Garment Workers Take on Wage Theft and Wall Street
A new international campaign is targeting fashion brands like Nike that are spending vast sums on stock buybacks instead of compensating workers for lost pandemic wages.
The Occupy Wall Street protests in lower Manhattan have struck at the symbolic heart of American corporate capitalism. America’s big banks have deep roots there, and the New York Stock Exchange is still on Wall Street itself. A protest in Liberty — I mean Zuccotti — Park is a protest at the core of the capitalist system. If Wall Street represents the richest 2% of America, the Occupy Wall Street protesters represent the other 98%.
Certainly the other 98% are tired of subsidizing the lavish lifestyles of the top two. What many Americans don’t realize, however, is that the real money in corporate America isn’t in banking. Bankers are just rich, not filthy rich; they’re the top two percent, not the top .02 percent. For the filthy rich, for the top .02 percent you have to look to hedge funds. Hedge funds are where bankers go when they think they’re underpaid.
Hedge funds are largely unregulated investment companies that can do essentially whatever they want because they don’t take retail deposits from small investors. They’re called “hedge” funds because they were originally created to reduce risk by hedging their bets. They used risk management strategies to prevent large downside losses at the expense of giving up some of their potential for upside gains. Hedge funds were designed to provide slow, steady returns without the risk of investing on the open market.
[pullquote]Hedge funds are where bankers go when they think they’re underpaid.[/pullquote]
That was then. This is now. Like all financial institutions, hedge funds came to realize in the 1980s that they could use their expertise in managing risks to take risks instead. Start with a strategy that reduces risk but also reduces returns, then reverse it. Now you have a strategy that increases risk but also increases returns. Hedge funds today are the high-risk, high-return segment of the investment universe.
The problem is that the high returns of hedge funds go to their managers and investors, while the high risks are ours. The run on the British pound in 1992, the collapse of the sub-prime mortgage market in 2008, and the unfolding European debt crises of 2011 were all accelerated and exacerbated by hedge funds. Hedge funds turn slowly-evolving policy problems into fast-bursting financial bubbles.
Unfortunately, the democratic process of government regulation and oversight can’t keep up with the pace set by hedge funds. Worse, the whole idea that governments should manage and plan their economies has been undermined by propaganda from business-funded, free-market think tanks. As a result, government no longer works to prevent crises. It just picks up the pieces after the damage has already been done.
The center of the global hedge fund industry isn’t lower Manhattan. It’s in the far suburbs of New York, in leafy Greenwich, Connecticut. If the Occupy Wall Street kids want to kick corporate capitalism where it hurts the most, they might consider following the real money out to Greenwich. For the top .02%, that’s where the action is. Besides, it’s nice there, and much less windy than in lower Manhattan. With winter coming that’s a big plus.
[pullquote]If the Occupy Wall Street kids want to kick corporate capitalism where it hurts the most, they might consider following the real money out to Greenwich.[/pullquote]
More importantly, Greenwich is where the hedge fund managers actually live. They can’t see or hear you from their 35th floor offices on Wall Street. They won’t be able to avoid you when they go out for a weekend cup of coffee. And their spouses will have to walk around you every day of the week when they go boutique shopping on ritzy Greenwich Avenue. There are no alternate routes in Greenwich.
The New York City police are highly experienced at handling mass protests and popular demonstrations. The Greenwich police get far fewer opportunities to earn overtime pay. They just might welcome the extra business. Heck — they have to deal with superfluous calls to hedge fund manager mansions every day of the week. They might just join in the protest.
Greenwich is an $8.00 (off-peak) one-way train ride from Grand Central Station in Manhattan. If things get too hot (or too cold) in Zuccotti Park, the Occupy Wall Street kids just might want to decamp to spacious Havemeyer Fields in downtown Greenwich. Thanksgiving in New England — Greenwich is the place to be!