Tuesday, October 18, 2011

Financial Services PR FAIL

So who is advising the financial services industry on their public relations, Lord North? Marie Antoinette? Wile E Coyote? The collective reaction to the Occupy movement has been a study in thud and blunder.

First we have the spectacle of the swells sneering from the balcony at the protesters on the sidewalk. Then members of the CBOT thought this gesture would be cute.

Here in Washington, DC we have been treated to the antics of a agent provocateur so stupid that he did not know better than to write a magazine article bragging about his crime.

A CEO asks his reporter friend to check out Occupy Wall Street to see if they are dangerous. Obviously they are not dangerous. Demonstrators have been pepper sprayed, beaten with batons, assaulted by a plain clothes officer, and run over by a police motorcycle. In spite of all this their non-violent discipline has held. If they were going to be violent, that would have happened by now.

And why has Mayor Bloomberg decided to play the part of a twenty first century Bull Connor?

There have been the comparisons to the hippies of the late 1960's. Take it from someone old enough to remember, there is no resemblance. The coalition of people supporting these protests is wide and deep, witness all the pizzas that have been ordered for the demonstrators and the donations, both in kind and monetary that have been made. That never happened in the 60's. Witness of the small acts of support, such as cab drivers who turn off their meter when taking riders to the demonstration or the sanitation workers in San Francisco who returned personal items to demonstrators after the police had tossed them. Such things never happened in the 60's.

The incident at Citi Bank was the first incident I have head of where a customer was arrested for trying to close her account; but it seems there have been previous incidents of this. Why police departments go along with it I will never know.

Anyone who thinks that the Occupy movement bears any resemblance to the Tea Party is encouraged to read this post by Peter Daou.

Certainly the financial services industry has been ill served by their trade press, take this unfortunate editorial in Investment News. While it concedes the demonstrators have a point it characterizes them as misguided and attention seeking.

With over 1,549 demonstrations in this country, and hundreds more around the world, the Occupy movement is already a very serious movement. Its impact will go way beyond electoral politics.

So here is my advice for anyone in the financial industry who would be interested:

Reexamine your business model.

Do nothing inflammatory in the present environment. For example, on November 5th protesters will be closing their bank accounts. DO NOT call the police and have them arrested. DO NOT think that you can control this story. Almost every protester there will be carrying a video phone, do not give them anything to film. Have extra staff there to handle the additional traffic and close the accounts as fast an efficiently as possible. Anything else will generate a storm of bad publicity that will haunt your company for decades to come.

Listen to the protesters in their own voices. This Twitter list follows protesters from all over the world.

Read the following reality based economics blogs:
Mosler Economics
Naked Capitalism
New Economic Perspectives

Above all recognize that you are in a new environment and that the old rules do not apply.

Edit -
Slightly off topic, but I thought that Jonathan Bernstein had an interesting take on Margin Call.