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Strange to say, but there may be something valuable going on among some of the Occupy Wall Street protesters.

Until now, two narratives have defined both the press coverage and public discussion of the Occupy Wall Street demonstrators camped out in lower Manhattan's Zuccotti Park.

The first depicts a collection of buffoonish, semiliterate juveniles engaged in a seeming left-wing version of a college prank. There is, to be sure, something to this story.

In last week's Zombie Parade the protesters, giddy with their cleverness, portrayed themselves as the living dead whose lives had been sucked from them by unnamed corporations.

One of the pre-Halloween costumers was asked why she had chosen to dress up like a zombie who looked like Marie Antoinette, the French queen guillotined by the revolutionaries of 1793. She replied that she had no idea of who Marie Antoinette was but just liked the look of the costume.

The second narrative sees the protesters as ripe to be harnessed by the labor leaders who hope to tap into their energy on behalf of the Obama 2012 campaign.

Watching New York Federation of Teachers President Mike Mulgrew prance about, speaking in the name of the protest, you might think Occupy Wall Street had signed on to a campaign to raise teachers' salaries in a city whose budget shortfalls are already producing layoffs.

But both of these explanations presume that there is a single, largely unified group of people in Zuccotti Park. There isn't. The exhibitionists, lost souls and zanies acting out tend to congregate in the Western stretch of the block-long park.

To their east, where anti-Obama placards outnumber those supporting the president, a more cerebral group of protesters is gathered. Their organizational skills have kept the encampment running in reasonably good order for these past three weeks.

Some of them, carrying anti-Obama placards, are standard issue leftists who, like the New York Times editorial board, think that the president's problem is that he has been too moderate and thoughtful.

But others are caught up in the practical details of self-government on a small scale. They are doing their best not to be co-opted, which is why, despite the hoopla from labor leaders, they haven't signed on to the union campaign. Like Students for a Democratic Society in the early 1960s, they are grappling with a paradox.

On the one hand, they insist that corporations ineffectively run the government; on the other, they want more government regulation to control the corporations.

By contrast, the Tea Party has a ready and plausible answer as to how to restore self-government and break the grip of the crony capitalism that ties the Obama administration to Wall Street. They want to drastically reduce the size of government.

The protesters have no such view. Like their 1960s predecessors, they're chasing their tails trying to imagine procedural reforms that will allow the demonstrators to govern themselves, while also curbing the power of those greedy capitalists.

It's too easy to dismiss the protesters, with their "Eat The Rich" signs, as just spoiled "trustafarian" misfits. They see themselves as the American equivalents of Egypt's Tahrir Square protesters who brought down President Hosni Mubarak, but they haven't noticed that it's the Islamists who are inheriting the Arab Spring.

Mocking them is easy; but here at home, the problem of crony capitalism is in fact eating away at our civic entrails. Leftists willing to grapple with this malignancy should be welcomed, if only for the potential seriousness of their efforts.

As the more thoughtful 68ers eventually discovered, the idea of reforming government by expanding it is a circular dead end.

This piece originally appeared at The Washington Examiner.

Fred Siegel is a senior fellow at the Manhattan Institute and scholar in residence at St Francis College in Brooklyn.

One of the great scams of modern political life is the charitable contributions of tax-exempt foundations associated with politicians.  A perfect illustration is one charity associated with former Chicago Mayor Daley which has received some attention.

The charity, After School Matters, set up by Maggie Daley (former Chicago Mayor Daley’s wife and sister-in-law of White House Chief of Staff William Daley) has received more than $54 million from the financially troubled city.   The Chicago Tribune explains that

“days before Emanuel took office, the Daley administration awarded the nonprofit a one-year, nearly $6.5 million contract to oversee summer jobs efforts and after-school programs.

The group is housed in city offices near the Cultural Center, where it pays no rent and uses city computers and phones."

The Tribune article provides some rather unusual facts. Three full time city of Chicago workers labor full time for the private charity.  It also benefits from corporate contributions, as The Chicago Sun-Times’ ace investigative reporter Tim Novak explains:

"After School Matters - founded and run by Maggie Daley - raised more money in a single year than 97 percent of the 12,757 charities in Illinois filing reports with the IRS"

How this corporate support “materialized” is now coming into question. Long time Chicago media critic Steve Rhodes points out that this appears to be a shakedown racket of those who do business with the city of Chicago.

In 2008, After School Matters became prominent news because of its donor list. Prominent corporations like J.P Morgan Chase and Motorola gave significant contributions to Daley’s charity, and all received City of Chicago contracts.  

This isn’t just a story about a local charity with conflicts of interest. Federal taxpayers are giving federal stimulus dollars to the Daley charity. Even Mayor Rahm Emanuel, the Chicago Sun-Times reports, admits “the city should not be dictating which charities recipients of city subsidies should donate to.”

Former Mayor Daley is upset that anyone would think that his wife’s charity isn’t fully dedicated to helping children. The Chicago Sun-Times reports:

Former Mayor Richard M. Daley on Monday denounced as “disgraceful” and a “personal insult to my wife” an internal audit concluding that recipients of city subsidies were told to donate to Maggie Daley’s After School Matters program.

The former mayor insisted that no arms were ever twisted to produce donations to the charity that his wife founded to occupy and educate Chicago teenagers.

Daley’s response is textbook Chicago media spin. When confronted with facts, claim outrage and avoid the specifics.   

Weakness in housing activity and in housing prices continues to be a major drag on the overall economy. My colleagues at California Lutheran University's Center for Economic Research and Forecasting have long maintained that the home ownership rate (HOR) needs to fall back to its historical norm of 64% before housing can recover. Their view has been that the attempt to increase the HOR by loosening credit standards contributed to creating financial instability. In a classic case of unintended consequences, the attempt to improve the home ownership rate contributed to rising home prices which ended up lowering affordability for first-time buyers.

A rising home ownership rate has been a major goal of public policy for several decades under both Republican and Democratic administrations. The rationale was multi-part. First, it was believed that communities are stronger where home ownership is greater. Second, building equity in a home was viewed as the primary path to improving a family’s financial condition. Finally, lower home ownership among minorities was felt to be an indicator of bias.

Policies directed towards increasing the rate of home ownership included subsidizing first time home buyers, reducing required down payments, and streamlining the application process. Weaker underwriting standards increased the effective demand for housing and helped propel a boom in housing activity and home price appreciation between 1995 and 2006. The overall HOR rose from 65% in 1990 to 69% in 2006 which was applauded on both sides of the political aisle.

However, rising home prices eventually reduced affordability and, along with excess supplies of housing due to overbuilding, led to a peak and then a decline in housing prices. The price decline eventually set in motion forces that generated severe losses to mortgage investors and homeowners alike. The underwriting pendulum shifted from easy to tight, and effective demand for houses plummeted. Millions of people have lost their homes, and many more have zero or negative equity in their homes. The homeownership rate has now declined from 69% to 66%, and appears to be headed lower.

Another fundamental indicator of housing weakness is the large number of delinquent mortgages and the implied backlog of future foreclosures. Of course, as the foreclosure backlog is worked through, the result will be a decline in the home ownership rate, as newly foreclosed-upon home owners become renters. Thus, this issue is not separate from the HOR issue.

The large number of vacant homes is also a measure of housing market health. During the period of 2002 through 2005 the housing industry massively overbuilt. The degree of overbuilding can seen by comparing the rate of household formation (about 1.1 million new households per year during this period) with total housing starts, which is the number of new units (including rentals) completed each year.

This number exceeded two million units per year during the boom. Since the end of the housing boom, total starts have fallen dramatically to around 600,000 per year. If the rate of household formation had remained at 1.1 million per year, then the surplus developed during the boom would have been eliminated by now. However, an important yet obscure statistic maintained by the Census Department, the Vacant Homes For Sale (VHFS), remains at more than one million above its long-term average. What is going on?

I suspect that the rate of household formation dramatically declined following the crisis and subsequent recession because more young adults returned to their family homes, and because multiple families are occupying the same housing unit.

The problem of too much housing stock and too few households will not be resolved purely by a lower home ownership rate. It will be resolved by rising household formation , even if the new households are renters instead of owners. What we need is more people. One strategy to accelerate the process is to streamline legal immigration and to lift or eliminate quotas on the number of people who can legally come to this country.

Jeff Speakes is Executive in Residence at California Lutheran University, and Lecturer in economics at the University of Southern California.

The Atlantic's Alex Madrigal announces "The Beginning of the End for Suburban America," a wish and hope long dressed-up as reality by a well-placed few who believe that the "be - all and end - all" is living anywhere but the suburbs. This is not to suggest that there is anything wrong with living in the core urban core if that is what one wants to do. I certainly have enjoyed living part-time in the inner core of the ville de Paris for some years. At the same time, however, the behavior of people has revealed an overwhelming preference for more space. From New York to Paris and Tokyo, some people choose to live in dense urban cores and a lot more choose to live in suburbs (and exurbs).

What data does Madrigal cite to show "the beginning of the end for suburban America"? Driving is down from a peak in 2007, also the year that employment peaked. These are not disconnected events. With the total unemployed now about equal to the number of employed workers in the New York and Chicago metropolitan areas, work trips that are not made nearly equal the decline in driving. The higher gas prices appear to have induced people (in the suburbs and in the dense cores) to make modest reductions in discretionary trips or to more efficiently organize their shopping trips.

Madrigal also points out that in 2010 new houses were smaller than their peak (also 2007). The median house size was still larger than any year before 2005 and 100 square feet larger than 2000. Madrigal cites declining rates of demand increase for electricity.
The connection between these trends and the suburbs is unclear. Madrigal does not separate the trends by residential geography, the more dense cores of metropolitan areas, the suburbs and exurbs of metropolitan areas and the balance of the nation. Granted, the data is not immediately available for such analysis.

Fortunately, there is more precise data that differentiates between dense core and suburban trends. It is the United States Census, conducted every 10 years and most recently in 2010. Between 2000 and 2010, the core municipalities of the 51 metropolitan areas with more than 1 million population captured 9% of the population growth, while the suburbs and exurbs captured 91%. The suburbs actually did better in the 2000s than in the 1990s, when they accounted for only 85 percent of the growth.

True, the relative decline of the denser cores did not resemble the disastrous decade of the 1970s. Further, the gains made by very small areas of the core over the past 10 years have been an important advance. But to suggest that the 2000s represent "the beginning of the end for suburban America" is profoundly at odds with reality.

So, the decade of the 2000s was another false start for the heralds of the suburban "end-times." The wishing and hoping has to be delayed yet again.

President Obama's new $50 billion infrastructure initiative --- part of his $447 billion American Jobs Act (AJA)---offered no surprises. It's almost an exact replica of his FY 2012 budget request which included a sum of $50 billion for transportation to "jump start" a proposed $556 billion six-year surface transportation reauthorization.

The rhetoric may have changed --- Obama avoided using the terms "stimulus" and "infrastructure" in presenting his AJA initiative to Congress---but the substance of the two initiatives is remarkably similar. Both proposals would fund an identical mix of programs (highways, transit, Amtrak, high-speed rail, aviation and the TIFIA credit program) and both would establish a National Infrastructure Bank.

The FY 2012 transportation budget request failed to obtain congressional approval for two reasons: (1) the Administration failed to show how the proposed $50 billion program would be paid for; and (2) there was no convincing evidence that the program would promptly create new jobs. Indeed, all evidence pointed in the opposite direction. The $48 billion in Recovery Act funds for transportation had failed to create the millions of jobs promised by the Administration. The money earmarked for highways had been spent largely on short term roadway maintenance-type contracts and had produced only temporary jobs. Nor was there much to show for in terms of an improved condition or performance of the nation's transportation system. As for the Infrastructure Bank, it is widely believed that at least one or two years could pass before the Bank would become operational and in a position to begin financing large-scale job-creating infrastructure projects.

The same reasons that led Congress to ignore the Administration's FY 2012 transportation budget request will likely cause the lawmakers to reject the new transportation initiative. They are skeptical that a fresh infusion of funds will succeeed where the first stimulus failed. Doing the same thing over and over again and expecting different results may not be exacly insanity but it does suggest a certain denial to look facts in the face.

The President said that "everything in this bill will be paid for" and that he will call on the Joint Deficit Committee to come up with additional deficit reductions necessary to pay for the American Jobs Act. But by proposing to end tax breaks for people making more than $200,000 and for oil and gas companies, the White House is setting itself up again for a fight with the Congress which already once before rejected this approach to "revenue enhancement." It remains to be seen if the independent congressional committee will do Obama's bidding. With the President's approval ratings at an all time low, they just might be emboldened to ignore his plea.

Note: the NewsBriefs can also be accessed at www.infrastructureUSA.org
A listing of all recent NewsBriefs can be found at www.innobriefs.com