Explaining Southern California's economy

Backtrack: What is Occupy L.A. really protesting?

Los Angeles Dismantles Occupy LA Encampment

Kevork Djansezian/Getty Images

Occupy LA protesters demonstrate on the front lawn of Los Angeles City Hall after the midnight deadline set by city officials to shut down the encampment expired on November 28, 2011 in Los Angeles, California. The Occupy Movement is planning to start a "Spring offensive" on May 1.

The Occupy Movement is getting ready to fire itself back up for what some are calling — maybe tongue in cheek, maybe not — a "spring offensive." The plan is to reassemble tomorrow, and the timing is transparent: It's May Day, the day when the workers of the world traditionally unite. Although the political right doesn't call them "workers" — it calls them "communists."

It doesn't seem to me that the basis for what the movement is protesting has changed all that much since the winter. So I'm reposting from back then what I wrote about Occupy L.A., which took over the lawns around City Hall for weeks, gained a fair amount of local support, protested relatively peacefully compared with Occupy efforts in other cities, and was then evicted by the authorities with some arrests. What are these folks still mad about? Read on...

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Do the math: Find out if you're in the '1 percent'

Occupy LA

Eric Richardson / blogdowntown

Those participating in Occupy Los Angeles march toward City Hall.

Ah, the Wall Street Journal. It serves capitalism, but it's also a newspaper, so it wants to jump on trends. Add some nifty, number-crunching online technology to that and you get this calculator, which will swiftly tell you just where you fall in the U.S. income distribution

Give it a try! But don't get hung up on income! Remember that much of the top 1%'s wealth comes from capital gains, not wage income. So you might be looking pretty good as a household if you bring in $200,000 per year and rank in the 94th percentile. But remember that you're then taxed at the 28 percent IRS rate, while a true 1%er — which I define as a member of the U.S. financial elite, making money from money rather than from labor — is seeing their capital gains taxed at 15 percent.

There are plenty of people in the U.S. who think they're rich, but they aren't. And even if they're in the 1% as set by earnings ($506,000 annually), the gulf between you and a 1%er who makes the same off less heavily taxed investment and divident income is vast.

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Invest with James: How to make money renting your shirts

Matthew DeBord

James has discovered the value of renting stuff he isn't using.

My almost-six-year-old son James is very interested in money. But unlike some kids who think about ways that they can do jobs for an allowance or create little businesses (Lemonade stands!) in order to get some cash to spend, James wants to divert wealth from other people without actually providing any real services. 

I think this makes him a member of the 1% that Occupy Wall Street is protesting, if not in assets then in philosophy.

His chief target is his older sister, Lucia, who has decided that she doesn't care about money and wants to live for her art.

James is obsessed with separating her from her money. He doesn't really know anyone else who has money he can get his hands on, so this makes sense. 

Money for both of them comes from the traditional sources of pre-adolescent capital: intermittent allowances, gifts, the Tooth Fairy. But James has more of it because he saves it all.

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Annals of the 1 percent: The agony of the bankers

Dow Jones Industrial Average Closes Slightly Down

Spencer Platt/Getty Images

Traders making money at the New York Stock Exchange. Just maybe not as much money as they used to.

Max Abelson (via Paul Krugman) writes at Bloomberg about bankers and their struggles to live on half a million a year, in the face of government regulations and more work than ever:

Michael Karp, 42, CEO of New York-based recruitment firm Options Group Inc., said Wall Street pay will fall 30 percent this year, and more for executives. It will be flat or down even in businesses doing relatively well, such as emerging markets and commodities, he said.

[...]

Karp said he met last month over tea at the Gramercy Park Hotel in New York with a trader who made $500,000 last year at one of the six largest U.S. banks.

The trader, a 27-year-old Ivy League graduate, complained that he has worked harder this year and will be paid less. The headhunter told him to stay put and collect his bonus.

“This is very demoralizing to people,” Karp said. “Especially young guys who have gone to college and wanted to come onto the Street, having dreams of becoming millionaires.”

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