formal essay #3 1st draft

8/3/2019 Formal Essay #3 1st Draft

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Jacob Paxton

Formal Essay #3

A Look at ³Occupy Wall Street´

All throughout history, people have taken up arms to protest legislation or action that has

been deemed wrong; such cases include the American Revolutionary War, the American Civil

War, the Glorious Revolution in France, and the overthrow of several kings of several provinces.

Recently, violent protest has changed. In the 1960s, Gandhi and Martin Luther King advocated

peaceful protest ± a type of protest that exposes corruption in a government by the government¶s

own doing. At the time, there were doubts as to how powerful these movements could be,

considering they didn¶t carry an instant consequence. The people proved this to be wrong. As

more and more people were unjustly treated, more and more people who were previously not

involved got angry at those dealing injustice to the protestors. This is the idea behind Occupy

Wall Street. Occupy Wall Street is a movement called on for September of this year to spread

awareness about the mistreatment of the middle class in fiscal policy. Protestors in this

movement, like protestors in previous peaceful movements all around the world, would ³sit-in´

at the financial district of New York City to gain the most attention from the people they want to

influence. The movement has spread worldwide due to the hi-speed communication the Internet

provides, with ³occupations´ currently in every continent.

The way the occupations work, sadly, has drawn people who come to take and give

nothing back to the movement. In acts of anti-capitalism, ³occupiers´ have created small, self-

sustaining societies that share freely instead of trading for goods. People take advantage of this

by joining the movement and living for free while contributing no action to the protests. These



people also have a natural tendency to act violently, due to their sudden grasp of more freedom

than the government will provide. Movements all around America have been generalized as

violent groups of hippies and lazy college students who want to mooch off the hard working

people around them. Though these people do take part (and you cannot prevent them to

participate), these people do not hold a majority but rather share a very small percent of the

protestors. In conclusion, the movements need peaceful, hard working people to far outnumber

the violent participants and moochers. Occupy Wall Street needs normal people. But why aren¶t

normal people joining in the protests, you ask? Most analysts of movements like this see that

OWS does not have a central, straightforward theme and a single leader to put faith behind, and

declare that a lack of focus will cause people to be less willing to join an unfocused environment.

The civil rights movement had a central theme: giving African-Americans rights to be like their

white counterparts. The women¶s rights movement did the same, but with women. To provoke a

normal crowd to join the peaceful movement, we must compress the motives of the movement

into a single goal. So, what can that goal be? The movement is calling for reformation of

taxation, but there are problems with this. People with money do not want to give up their

money, and people without money cannot give up the money they don¶t have. I will attempt to

find a concise goal that can be worked towards by both the ³1%´ and the ³99%´ that would solve

the worldwide debt crisis.

There are many proposals to solve the debt crisis, most of which are observed within the

Occupy movement itself. The idealists of the movement believe that the debt should just be

forgiven and forgotten. Forgiving the debt of another is selfless and self-fulfilling, though most

debtors do not see forgiving the debt as an option. The debtors make up the 1% almost entirely,



and if the 99% enact policy to force debtors to forgive debt then class warfare ensues. This

option must be cast aside.

Another option would be to ask the rich to have some humanity and fund debt relief

programs. In ³Is Debt Relief Efficient,´ Serkan Arsanalp and Peter Henry analyze various

sources to see if debt relief would benefit both the relieved country and the loaning country. In

their analysis, funds from stockholders of the relieved country increase dramatically in

anticipation alone of future debt relief. This is due to an increased trust that the market will

become stable and grow before money is pumped into the system. On the other hand, the control

country loses a lot of stockholders- this is mainly due to the treasury taking a risk by sending

money to a debt-ridden country. Debt relief is efficient for the country that is receiving aid and

sticks to the reform the control country suggests, while the control country loses money and

trusting shareholders and henceforth is not efficient (Arsanalp and Henry, 2005). William

Easterly has analyzed the same statistics for himself and would agree. He first says that third

world poverty is not worsened by crushing debt, saying the debt is ³partly fictional.´ From this,

he builds up that debt relief would not be helpful because without Party A setting out to control

Party B (which believers of debt relief say shouldn¶t happen), Party B would not know what to

do with the money and fail to fix most of the problems in the country. Easterly goes on to say

that debt relief probably does not boost foreign investments, and overall does not do anything to

help (Easterly, 2001). From these two articles, it would seem that debt relief is not a good option

either, as it puts one country in control of another and does not benefit either country.

Naturally, the next option would be to do nothing, as both of the previous articles suggest

that third world debt is somewhat fictional. In ³Resolution of Technical Default´, Messod

Beneish and Eric Press analyze the effect of default on shareholders of companies. The article



suggests that the costly part of default on the country or company¶s part is the binding part of the

covenant between the shareholder and the defaulting company. Instead, a defaulting company

that agrees to give the money back will see a huge surge of investors. This may be explained by

the will of the people to ride the wave back up to the crescent of the hill, where they will sell the

stock at a profit. If companies or countries set out policies that promise instead of bind payment

methods of the company back to the shareholder, the company may see default as profitable

(given the same amount of stock is bought, which would be unlikely without the binging

agreements). The results, however, only follow the tail end of the defaulting firms, and more

research needs to be done (Beneish and Press, 1995). These results are also backed up by David

Nice¶s ³The Impact of State Policies to Limit Debt Financing.´ Nice¶s argument follows up more

on the debt relief arguments from earlier in the paper, but he addresses a key issue. The facts he

present follow up on Beneish and Press¶ article, and the argument he makes says that both the

pro-debt relief and anti-debt relief supporters need more research to find out whether a country

needs debt relief or not, but he also says that the people who argue over debt relief look more at

the appearance of their action than what the action would actually fix (Nice, 1991). The issue,

according to David Nice, is not that debt relief would work or not, but that the people arguing

over how debt relief should be carried out are socially compromised to do so. We can fix this by

either electing non-socially compromised officials to deal with the problem or getting those we

have now to act without social reprehension.

Since we are coming down to fixing how people approach these problems, why not attack

the government¶s way of approaching the problems? Carmen Reinhart, Kenneth Rogoff, and

Miguel Savastano (I will use Reinhart as the shortened subject to refer to all of them) propose

that governments should be exercising debt intolerance in the first place. Their article is the



longest because it addresses all of the aforementioned issues and comes up with the only real

solution to be fixing the present and future. She (Reinhart and others) says that governments

likely to overspend in foolish fashions will usually end up defaulting some time after they raise

the debt ceiling for the first time. ³As the track record of serial default highlights, many of these

[economic] booms ended in tears,´ she says (Reinhart, Rogoff, Savastano; 2003).

In conclusion, we have arguments that are for and against debt relief. We have arguments

that suggest letting default happen, arguments that attack the people arguing for/against default,

and arguments that attack the problem itself. With all of the arguments presented, the logical way

to approach concision for Occupy Wall Street is simply to attack the problem as it is now.

Instead of promoting reform through debt relief or default, protestors need to be attacking heavy

spending during economic booms. To consider this ³focused´, a motto may be proposed: ³Debt

intolerance!´ This does not have an immediate effect, however; a government must be in an

economic boom to practice intolerance. There is no true way to focus this movement into a goal

or two on the topic of debt reformation, as the arguments suggest that more thought and better

attitude towards debt and debt relief is the only solution. These goals are hard to truly work

towards.

But there is cause to be out protesting. These problems need to be addressed. We so

easily choose to stay safe in our homes, stay protected from losing out if the world leaves these

protests behind. I guess the real argument here is simple: go out and protest. Fight for what you

believe in. There are over a million and a half people out protesting in OWS worldwide right

now, and their lack of concision is due to their separate beliefs on how to fix the world¶s

economic system. The first thing we can all get behind is debt intolerance, and once we are all

behind it, we can start thinking out rationally what countries need debt reform, what countries



don¶t, what countries need specialized plans, and so on. The weight of economics lies with us all,

whether it be the 1% or the 99%. The classes need to come together and find common ground to

set this messed up world straight.

formal essay #3 1st draft

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