Hand-in-Hand

In "Anarchy and Austerity: Why London Won't Be the Last City to Burn," The Atlantic's Derek Thompson touches upon what has been a key underlying theme of my second book, Financial Armageddon, and my third, When Giants Fall: deteriorating economic circumstances go hand-in-hand with deteriorating social conditions.

The theft and violence and street crime and lawlessness in London is shocking. But it's not unique. Around the world, the burden of unemployment falls hardest on the young, who often respond with violence. The average jobless rate between 18-29 years was nearly 20% last year in OECD countries, the Wall Street Journal has reported. High unemployment was a factor in protests in Spain, uprisings in the Middle East and North Africa.

The connection between joblessness and violence comes to life in a timely August research paper Austerity and Anarchy: Budget Cuts and Social Unrest in Europe, 1919-2009, which found "a clear positive correlation between fiscal retrenchment and instability." Authors Jacopo Ponticelli and Hans-Joachim Voth examined the relationship between spending cuts and a measure of instability they termed CHAOS -- "the sum of demonstrations, riots, strikes, assassinations, and attempted revolutions in a single year in each country."

Their conclusion: Austerity breeds anarchy. More cuts, more crime.This clickable graph helps to tell the story.

Of course, if our government had operated in a more honest and fiscally responsible manner before now, we wouldn't be in the position of having to choose between an austerity-fuelled eruption or a hyperinflation-fuelled meltdown. But it's too late for that now.

Comments

[Rocky]

Germany certainly became a more violent place after WWI than it had been before the war. It was also a period in which conservative parties did not want to raise taxes, the currency collapsed and the seeds for dictatorship were sown. There was not a single majority government during the entire Weimar Republic. In the end, a dozen or so old line parties could not even agree on a coalition government that excluded the Nazi Party.

[RPY]

The youth of Britain are rebelling against what they see as a great injustice. Global financiers through their greed and recklessness bring the global economy to it's knees. They cost 10's of millions their jobs, and their homes.And then they have the gull to past their losses on to the least able to pay. None of them go to jail!
How can one wonder why the young have little or no faith in the system.
Then fight back the only way they can.
Some them of course will go to "jail" for their participation in the riots.
And the only immediate answer the government can come with is force. Not justice. But force!

[John Feier]

Gee... maybe taxing the RICH isn't such a bad idea after all?

[Hand to Mouth]

Completing the Theft from the Social Security Trust Fund

The Catfood Commission rump report made it crystal clear that the political and financial elites have no intention of ever paying off the bonds held by the Social Security Trust Fund. You thought you were paying excess FICA taxes so that there would be enough money to pay your Social Security in your retirement, but that was never the intention. The intention was to raise your taxes and cut taxes on the rich.

The whole point of every charade version of “strengthening Social Security” is to insure that the income of the system is enough to pay the benefits that are due that year, hopefully with an overage that can be swallowed up in the General Fund and used keep the taxes on the rich at the lowest level since the time whereof the memory of man runneth not to the contrary. The Catfood Commission, the Great Compromise, the Gang of Six, the Chained CPI, and all other plans make it clear that the elites of both parties intend to complete the theft from the Social Security Trust Fund by raising your taxes and/or cutting your benefits.

You are not represented in the halls of government. Only rich people and their corporations and their lobbyists and their flacks, and their court jester economists, and their astroturf groups and their talk radio liars and their media companies and their think tanks and their foundations are represented in government.

http://firedoglake.com/2011/08/11/completing-the-theft-from-the-social-security-trust-fund/

[Hand over Mouth]

Wealth transfer continues...

Robin Hood in Reverse: Bank Bailout Bonanza Heats Up
http://www.ritholtz.com/blog/2011/08/robin-hood-in-reverse-bank-bailout-bonanza-heats-up/

[Seems like a "tit for tat"?]

These riots reflect a society run on greed and looting

While bankers have publicly looted the country's wealth and got away with it, it's not hard to see why those who are locked out of the gravy train might think they were entitled to help themselves to a mobile phone. Some of the rioters make the connection explicitly. "The politicians say that we loot and rob, they are the original gangsters," one told a reporter. Another explained to the BBC: "We're showing the rich people we can do what we want."

Most have no stake in a society which has shut them out or an economic model which has now run into the sand. It's already become clear that divided Britain is in no state to absorb the austerity now being administered because three decades of neoliberal capitalism have already shattered so many social bonds of work and community.

What we're now seeing across the cities of England is the reflection of a society run on greed – and a poisonous failure of politics and social solidarity. There is now a danger that rioting might feed into ethnic conflict. Meanwhile, the latest phase of the economic crisis lurching back and forth between the United States and Europe risks tipping austerity Britain into slump or prolonged stagnation. We're starting to see the devastating costs of refusing to change course.

http://www.guardian.co.uk/commentisfree/2011/aug/10/riots-reflect-society-run-greed-looting

[The Hampster Wheel Effect]

The Beaten Masses: Confronted With Severe Financial Hardship, Why Do Americans Remain Passive?

If you are wondering why a critical mass of people desperately struggling to make ends meet are still not fighting back with overwhelming force and running the mega-wealthy aristocrats out of town, let’s consider two significant factors:

1) People are so busy trying to maintain their current standard of living that their energies are consumed by holding on to the little that they have left.

2) People have very little understanding of how much wealth has been consolidated within the top economic one-tenth of one percent.

Considering the first factor, it is obvious that people have become beaten down psychologically and financially. A report in the Guardian entitled, “Anxiety keeps the super-rich safe from middle-class rage,” suggests that people are so desperate to hold on to what they have that they are too busy looking down to look up: “As psychologists will tell you, fear of loss is more powerful than the prospect of gain. The struggling middle classes look down more anxiously than they look up, particularly in recession and sluggish recovery.”

Considering the second factor, people do not understand how much wealth has been withheld from them. The average person has never personally experienced or seen the excessive wealth and luxury that the mega-rich live in. Wealth inequality has grown so extreme and the wealthy have become so far re...

http://daviddegraw.org/2011/08/the-beaten-masses-confronted-with-severe-financial-hardship-why-do-americans-remain-passive/

[roger]

The US has reached a cross road.
one: status quo, dream on.
Two: Fascism, a great possibility.
Three: socialism, a no no for the brain
washed masses
How do you choose if you are totally
ignorant in political science..

[Stevefraser]

"Joblessness and violence"...."among those in the dock accused of looting are a millionaire's grammar school daughter, a ballet student and an organic chef.
A law student, university graduate, a musician and an opera steward also said to have taken part.They are just some of the youngsters from comfortable middle-class backgrounds who have been charged with criminality..." (DAILY MAIL). Sorry Mike, looting and mob stealing is exciting and fun and encouraged by Leftist politicos...BTW, please check the violence stats for the USA during the Great Depression. Very low, I believe.

[roger]

@Stevefraser,
You don't know much about 1929, do you.
Such as the shooting of civilians by the
US army,or about how the country was on
the brink of revolution and how Roosevelt
saved the day for capitalism or how about
reading the (american adventure in Siberia during
the Russian revolution by General William S.Grave)
It would take you a life time of reading to inform
yourself. history is not a matter beliefs,
It can be crude and painful to our prejudices.

[Francesco]

@stevefraser..Low or unreported?

"Most people do not realize that it was Adam Smith who wrote this famous characterization. He was writing about narrowly mercantilist nature of the British Empire and its colonial market strategy. The exploitation of the Empire's resources and peoples by a few legendary companies is well known.

If one substitutes 'crony capitalists' or 'financiers' for 'shopkeepers' it might well be a decent fit for the latter years of the American Century's empire, which is based on a regime of guns and dollars.

Perhaps not so much as treason in this case, but plunder, and the betrayal of oaths and trusts, and fraud on a grand scale. But this control of history and the interpretation of events is a major component of the credibility trap that impedes legitimate reform.

http://jessescrossroadscafe.blogspot.com/2011/08/sp-500-and-ndx-futures-daily-charts_12.html

When the governance of a society refuses to listen to the calls for justice and reform over a long period of time, when it acts to ignore, co-opt, diffuse, and then suppress the voice of the reformers, when it uses the law as a means of legal plunder, that government and society will eventually answer not to reasoned dissent, not to principled calls for reforms, but to the rage of the mob.

"Men naturally rebel against the injustice of which they are victims. Thus, when plunder is organized by law for the profit of those who make the law, all the plundered classes try somehow to enter, by peaceful or revolutionary means, into the making of laws. According to their degree of enlightenment, these plundered classes may propose one of two entirely different purposes when they attempt to attain political power: Either they may wish to stop lawful plunder, or they may wish to share in it."

Frederic Bastiat

"And remember, where you have the concentration of power in a few hands, all too frequently men with the mentality of gangsters get control. History has proven that."

Lord Acton

"Those who make peaceful revolution impossible will make violent revolution inevitable."

John F. Kennedy

http://jessescrossroadscafe.blogspot.com/2011/08/lessons-forgotten.html

[Stevefraser]

“A population thinks (because it has often been told so by intellectuals and the political class) that it is entitled to a high standard of consumption, irrespective of its personal efforts; and therefore it regards the fact that it does not receive that high standard, by comparison with the rest of society, as a sign of injustice. It believes itself deprived (because it has often been told so by intellectuals and the political class), even though each member of it has received an education costing $80,000, toward which neither he nor—quite likely—any member of his family has made much of a contribution; indeed, he may well have lived his entire life at others’ expense, such that every mouthful of food he has ever eaten, every shirt he has ever worn, every television he has ever watched, has been provided by others. Even if he were to recognize this, he would not be grateful, for dependency does not promote gratitude. On the contrary, he would simply feel that the subventions were not sufficient to allow him to live as he would have liked. At the same time, his expensive education will have equipped him for nothing. His labor, even supposing that he were inclined to work, would not be worth its cost to any employer—partly because of the social charges necessary to keep others such as he in a state of permanent idleness, and partly because of his own characteristics.”. T. DALRYMPLE (Manhatten Institute).

[If we get rid of the poor who will get us dinner?]

Heil Stevefraser!

Chip off the old block your boy Teddy...

Theodore Dalrymple

In his writing, Daniels frequently argues that the liberal and progressive views prevalent within Western intellectual circles minimise the responsibility of individuals for their own actions and undermine traditional mores, contributing to the formation within rich countries of an underclass afflicted by endemic violence, criminality, sexually transmitted diseases, welfare dependency, and drug abuse. Much of Dalrymple's writing is based on his experience of working with criminals and the mentally ill.

Although he is occasionally accused of being a pessimist and a misanthrope, his defenders praise his persistently conservative philosophy, which they describe as being anti-ideological, sceptical, rational and empiricist. In 2010, Daniel Hannan wrote that Dalrymple's work "takes pessimism about human nature to a new level. Yet its tone is never patronising, shrill or hectoring. Once you get past the initial shock of reading about battered wives, petty crooks and junkies from a non-Left perspective, you find humanity and pathos"

Criticism

Maruna and Mann argue that Dalrymple's claim that poverty is often caused by the lack of a sense of responsibility is harmed by the fact that he does not demonstrate the existence of a responsible bourgoisie.[27] A. Jamie Saris appends Dalrymple to a list of authors whom he accuses of misusing the idea of culture in bad faith, as a form of victim-blaming for social problems and poverty. He claims that the views exemplified by Dalrymple are drawn from Charles Murray and have been critiqued by Loïc Wacquant and William J. Wilson. Gary A. Berg claims that Dalrymple accuses the poor of being immoral and connects his claims to those of the eugenics movement.

http://en.wikipedia.org/wiki/Theodore_Dalrymple

[Stevefraser]

Some good info on TD. Based on your post I plan to study his work in greater depth. Thanks... But "Heil Stevefraser"? Were not the National Socialists socialists? Or is that something else I've somehow gotten wrong. They certainly railed against 'international capital and the blood sucking capitalist criminals'. Sound familiar?...With your obvious sophistication in the historical sciences perhaps you can enlighten our readers on the essential similarity of American Progressivism (e.g.Obama) and the European Fascists. As you must know, Dr. Goebbels said, "Why are we the National Socialists fighting the Communists, we agree 99% of the time?". Yes, I know why the NZ and the Reds were fighting in the streets of Weimer Germany as must you: Stalin was backing the Red Street Gangs with the goal to bring about a coup and have Germany the second Marxist/Stalinist terror state after Russia. And the Weimer Government decided to prevent this at any cost. Right? Yup.

[Mike Allen]

Please reconsider the use of the word "anarchy". It simply means "without government". The word has nothing to do with violence, destruction of private property and chaos. As Ludwig von Mises said, "government is the negation of liberty". Also, government causes far more violence, violation of private property, and chaos in society than any other entity ever, BY FAR. A blog by this name, which obviously understands what governments are doing to our world, should be advocating for the peace and prosperity of ordered anarchy that respects natural rights with non-aggression.

Every form of government has been tried and failed, including the attempt at a limited constitutional republic. A few evil men began immediately to expand and abuse even these limited levers of power, evolving into what we have today. It's time to give something else a chance. We don't need these levers of power that they can inevitably be expanded and abused, regardless of how limited they are.

There are many successful precedents for government not performing its individual current functions. Also, Ireland had no government for 1000-years and even defended against the English empire's assaults for the last couple of those centuries. The vast majority of sheeple are so immersed in the matrix of government that they can't even conceive of how wonderful it would be to have it gone. It's time for a major paradigm shift. Take the red pill and see government for what it really is, a completely unnecessary parasite on society. We need anarchy, which is simply "no government".

The best news is that this is completely achievable in the near term. Governments around the world are very near economic self-destruction. It is not necessary or advisable to take action against governments. Violence is the government means and spreading the idea of liberty is ours. When government collapses, people need to understand that government should not be replaced. At that time it will be safe to take action to simply assure government doesn't return after it destroys itself. If people have educated themselves about how society can function without government, then we can have harmony and prosperity that few today can imagine.

To find out more, check out the new website at http://www.pure-liberty.org/ and then share it with everyone.

For Liberty,

Mike Allen

[Bailey]

Id say the majority of the "youths" are chronically unemployable if they even wanted to work,which they dont. The riots were far more racial than most will admit,despite the presence of a few white or asian "chavs" the mobs were african. Sikhs gaurded their manors with swords, asians with bats and handguns, english with fists and bats against roving bands of afro-caribbean looters. Not much different than 1985. Now when whats left of the working and middle class riot in numbers I doubt theyll be looting neighbors stores, but attacking political and banking targets. Then the riots will be about the kleptocracy,these riots certainly were not.