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January 16, 2014

An Occupy Wall Street Offshoot Has Its Day

There is a tendency in recent American political discourse to use the term “populism” as a form of putdown. The implication is that that while populists may have some legitimate grievances, they are rebelling in a disorganized and ill-informed way. As President Obama implied in early 2009, the populists have pitchforks, while his administration represented the responsible mainstream.

This is an inaccurate portrayal of populism in America, both historically and today. Occupy Wall Street is a perfect example. To be sure, part of that 2011 movement was purely about expressing frustration – justified frustration – at how very powerful people in the finance sector had behaved and continue to behave. But the movement also led to an important offshoot or related development, Occupy the S.E.C., which focused on the Securities and Exchange Commission.

This group wrote a brilliant commentary on the originally proposed Volcker Rule, which is designed to limit proprietary trading and other forms of excessive risk-taking at very large banks. Their comments, along with the work of others who wanted more effective reform, were helpful in pushing officials toward the final Volcker Rule, which was just unveiled.

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Of course, Occupy the S.E.C. had many friends and allies in working for a strong Volcker Rule. Paul Volcker has unequaled prestige among economic policy makers. Senators Carl Levin of Michigan and Jeff Merkley of Oregon, both Democrats, devised legislative language and fought to get this into Dodd-Frank. Within official circles, Gary Gensler played an important role in keeping the Volcker Rule meaningful, and the late arrival of Kara Stein at the S.E.C. was essential for strengthening some crucial details.

And, as Ms. Goldstein points out, Better Markets – a pro-reform group headed by Dennis Kelleher – has been tireless in pushing for a better Volcker Rule. (Caitlin Kline, a co-author of the Occupy the S.E.C. letter on the Volcker Rule, now works at Better Markets.)The groups Public Citizen and Americans for Financial Reform have also been consistently helpful.”

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Read Simon Johnson’s full Economix blog post here

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