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The Daily Reckoning | Saturday, December 31, 2011
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[Ed. Note: In today’s column, the final installment of our Daily Reckoning Best of 2011 Series, Bill addresses what was surely one of the biggest themes of the year gone by...revolution! From the death of Mohamed Bouaziz in Tunisia, an event which kicked off the Arab Spring, through to home-grown demonstrations of discontent across the United States and the UK, to the Global “Day of Action,” which saw coordinated marches on six continents, 2011 will be remembered, if for nothing else, as the year of protest.
Bill’s essay on the subject, which first appeared in these pages back on the 12th of October, follows...The Daily Reckoning Presents Vive La Revolution!
The Occupy Wall Street movement is getting a fair amount of press. The movement, as you know, dear reader, is a loose assembly of the jobless, the homeless and the shiftless. Troublemakers, every one of them, with no coherent or sensible view of what is wrong or how to fix it. But what’s wrong with that?
Bill Bonner
The Occupy Wall Street protests started on Sept. 17 with a few dozen demonstrators who tried to pitch tents in front of the New York Stock Exchange. Since then, hundreds have set up camp in a park nearby and have become increasingly organized, lining up medical aid and legal help and printing their own newspaper, the Occupied Wall Street Journal.
About 100 demonstrators were arrested on Sept. 24 and some were pepper-sprayed. On Saturday police arrested 700 on charges of disorderly conduct and blocking a public street as they tried to march over the Brooklyn Bridge. Police said they took five more protesters into custody on Monday, though it was unclear whether they had been charged with any crime.
On Monday, the zombies stayed on the sidewalks as they wound through Manhattan’s financial district chanting, “How to fix the deficit: End the war, tax the rich!” They lurched along with their arms in front of them. Some yelled, “I smell money!”
The US is probably getting ready for a revolution. Back in the Cold War days, the CIA was asked to do a portrait of a country that might have a revolution. It decided that such a country would have three characteristics:
A big gap between rich and poor.
A middle class that was disappearing...or one that never existed in the first place.
A lot of people with a grudge.
The US fits each of these criteria. And then some others the spooks hadn’t thought about. The U6 broad measure of unemployment is going up...with 16.5% of the population without work. There are 6.2 million people who have been looking for a job for more than 6 months.
Americans are $7 trillion poorer, according to David Rosenberg, than they were 4 years ago — and property prices are still going down.
Yes, there’s also a Great Correction in progress. It, along with the policies of the US government, grind the faces of the poor.
Millions of marginally successful people think the system has failed them. Youth joblessness is at Great Depression levels. More than 45 million are on food stamps.
People come to think what they must think when they must think it. So, a person who feels he has failed must come to terms with it. He must find a reason that gets himself off the hook. It must be someone else’s fault.
It was not his fault he failed his chemistry exam. The ‘system’ should provide him with a good job anyway. It was not his fault his house got taken away; the system caused prices to fall...and his job got exported to Mumbai. It was not his fault he didn’t save any money; the banks took advantage of him mercilessly. He may even get a “deficiency notice” — telling him he has to pay the bank for its loss on his foreclosed house.
Add insult to injury, why don’t you!
The guy has a legitimate beef!
It wasn’t his fault that the Nixon administration cut the link to gold in 1971. It wasn’t his fault the Chinese produced things better and cheaper. It wasn’t his fault that the feds kept stimulating the economy...and encouraging him to go deeper and deeper into debt at artificially low interest rates. And it certainly wasn’t he who caused the housing bubble to blow up...or who caused it in the first place.
But one thing you can depend on. Not many people will do the hard work of connecting the kneebone of this disaster to the legbone that caused it. And he won’t want to make the sacrifices necessary to protect himself from it either. (Our advice: cut expenses to almost zero...save money...buy gold...become a bankruptcy lawyer.) Instead, he’ll join the revolution.
Of course, people do not join revolutions for good reasons. They join them for bad ones. They expect miracles. One wants free money. The other wants power. One wants to see his brother-in-law, who earns big money as a currency trader at JPMorgan, brought low. Another just wants to get high. One expects his mortgage to disappear. Another wants the whole neighborhood to disappear. One hopes to see his dead wife rise from the grave...the other hopes his live wife will fall into it.
One believes the bankers are rich and evil. Another believes the oil companies are rich and evil. A third thinks all rich people are evil. And a fourth believes that all people are evil, even those in the Occupy Wall Street movement.
Some want to save porpoises. Some want people to use only natural deodorant. And a third thinks the world uses too much oil...and that only people who drive Priuses should be allowed on the road on Sunday. He owns a Prius dealership.
It is fun to mock the protestors. That’s why we do it. They are such easy targets.
But here at The Daily Reckoning we always stand with the powerless, the aimless and the witless. We are champions of the underdog...the lost cause and the diehard. So, we lock arms with the protestors and pledge our solidarity.
Vive la revolution!
But the poor protestors are just victims of history. When the US embraced its empire it condemned its middle classes. Why? Because that’s how empires work. They bring in cheap goods — and sometimes money itself — from outside. Whether they are taken as booty or traded for the imperial currency, the effect is about the same; they undermine local industries and local wages.
Ancient Rome imported wheat from Egypt, by the boatload, and gave it to citizens (an early form of food stamps). Result: the price of wheat collapsed. Small farmers couldn’t compete with free wheat. They couldn’t earn a living.
The Romans also brought in slaves. Rich, politically-connected Romans took over the small farms, consolidated them into big plantations, and ran them with slave labor. Again, the local labor was out of luck.
Things got so bad for the small farmers that they sold their children into slavery...and then, themselves. Then, in alarm, an edict prohibited Roman farmers from selling themselves into slavery. They were required to remain on their farms...and at work.
Spain ran a very different, short-lived empire in the 16th century. It conquered New World civilizations and imported gold and silver on a colossal scale. It was as if they were printing money! This easy money made the Spaniards rich. They used it like America uses her dollars — to buy things from overseas. Pretty soon, the Spanish neglected their own manufactures and their own farming. Prices rose. Spain’s nascent middle class was smothered in the crib.
Are things so different now? The rich get rich. The middle classes get poorer; they have to compete with imperial plunder...riches coming from Asia, bought with dollars that were never earned...and never will be redeemed.
America’s middle classes were happy to sell their own children into perpetual debt servitude. The kids face obligations 5 to 15 times as great as annual output. Unless they revolt, they will have to work their entire lives to pay for their parents’ excesses.
But what will they do when future generations can take no more? They cannot sell themselves into slavery. They’ve already done so. Most face a lifetime of student debt, mortgage debt, and medical debt (aka Medicaid and Medicare), already.
What can they do? Join the revolution!
Regards,
Bill Bonner,
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ALSO THIS WEEK in The Daily Reckoning... A look back at some of the memorable columns of the year past...
The Eight Marks of Fascist Policy, Part I and Part II
by Llewellyn H. Rockwell Jr.
As for the leadership principle, there is no greater lie in American public life than the propaganda we hear every four years about how the new president/messiah is going to usher in the great dispensation of peace, equality, liberty, and global human happiness. The idea here is that the whole of society is really shaped and controlled by a single will — a point that requires a leap of faith so vast that you have to disregard everything you know about reality to believe it. And yet people do. The hope for a messiah reached a fevered pitch with Obama’s election. The civic religion was in full-scale worship mode — of the greatest human who ever lived or ever shall live. It was a despicable display.
Guns vs. Guitars
By Joel Bowman
Buenos Aires, Argentina
Bullying small and medium businesses, sending armed goons to American factories, confiscating private property, closing down production and harassing business owners and their employees; a curious strategy for nurturing domestic job creation, wouldn’t you say? The above strategies might seem ludicrous, even downright criminal, to we laypeople, but to government officials, it’s “all in a day’s work.” Take, for example, the latest case of The Feds vs. Gibson Guitars.
In Praise of Anarchy
By Joel Bowman
Buenos Aires, Argentina
To those who would argue that coercion is necessary to foster freedom, that force is a prerequisite for peace and that the expropriation of individuals’ property on threat of violence is compulsory to fund an agency that, alone, is capable of guaranteeing safety and prosperity, we say: you don’t know the real meaning of anarchy, you don’t know what voluntarism is and, until you do, you will never know what it means to be truly free. Thank you to all the people...who do understand these concepts and, through their fine example, prove statists everywhere and always wrong on a daily basis.
The March of (Trade) War?
By Addison Wiggin
Baltimore, Maryland
“I want to go to war with China,” declared a presidential candidate last night on national TV. Granted, we’re taking this declaration out of context. A little, anyway. “I don’t want to go to a trade war,” said former Sen. Rick Santorum. “I want to beat China. I want to go to war with China and make America the most attractive place in the world to do business.”
The Idea of America
By Jeffrey Tucker
There are occasions in American life — and they come too often these days — when you want to scream: “what the heck has happened to this country?!” Everyone encounters events that strike a particular nerve, some egregious violations of the norms for a free country that cut very deeply and personally. We wonder: do we even remember what it means to be free? If not — and I think not — The Idea of America: What It Was and How It Was Lost (hardcover and Kindle), a collection of bracing reminders from our past, as edited by William Bonner and Pierre Lemieux, is the essential book of our time.NEWSFLASH: It’s Too Late to “Save America”
It’s too late to “save” America as we know it. But that’s actually good news for you. How?
Watch this urgent new briefing right now — and witness the ONE REASON America’s next big collapse could be great news...for Americans.The Weekly Endnote...
Wherever you are this weekend, Fellow Reckoner, we hope you enjoy a happy and safe end-of-year celebration.
Markets are closed on Monday. We’ll return when they reopen for business on Tuesday. Until then...
Cheers, Joel Bowman
Managing Editor
The Daily Reckoning
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Saturday, 31 December 2011
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