It's a pretty straightforward idea: When a country borrows too much money it becomes ungovernable because interest payments eat up the cash that previously went to satisfying voters. Whoever is in charge gets blamed, and every election becomes a "throw the bums out" event. That this is happening in the developed countries with the most debt -- and that US discontent is causing groups like the Tea Party and Occupy Wall Street to coalesce around competing narratives -- should come as no surprise. Yet it does seem to have caught most of the mainstream media and political establishment flat-footed.
Tune into MSNBC or most other liberal outlets and you'll hear about the racist knuckle-walkers who populate the Tea Party, while Fox News and the Wall Street Journal dismiss Occupy Wall Street a bunch of unwashed, economically-illiterate hippies. Rage is met with rage, which leads to neither understanding nor successful governance.
I've been swapping emails with a good friend, a New Yorker who was ecstatic when Barack Obama was elected. Three years later, not so much:
Here's my very cynical view of Obama. He has single handedly set back our country many decades in many significant ways. The racist insane nutjobs that make up a significant portion of our populace, embodied by the Tea Party, came out of the woodwork, and he did nothing to confront them or stop them. He single handedly aided and abetted their rise. He felt they could be reasoned with, and gave them legitimacy by negotiating with them. I wish I were an Obama advisor. Here's what I would say "The President's first and foremost job is to destroy his enemies." He can cling to the Yes We Can, post-partisan rhetoric by simply positioning the TPers as so far outside the mainstream that they don't warrant, and that he's open to talking to anyone who doesn't have foaming mouths.
Also, when he loses, he will have emboldened the nutjob racist right, boosting their position that a colored boy simply can't get the job done. This is his hugest error, a tragedy that our first black president with so much talent and so many gifts and so much promise turned into Jimmy Carter (who I love by the way...stop capital punishment everywhere!)...
...The biggest issue with the banking aristocracy is that frankly their functions should be nationalized. They have us all by the balls. If they fail, they take everyone down with them. The bailout is the largest theft of public funds in the world's history. I'm with Krugman on this one. Make banking boring again. Toss some of these assholes in jail, then regulate the shit out of it. If Greenwich CT gets hit badly, I won't lose any sleep.
I have stopped giving Obama money. Me and everyone else in my position, all juiced up by his rhetoric, yes we can, change is coming, then nearly unilateral white flag in the face of animosity. I will probably vote for him (though if Romney remained the moderate east coast governor, and could embrace the HUGE insurance system reform successes, his Mike Bloomburg-esque noblesse oblige, I would vote for him in a heartbeat).
More on Occupy Wall Street...it is incredible how a relative handful of people can cause the establishment to shake in its boots..I'm down with the cause, of course. Seems like the cops lead a bunch of protestors marching onto the Brooklyn Bridge, then trapped them and arrested them. At least this is the accusation of some of the protestors...seems like the NYPD would do that, no problem.
Smaller government typically sells, except for those who actually rely on government, and that's pretty much everyone. We probably differ on this, but it seems the height of hypocrisy for Tea Baggers to try to grasp the mantel of right wing populism, somehow speaking for the poor, when it's these folks who will get hurt the worst...Social Security and Medicaid are massively popular programs, and the real trick is how do you get people to advocate against their own best interest. seems like the TPers are successfully doing this.
We just went down to the massive protests on Wall Street...it's quite a scene, a mix of races, ages, grey hairs, young punks, college kids banging on drums, just wild, definitely dominated by youngsters, but in NYC some major unions came out in support. Foley square, which is by the federal courthouse, was jammed. I'd wager 25,000 people, maybe more...
we talked to some youngins camped out in Zuchatti square..they said at the beginning it was 50 people. that's 2 weeks ago. truly a mix of demands, but mostly jobs, and taxing the rich, etc etc...quite amazing energy, and pretty cool to see...
there were even signs "End the Fed" right out of the gold bug playbook. like I said, the Tea Partiers should be there, but there's too many poor non-white folk around for their taste, as far as I can tell..anyway, very cool to see such young energy. it's gonna be a wild ride..
And here's an interview with an author who speaks for a growing number of people on the left:
Both sides are, in their criticisms of the oligarchy that runs the financial system for its own benefit and to the detriment of everyone else. In today's America, Goldman Sachs, the Treasury Department, and the Fed are just divisions in the same profit-maximizing organization. Both the Tea Party and Occupy Wall Street seem to get this.
But only the Tea Party seems to understand that the root cause isn't the current generation of rich folks, but a financial system that was born in 1913 with the creation of the Federal Reserve and came to maturity when the US left the gold standard in 1971. It is the Fed that has allowed debt to explode at every level of society while corrupting the banks and politicians with easy money. Today's mess couldn't have happened without the ability to create unlimited amounts of currency. And it won't be fixed without a return to constitutionally limited government and sound money.
Is chaos inevitable?
As long as most people don't understand how we got here -- i.e. how a government with an unlimited printing press will ALWAYS produce exactly this result -- they'll be terrified and confused and desperate for scapegoats and easy fixes. They'll veer right or left depending on their temperament, and become ever more willing to blame the other side for the mess that both sides created. The antidote, of course, is education, and if the rising number of gold buyers and Ron Paul supporters are any indication, this is happening. But it's not happening fast enough.
Is this the first step towards civil war?
Dehumanizing those who disagree and turning them into alien "others" is a common rationale for taking away their rights. Many on the US right consider coastal liberals to be not just wrong, but evil, and as the emails and video above make clear, the US left is developing the same feelings for the well-off in general and the Tea Party in particular. Neither side sees the other as worthy of understanding or collaboration. So for anything to get done one side has to win.
Right now this is a political civil war with a 1960s feel. But back then the fix was easy: pull out of Vietnam and extend civil rights to easily-identified and undeniably worthy minorities. Today there's no way to resolve an overwhelming debt burden without depression or hyperinflation. So the argument has just begun and will almost certainly escalate.
What can individuals do?
You already know. Avoid dollars because no matter who's in charge after the next election they'll choose inflation over depression, a tendency that's' hard-wired into every politician's DNA and always trumps party affiliation. Own precious metals in several forms and places because these are the only remaining kinds of money that can't be created by governments in infinite quantities. And stop counting on "society" to take care of you. The cuts and possible disruptions in public services and supply chains that come with debt default will make some parts of the US resemble a Third World country.