I’ve been reading quite a number of articles written in anticipation of a revolutionary uprising by outraged citizens in response to the fallout from Wall Street’s giant Ponzi scheme. The writers of these items are talking about a more significant uprising than anything we have seen from the Tea Party demonstrators. Some are expecting riots in the streets. Since widespread civil unrest has recently taken place in Europe, much attention has been focused on the issue of whether anything like that could happen in the United States. From my own perspective, I just don’t see it happening. Nevertheless, I can’t understand what keeps the American public from getting really mad at this point. It could be due to an epidemic of Attention Deficit Disorder or excessive preoccupation with other distractions. Perhaps some sort of far-flung conspiratorial effort is under way, involving mass hypnosis via television or drugged drinking water.
On the other hand, I do agree with those commentators on the point that the predicted insurgent reactions are entirely foreseeable. Are they likely? Consider what these pundits have said and decide for yourself . . .
One of my favorite commentators, Paul Farrell of MarketWatch, discussed an inevitable backlash against the super-rich, who are waging class warfare by victimizing those of us down the food chain. Nevertheless, he doesn’t really make it clear how this revolution will manifest itself. Will there be actual physical violence . . . or just a “bloodbath” in the stock market? Here is how he described it:
Yes, it’s called the Doomsday Capitalism revolution. And I’m betting you’ll be able to track it on Twitter.
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This new preemptive war is already in progress, and America’s billionaires are the aggressors: Buffett’s billionaire buddies on the Forbes lists, his Wall Street banker buddies, his exporter buddies in China, all of Buffett’s buddies in this “rich class” are already engaged in a hostile takeover war against the American middle class, against the working class and the poor, against all Americans not on the Forbes lists of billionaires.
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Here’s how I imagine this revolution unfolding as a series of rapid-fire tweets, as citizen-warriors pass along this collection of earlier warnings to reenergize and drive the rest of America to rebel against Buffett’s “rich class,” tweets that will trigger an anti-capitalist revolution.
Warning to all investors: Prepare now, play defense. Expect an economic upheaval rivaling the 1929 crash, creating a climate for true reform that will make the 1930s look like a real tea party.
At The Curious Capitalist blog, Stephen Gandel pondered what would result from all the fear and loathing about whether the Federal Reserve would begin another round of quantitative easing. His essay was entitled, “Will the Federal Reserve Cause a Civil War?” Mr. Gandel focused on a recent posting at the Zero Hedge website, which quoted this observation by Karl Denninger:
In a very real sense, Bernanke is throwing Granny and Grandpa down the stairs – on purpose. He is literally threatening those at the lower end of the economic strata, along with all who are retired, with starvation and death, and in a just nation where the rule of law controlled instead of being abused by the kleptocrats he would be facing charges of Seditious Conspiracy, as his policies will inevitably lead to the destruction of our republic.
Stephen Gandel analyzed the potential for civil war as a consequence of more quantitative easing with this logic:
Lower rates do tend to favor borrowers over savers. And the largest borrowers in the country are banks, speculators and large corporations. The largest spenders in our country though tend to be individuals. Consumer spending makes up 70% of the economy. And the vast majority of consumers are on the low-end of the income scale. So I think it is a valid question to ask whether the Fed’s desire to drive down interest rates at all costs policy is working. Companies are already borrowing at low rates. They are just not spending. . . .
That being said, civil war, probably not. “It is a gross exaggeration,” says Allan Meltzer, who is a top Fed historian at Carnegie Mellon. “I cannot recall ever learning about riots or civil war even when the Fed made other mistakes.”
Meanwhile, the prognostications of a gentleman named Gerald Celente appear to be gaining a good deal of traction. Here are some of Celente’s thoughts as they appeared in his own Trend Alert newsletter, back in April of 2009:
“Nothing short of total repudiation of our entrenched systems can rescue America,” said Celente. “We are under the control of a two-headed, one party political system. Wall Street controls our financial lives; the media manipulates our minds. These systems cannot be changed from within. There is no alternative. Without a revolution, these institutions will bankrupt the country, keep fighting failed wars, start new ones, and hold us in perpetual intellectual subjugation.”
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“I am calling for an ‘Intellectual Revolution’. I ask American citizens to free their minds from the tyranny of ‘Dumb Think.’ This is a revolution about thinking – not manning the barricades. It’s about brain power – not brute force.”
It would seem that some degree of anger would be required to incite an “Intellectual Revolution” — even one without any acts of insurrection. At this point, it just doesn’t appear as though the American taxpayers are really there yet – Tea Party or not. People who “want their country back” aren’t the people who will lead this charge. Watch out for the people who want their jobs, homes and money back. They will be the ones with the requisite anger to seek real change – as opposed to the “change you can believe in”.