, or at least less aggressive, toward people who are older and more frail), while collaring “rowdy youths” is, even if not uniformly relished, certainly an expected part of the job (and happens every Friday night, outside the local college watering hole).

        If you could equalize all other factors, I’d expect a crowd of young hippies to encounter/engender more police violence than old hippies; young rich whites, more than older rich whites; young black women, more than older black women; etc. etc.

        If OWS was younger than TP (and by and large, they were), this is no doubt some of it.

        Which is not to say other demographic and perceived political factors weren’t also part of it.Report

      • Avatar LeeEsq in reply to NewDealer says:

        Glyph, I suppose its a chicken and egg thing. Did the cops adopt a more confrontatitional stand with OWS because they were younger or was OWS more confrontational with the cops because they were younger?Report

      • Avatar Glyph in reply to NewDealer says:

        @leeesq – both.Report

      • Avatar Kazzy in reply to NewDealer says:

        “In hindsight, adopting FUCK THE POLICE as the official theme song might have been a bad idea.”

        But that is a HORRIBLE way to set policy. Cops are supposed to enforce the law, not their feelings.Report

      • Avatar Chris in reply to NewDealer says:

        But that is a HORRIBLE way to set policy. Cops are supposed to enforce the law, not their feelings.

        Sure, but the question wasn’t how to set policy, it’s “what is the explanation for the violence”. It’s perfectly consistent to believe simultaneously that
        (1) OWS protesters were more likely to adopt a confrontational attitude that Tea Partiers that aggravated/”provoked” tensions
        (2) The police are responsible for the resulting violence after wild overreactions

        I am extremely skeptical of the police myself, having basically Scandinavian opinions on criminal justice matters. But I don’t think “the police just decide to bash heads one day” is a particularly accurate model of how these things blow up, even if in general you think the police are responsible.Report

      • Avatar Vikram Bath in reply to NewDealer says:

        Age makes sense to me as a factor. Somehow I forgot about that. It seems that you all think age influences the perceptions of the police.

        Does it influence the actions of the protesters directly as well, e.g. through a greater willingness to confront?Report

      • Avatar Glyph in reply to NewDealer says:

        Are youth more generally predisposed to risky actions, and thinking they’ll live forever? Are they more likely to let their testosterone think for them?

        To me it’s self-evident that young people are generally less able to avoid violent confrontation. Older people are usually more likely to walk away, they can better read the social signals that say “this could turn ugly, and I might get hurt” and de-escalate (and where did they learn these skills? Why, as youths: testing the boundaries, and finding out where they are by getting into the odd scrap).

        Again, none of this excuses police overreaction. But yes, I would expect a younger crowd to be more full of piss ‘n’ vinegar. As they should be.Report

      • Avatar Kazzy in reply to NewDealer says:

        Chris,

        I meant to write a follow up comment in which I noted that that might serve as a practical explanation for what happened, but we should not accept it as a rationale. But the baby was crying. My bad.Report

      • Avatar Kazzy in reply to NewDealer says:

        “…the optics of dragging anyone who looks like they could be someone’s grandma off to jail is to be avoided at all costs…”
        @glyph

        Unless you’re Pedro.Report

      • Avatar Chris in reply to NewDealer says:

        Having had interactions with police on multiple occasions in the context of protests that involved a lot of young, angry people, I suspect that it’s a causal circle. The police tactics used to deal with those protests often make violence inevitable, particularly since their rulebook tells them they should surround the protestors and force them into an ever-smaller space. The protestors are angry and, while I can’t speak for OWS (in which I didn’t participate at all here in Austin, because it was a godawful mess pretty much from day 2), usually know what the police are going to do (see above), so they often react even before the police act. It’s a dance that usually plays out basically the same way: flareups, followed by overreactions, followed by counter overreactions.

        It doesn’t help that the police have a nasty habit of infiltrating activist groups on the left side of the political spectrum. That is, it doesn’t help the level of respect that the protestors have for the police.

        Under this view, it’s likely that one of the reasons this hasn’t happen with Tea Party protests for the most part, is that, with the exception of the pro-lifers who protest constantly, most of the Tea Partiers, regardless of their age, were not experienced activists and protestors, and therefore the dynamic, which relies on history, was not in play. I would not be surprised, however, if the Tea Party spawns an organized and lasting protest/activist movement, to see a similar dynamic develop.Report

      • Avatar LeeEsq in reply to NewDealer says:

        Glyph, personally my parents raised me to avoid these sort of confrontations and how to lower the temperature or if necessary walk away. Not every young person is courageous. Many of us are risk-adverse.Report

      • Avatar Kim in reply to NewDealer says:

        Chris,
        Ours was peaceful.
        Even the protests about Trayvon were peaceful.
        (Notably: the police officer on the scene got down in
        the street with the protestors. Then got her buddies
        to reroute traffic.)Report

  4. Avatar Kolohe says:

    Because a single AR-15 has more firepower than a fully operational drum circle.

    But really, it’s like real estate sales – location location location. Two protests around Capitol Hill last week involved congresspersons – the conservative one against the current state of health care laws, and a progressive one against the current state of immigration laws. The former was in an open field, and passed with little fanfare or notice, the latter was in the middle of a city street, and while essentially drowned out by the other news of last week, resulted in the arrest of some 6 congressmen and women.Report

    • Nob Akimoto Nob Akimoto in reply to Kolohe says:

      Kolohe, I know you’re kidding, but I do think that there’s a tendency for a fair number of heavily armed people wandering around TP rallies probably does have something to do with a softer police touch.Report

      • Avatar KatherineMW in reply to Nob Akimoto says:

        Yet somehow if leftists showed up at their rallies with machine guns, I don’t think the police would go easier on them. Very much the opposite.

        The attitudes and culture of the police and the general public are the major factor here. Leftists – college students, poor people, non-white people – are folks it’s perceived as okay to brutalize and shoot. Right-wing white people aren’t.

        (Still, “fully operational drum circle” is a hilarious line.)Report

      • Avatar LeeEsq in reply to Nob Akimoto says:

        A leftist protest with guns would be called an armed insurrection and the cops would be even more violent.

        The cops reacted more violently to OWS becasue the average age of the protestor was much younger, they were less white, and their message viewed as more of a threat to the establishment.

        Somehow every time the left protests, it becomes a threat to the establishment. Free speech for me but not for thee.Report

      • Is Occupy really not white?

        Sure, the Tea Party might be lily white, but I don’t think that makes Occupy not white. If you watch the compilation video for example, the crowds appear much, much more than 50% white despite occurring in cities.Report

      • Avatar KatherineMW in reply to Nob Akimoto says:

        It doesn’t take much to be “less white” than the Tea Party.Report

      • Avatar Jaybird in reply to Nob Akimoto says:

        It takes more than a Master’s degree in Puppetry Arts, though.Report

      • Avatar Glyph in reply to Nob Akimoto says:

        Memo to myself
        Do the dumb things I gotta do
        Not just a Master’s in Puppetry Arts
        Report

  5. I’d say much of this correct (both the comments and the posts), but there is/was another element, perhaps. The Occupy Ottawa protest got a lot of hangers on from people who in their day-to-day lives were generally in conflict with cops (mostly a lot of drug users and dealers – so much so that they had their own section of the camp, dubbed “Amsterdam”). If this is similar to other sites, that could up the violence.

    I should also note that the Occupy Ottawa protest (for which I was sympathetic) wasn’t particularly violent at all.Report

    • Avatar NewDealer in reply to Jonathan McLeod says:

      I would say that Occupy New York and SF probably also had some hangers on from the same group. In SF, it was the panhandling street kids who still think it is 1967 and generally annoy most SF residents.Report

    • Avatar morat20 in reply to Jonathan McLeod says:

      I guess it depends on how you define ‘violent’. The Occupy protests were non-violent, by and large, in the “the protestors weren’t violent”. They were violent in the “there was violence involved” sense, because the cops acted quite violently.

      Again, that’s a straight-forward extrapolation of drugged out hippies mixed with the belief that left-wing college kids are apparently all anarchists.

      You can listen to some of the horror stories about the NYC cop’s during the last GOP convention there for some fun ‘violence’ involving left-leaning protestors.Report

      • Avatar NewDealer in reply to morat20 says:

        I was around during the GOP protests in 2004. I generally thought the cops went more for the liberals than the right-winger provocateurs. There was a guy in what could be called a right-wing troll truck that constantly drove around Union Square. It was always the left that got arrested, not that guy.Report

      • Avatar LeeEsq in reply to morat20 says:

        I’m in general agreement but OWS was also more willing adopt an attitude towards the police presence regardless of what was happening. Partly because they were wrong and partly because they saw the police as part of the problem as being the toadies of the 1% or something like. The Tea Party adopted the wiser strategy of just ignoring the police, probably because of a combination of respect and prudence.

        This doesn’t justify the police reaction but when you provoke somebody long enough, they tend to react even if they aren’t supposed to. It probably would have been better simply to pretend that they police weren’t there.Report

      • Avatar Vikram Bath in reply to morat20 says:

        They were violent in the “there was violence involved” sense, because the cops acted quite violently.

        It wasn’t my intention to really blame anyone. (Though there are definite documented cases in which the police were to blame.)Report

  6. Avatar Kazzy says:

    Why did the police get violent with OWS protestors? Because they could. It’s that simple.

    Now, why were they allowed to get violent with OWS protestors but not others? I think folks above have pretty correctly fleshed that out.Report

  7. Avatar Adam says:

    I think one factor you’re overlooking is length of the protests. The Occupy protests were much more long-term than the Tea Party protests – the former featured people camping out for weeks on end, while the latter tended to be just one-day affairs (or at most over a weekend). The length means that cops’ water-cooler talk naturally turns to how obnoxious these protests are getting, and I can easily see a lot of “man, I just want to bust those [expletive]’s [expletive] heads” rhetoric, which over a long enough timeframe translates from violent speech to violent action.Report

    • Avatar Glyph in reply to Adam says:

      This is a good point. The longer something drags out, the more tensions rise on all sides. Not to excuse cops (anyone who’s spent time here, knows how little I trust them) but it’s just as easy to see protestors getting more and more agitated over each perceived or actual slight from the cops.Report

      • Avatar LeeEsq in reply to Glyph says:

        The length of OWS protests also put people in a bind. A lot of protests took place in areas of public use like the parks and locals were probably getting upset over the loss of public space.Report

    • Avatar Kazzy in reply to Adam says:

      “The length means that cops’ water-cooler talk naturally turns to how obnoxious these protests are getting, and I can easily see a lot of “man, I just want to bust those [expletive]‘s [expletive] heads” rhetoric, which over a long enough timeframe translates from violent speech to violent action.”

      If police policy is set by water-cooler talk… eash…Report

    • Avatar Vikram Bath in reply to Adam says:

      The length of individual protests is an excellent point.

      I wonder if is influenced in part by age again. I used to stand up at music concerts all the time. Now, my knees and back would get tired before the opening band finished.

      And camping? You’ve got to be kidding me.Report

      • Avatar Glyph in reply to Vikram Bath says:

        Not just from the “youthful stamina” point of view – I seem to recall TP-sympathetic types making comments to the effect that TP protests tended to be just weekend affairs because TP’ers had jobs to get back to on Monday.

        While this was undoubtedly intended as hippie-bashing snark, there’s no doubt that a crowd that’s made up of students, underemployed recent graduates and the like just has more free time than a crowd of older people with kids and mortgages and such (not that there were none of these amongst OWS, and none of this comment should be taken as OWS-bashing in general – I remain somewhat saddened at heart that OWS’ers and TP’ers never seemed to realize they were making essentially some of the same complaints, while using different words to do so; and any moment where they could realize that, has long since passed).Report

      • Avatar LeeEsq in reply to Vikram Bath says:

        Even if OWS and the Tea Party were making some of the same complaints, the appropriate solutions were radically different. There was no ground for a common ground because of this. The solutions of OWS, in as much as they existed, were basically left-liberal to left-anarchist in nature. Most of them would be positively delighted with medicare for all and more federal spending to lower the cost of education. The Tea Party argues for a more rightist approach to the issues.Report

      • Avatar NewDealer in reply to Vikram Bath says:

        Occupy San Francisco eventually became a homeless/street kid emcampment on the Embarcadero and in front of the Federal Reverse building on Market Street.Report

    • Avatar Pierre Corneille in reply to Adam says:

      I also like Adam’s point. As far as I know, most Tea Party protests were events, perhaps attended by a friendly politician, and over within hours. The occupiers, however, were setting up camp in places.Report

  8. Avatar LeeEsq says:

    Point 2 can not be emphasized enough. Cops are much more likely to find common cause with the Tea Party than OWS even though public unions are a beit noir of the Tea Party. Since the Tea Party comes from GOP stock, they have a strong law and order element to them. Their demands are much less radical than OWS demands. The tend to appear and dress more mainstream except when they get into their yankee doodle cosplay. Cops are establishment and the Tea Paty appears to be the establishment.Report

  9. Avatar Chris says:

    Isn’t age the obviously correct answer? Being young is hugely criminogenic, and OWS protesters were much younger than Tea Partiers. Take a look at page 6 here:
    http://www.fbi.gov/about-us/cjis/ucr/additional-ucr-publications/age_race_arrest93-01.pdf

    Violent crime rates for 25-29 year olds in 2001: 467.4
    For 60-64 year olds: 54.1

    If anything I suspect that understates the magnitude of the difference. I would think that young people are even more heavily overrepresented in “public disorder” type violent crimes like minor rioting than in other kinds of violence.Report

    • I found some of this interesting, but some of it actually reinforces the original assertion. For example, in one of the videos it’s actually a young anti-Tea Party protester whose head is stepped after he has inserted himself deep in another protest. The CS Monitor link is similarly about two different protests interacting.

      The AATTP link doesn’t seem to have anything to do with the protests at all. It seems to just show that certain Tea Partiers are bad people, which wasn’t really in question.

      On its face the ftrradio link makes the most firm accusations. The comments on that post seem to suggest that the original video might contradict the assertions in the article.
      —-
      But still, it is good to know that it hasn’t been all smooth sailing for the Tea Party protests.Report

  10. Avatar KatherineMW says:

    It’s not 100% a left-right issue because, although the police may be more sympathetic to conservatives, they seem to be hard on libertarians, too. I think I remember some incidents from the ’08 Republican convention in Minneapolis-St.Paul, where there were libertarian protestors. Would appreciate input from people who remember more from that time.Report

  11. Avatar Stillwater says:

    Why so different?

    Doesn’t “DFH” account for most, if not all, of it?Report

    • Ah, thank you urban dictionary.

      It’s interesting that people on the left would make up an appellation for themselves.Report

      • Avatar morat20 in reply to Vikram Bath says:

        Hmm? Oh, DFH. It’s used because it’s a pithy way of describing how they are viewed — it certainly beats pretending that phenomenon doesn’t occur.

        Not sure how well you recall the lead-up to Iraq 2.0, but the DFH-bashing was probably in peak form at that point.

        In a lot of ways, I think some people are STILL fighting the 60s.Report

  12. Avatar Alan Scott says:

    Density?

    In every picture I’ve seen of OWS, the crowds are packed about twice as tightly as the pictures of tea party events.

    Most of that, I think, is that it’s hard to get OWS sized crowds anywhere except big cities, and the tea party isn’t very popular in big cities.Report

  13. Avatar NotMe says:

    This thread is hilarious with all the folks making excuses for the OWS violence.Report

  14. Avatar Badtux says:

    One word: Anarchists.

    I’m not joking. You had anarchists of the black bloc persuasion show up and subvert Occupy encampments by being louder, more obnoxious, more in-your-face. That in turn changed the demographics of the Occupy movement into something far more confrontational and obnoxious than what it had started out to be. Occupy was like that obnoxious co-worker who goes out of his way to offend everybody around him, who deliberately flosses his teeth in the middle of the company cafeteria while people are trying to eat just to make people sick, who smiles with delight whenever someone talks about problems they’re having, who deliberately makes changes to his code that breaks everybody else’s code without telling anybody… you know, the guy whose very appearance makes you want to slam your fist into his face repeatedly until he learns that being an obnoxious asshole gets him nothing but a fist sandwich. Except you don’t do it because you’re not a policeman and thus, well, you’d get sent to jail and fired.

    Well, Occupy attracted loads of that kind of people, who after a while drove out all the other people who initially supported it because, well, who wants to be around obnoxious pricks all the time? And cops… cops don’t have any problem giving obnoxious pricks a fist sandwich.

    I’ve been around protest movements for over 30 years now, and I’ve seen this dynamic play out time after time. You got the honest good-hearted people who start the movement with the best of intentions. And then you have the pricks who don’t care about intentions, they just want a stage for their prick-ness because being a prick is what their life is all about. The only movements that have lasted were the ones with strong central leadership that was capable of either harnessing the pricks in productive ways or driving them out. Occupy was deliberately leaderless, and thus fell prey to the same syndrome I saw happen everywhere else in that 30 years when someone tried to use anarchy theory to organize a movement — the pricks came in, and eventually the non-pricks got fed up and left. And then the cops crushed the pricks for being, well, pricks. Seen it over, and over and over again. The Teabaggers had that strong central leadership to enforce discipline, even if it was hidden behind a couple of layers of misdirection. Occupy didn’t. That’s what doomed Occupy to irrelevancy in the end.

    Then there was their hobby of, well, occupying public space in what for all intents and purposes were homeless encampments. Which also annoys public officials who, well, don’t want to be confronted with homeless encampments, they want homeless encampments to be on the low-down in places where “good” people never go. That’s what led to a lot of the early police action against Occupy, when the police moved in to enforce anti-camping laws. The Baggers never camped (their mobility scooters woulda run out of battery power!) so they never got the cops moving against them that way.Report

    • Avatar LeeEsq in reply to Badtux says:

      I agree with most of this except the part about the good-intentioned thinking leaving. We have no evidence of this either way. However, the decision of OWS to be deliberately leaderless and not develop on concrete goals and strategies was a bad one that opened themselves to the more confrontational aspects of the Left. I don’t think that the anarchists were being pricks for the sake of it, they probably sincerely believe that confrontation is the only way to get their goals accomplished.Report

    • Avatar Vikram Bath in reply to Badtux says:

      Thanks for the detail.

      The only movements that have lasted were the ones with strong central leadership that was capable of either harnessing the pricks in productive ways

      Have you seen that happen? Do you have any examples of it being done successfully?Report

      • Avatar Badtux in reply to Vikram Bath says:

        The closest thing I saw to a movement that managed to harness the jerks and use them in productive ways was the early civil rights movement, which MLK managed to keep together while keeping the violent types out and harnessing people like Jesse Jackson who are obnoxious but can be used. MLK was very careful about who he put into confrontational situations that the kind of person he was putting there was not going to behave in a way that would reflect badly on the movement. For example, they searched for several weeks for the “right” person to refuse to move to the back of the bus before they settled on Rosa Parks. Of course when he died then everything went to ****.Report

    • Avatar LWA in reply to Badtux says:

      This was, in fact, my very experience with my local Occupy. Thanks for putting it so well.

      There is an ugly streak of self-regarding authoritarianism hidden within anarchists.Report

      • Avatar Badtux in reply to LWA says:

        Not all anarchists, LWA. Just the ones that adopt black bloc tactics. The core of anarchy theory is that the central power of existence is power. The notion that you will destroy power by adopting power is as ridiculous as the notion that you will dry a rug by spraying it with a fire hose, but these “anarchists” don’t care.

        The local Occupy to me was Oakland, and there it got taken over by professional “community activists” who organized their supporters to take over the assemblies and who have long had a confrontational attitude towards the OPD who they blame for the murder rate in their city while they themselves are doing nothing to encourage people to narc on the murderers. The results were pretty much a given, since the two parties hated each other to begin with.Report

    • Avatar roger in reply to Badtux says:

      Good answer, Badtux and LWA. These seem like the best explanations.Report

  15. Avatar Damon says:

    I’d also add that while the tea party is kinda fringe-y, they are in the current political process, ie they are a lot more in the “establishment” than out. I’d classify Occupy as more out than in. Ergo, cops gonna be harder on them.

    And KatherineMW, I seriously doubt that anyone from Occupy would show up with a machine gun. First off, almost none could afford to buy one since they were a buch of college kids, etc. without much income. You’d be much more likely to find a machine gun at a tea party protest becuase they are likier to have enough wealth to actually obtain one. Either way, weapon fire from either party (not the cops) would result in a severe crack down.Report

  16. Avatar North says:

    I’m gonna agree with a lot of the commentators. The protesters of the Tea Party simply weren’t hanging out like OWS did. The Tea Party would protest, kvetch and yell but when the sun went down they went home or back to their motels or to a restaurant to get a bite. When the sun went down OWS set up tents and commenced turning the spaces they were occupying into impromptu shanty towns. My own passing impression was that OWS generally made a nuisance of themselves to non-political actors more (obstructing streets, making a mess and being around constantly) but that’s only an impression and could be the result of the police being harder on them.Report

  17. Avatar Kim says:

    Okay, here’s a little inside baseball:
    You do have professional protestors.
    Some of these people like to go to jail.
    (hence why in the Trayvon Martin protests
    around here, the protestors were telling
    the policewoman, “we don’t wanna go to jail.”
    To the police, it is an honest and open question —
    sometimes the protestors really do want to go to jail.
    This does NOT excuse violence, under any circumstances, mind)

    You also, in OWS’ case, have a lot of
    it dying in a whimper. I can see someone saying
    “I’ll get more publicity by going to jail! go me!”

    With the Tea Party, being older, one assumes
    they are not likely to enjoy sleeping on cots in jail,
    and want to go home to the kids anyway.Report

  18. Avatar E.C. Gach says:

    I’m not sure whether it’s the commentariat that’s changed, the image of the Tea Party, at least now as opposed to sometime circa 2010.Report

    • Avatar morat20 in reply to E.C. Gach says:

      I think the early Tea Party was…romanticized, in a way. By the media, but it’s members. I mean, take the famous rant that started it: A finance guy (well,a media one — Santenelli?) ranting about “losers”…

      Banks made too many risky loans and went under. That was the core of the issue. And he blamed the borrowers. Not the banks.

      That’s now how banks work. That’s not how lending works. If you go under because your loans aren’t repaid, it’s because you made stupid loans and shouldn’t be in the banking business.

      It fit right into the taker/maker mythos, sure — but I’m not sure it was EVER the romantic revolution people tried to make it in 2009 and 2010. Sure made for good TV though.Report

      • Avatar Brandon Berg in reply to morat20 says:

        There was plenty of blame to go around. Sure, the banks were stupid to lend money to people who couldn’t repay them, but the borrowers shouldn’t have taken those loans out, either.

        And remember that many of the loans were held by investors who had been misled by ratings agencies. They, along with taxpayers, are the real victims in this story.Report

      • Avatar Morat20 in reply to morat20 says:

        See, that response is interesting.

        It’s a fun little quirk of American capitalism. The banks were ‘wrong’ and ‘stupid’ in the capitalist sense — they made very, very, VERY bad business decisions and would have gone broke (something capitalism is all about. Winners, losers and the like) had they not threatened the entire economy.

        The borrowers were, however, NOT wrong in that sense. They were offered good deals and took them. Speaking from a purely capitalist perspective — they were winners. They got far better terms than an efficient market would give them, and so they quite rightly took them! If they’d been a business doing that, rather than an individual, people would applaud their shark-like acumen.

        But that’s where “wrong” comes up in the other sense. As in they were ‘morally’ wrong. They “shouldn’t have” taken that money, because…why again? Because the bank would end up on the hook for it? Because they — the borrower — should have realized it was a bad deal for the bank and shouted “No! I refuse to hurt the bank this way!”.

        Again — in the business world, that would be seen as good business. Company A is offered a deal by Company B that will screw Company B because it’s not foresightful enough? TAKE IT. Otherwise you’re hurting your shareholders.

        So what you had, starting off all of this — was a rant by a businessmen, a banker, in which he pinned ALL of the blame on individuals because they acted like corporations are supposed to. In a way he would have applauded had it been Microsoft and Apple instead of bank and mortgage holder.

        You don’t really get to have it both ways. You can’t be for dog-eat-dog capitalism and then blame someone for taking the money that got tossed on the table for him. The borrowers, by and large, certainly did nothing legally wrong (and those that did, those that took out liar loans? They were happily aided by the banks — heck, the origination of the ‘lie’ part was often done by the bank, to move paper, not by the borrower) nor broke any contracts.

        The banks offered loans that were improperly priced. They discounted risk, because the market incentives were to ignore risk entirely and sell the paper off. The least culpable people in the whole mess were homeowners, who were simply offered a loan and terms by a bank — and took them. It’s not the borrower’s responsibility to ensure his loan is priced appropriately, is it?

        And yet — they were the losers, the focus of the rant. A standard financial bubble and pop, and of course the blameless ones were the innocent bankers because they were taken advantage of by faceless homeowners who actually took the bad loans they were offered.

        No bank failures there. No mistakes by the titans of industry. Just moral culpability and moral bad faith by borrowers.Report

      • Avatar Will Truman in reply to morat20 says:

        Assuming that they did not lie on their loan application, I’d say that they were “wrong” in the sense that they were taking on debt they could not afford and leaving themselves vulnerable to all sorts of bad financial outcomes.

        Now, until or unless they turn around and argue that we should bail them out, or they declare bankrupcy*, then they live with their own consequences. And even if their debt is forgiven, they still often bear the biggest brunt of their error.

        * – Bankruptcy itself is iffy. On the one hand, those that got stiffed are those that lent money to people that they shouldn’t have. On the other, stupid actions hurt the bankruptcy regime in a more broad sense. It increases the likelihood of calls for “reform**” and a system in which people do not act stupidly is one that is going to have better interest rates and more favorable loan terms than one where people do act stupidly. So there we do have collateral damage. Culture does a lot of heavy lifting on these things.

        ** – This, in turn, hurts people who went bankrupt due to no fault of their own or for the reasons we have bankruptcy law. They made an understandable miscalculation or were the result of bad fortune. But they didn’t take out a loan to buy more house than they could reasonably afford. On the other hand, a lot of people who did buy houses stupidly were acting in accordance with what was conventional wisdom at the time. I don’t think many of them intentionally purchased a home with an eye towards default, so in this vein I am actually inclined to cut them some slack or mostly reserve judgment. Even though I would not, under any circumstances, celebrate their “shark-like acumen***.”

        *** – The “shark-like acumen” being reserved for those that were able to pay off their mortgage. Because they flipped in time, or got the raise or promotion needed to make the balloon payment. But those aren’t the people really being condemned, are they? They people being condemned – rightly or wrongly – are those that defaulted or are complaining about being underwater.Report

      • Avatar Brandon Berg in reply to morat20 says:

        There’s a difference between negotiating a good deal and reneging on your financial obligations.Report

      • Avatar Rod in reply to morat20 says:

        My analysis is far simpler. I’ve only ever once signed a mortgage. The person on the other side of the desk has underwritten thousands of them.

        So who should have more expertise and therefore more culpability?Report

      • Avatar Kazzy in reply to morat20 says:

        @brandon-berg

        But written into those contracts are the terms of how reneging will be handled. If the borrower ultimately accepts those consequences, they have ultimately honored the contract.

        To offer an example:
        You and I agree that you will give me $100 today and I will pay you $10/month for the next 12 months. Should I fail to make any of those payments, we also agree that you can come and take my TV.
        A few months pass and I stop making payments. You come and take my TV.

        You can’t then demand that I do more. We’ve honored the terms of the contract. If you didn’t like those terms, YOU shouldn’t have signed it.Report

      • Avatar Will Truman in reply to morat20 says:

        @kazzy What you say is correct provided that:

        (1) The entity defaulted upon was aware of the degree of risk involved. For example, if the borrower lied on his application and the bank was unaware of it, or if the bank colluded and the investors were not informed of it. In the latter case, the bank deserves either co-equal or a majority of the blame. There is a lot of reason to believe that if the bank was assisting in the fraud, that they were intentionally looking the other way. In which case, they cannot exactly claim victimhood.

        (2) Good-faith effort was made to abide by the terms of the loan. There is little reason to believe that this isn’t the case, except in certain non-recourse/underwater mortgage situations.Report

      • Avatar Kazzy in reply to morat20 says:

        But doesn’t that run both ways?

        If the person making the loan says, “Don’t worry, your interest rate won’t go up for the life of the loan,” but buried on page 37 is a clause saying that it can and likely will go up significantly in year 12, do we let the borrower off the hook? Do we chastise the person making the loan? Or do we tell the borrower he should have read the paperwork better and, hey, that’s business?Report

      • Avatar Will Truman in reply to morat20 says:

        I’d argue that there’s a distinction between deception and lying on a document, but nonetheless they are morally close. And arguably, whatever distinction there is between the two is more than compensated for by the image asymmetry that Rod refers to.

        I would say, though, that most mortgage documents are relatively straightforward. If there is deception going on, it is hiding in plain sight on Page 2 or 3, and the borrower just doesn’t understand what the words mean.This doesn’t detract from your point, or support it necessarily, but as someone who worked on mortgage documents (or the automated production thereof) for two years, I thought I would mention it.Report

      • Avatar LWA in reply to morat20 says:

        I find it interesting that self-interest is perfectly appropriate when practiced by businesses, yet morally reprehensible when practiced by individuals.

        Or I should say, it is acceptable when practiced by those in power, and morally reprehensible when practiced by the powerless.

        Rick Santelli is the perfect example. He wasn’t outraged at the government bailing out banks- he was outraged that the government was bailing out powerless individuals.Report

      • Avatar Will Truman in reply to morat20 says:

        The criticism of the borrowers is not that they games the system for profit. It’s that they behaved stupidly, lost, and are perceived by many as victims in need of recompense. This narrative may be right, and it may be wrong, but it’s different than being angry at them for being crafty fox-smart.

        Of course, Santelli did f-up, or show his true colors, by not being critical of the bank bailouts. But if you are so inclined, you can find people that are skeptical of the bank bailouts and bailing out homeowners (I would expect Brandon to be such a person). Such people might be more worthy of your time. Of course, they’re also less easy targets.Report

      • Avatar Kazzy in reply to morat20 says:

        Being stupid and being a victim are not mutually exclusive.

        For most people, their stupidity does not lead to losses that leave them hundreds of thousands of dollars in the hole.
        But the mortgage crisis did just that to a great number of people, because another group of people knowingly and willingly decided to exploit their stupidity and pass the risk on to others, folks who were not necessarily stupid but who were screwed by a game of three card monty played by ratings agencies.Report

      • Avatar LWA in reply to morat20 says:

        Will-
        Yes, there certainly are people who are critical both of the banks and the homeowners.

        But where are these reasonable people? Not in positions of power, thats for sure.

        There is plent of lip service and limp wristed fauxtrage over corporate welfare, but when actual measurable action gets taken which form of welfare is inevitably on the chopping block?

        Elilas Esquith has a good article up that touches on this- that the Beltway consensus takes it for granted that there is only one way to fix Social Security and Medicare, and that is to cut benefits.
        Raising taxes? Unmentionable. Literally, it is not something that serious journalists discuss or will dare mention. I read somewhere that SS could be made solvent for 75 years, simply by raising the cutoff limist for the payroll tax.
        But I only read it on a liberal site. You won’t see it mentioned on the Sunday talk shows, on CNN, CNBC, FOX, or any other Very Serious outlets. Instead, you will get Pete Peterson’s useful idots telling us that we owe it to our children to cut Social Security.

        Cutting ag subsidies? That gets a forgettable and unnoticed white paper from Cato. Cutting SNAP benefits? That gets a Senate filibuster and swift motion from the Speaker of the House.

        Prosecuting the Wall Street criminals? That gets a passing mention on a blog; Blocking the Consumer Financial Protection Agency? Thats get a to-the-death fight from the majority party.

        The pox-on-both houses argument fails miserably by equating predator and victim, and by ignoring the pattern of favoritism and self-dealing by the powerful at the expense of the powerless.Report

      • Avatar Will Truman in reply to morat20 says:

        Kazzy, I’m sympathetic right up until the Three-Card Monty part. There were victims there, but that was mostly investors. Most of the borrowers weren’t tricked except insofar as they didn’t understand the basics of mortgage lending (Adjustable vs Fixed rates, balloon payments, interest-only, etc.). Those who actively tricked or were lied to are a different matter, though there I would remove them from the “stupid” category entirely. Naive, perhaps, but above all victims of an overly complex system that in itself isn’t trickery but which does help make trickery possible.

        (I’d add, even in cases where they did behave stupidly, that doesn’t absolve the banks, but does change the dynamics of victimhood, in my view. I take a more sympathetic view of the borrowers than many. I’d prefer bail them out than the banks, if I had to choose. Even so, they did play a role in this.)Report

      • Avatar Kazzy in reply to morat20 says:

        Will,

        The “three-card monty” part referred to the investors. They bought Triple-A rated investments that were not and should not have been rated Triple-A.

        I am sympathetic to the borrowers as well. I don’t absolve them fully of responsibility, but I find difficulty in making them out to be immoral actors when they sat down at a table, were offered a sweetheart deal, and were told by the person across the table from them — someone who they presumed and trusted as an “expert” — that everything would be fine.

        I think the worst folks involved are those who made it possible for the banks to do what they did. Those who made the rules such that they could repackage and restructure their debt and make it look much stronger than it was and re-sell it, thereby allowing them to make a bunch of risky investments without the risk. What I do know of the situation tells me that was largely a combination of bank higher ups and the politicians they were in bed with. When I talk about the “lenders”, I don’t necessarily mean the guy sitting at the table with the borrower offering him a great 30-year-rate; I mean the guy several floors up who knows that borrower has a good chance of defaulting but has already sold off the loan to someone else under what essentially amount to false pretenses.Report

      • Avatar Will Truman in reply to morat20 says:

        Kazzy, I don’t think we’re very far apart on this. See my previous comment where the borrowers only did something immoral if they purposefully lied on their application or did not make a good-faith effort to repay the loan.Report

      • Avatar Rod in reply to morat20 says:

        I’m just floored by how when you look at all the players in this sad tale — lenders, investors, rating agencies, regulators, and borrowers — they’re all professionals, experts, and generally highly paid for their supposed expertise, with one exception, the borrowers. And despite that fact, you still have people that want to blame the amateur, the little guy. Effing amazing.Report

      • Avatar Will Truman in reply to morat20 says:

        Rod, I don’t think anybody here has suggested that The Blame lies with the borrowers. Merely that they are not clear of it. That’s the part we’re talking about because that’s the part that issue is being taken with.Report

      • Avatar Rod in reply to morat20 says:

        @will-truman , I just want to be clear on the issue of culpability here, because it seems to me that the worst that the typical borrower (leaving aside professional flippers) was guilty of was wanting to buy a house and believing the advice of professionals like loan officers and realtors. Their sin was naivete versus greed and recklessness on the part of the pros.Report

      • Avatar Kazzy in reply to morat20 says:

        @will-truman

        I never saw us being far apart. I assume it is Brandon that myself (and Rod) are primarily objecting to.Report

      • Avatar Will Truman in reply to morat20 says:

        Rod, I would probably go a step beyond naivete, though I have a bit of difficulty putting my finger on it. Somewhere way shy of the kicking of dirt over the credit ratings, though. Given what they’d done to their fiscal lives, I am not particularly inclined to pile on to the borrowers, except when it seems people are seeking absolution or treat them as victims.

        As Brandon says, there is a lot of blame to go around here. Up to and including the borrowers who used poor judgment, even if they do not (in my view) harbor the same level or type of blame as the other players.

        I worked on the mortgage side of this during the run-up (not for a mortgage company, I should note). Watching it unfold, my chief frustration was with the banks. But there was a secondary frustration with people borrowing under terms that represented foolishness at best, or (yes) avarice at worst. Even if the banks were more culpable, that doesn’t change that.

        Have we reached the point where saying as much constitutes absolution of the banks?Report

      • Avatar Jaybird in reply to morat20 says:

        Personally, I think that the banks ought not have been bailed out… but I also have a story from when we were buying our house in the early oughts.

        Maribou and I sat down and went over mortgage rates, mortgage payments, likely houses in the likely parts of town (you could get one *THIS* size in *THIS* part of town, but you could get one that was only *THAT* size in *THAT* part of it…), and we hammered out that what we really wanted was something around $150k. We could push it 10 or maybe 20 percent if we had to, but we wanted to not have to.

        So we went in to talk to our mortgage broker and, wouldn’t you know it, he asked about our jobs, our salaries, and he brightened when we told him what we made and what that meant we wanted.

        He told us that we were pre-approved of some obscene number. It was in the low 300s… and the interest rates we kept getting approved of were similarly obscene. We hammered out that we had about 5% to put down and he scoffed and told us that we should use that money to buy furniture because we’d still be paying PMI no matter what and we should have nice things until we refinanced when the house was worth more in a couple of years.

        Dude was seriously sleazy.

        But… I can’t help but think that a person who would have gone in there with the attitude that said “let’s see what we can get” and then danced a jig when they found out it was twice as much as a cautious person would have estimated would have been derelict in his or her duties as well.Report

      • Avatar Badtux in reply to morat20 says:

        I live in California. In California, the sole recourse a bank has for a non-performing mortgage is to repossess the house. That’s it. California is a non-recourse state. Bankers should never issue loans where they’ll lose money if they have to foreclose here, it makes no business sense on its face. Yet California was one of the centers of the housing crisis. Why?

        Simple: A friend whose mother was a mortgage broker in 2006 told me, “buy a house! My mom can get you a loan with no money down, and if it turns out you can’t afford it, houses are going up at 20% a year and just sell it for profit!” I didn’t because the numbers made no sense when I looked at the income vs. housing prices level, but there was a lot of that going around, and not everybody had their eyes on the relationship between median family income and mortgage prices. Math is hard. For large numbers of borrowers in 2006, it seemed like a good deal, no money down, and then flip the house or refi to another sweetheart loan in a couple of years before the balloon payment came due. Except housing prices crashed in 2008 and they couldn’t flip. Oh well. The balloon came due, they couldn’t pay, they couldn’t sell the house because it was way underwater, so they just waited for the eviction notice or for the bank to pay them to move out (yes, banks did that, California has a 30 day process for eviction and in many cases it was cheaper just to pay the former homeowner to move out than to go to court and do a formal eviction). In many cases they got up to two years of free rent out of it because it took the banks that long to process all the delinquent loans. It was all legal and aboveboard, all laid out in the mortgage contracts and in California state law.

        From the borrower’s perspective, they were taking a business gamble that housing prices were going to keep going up. They lost the gamble, and lost the home plus any mortgage payments they’d made, but they didn’t have much skin in the game anyhow so it wasn’t as if it was a big deal to them here in California (a non-recourse state). It was the bankers who were supposed to know better and know that housing prices were going to collapse, but the bankers didn’t care because they’d already flipped the loans to investors — while getting credit rating agencies to lie and say that the loans were AAA-rated “Good As Treasuries” mortgage-backed securities despite the loans being guaranteed to default within three years if housing prices went down rather than up.

        The people who should have really been up in arms were the investors. The banks should have been drowned in lawsuits over them selling mortgages that they knew were doomed to fail to investors as AAA-rated loans, and bankers should have been frog-marched to criminal court en masse for fraud for selling this worthless paper to investors as being “as good as treasuries”. I still cannot fathom how it is that bankers managed to crash the economy via a massive fraud upon investors, and yet it was they who were bailed out — not the investors (including most large state and municipal pension funds) who lost billions due to the fraud. I guess it’s true that there’s two standards of justice in the United States — one for us ordinary people, and one for the filthy rich. Because I know if I sold someone worthless trash as being “as good as Treasury bonds”, I’d go to jail for fraud. WTF?Report

      • Avatar Rod in reply to morat20 says:

        Have we reached the point where saying as much constitutes absolution of the banks?

        To the extent that you and are in disagreement, I would characterize it more as a matter of emphasis or degree than anything more substantive. Part of the problem with these discussions is that “borrowers” covers a lot of territory from true victims of scammy loan originators to greedy house flippers and from naive, unsophisticated first time buyers to, knowledgeable investors who miscalculated the extent or timing of the boom/bust cycle.

        So we can legitimately hold different views regarding the culpability of the borrowers depending on who we are thinking of.Report

      • Avatar Kazzy in reply to morat20 says:

        @jaybird

        The difficulty in calling that person derelict in his/her duties is that these are a set of duties that are poorly defined and which most people have zero practical experience or knowledge of. Sure, people should know what they can afford to pay in housing expenses per month. But as I’m sure you know now, there are a ton of variables and a ton of factors that make buying unlike anything most people have done before. Property/school taxes can shift wildly, and while the same is true of rental prices, you can walk away from the latter, but not the former. A home purchase is both a housing expense and an investment, thereby shifting the way it is viewed. A mortgage is typically a 30-year agreement; most people will never sign a binding contract of that term again in their life (unless it is another mortgage). High and prolonged unemployment coupled with a rapidly declining housing market likely left many people who did everything right (bought within their price range, had emergency savings, tried to sell when their circumstances shifted) still holding the bag.

        So I can see how a reasonably responsible person can perform a reasonable degree of due diligence and still end up in a mortgage they shouldn’t be. Part of their due diligence is consulting with the necessary expertise to better inform themselves. If those “experts” lead them astray, that is on the experts, not the borrowers.

        Were there some people who simply saw big homes and low interest rates and jumped? Sure. Those people are probably worthy of some criticism. But I don’t think that explains everyone who wound up defaulting on their mortgage.Report

      • Avatar Mike Schilling in reply to morat20 says:

        Since corporations have free speech, I don’t see why individuals can’t transfer their bad debts to a subsidiary and let it go bankrupt.Report

  19. Avatar Notme says:

    Another peaceful protest by armed non OWS folks. Who would have thought that armed folks could be peaceful? Aren’t we supposed to believe the liberal hype that armed citizens will only engage in public shootouts?

    http://www.mysanantonio.com/news/local/article/Armed-protesters-arriving-at-the-Alamo-for-4909381.phpReport

  20. Avatar Rufus F. says:

    Because young people have a lot more energy for violent clashes than old people?Report

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