October 11, 2011

PIMCO’s El-Erian: Listen to Occupy Wall Street

‘Part of a worldwide drive for greater social justice,’ El-Erian says

PIMCO's Mohamed El-Erian. (Photo: AP) PIMCO's Mohamed El-Erian. (Photo: AP)

Mohamed El-Erian, CEO and co-CIO of PIMCO, said that, to people wondering whether they should pay attention to the Occupy Wall Street protests, “the answer is yes.”

Although some think that the movement, without an obvious leader and lacking a detailed list of demands, will simply dissipate without effect, El-Erian said that instead it was “part of a worldwide drive for greater social justice.”

In an opinion piece on The Huffington Post, El-Erian wrote late Monday that despite its apparent shortcomings, observers should not make the mistake of underestimating what he said was “becoming a national movement that exponentially gains energy and visibility.” Comparing it to the similarly leaderless grass-roots movements in the “Arab Spring” phenomenon, he said that dismissing Occupy Wall Street would be similar to the leaders of Arab countries disregarding Arab Spring demonstrations until they had toppled leaders from their positions of power.

Conceding that it may not be as powerful as such examples, El-Erian said that, nonetheless, Occupy Wall Street shared three similarities with those movements:

First, he said, “the desire for greater social justice is a natural consequence of a system shown to be blatantly unfair in its operation and, to make things worse, incapable of subsequently holding accountable people and institutions.” In the U.S., he explained, that meant “a system that privatized massive gains and then socialized huge losses,” little or no accountability for bailed-out banks, and a complete inability to help those affected: the unemployed and the poverty-stricken.

Second, he predicted that Occupy Wall Street would grow as the economy limped along and suffering continued or escalated. Lack of action by politicians unable to consider common sacrifice and purpose, coupled with the danger of contagion from an already-beset Europe, would add to the movement’s motivation and numbers.

Third, social media improvements will “overcome communication and coordination problems that quickly derailed similar protests in the more distant past.”

Based on these factors, he said that the question was “not whether, but how OWS will morph,” and offered two possibilities: coalescing around a common agenda or fragmenting.

Politicians and media, he added, should see OWS as a  “ ‘signal’ of the challenges America faces as a compassionate society, and as a democracy built on the importance of fairness and opportunity.” Constructive collaboration with OWS, once it is understood and engaged properly, he concluded, could lead to ways for America to recover “its economic vigor, provide more jobs, and deliver better on its traditional commitment to social fairness and equal opportunities.”

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