By Yinan Hu and Adrienn Szlapak
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Occupy Wall Street, a completely leaderless movement that claims to represent 99% of the population against the greedy 1%, staked a claim on a small piece of New York real estate known as Zuccotti Park in September 17.
Employing a range of tactics for media publicity, the movement has gathered thousands of people to occupy Zuccotti Park (private) near in the Wall Street vicinity and staged protesters all over the Manhattan, inspiring solidarity movements globally in 71 cities and drawing disdain from those opposed to their political views.
The unorthodox approach of the Occupy movement—deliberately avoiding sharp, limited demands in favor of a democratic-cum-anarchic call for change—has prompted speculation on the movement's potential success.
In spite of the vagueness of its message, this amorphous structure has proven successful. The undefined mission and intentional disorganization have allowed the movement to be inclusive, drawing people from all different walks of life –from former Wall Street traders to union organizers to professional left-wing activists.
While no one can deny that Occupy Wall Street (OWS) has been quite successful in drawing media attention and attracting solidarity movements worldwide, the ultimate effectiveness of its media strategy remains uncertain, due to the lack of defined message and an apparent absence of internal consensus.
The widespread media coverage won by the movement is so far regarded as one of the biggest successes, something that even the initiators did not expect.
“No one knows what’s going to happen the next day,” admitted Throine Peace, one of the media coordinators on the #OWS Media Team, an internal working group based in the middle of the park. “We are carefully letting people grow; now you can’t take it down,” he added during an interview, “the movement is meant to redefine itself everyday with the changes” and indeed no one has predicted the wild attention they have raised so far.
Another member of the Media and the Press Teams, Jason Ahmadi, believes their communications strategy has succeeded particularly well on the Internet.
“We are attacking all fronts” he said. He considers the movement’s website and the relationship it has developed with LiveStream as their biggest success, a place where anyone who is interested can follow what is happening even if they cannot be there.
The spread of “Occupy” protests nationwide triggered also attests to this success; the #Occupy movement in Seattle and Washington D.C. are prime examples of this. In addition, numerous organizations plan to incorporate the idea of #Occupy movement into their own campaign causes. Recently, the idea of bringing Occupy Wall Street together with the Tea Party even surfaced briefly. No matter criticism or support, cooperation or skepticism, the attention #Occupy achieved in just four weeks far outstrips the track record of recent such movements.
Turning this success of media attention into real changes, however, remains a challenge. #Occupy has yet to define a consistent message that can be condensed down to pragmatic political changes. Though everyone in the movement wants a fairer economy and to live a better life, their suggestions for changes vary widely. There are people asking for stricter governmental regulations, while others are urging for smaller government, if not an anarchic society. Some protest against job outsourcing to developing countries, while others hold signs for a truly globalized planet. The only common idea all protesters seem to share is solidarity in belonging to the “99 percent”.
People came to the Park to voice their opinions through the existing publicity, become part of the movement and help expanding the spread with their own outreach efforts. In this case, to reach a consensus among people holding conflicting opinions, if at all possible, and come down to certain specific policy options means to block out a certain group of people, who are part of and have been helping to expand the movement. If Wall Street is facing a protest, the protest is facing a dilemma.
Not surprisingly, this dilemma has caught attention from media, NGOs, scholars and politicians, including former US President Bill Clinton. In a Chicago talk show last Wednesday night, Clinton, who has sympathized with OWS, urged the protesters to come down to more specific political goals and work with people who have the knowledge and power to implement these changes.
“To make the change, eventually what it is you’re advocating has to be clear enough and focused enough that either there’s a new political movement which embraces it or people in one of the two parties embrace it,” Clinton said.
Though it is hard to predict what OWS is heading towards, a growing number of case studies in campaign, advocacy movements or NGO management have discussed lessons learned from the movement. Most of these articles focus on its successful strategy in outreach, while warning future movements to develop a more defined message.
Responding to this debate, Throine argued that a more open approach amplified the movement’s appeal. “If you say this is about one thing at the beginning, lots of people would not have come,” he said. #Occupy is a progressing movement.
Two clear but conflicting efforts to redefine OWS are in the air: one to address their weakness and, as Clinton suggested, “work with a political party” or “form their own.” This allows OWS more space to come down to real changes from the top down. The other would seek to maximize the advantages of an undefined message, or even broaden it. To make any real changes this way, #Occupy would need to influence individuals spiritually from the bottom up.
Still, some common ideas exist in either of these directions: they all recognized #Occupy’s inclusiveness as comparing to the previous protests or revolutionary movements, while at the same time even #Occupy admitted that it is not the same as those organized and targeted campaigns in many ways. This comparison of #Occupy with something it is fundamentally different from reveals a stereotype in the understanding of the movement.
The stereotype about protest movements is that they should have a central message and an organized, effective structure; therefore, when there is no defined consensus within, people think there is something wrong. The premature self-comparison with the Arab Spring may have made the situation even worse as people constantly refer back to it, while forgetting about the progressive redefinition and adaptation of the movement.
What if it is not meant to be a unified movement? What if it is not meant to carry one channeled message? What if it is just “an open resource project”, as they like to call themselves, which hosts an amalgam of ideas from everybody who is willing to contribute, but which has no defined message as a whole? Rather than asking whether this could be the third direction #Occupy could turn towards, it appears “a platform for voices” is what really defines the movement right now.
In this case, debates on #Occupy’s problem based on the ground of “campaign theory” do not shed much light on the future of the movement. If they need to make a decision for their future, it seems they already had made one. The question is, how should the world view OWS from a different perspective. Just as software programmers need to maintain the server, how can OWS keep their momentum and advantage of existing publicity and turn that to the advantage of people and groups who need a place to speak their mind.
by Caitlin Dally, Student Organizer
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The occupy movements across the nation have been captivating to watch unfold from Wall Street to Market Street here in San Francisco. For almost a month people have been outside, unwilling to return to their homes without an answer for change. Whether you support them or not you better take notice.
On Wednesday October 12th, I decided to check out the Occupy SF protests and campsite for myself, which occurred in front of the Federal Reserve Building. After reading about and watching footage - Hide quoted text - from the protests in New York City, I was curious to see how the ideals from Wall Street had materialized and organized themselves in San Francisco. My curiosity and hopefulness soon turned to disappointment. It appeared that the anarchist community living on the streets, as well as some summer-of-love leftovers, emigrated from their typical postings at Haight Street and the Panhandle to the steps of the Federal Reserve. The demonstrators toted signs of protest from San Francisco’s past, such as, “War is over, if you want it” and “flower power.” Anti-war signage, daisy chain head wreaths, and hippy meditation enveloped the streets, seeming to reinforce the cliché of San Franciscan radicalism and thus more destructive than constructive for the movement and its image.
Defeated, I crossed the street turning back around to USF. Soon after, however, I looked back at the demonstrators and saw a woman holding her young daughter with signs around their necks. I returned to the demonstrations to find out what had drawn such a normal, mainstream woman to the protest.
Jodie has three children, is in her mid-thirties, and went to college during the time of the South African apartheid – the last time she had participated in a protest. It was her first day there and she felt like she needed to represent people outside of what she calls “The Fringe,” at the Federal Reserve as well as wanting to set an example for her kids about expressing themselves and their beliefs. When I approached her asking her why she was on the street, she was near tears. She expressed grave fear for what the future holds for her children. Her sign read, “Our children’s future should be bright.” Speaking to her made me return to my initial jubilation of the Wall Street movement. Meeting and speaking to her reminded me of what this movement means to me, that this seedling revolution is about us, the future.
As a senior majoring in a non-descript field, I am not exactly on the pathway to a career, success, and sustainable living. However, I also know I am not alone. One of the solutions I believe is pertinent for the occupy movement to integrate is community investment into their vision for a “new economic system.” Community investment, an investment strategy where investors and lenders direct capital to communities that are underserved by traditional financial services firms, has the potential to answer the demands of the Wall Street protesters. If USF were to divest from Bank of America, one of the worst banks in America, the funds directed from the school’s endowment to community investment assets would provide underserved communities with access to credit, equity, capital and basic banking products that these communities would otherwise lack. By simply placing USF’s cash (our money) from the endowment, into a community bank with equal and fair rates, USF would benefit, as would our surrounding community in San Francisco.
The idealist in me has a lot of hope for the occupy movement. I am heading to New York City for the REC national conference and am excited to visit the demonstrations at Wall Street and be a witness to history unfolding. Despite my enthusiasm, the realist inside of me also recognizes that at some point the protests will end. After that point, what will come? Historians have always been the quickest to remind us that the rebuilding and restructuring of a new society after the revolution are the most difficult parts. USF has the opportunity to do something very easy: moving money. This can provide a more effective alternative to create a better America- constructing an economic system that does serve the 99%.
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Students at Wesleyan submitted the following letter to the Trustees of the University. If you're an alum or staff member at Wesleyan, offer them your support.
To the Trustees of Wesleyan University,Click here to read the rest of the letter.
Michael Roth, President
Anne Martin, CIO
Wesleyan University finds itself today at a major crossroads in financial strategy. The continuing aftereffects of the first devastating economic crisis of the twenty-first century, and the relatively small size of our endowment that has resulted partially from it, convene to place the University in an ideal position to reevaluate how it goes about investing the money it receives from its alumni and friends.
In this letter, in addition to calling for the initiation of just such an appraisal by the Trustees of the University, and in addition to offering to the Trustees a few examples of prudent and ethical tactics for future endowment development, the Wesleyan Socially Responsible Investment Coalition also brings before the Trustees a few basic demands for investment transparency that will serve as a starting place for this process. These suggestions and demands are motivated by a love of Wesleyan and what it represents, a gratitude for all the opportunities it has afforded us, and a commitment to ensuring that it remains such an excellent institution for a long time to come.
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by Yinan Hu
With the U.S. trade deficit reaching the highest levels in three years, the unemployment rate hovering at 9.1 percent, and President Barack Obama announcing the second stimulus plan in two years, Americans are terrified of their country’s fiscal future. It should be no surprise that young protesters have camped out on Wall Street, venting their anger at the financial system. Against this backdrop of widespread discontent, the same financial institutions continue the same risky strategies that led to the crisis in the first place. If this continues, say World Policy Institute senior fellow Jeff Madrick and former Assistant Secretary of the Treasury for Financial Stability Herb Allison, these firms will keep finding ways to fail. For the U.S. to recover and avoid further financial disaster, the government needs to find a way to re-regulate Wall Street.
As the country struggles to get back on its feet, hostility and blame fall on Wall Street as the root cause of the banking crisis. Now, many Americans are demanding reregulation and the removal of Wall Street’s lobbyists’ hold on Congress. Madrick and Allison echoed these sentiments in a The Century Foundation and World Policy Institute talk on Sept. 16 where they discussed what the role of Wall Street really is, and what can be done to fix its dangerous shortcomings. Madrick, who wrote The Age of Greed: The Triumph of Finance and the Decline of America, 1920 to the Present
, raises an important question in his book and in the discussion: What good is Wall Street? It’s a question “we should ask, and we were being afraid to ask,” Madrick says.
As the size of the financial industry grows, the original purpose of banking to allocate capital to its most productive uses has been forgotten not only by the bankers but by the public as well. According to Madrick, the current system that pushes the socially beneficial goals of the industry to the periphery only encourages greed. Now, banking shifts money around while rarely increase market efficiency.
Allison, who wrote The Megabank Mess on financial reregulation, takes a bolder step, claiming, “Trading has never made money on Wall Street.” Allison points to proprietary trading, where banks bet their own capital on movements in the markets, as a financial activity with no economic benefits. The profits, he claims, are illusory since they always will disappear, usually all at once in downturn. It can take months or years to find out whether the profit is real or the temporary result of excessive risk.
Before directing the Troubled Asset Relief Program (TARP), the government’s $700 billion financial bailout program, Allison worked as President and CFO of Merrill Lynch. At the financial firm in the 1990s, he once saw a trading desk lose more money in a day than the company had made in more than 100 years. Allison says the payment structure is partly to blame. “Traders are getting paid on a basis of carrying risks,” he says.
As Wall Street continues to evaluate profits and losses every afternoon based on the closing prices, traders are motivated to think in the short-term, ignoring uncertain or pessimistic long-term growth predictions. Defending their activity as an obligation to make profits for shareholders, banks actually fail shareholders when the market collapses. Traders are left with huge personal bank accounts, while shareholders and taxpayers pick up the losses.
Though the Dodd-Frank financial reform bill came out to prevent banks from taking too many risks, its effect is limited, according to Madrick and Allison. Some banks now issue bonuses in the form of restricted stock that can’t be sold immediately or cash that cannot be used for a certain number of years. Still, with continued loose regulation, the previous model focused on short-term profits is too lucrative for traders to stop.
On Wall Street, there is a widely held belief that “Greed is Good.” Allison says, “These banks had one goal, and they still do. Their goal is measured in profitability. If there is only one goal, there are no limits.” The pressure to generate profits immediately while ignoring long-term outcomes will continue to drive excessive risk taking.
Deregulation of Wall Street was once necessary for growth, Madrick says, but that need is long gone. Now that firms have consolidated into just a few players—many arguably too big to fail—the government needs to return to Wall Street with real regulations so they can’t ignore their social role of allocating resources efficiently.
But before the government can do this, Allison argues, officials will need to break free of Wall Street’s grip on the government. Major investment firms turn their money into power when their lobbyists go to Congress, preventing any government attempt at regulation. Only after the conflict of interest is resolved can there be any hope for the re-regulation of Wall Street.
This post was based on a discussion by Jeff Madrick and Herb Allison on Financial Regulation and the Future of Wall Street
(brief bios for the two speaker can be found by clicking the link). The video recording for this talk can be found here as well. There was a New Yorker article by John Cassidy titled What Good is Wall Street: Much of What Investment Bankers do is Socially Worthless
which inspired me and I strongly recommend if you are interested in the greed in Wall Street as well as Occupy Wall Street.
A new year, a new set of exciting campaigns, a new slate of potential victories to push our movement to the next level. As always, REC is so thankful and honored to work with such amazing leaders across the country.Mt. Holyoke College
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students continue their discussion with REC and other stakeholders about how to strengthen their school’s committment to responsible investmnet, including the potential of joining other interested students in the Pioneer Valley region, including people at Amherst, Smith,
and UMass Amhers
REC’s Community Investment National Campaign
is entering its second year with more energy than ever! REC is supporting student leaders guiding the campaign from a variety of schools across the country, including the University of San Francisco, Tulane University, Florida A&M University, the University of Pittsburgh, Hampton University,
and Fairfield University.
At the University of North Carolina - Chapel Hill
and at the University of Illinois at Urbana-Champaign
, students are asking their administrations about their investments in the coal industry. Likewise, at Swarthmore College
, students are focusing on the college’s investments in fossil fuels in order to encourage a dialog about our energy future. REC is excited to support their efforts to make their endowments more sustainable.
REC is excited to be working with students at Bard College
about new ways to collaborate with their committee on investor responsibility this year. Bard students on their committee had amazing success in 2008 with their shareholder resolution against McDonalds.
Students at Cal Poly in San Luis Obispo
will be presenting on REC’s work and the responsible investment movement at their new students’ Week of Welcome (WOW) this week.
The University of Louisville
in Kentucky is doing great work with their new SRI Committee! Read more
about one student’s experience at our Effective Committees Workshop this year and what she was able to take back to her school here.
by Caitlin Dally, Student Organizer
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As a new member of the responsible investments activist community, I have to admit I was a little intimidated entering the REC Student Organizing Institute this past August. I am an extremely passionate person, devoted to social justice – I am studying international studies/peace and conflict mediation – and yet the thought of fighting to move money hadn’t crossed my mind as an effective means for making change, until recently.
I study at the University of San Francisco, a Jesuit institution that prides itself for educating students to create a more humane and just world. I feel that myself, and most of my peers, feel very strongly that we share these values. The past couple weeks I have returned to school revitalized with the opportunity to do this work. I have contacted friends and colleagues to build a team and start a project on community investment at USF. Currently the university is having a facelift, as the new John Lo Schiavo; S.J. Center for Science and Innovation is being built in the center of the main campus. During this construction USF has also chosen to alter its motto to “change the world from here”. The transition has been a controversial one, but it has made me start thing about my project on creating a responsible investment movement on our campus through community development and investment. I found that once I could explain my project in an effective way, people were interested and wanted to participate in something I cared about because they realized they also cared about it. USF can change the world from here by directly investing in its community.
My main tactic so far has been to reach out to organizations in the San Francisco community that are affiliated with the responsible investments movement and/or Jesuit institutions. I am hoping that when I approach the administration at USF with the support and knowledge base of these organizations I can be more effective and credible in persuading them. Lucky for me, there are endless amounts of resources and people to contact! Just researching various organizations can get me spiraling into an investigation of the responsible investment community here in the bay area. I am so excited to learn from all of them and build my campaign with the team here at USF.
If you’re going to San Francisco, expect to find the world at your fingertips. All you have to do it reach out to it.
by Anastazia Neely, Student Organizer
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When I applied to work with REC, I was like a aquaphobe diving headfirst into a body of water with no floatation device. Lucky for me, REC taught me how to swim.
I returned from the Summer Organizing Institute
feeling like I had the power to change the world with my pinky finger. The REC staff and everybody else were so bright and positive. It was a nice, whimsical escape from the general negativity and disinterest associated with social motivations. The first couple of days after the training were bliss, I was eager to inform anyone who would listen about the endless possibilities of responsible and community investment - but just like a five-hour energy I eventually crashed.
Caught up in the whirlwind of returning to school for my senior year, saying goodbye to my family and meeting up with friends, I was definitely thinking about Hampton but their endowment was the furthest thing from my mind. Luckily, my phone's reminder on the upcoming conference call with the rest of the student organizers brought my responsibilities back to the forefront. I took a high-speed crash course review through the student handbook
(though I already read it on the train back from the Summer Institute) and did some quick research.
The fun thing about research is that if you do it right, you're bound to learn something new by the end. At the end of all research is a rainbow of surprise and the end of my research revealed a document showing the chain of command at Hampton University. Students constantly wonder who to talk to about what and here was the answer - right in front of me. I zeroed in on the Vice President of Business Affairs/Treasurer and her office is within walking distance. If and when I get a meeting, I have so many questions!
- What's your favorite food?
- What's the current policy on choosing investments?
- How about this weather we're having?
- Who handles Hampton's endowment?
- Sprite, Mountain Dew or Mello Yello?
- What is Hampton currently invested in?
- Are you familiar with responsible investment?
- How would you like some apple pie?
- How does Hampton's mission of multi-cultural unity align with the endowment?
And if it goes well, I might even throw a couple bonus questions her way.
- What's your philosophical standpoint?
- When can I take you to lunch?
- Can you introduce me to the University President?
Anyway, my talking points are in the works. Right now, I'm just focusing on scheduling a meeting and I plan to have that accomplished as soon as all employees have returned from the Labor Day holiday. In the meantime, I'll be trying to start my senior year on a good note, making new friends and subliminally recruiting everyone on the sidewalk to join the ranks of the responsible investment movement.
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Students at UNC who won big last year, taking on the schools coal-fired power plant and encouraging a campus climate action plan are now taking on the endowment. Not So Green After All
talks about the initial attempts of students to encourage the administration to examine how the endowment is supporting the coal fired power plants they turned their back on just last year.
The past decade has watched the University put together quite the environmental resume. And, with Chancellor Holden Thorp’s commitment last year to end the University’s use of coal by 2020, there’s plenty of reason to think that resume will only grow greener with time.
But the group that pushed for Thorp’s commitment, the Sierra Club’s Coal-Free Campus campaign, wants more. It wants the UNC Management Company, the body that invests the University’s nearly $2 billion endowment, to make its holdings transparent.
They say that’s the only way UNC can be sure it isn’t investing in companies that haven’t made the same coal-free commitment. And they’re right.
Let's go UNC. Let's see how you're commitment to the environment holds up when your managing your endowment.
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RSF Social Finance just published a white paper by Leslie Christian of Portfolio21 titled A New Foundation for Portfolio Management
. Their rethinking Modern Portfolio Theory and how we think about investing. Here's a quote from just one section of the paper, which explores a variety of themes of investing, not just about these kinds of questions:
It is generally assumed that investors seek to maximize financial returns to themselves and/or their beneficiaries within certain risk parameters and timeframes. Returns may be derived from dividends, interest, earned income, or capital appreciation, or a combination of these. There is no stated utility, positive or negative, assigned to the societal (universal) effects of the form or characteristics of return generation. This single-minded focus on returns to the investing entity is problematic when it fails to consider the end beneficiaries. For example, a pension fund may derive financial returns from an investment in a real estate project that has uprooted and destabilized the retired employees who receive financial benefits from the fund. Does the financial return to the fund offset not only the financial, but also the personal costs to the beneficiaries? (pp 12)
This isn't intended to be the be all end all of investment theory, but to stimulate a discussion around the basis for making investment decisions. I for one think that this is a very important discussion to be having. Why do we invest money. Long-term institutional investors especially need to be thinking about how they make investment decisions and what other methods could me the needs of the investor and of society to be successful.
Interested in the theory behind investing? Take a look.
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REC is delighted to welcome Steve Viederman to our board of Directors. Steve is one of the pioneers in the responsible investment space having, in the early 90s, led the Jessie Smith Noyes Foundation's efforts in mission-related and impact investing and shareowner activity. He continues to advocate in these areas because he believes that the future matters.
Presently Steve's work focuses on broadening the definition of sustainability in general, and more specifically on sustainable investing (future-oriented, risk-adjusted and opportunity-directed), increasing institutional investors’ involvement, and fiduciary duty. He is an active writer and speaker in the responsible investment space.
We're delighted to have Steve join the great group of dedicated individuals and help build REC's strategy and knowledge as we look towards the future. Welcome Steve!!