Occupy Everything: What Do CEOs Think?

So CEO’s: what do you think of the Occupy Wall Street phenomenon?

Citigroup CEO Vikram Pandit has weighed in about the Occupy protests, saying “Their sentiments are completely understandable. Trust has been broken between financial institutions and the citizens of the U.S., and that is Wall Street’s job, to reach out to Main Street and rebuild that trust. … I’d be happy to talk to them anytime.”

Hedge Fund Manager John Paulson said, “The top 1% of New Yorkers pay over 40% of all income taxes, providing huge benefits to everyone in our city and state. … Instead of vilifying our most successful businesses, we should be supporting them and encouraging them to remain in New York City and continue to grow.”

Laurence Fink, CEO of Blackrock: “The protesting is a statement (that) the future is very clouded for a lot of people. These are not lazy people sitting around looking for something to do. We have people losing hope and they’re going into the street, whether it’s justified or not.”

Wall Street watcher and author of “The Big Short” Michael Lewis: “They’re right to be angry, but they have to figure out what they want if they’re going to have any effect. If there were specific demands, it would start to get very interesting.”

All of these quotes come from Bloomberg.com which has great coverage of business reaction.

(Another source of quotes that is less polished and outright disdainful of the protesters is anonymously represented in a Saturday New York Times piece. The headline does not come close to capturing the derisive tone of comments in the piece: In Private, Wall Street Bankers Dismiss Protesters as Unsophisticated.“)

The “Occupy” movement has been criticized for not articulating a true agenda. I am not sure this is true, but regardless, the protests are making the pain and anger graphic and un-ignorable. That alone could prove to be a meaningful contribution. The Tea Party is a similar phenomenon. Putting aside the merits of the arguments and the many distinctions, both movements reflect that the American people are traumatized by very simple realities like dramatically declining wages, unprecedented stress on daily life, unresponsive government, and a loss of confidence in the future. Dignity is shattered but this goes far beyond the psychological state of America.

Are the protesters antibodies reacting to infections in the nation? I asked Dr. Joshua Boger, prominent scientist, founder/former CEO of Vertex Pharmaceutical (and a co-founder of PBLN) and got a helpful response:

Not sure the metaphor of antibodies works. [Anti-bodies] are by definition mindless and amoral.  And if principled their only principle is self = good and non-self = bad.  [Former Vice President Al] Gore captures the collective  consciousness a bit better by calling the actions a “primal scream”.  As usual, Nick Kristof’s column on the subject is spot on.

A teaser here of Kristof’s opening line:

It’s fascinating that many Americans intuitively understood the outrage and frustration that drove Egyptians to protest at Tahrir Square, but don’t comprehend similar resentments that drive disgruntled fellow citizens to “occupy Wall Street.”

PBLN’s Board Chair and also a co-founder Tom Dretler (former CEO of Eduventures, Inc. and Executive in Residence at Sterling Capital Partners) cut to the heart of the matter: “the American Dream can’t be a mirage.”

We’ll share more business leader perspectives on the protest movement in this space.

More importantly we look forward to engaging the substantive outrages that lie beneath at our jobs-focused CEO Summit on November 10 at UMass Boston and forming a long-term action agenda for business leadership. Please share your views in comments here – and if you are a business leader yourself, contact us about the Summit and we’ll sign you up so you can get directly involved.

Comments

  1. The top 1% may pay 40% of income taxes, but that statistic is quite useless out of the context of how much of the nation's overall income they make (18% in 2008) and what the term "income" means (e.g. capital gains tax is much lower than income tax).

    According to the work of Dan Ariely and & Mike Norton, which only addresses quintiles, the top 20% of americans have 85% of the wealth, and the top 40% of americans have 95% of all wealth. The other 60% of the population must share 5%. http://danariely.com/2010/09/30/wealth-inequality

    Yes, America must be pro-business, but it must also strive to be more equitable. High taxes will certainly send businesses elsewhere, but I have yet to see any evidence linking job creation to tax cuts.

    In my opinion the future of America's recovery lies in a generation that is prepared to be entrepreneurial. With great hardship comes great opportunity. Some people may say this is the very worst time to start a business; I would say this is one of the very best times. Many of my peers still believe that the surest way to success and financial freedom is through corporate careers; I am certain that the only reasonable way to protect my future is to create my own.

    • Thanks Claire! Are you coming to the PBLN Summit Nov 10? We would love to have you there with this perspective. Much of our focus will be on entrepreneurship and the opportunities to renew American growth with the right package of product, practice and policy innovations. We don't do "dog and pony show" and our Summits are what the participants make them. Send an email to Steph@pbln.org about a discount code. And – thanks for the comment.

      http://pbln.firsttracksmarketing.com/2011-boston-summit/

  2. The top 1% may pay 40% of income taxes, but that statistic is quite useless out of the context of how much of the nation's overall income they make (18% in 2008) and what the term "income" means (e.g. capital gains tax is much lower than income tax).

    According to the work of Dan Ariely and & Mike Norton, which only addresses quintiles, the top 20% of americans have 85% of the wealth, and the top 40% of americans have 95% of all wealth. The other 60% of the population must share 5%. http://danariely.com/2010/09/30/wealth-inequality

    Yes, America must be pro-business, but it must also strive to be more equitable. High taxes will certainly send businesses elsewhere, but I have yet to see any evidence linking job creation to tax cuts.

    In my opinion the future of America's recovery lies in a generation that is prepared to be entrepreneurial. With great hardship comes great opportunity. Some people may say this is the very worst time to start a business; I would say this is one of the very best times. Many of my peers still believe that the surest way to success and financial freedom is through corporate careers; I am certain that the only reasonable way to protect my future is to create my own.

    • Thanks Claire! Are you coming to the PBLN Summit Nov 10? We would love to have you there with this perspective. Much of our focus will be on entrepreneurship and the opportunities to renew American growth with the right package of product, practice and policy innovations. We don't do "dog and pony show" and our Summits are what the participants make them. Send an email to Steph@pbln.org about a discount code. And – thanks for the comment.

      http://www.pbln.org/2011-boston-summit/

  3. There was a fascinating radio program tonight broadcasting a roundtable at BU (Boston University). The program was called "World of Ideas". The topic was the negative impacts – on an entire society – from having major inequalities in that society's economy. It was startling to hear that in ever category measured, the larger the inequality in income, the more social ills everyone experienced. The reality is obvious: we are all in this together. If we only look out for ourselves we are robbing ourselves of the best lives we could attain vs if we work to improve the lot of others while growing our businesses and being successful in our work. From a purely economic perspective, there is also the fact that if so many people are suffering financially they will not be able to buy things and companies will suffer as there will be less demand for their products. I hope the sit-ins become more widespread. It's time Americans woke up, got off the couch and realized we need to stand up for what is right for our country – not just for ourselves.

  4. There was a fascinating radio program tonight broadcasting a roundtable at BU (Boston University). The program was called "World of Ideas". The topic was the negative impacts – on an entire society – from having major inequalities in that society's economy. It was startling to hear that in ever category measured, the larger the inequality in income, the more social ills everyone experienced. The reality is obvious: we are all in this together. If we only look out for ourselves we are robbing ourselves of the best lives we could attain vs if we work to improve the lot of others while growing our businesses and being successful in our work. From a purely economic perspective, there is also the fact that if so many people are suffering financially they will not be able to buy things and companies will suffer as there will be less demand for their products. I hope the sit-ins become more widespread. It's time Americans woke up, got off the couch and realized we need to stand up for what is right for our country – not just for ourselves.

  5. AndyTarsy says:

    The following is from further exchange with Joshua Boger – these are his words (authorized for use here):

    I am delighted by the innovation being shown so far in the Occupy movement. The descriptions of how they communicate by serial repeating backwards in the crowd is way cool, for example. The self organizing of local subgroups by tent geography is way cool. The infuriating-to-media refusal to"issue demands" is way cool. But they do need at some point to focus, but so far I don't think the hand is being overplayed.

    What is misguided though is the rhetoric about income distribution. I am not a fan of the 99% slogan, because I think it misses the point. The point is not that 1% controls 90%, which in itself doesn't tell me whether that is bad or good for most people. What the focus should be is that there has been negative to no economic progress for the 90%. The distinction is subtle, maybe too subtle, but simple Marxist income redistribution won't solve any problem. There will be free ice cream for a while then we'll stagnate again. The problem indeed may lie in some of the mis-incentives that likely have contributed to the dramatic Bushian concentration of wealth, but treating that consequence as the disease will be disappointing and divisive.

    Is Warren Buffett a bad guy because he is one of the 1%? Am I? I don't think so. The concentration would be tolerable maybe even desirable if there was a greater sense of shared social responsibility, not just for voluntary redistribution but for societal change that was effective in creating growth of wealth and opportunity for all. It's not getting the latter that should be the target, not the "income inequality" itself. (I shudder when the heads bob in agreement that a goal is "income equality". Been tried. Didn't work in Chile. Isn't working in Venezuela. Didn't work for Mao….). But the ANGER at the acceptance by those in power, political and economic, of negative opportunity growth is a powerful and maybe transformative notion. [W]e have to resist the "class" rhetoric". A defining principle, maybe THE defining principle of the United States is that while almost all of us self-identity as "middle class" almost none of us think that is a caste mark on our foreheads.

    So it is politically and socially dangerous to start applying caste marks to others, sorting everyone into their caste, and then rhetorically creating mechanisms to move wealth around the classes. That's not what made this country great.

  6. AndyTarsy says:

    The following is from further exchange with Joshua Boger – these are his words (authorized for use here):

    I am delighted by the innovation being shown so far in the Occupy movement. The descriptions of how they communicate by serial repeating backwards in the crowd is way cool, for example. The self organizing of local subgroups by tent geography is way cool. The infuriating-to-media refusal to"issue demands" is way cool. But they do need at some point to focus, but so far I don't think the hand is being overplayed.

    What is misguided though is the rhetoric about income distribution. I am not a fan of the 99% slogan, because I think it misses the point. The point is not that 1% controls 90%, which in itself doesn't tell me whether that is bad or good for most people. What the focus should be is that there has been negative to no economic progress for the 90%. The distinction is subtle, maybe too subtle, but simple Marxist income redistribution won't solve any problem. There will be free ice cream for a while then we'll stagnate again. The problem indeed may lie in some of the mis-incentives that likely have contributed to the dramatic Bushian concentration of wealth, but treating that consequence as the disease will be disappointing and divisive.

    Is Warren Buffett a bad guy because he is one of the 1%? Am I? I don't think so. The concentration would be tolerable maybe even desirable if there was a greater sense of shared social responsibility, not just for voluntary redistribution but for societal change that was effective in creating growth of wealth and opportunity for all. It's not getting the latter that should be the target, not the "income inequality" itself. (I shudder when the heads bob in agreement that a goal is "income equality". Been tried. Didn't work in Chile. Isn't working in Venezuela. Didn't work for Mao….). But the ANGER at the acceptance by those in power, political and economic, of negative opportunity growth is a powerful and maybe transformative notion. [W]e have to resist the "class" rhetoric". A defining principle, maybe THE defining principle of the United States is that while almost all of us self-identity as "middle class" almost none of us think that is a caste mark on our foreheads.

    So it is politically and socially dangerous to start applying caste marks to others, sorting everyone into their caste, and then rhetorically creating mechanisms to move wealth around the classes. That's not what made this country great.

  7. AndyTarsy says:

    This comment came in to PBLN from one of our Charter members, Geoff Mackay, CEO of Organogenesis:

    Nitin Nohria, Dean of Harvard Business School had an interesting insight last week. At the same time that the protests were taking place across the country, our whole nation loved and mourned Steve Jobs. This highlights that people don’t mind billionaires as long as society is positively impacted. The problem with some on Wall street is that they are perceived as parasites whose actions don’t strengthen the country. In Nitin's words, they “claim value” before they “create value”. To me this is an important distinction because you can be a strong supporter of capitalism and still feel that value must be created prior to pay-out.

  8. AndyTarsy says:

    This comment came in to PBLN from one of our Charter members, Geoff Mackay, CEO of Organogenesis:

    Nitin Nohria, Dean of Harvard Business School had an interesting insight last week. At the same time that the protests were taking place across the country, our whole nation loved and mourned Steve Jobs. This highlights that people don’t mind billionaires as long as society is positively impacted. The problem with some on Wall street is that they are perceived as parasites whose actions don’t strengthen the country. In Nitin's words, they “claim value” before they “create value”. To me this is an important distinction because you can be a strong supporter of capitalism and still feel that value must be created prior to pay-out.

  9. This protest is about fairness more than anything- all of the grievances have a common core around fairness. Things are out of balance and the system is not working for a broad swath of the population. Anytime 1% of the population owns 50% of the cookies and the next 4% own another 30% you are out of balance). To the degree that nature abhors a vacuum, economic systems abhor imbalance.

    To the degree that there is anti corporate sentiment it appears to be mostly targeted to the bigger folks who are perceived to get extra benefits, increasingly calling the shots in Washington, not generating jobs, and richly compensating their senior executives. Its a valid point.

    It is my own belief that its early days and this movement is just starting. While there may be a sense of mild euphoria in the air ("wow, this is cool– look at what we are doing") we should not for one minute underestimate where this can go. If these folks don’t get jobs and feel that public policy is not redressing some of the fairness issues then this energy will easily turn to frustration and then to anger in 6, 12, 18 months.

    Leaders in the community (including business leaders) need to listen to this movement and be thoughtful about demonstrating leadership and listening skills. The law of physics says there is an equal and opposite reaction. If that is the case the reaction to the gross imbalance could be sharp and dramatic and lead in directions we may not even contemplate.

  10. This protest is about fairness more than anything- all of the grievances have a common core around fairness. Things are out of balance and the system is not working for a broad swath of the population. Anytime 1% of the population owns 50% of the cookies and the next 4% own another 30% you are out of balance). To the degree that nature abhors a vacuum, economic systems abhor imbalance.

    To the degree that there is anti corporate sentiment it appears to be mostly targeted to the bigger folks who are perceived to get extra benefits, increasingly calling the shots in Washington, not generating jobs, and richly compensating their senior executives. Its a valid point.

    It is my own belief that its early days and this movement is just starting. While there may be a sense of mild euphoria in the air ("wow, this is cool– look at what we are doing") we should not for one minute underestimate where this can go. If these folks don’t get jobs and feel that public policy is not redressing some of the fairness issues then this energy will easily turn to frustration and then to anger in 6, 12, 18 months.

    Leaders in the community (including business leaders) need to listen to this movement and be thoughtful about demonstrating leadership and listening skills. The law of physics says there is an equal and opposite reaction. If that is the case the reaction to the gross imbalance could be sharp and dramatic and lead in directions we may not even contemplate.

  11. I think that Kristof's quote is spot on. Many supported the movement in Egypt, a movement that is not that different from the one in this country. People want jobs, they want to be able to afford to live – the most basic human need is not being met, at least not to the extent that it has in the past.

    The student protesters want to know that they're not wasting their time going to school, and becoming muddled with debt, only to to be unemployed after graduation. Simply put the protester believe that the system is broken, capitalism as it stands now is not improving the quality of life in America and for a lot of Americans that is a harsh reality to face.

  12. I think that Kristof's quote is spot on. Many supported the movement in Egypt, a movement that is not that different from the one in this country. People want jobs, they want to be able to afford to live – the most basic human need is not being met, at least not to the extent that it has in the past.

    The student protesters want to know that they're not wasting their time going to school, and becoming muddled with debt, only to to be unemployed after graduation. Simply put the protester believe that the system is broken, capitalism as it stands now is not improving the quality of life in America and for a lot of Americans that is a harsh reality to face.

  13. Terry Catchpole says:

    Re. the comment above: "At the same time that the protests were taking place across the country, our whole nation loved and mourned Steve Jobs. This highlights that people don’t mind billionaires as long as society is positively impacted. The problem with some on Wall street is that they are perceived as parasites whose actions don’t strengthen the country."

    To pick just two of the "some on Wall Street," Bank of America employs approximately 288,000 "parasites" and Citibank employs approximately 260,000. Are we not to rest until all of them are out of work, as well?

  14. Terry Catchpole says:

    Re. the comment above: "At the same time that the protests were taking place across the country, our whole nation loved and mourned Steve Jobs. This highlights that people don’t mind billionaires as long as society is positively impacted. The problem with some on Wall street is that they are perceived as parasites whose actions don’t strengthen the country."

    To pick just two of the "some on Wall Street," Bank of America employs approximately 288,000 "parasites" and Citibank employs approximately 260,000. Are we not to rest until all of them are out of work, as well?

Trackbacks

  1. [...] Part Two: More CEOs React to “Occupy Wall Street” Protests October 18, 2011 by Andy Tarsy 2602Leave a Commenthttp%3A%2F%2Fwww.pbln.org%2Fpart-two-more-ceos-react-to-occupy-wall-street-protests%2FPart+Two%3A+More+CEOs+React+to+%22Occupy+Wall+Street%22+Protests2011-10-18+16%3A32%3A58Andy+Tarsyhttp%3A%2F%2Fwww.pbln.org%2F%3Fp%3D2602 We have had tremendous responses to our blog post “Occupy Everything: What do CEOs Think?” [...]

  2. [...] Part Two: More CEOs React to “Occupy Wall Street” Protests October 18, 2011 by Andy Tarsy 2602Leave a Commenthttp%3A%2F%2Fwww.pbln.org%2Fpart-two-more-ceos-react-to-occupy-wall-street-protests%2FPart+Two%3A+More+CEOs+React+to+%22Occupy+Wall+Street%22+Protests2011-10-18+16%3A32%3A58Andy+Tarsyhttp%3A%2F%2Fwww.pbln.org%2F%3Fp%3D2602 We have had tremendous responses to our blog post “Occupy Everything: What do CEOs Think?” [...]