Best of the Week
Most Popular
1.The Gallery of Crowd Behavior: Goodbye Stock Market All Time Highs - Doug_Wakefieldth
2.Tesco Meltdown Debt Default Risk Could Trigger a Financial Crisis in Early 2015 - Nadeem_Walayat
3.The Trend Every Nation on Earth Is Pouring Money Into - Keith Fitz-Gerald
4.Do Tumbling Buybacks Signal Another Stock Market Crash? - 26Mike_Whitney
5.Could Tesco Go Bust? How to Save Tesco from Debt Bankruptcy Risk - Nadeem_Walayat
6.Gold And Silver Price - Respect The Trend But Prepare For A Reversal - Michael_Noonan
7.U.S. Economy Faltering Momentum, Debt and Asset Bubbles - Lacy Hunt
8.Bullish Silver Stealth Buying - Zeal_LLC
9.Euro, USD, Gold and Stocks According to Chartology - Rambus_Chartology
10.Evidence of Another Even More Sweeping U.S. Housing Market Bust Already Starting to Appear - EWI
Last 5 days
The Colder War: How the Global Energy Trade Slipped From America's Grasp - 30th Oct 14
Don't Get Ruined by These 10 Popular Investment Myths (Part VIII) - 29th Oct 14
Flock of Black Swans Points to Imminent Stock Market Crash - 29th Oct 14
Bank of America's Mortgage Headaches - 29th Oct 14
Risk Management - Why I Run “Ultimate Trailing Stops” on All My Investments - 29th Oct 14
As the Eurozone Economy Stalls, China Cuts the Red Tape - 29th Oct 14
Stock Market Bubble Goes Pop - 29th Oct 14
Gold's Obituary - 29th Oct 14
A Medical Breakthrough Creating Stock Profits - 29th Oct 14
Greenspan: Gold Price Will Rise - 29th Oct 14
The Most Important Stock Market Chart on the Planet - 29th Oct 14
Mysterious Death od CEO Who Went Against the Petrodollar - 29th Oct 14
Hillary Clinton Could Be One of the Best U.S. Presidents Ever - 29th Oct 14
The Worst Advice Wall Street Ever Gave - 29th Oct 14
Bitcoin Price Narrow Range, Might Not Be for Long - 29th Oct 14
UKIP South Yorkshire PCC Election Win is Just Not Going to Happen - 29th Oct 14
Evidence of New U.S. Housing Market Real Estate Bust Starting to Appear - 28th Oct 14
Principle, Rigor and Execution Matter in U.S. Foreign Policy - 28th Oct 14
This Little Piggy Bent The Market - 28th Oct 14
Global Housing Markets - Don’t Buy A Home, You’ll Get Burned! - 28th Oct 14
U.S. Economic Snapshot - Strong Dollar Eating into corporate Profits - 28th Oct 14
Oliver Gross Says Peak Gold Is Here to Stay - 28th Oct 14
The Hedge Fund Rich List Infographic - 28th Oct 14
Does Gold Price Always Respond to Real Interest Rates? - 28th Oct 14
When Will Central Bank Morons Ever Learn? asks Albert Edwards at Societe General - 28th Oct 14
Functional Economics - Getting Your House in Order - 28th Oct 14
Humanity Accelerating to What Exactly? - 27th Oct 14
A Scary Story for Emerging Markets - 27th Oct 14
Could Tesco Go Bust? How to Save Tesco from Debt Bankruptcy Risk - 27th Oct 14
Europe Redefines Bank Stress Tests - 27th Oct 14
Stock Market Intermediate Correction Underway - 27th Oct 14
Why Do Banks Want Our Deposits? Hint: It’s Not to Make Loans - 26th Oct 14
Obamacare Is Not a Revolution, It Is Mere Evolution - 26th Oct 14
Do Tumbling Buybacks Signal Another Stock Market Crash? - 26th Oct 14
Has the FTSE Stock Market Index Put in a Major Top? - 26th Oct 14
Christmas In October – Desperate Measures - 26th Oct 14
Stock Market Primary IV Continues - 26th Oct 14
Gold And Silver Price - Respect The Trend But Prepare For A Reversal - 25th Oct 14
Ebola Has Nothing To Do With The Stock Market - 25th Oct 14
The Gallery of Crowd Behavior: Goodbye Stock Market All Time Highs - 25th Oct 14
Japanese Style Deflation Coming? Where? Fed Falling Behind the Curve? Which Way? - 25th Oct 14
Gold Price Rebounds but Gold Miners Struggle - 25th Oct 14
Stock Market Buy the Dip or Sell the Rally - 25th Oct 14
Get Ready for “Stupid Cheap” Stock Prices - 25th Oct 14
The Trend Every Nation on Earth Is Pouring Money Into - 25th Oct 14 - Keith Fitz-Gerald
Bitcoin Price Decline Stopped, Possibly Temporarily - 25th Oct 14
Bullish Silver Stealth Buying - 24th Oct 14
Blood in the Streets to Create the Gold Stocks Investor Opportunity of the Decade - 24th Oct 14
Swiss ‘Yes’ and ‘No’ Gold Initiative Campaigns Compete at Launches in Bern - 24th Oct 14
War And The Law Of Unintended Consequences - 24th Oct 14
Tesco Meltdown Debt Default Risk Could Trigger a Financial Crisis in Early 2015 - 24th Oct 14
Saudi Move to Cut Oil Prices Is Now Russia's Biggest Economic Threat - 24th Oct 14
US Stock Market Top Is Now In Sight - 24th Oct 14
New Profit Points in the Shifting Balance of Power, Welcome to Saudi America - 24th Oct 14
QE Failure & Folly Of Paper Mache, Treasury Bond Integrated Lifeline Patches - 24th Oct 14

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

Stocks Epic Bear Market

U.S. Economic Austerity May Result in Unrest on America's Streets

Politics / Economic Austerity Dec 16, 2010 - 10:56 AM GMT

By: Danny_Schechter

Politics

Best Financial Markets Analysis ArticleWilliam Shakespeare put a key question this way; “To Be Or Not To Be?” Today’s economists and policy makers pose a different choice: to spend or not to spend.

Governments throughout the west are in a panic as debt mounts and economies contract.



Their solution is cut, cut, cut, in the name of a doctrine called austerity. They are slashing budgets, trimming public payrolls and arguing fatalistically in the spirit of Margaret Thatcher’s philosophy, “There Is No alternative.” (TINA.)

Austerity is the other name for it, Confronting massive deficits fearful of losing investor confidence. European governments are pulverizing budgets and shutting down public services. The plan by England’s new Tory government is considered among the most painful, if not draconian. It is justified as absolutely necessary.

This view is being challenged in the realm of the ideas and with a growing spasm of street protests rocking European cities.

You have probably seen the pictures: A bloodied former Minister in Athens as rioters denounce the IMF which is demanding concessions from their government. Strikes in France, Spain, Portugal, The Czech Republic and Italy had the SWAT teams out in force. A meeting this week in Germany by Eurozone Ministers is unlikely to please anyone.

At time when most people are saying the path out of the financial crisis and European debt problem is for individuals and governments around the world to cut back, the American economist Paul Krugman wants us to spend, spend, spend.

What’s behind the fervor for austerity, he asks?

“The answer is” he writes, is “to reassure the markets — because the markets supposedly won't believe in the willingness of governments to engage in long-run fiscal reform unless they inflict pointless pain right now. To repeat: the whole argument rests on the presumption that markets will turn on us unless we demonstrate a willingness to suffer, even though that suffering serves no purpose.”

This argument has moved off the op-ed pages and into the streets. These protests conjuring up a revival of the class war confrontations of the 1930’s are erupting in many countries.

The marches are becoming more militant and bitter, as clashes between the police and angry protesters grow in intensity marked by scattered violence.

Symbolically, the one incident that received massive coverage was a student attack on British Royalty when Prince Charles car was attacked with some protesters chanting, “off with their heads.”

Reported the Telegraph,

“Demonstrators kicked the Rolls-Royce as it traveled to the Royal  Variety Performance in central London. White paint and bottles were thrown over the car and a window shattered.

The Prince and Duchess (Camilla Parker-Bowles) were “unharmed” and continued with their engagement at the London Palladium, a Clarence House spokesman said.

The attack, caught on amateur video showed a how startled the Royal couple was even though afterwards “the Duchess, later laughed off the attack, When asked how she was as she left the London Palladium, the Duchess said: ''I'm fine thanks – first time for everything.''

It may have been the first time but as more austerity measures are expected, it is unlikely to be the last.

These protests reflect more that dissatisfaction with a single issue but seem to be a reflection of growing public disenchantment with unresponsive government, an untrustworthy media and a failing economy.

So far, conservative governments are ignoring the criticisms and moving forward with their slashing of worker and unemployment benefits and the social safety net. In England, the Parliament voted to raise tuitions -- cap is set to rise to $14,500 by 2012, higher than the current average of $7,605 at U.S. state universities-- but the student protests are surprising officials by their tenacity.

Just watch the passion of this 15 year old speaking at a rally the University of London:



Student activists like this are becoming radicalized and can become contagious, argues Gary Younge in Guardian:

“As these protests intensify - as they are bound to – we can expect them to be routinely disparaged on the right as either privileged kids acting out or innocents led astray by revolutionaries

…That students and youth in Europe have erupted at this moment, however, should come as no surprise. More than one in five people under the age of 25 in the EU is unemployed. In Spain the figure is 43%; in Greece 30%; in Italy 26%. Meanwhile the principle that education is a public good, to which all are entitled, all contribute, and all benefit through a more competitive economy, is in its death throes.”

In the United States, A Republican-dominated Congress, swept into power on the backs of right wing Tea Party activism spurred by Fox News and other fear-driven conservative media, promises to roll back government programs even as it “compromises” with Dems to keep tax cuts for millionaires and billionaires.

So far, there has been little street activism in the United States. Perhaps it’s because of the Christmas shopping season, the inundation of entertainment shows and sporting events or just so little oppositional leadership, especially among Democrats unwilling to challenge a Democratic President who has just negotiated a compromise deal with Republican tax cutters.

Only one Senator, Bernie Sanders, the independent from Vermont had the guts to take on Barack Obama  in an 8 hour and 37 minute near filibuster speech that drove up the ratings of CSPAN, the congressional TV channel. http://www.huffingtonpost.com/2010/12/10/bernie-sanders-filibuster_n_795087.html

Commented blogger David Seth Michaels: “it was the most important political speech-- by far-- of the past two years. Seldom, if ever, has anyone seized the spotlight to discuss and examine so thoroughly the plundering of the nation by its wealthiest citizens. And to demand so clearly that the government provide genuine relief for the millions of Americans who are now suffering the consequences of the plunder.”

But his supporters did not pour into the streets, at least not yet. Sanders has been challenging what he calls his: “progressive friends” on these very issues, “I have long been concerned that some progressive activists do not stand up and fight effectively or pay enough attention to the needs of ordinary Americans.”

When they do speak out, many prefer sending emails or organizing Facebook pages. Where is the outrage and sense of solidarity or militancy? The unions are quiescent, most pols seem incapable of inspiring anyone. Has this generation been seduced by their Ipads and smartphones? 

Has everyone forgotten that call to get involved? Remember the dicta, “It’s not the ship that makes the waves, it’s the motion on the ocean.” It may take time, but it is likely in the not too distant future that American activists will emulate the movements now emerging in Europe.

Governments have the power to impose their austerity measures, but not without a fight. As things get worse, Bob Dylan’s pithy blast from the past may be back to characterize the times ahead: “A Hard Rain Is Going To Fall?”

News Dissector Danny Schechters film and book Disinformation. For more information, Http://www.plunderhecrimeofourtime.com.

    News Dissector Danny Schechter has made a film and written a book on the “Crime Of Our Time.” (News Dissector.com/plunder.) Comments to dissector@mediachannel.org

    © 2010 Copyright Danny Schechter - All Rights Reserved

    Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2014 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

Rick
16 Dec 10, 15:31
Prescription For Disaster: Cut Off The Aid!

You can bet your bottom dollar that just as soon as the money runs out (unemployment benefits, food stamps, welfare, medicaid, etc. etc.), then you will have the unrest. It's no small wonder then why the politicians just prefer to keep the unfortunates on the public tether; the political cost of severing that cord would be deemed too catastrophic.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Free Report - Financial Markets 2014