Sophisticated Strategery

Occupy Wall Street held back from rejecting participation in the current American political system Wednesday night when the General Assembly -- the group's main decision-making body -- tabled an official resolution to refuse support for both the Democratic and Republican parties.

It's a sign that the consensus-driven mass of protesters in downtown Manhattan are more concerned with keeping their strategic options open than completely severing ties with a political order they see as fundamentally compromised.

“The Democratic and Republican parties do not represent the people because they’ve been bought and corrupted by Wall Street, and the occupation does not support their candidates," read the statement, which seemed driven by concern on the part of activists that official support from the national Democratic party -- whose leaders have already tentatively embraced the cause -- could destroy the movement's independence.

"The mainstream corporate media is trying to dismiss this movement," said a member of the "We Will Not Be Co-Opted" Working Group as the proposal was offered. "They are constructing a narrative that we are the puppets of the Democratic Party. The Tea Party was co-opted by the Republican Party; we will not be co-opted by the Democratic Party."

Activists are plainly sick of a political culture where leaders of both parties take massive donations from financial companies. But the failure to pass the resolution seemed to indicate a recognition on the part of many that one party is more beholden than the other; indeed, reports that Barack Obama's fundraising from Wall Street is down sharply compared to his 2007-08 campaign provide ammunition for those Democrats who argue that the Dodd-Frank financial reform legislation passed last year was a real win for consumers over big business.

"To be clear, we are in a very good position," said an activist opposed to the resolution in its current form. "Never in my life has a political party been trying to co-opt my agenda! We’re doing very well. We’re reframing the discussion, like certain groups on the other side have been doing for 40 years. If we want 99% to be with us, that includes a lot of people who, for their own reasons, have determined it’s important to engage the political parties that exist. This includes a lot of effective communities. I don’t think now is the time to put up barriers to potential allies."

Goldman Sachs, once Wall Street’s highest flier, has been grounded, and it does not bode well for the rest of the financial industry or the New York City economy that depends on it.

The bank, both envied and loathed for its ability to churn out huge profits year after year, reported a quarterly loss on Tuesday — its first since the financial crisis and only its second since going public in 1999.

The misstep by the financial leader speaks to what could be a more lasting shift on Wall Street, which has been steadily retrenching over the last 12 months. While protesters a few blocks away were denouncing greed and “too big to fail” banks, the institutions themselves were coming to grips with the current diminished reality.

Banks, required by regulators to discontinue high-profit businesses like proprietary trading, reduce borrowings and hold more capital, may no longer be able to produce the supercharged earnings that were common before the financial crisis.

Although Wall Street has not changed in some significant ways — top executives are still receiving huge pay packages and its lobbyists continue to have sway in Washington — the industry is facing forces of change unlike anything since the Great Depression. Trading operations are muted. Risk-taking is tempered. And boring businesses are back in vogue.

“These firms are going back to the traditional investment banking model of the 1980s and early 1990s,” said Tom Marsico of the mutual fund firm Marsico Capital Management, once a large owner of financial stocks who shed investments in Goldman and other banks this year.