Brian Blackwell Word Cafe: Real Grievances Fuel 'Occupy' Protests

The Occupy Wall Street movement in New York that has sparked protests in Boston, Washington, Chicago, Denver and other cities across America has confounded Republicans, Democrats and analysts alike.

Those on the right say the Occupy Wall Street protesters are the same old riff-raff of leftist anarchists, unlike the grassroots conservative Tea Party movement. The left sees it as an authentic uprising against the huge income disparity in America.

The 'Occupy' protests occurring across the nation are actually part of a combustible global protest that goes beyond the professional rabble rousers. And the protesters are diverse, including middle-class and professionals.

Income and wealth inequality have been growing at an alarming rate in America for decades with little public outcry. The catalyst for the Occupy Wall Street movement is that during the worst financial crisis since the Depression, Wall Street and the wealthy were taken care of while average folks suffer.

Wall Street has flourished since the government rescue of 2008 and the big banks have posted record profits and booming bonuses since they were bailed out with taxpayer money.

Although Goldman Sachs Group Inc. reported a rare quarterly loss last week, Lloyd Blankfein, its chairman and chief executive officer, was paid $19 million last year, up 50 percent from the year before. JPMorgan Chase & Co.’s Jamie Dimon received $23 million. A prime target of the protesters in New York is John Paulson, the hedge fund billionaire who made a fortune betting on the mortgage debacle, assisted by a sweetheart deal from his banker.

American politicians are dancing around the issue. Two Republican presidential candidates, Ron Paul and Jon Huntsman, said the anti-Wall Street protests have struck a responsive chord. The frontrunner, Mitt Romney, initially blasted the Wall Street protests as "dangerous" and "class warfare." Within a week, he said he understood "how these people feel."

Contributions to Democrats

The Democratic Congressional Campaign Committee recently urged its supporters to back the Occupy Wall Street protests. This gave heartburn to the committee’s fundraisers who rely disproportionately on the financial community for campaign contributions.

President Barack Obama, who has received millions in campaign contributions from Wall Street, has sought to embrace the protesters, saying they are "giving voice to a more broad-based frustration with how our finance sector works. The American people understand that not everybody’s been following the rules."

The fear in Washington is that the Occupy Wall Street protests could get out of hand, turn violent, thus creating a political backlash like during the anti-Vietnam War protests a couple of generations ago.

Three Out of 10 Americans Drop Out of Middle Class

Three out of 10 Americans, 28 percent, born in the middle class drop out of it as adults, according to a recent study on economic mobility from The Pew Charitable Trusts.

The study defines middle class as those families making between $32,900 and $64,000 in 2010 dollars, which ranks between the 30th and 70th percentiles of income.

The 30th percentile was used as a cut-off point because it is where families typically stop relying on government support to get by, said Erin Currier, project manager for Pew's Economic Mobility Project.

The study looked at what participants earned in the years before the recession started versus what their parents made at a similar age in 1979.

What the study shows is that growing up middle class, although it may confer many advantages, doesn't mean a person will remain middle class, Currier said.

Nearly one in five people, 19 percent, made less than their parents did at the same age in inflation-adjusted dollars.

The study's snapshot of incomes was taken before the worst economic slump since the 1930's, a downturn that has left 14 million unemployed and pushed the poverty rate above 15 percent.

Median household incomes in the U.S. last year were at 1996 levels after adjusting for inflation, according to the U.S. Census Bureau.

"It is reasonable to assume with the economic downturn, the percent of people who are struggling and may be downwardly mobile could be much higher than what our study found," Currier said.

Banks Negotiating Short Sale Prices and Driving the Market Down

Short sales and forclosure values are being used to determine the value of homes across America, driving the market down, which in turn is adding fuel to the nation's economic troubles.

In August 2010, William Maxwell, an expert in finance, author, and professor at Southern Methodist University's business school, had his Dallas home appraised. It was appraised at $790,000 as part of a mortgage refinancing. Yet this past spring, when he tried to sell his four-bedroom home for $756,500, the appraisal commissioned by the buyer's lender, Bank of America Corp., came up with a value of $730,000. The appraisal killed the sale.

Protesters Find Allies in Ranks of The Wealthy

The Occupy Wall Street protesters — also known as the “99 percent” — have struck a chord with a few members of an unexpected audience: America’s rich and privileged.

United under the banner “We are the 1 percent: We stand with the 99 percent,” a band of entrepreneurs, trust fund babies, professionals and inheritors has taken to the web to share their abhorrence of corporate greed and support for tax code changes that would see them pay a higher share of their considerable wealth.