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Rioting in America?

July 10, 2009 4 comments
No Soup For You

No Soup For You

Today we have a little daydream about what might happen in American society if unemployment were to skyrocket, as it appears very likely to do.

The scenario might go something like this. Official unemployment soars to twenty, may be thirty percent, such that the number of idle males of working age in America is one in three or one in two. They have no money, their children are hungry, their wives are bitter and angry. There is no point staying at home, so the men walk the streets looking for work, looking for food and looking for trouble. The police find themselves becoming busier and busier picking up loiterers and shoplifters or busting swap meets selling black market goods. Everybody is a criminal nowadays, the police say among themselves. Many of these unemployed men have never stolen anything before and did not anticipate the sophistication of modern shop security systems, nor the heavy handedness of some elements of the police force. Scuffles have been breaking out here and there with angry shoppers or at long queues at soup kitchens, but it’s all orderly 30’s Depression style stuff so far.

One day some inner city police come across a disheveled looking man in his thirties, catch him for jay-walking or some other minor offence (he “looks” suspicious). To teach a quick lesson, they ‘taser’ him in broad daylight, in front of a half dozen nuns on their way to a prayer meeting. The event gets filmed by a teenager with a stolen handy-cam. The man resists and is zapped again, then kicked, and so on. The nuns look on in horror and fear. A police officer sees the teenager filming and confronts the kid, who flees. The kid gets caught and beaten, a short distance up the road. One policeman gets a flower pot thrown on his head by a woman looking down from her apartment above. The nuns rush to the policeman’s aid. Reinforcements arrive in the form of riot police. The nuns are mistaken for having assaulted the police officer (who can’t remember anything) and are arrested and beaten. Every one in sight is rounded up and driven off to detention. Two of the six nuns die en route from heart attacks, since they are in their late eighties. None of this appears in any newspaper or any news network for some days, as is the new policy of media outlets “in the interests of public peace and fairness”.

Almost the same thing happened a week before, but no one heard about it because there was no captured footage. There are only rumours. On this occasion, however, a police clerk handling the evidence happens to be related to one of the deceased nuns and leaks the confiscated video footage, in high definition, on Youtube. People instantly recognize the disheveled looking man as the local guy who runs the soup kitchen network (affectionally known as “Stan The Soup Man”). The local Catholic bishop expresses his outrage at the death of two nuns. Everybody in the city takes to the streets demanding the release of Stan The Soup Man, including the mayor and the bishop. It’s all peaceful, albeit noisy. Most of the people in the crowd have come as families of the unemployed men; wives, children, babies, pet dogs.

They march to police headquarters, demanding an explanation. The police chief is there, on the top step, about to give an announcement of apology and an explanation of events, hoping to assure the crowd that Stan The Soup Man is okay and was merely detained for questioning over an unrelated matter. Just in case, riot police are assembled out of view, a couple of streets away. They are told by their superior officer that “it’s nuttin’ much, just a bunch of women and kids”. However, during his speech, unbenknownst to the police chief, Stan The Soup Man now lay unconscious in a prison cell, bleeding into his head. He was fine several minutes ago, but Stan was always very sensitive about his Hispanic roots, and one police guard had just made a racist taunt agains him. Stan couldn’t hold back and said something in return. A beating ensues, and now Stan was minutes away from inevitable death. At the closing words of the police chief’s speech, an SMS message is received from within the police compound that Stan had just died. Chaos and a blood bath ensues. Women and children are shot and killed. Within hours, protests, sit ins, and riots across the country break out.

It’s not difficult for such an even to happen. Similar mistakes are made by the police, probably every few minutes, but like stray sparks of an electric motor, they mean nothing unless the surrounding conditions are such that an explosion results. Looking at the various developments in the US economy currently, with nationalization of the remnants of US manufacturing, the loss of over 400,000 jobs per month around the country and the increasing aggressiveness, both politically and economically, of America’s biggest trading partner, China, it is very likely that an explosive social situation will develop soon.

There is nothing, currently, to prevent the coming dip in living standards headed for the United States. That said, there is a long way for those standards to fall before one could consider America ‘poor’. The task for government lies in preventing poverty to turn to hunger and starvation. It is when the most basic needs of people are not met that civil disorder becomes most likely.

Will the Obama administration find within itself the skills and wisdom to carry out the successful rescue of the coming wave of an American Underclass? This is not likely, given how poorly eveyrthing else has been managed. The White House itself appears directionless and desperate. All they have is contingency plans, but no way forward, despite all the rhetoric to the contrary. It’s also not realistic to see an atheist, materialistic regime embarking on any kind of genuine charitable enterprise. To US Government policy makers, people are not souls, but numbers and statistics. They are a resource to be managed and exploited. The War on Drugs is the clearest example of how decisions are made in America, where two thirds of the prison population are there because of drug related crimes.

The likely path to be taken by America is to boost its military. It will come in the mass recruitment of the unemployed in exchange for food stamps, housing assistance and health insurance. If there are no wars to fight, the soldiers can be let loose on America’s streets to “help” the police, or to clean the streets, or do some other brain-numbing task. This may be the lesser of two evils, and would likely be sold to the public as such, but it can only result in the further brutalisation and dehumanisaiton of American society.

Prepare for the Big Dipper

July 8, 2009 2 comments

A report on MSN news estimates US unemployment at 20%, citing inaccuracies and bias in data collection and methods of calculating the unemployment rate in America. Ah, America, the nation where Freedom of Speech really means freedom of the rich to tell lies with impunity. It’s the nation drunk on ignorance, the land of make-believe, where Michael Jackson with his Neverland and Disney with his Disneyland were quite at home and nothing out of the ordinary.

unemployment us

Any reports about economic developments, positive or negative, coming out of mainstream U.S. media, need to be taken with a grain of salt. However, when you get an official unemployment rate at just under 10% (which people think is already staggeringly high), and an expert opinion claiming it is more like 20%, it’s worth a second thought. There certainly has been an ongoing trend of absolute bollocks posing as news over the past few years. The Iraq War was going to be a rip-roaring success, with soldiers greeted by cute Iraqi children in folk dress, with tears of joy, laying flowers at the curbside as American tanks rolled in. It was supposed to usher in a “new Springtime” for the US economy and peace in the Middle East. The Lehman Bros. company collapse was going to be isolated, easily patched up. The world would chuckle and move on. That is, according to all the major newspapers and news networks. Many people suspected, however, that it was complete rubbish. They were dead right.

What can be predicted from a society that lies to itself to the extent that occurs in America is the same as could be predicted of a con man. People believe him at first, but after a while the trail of destruction becomes a little too obvious, the cons too ambitious, and suddenly a few intelligent people take the time to do a bit of background reading. Soon enough, the con man is busted and the game is up.

This brings us to another issue: expiring unemployment benefits. Continuing unemployment claims fell 53,000 to 6.7 million last week, but Deutsche Bank’s chief U.S. economist Joseph LaVorgna wonders how much of this decline is due people exhausting their standard 26-week benefit. He says: “We are concerned about what will happen when a significant share of out-of-work individuals’ benefits completely expire, because this could lead consumer spending to re-weaken, hence jeopardizing a fragile recovery.”

It’s likely  that unemployment is massively understated in America, as it is in most countries. No politician likes to boast about the figures, and aspiring politicians are cautious to doubt them, lest they themselves get elected and are forced to revise the figures upwards.

The usefulness of this information lies in avoiding bad investments in the short term (like shares or apartments), and planning for one’s own unemployment. A 1 in 5 figure means that any safety nets in place are likely to be already strained to breaking point. If the figure advances to 2 in 5, then the term “safety net” is not even worth remembering. At this stage, people ought to stop believing newspapers and be well on their way to preparing to hunker down for a long, cold economic winter. Survival is the name of the game now.

Industries likely to ride out the difficult times are those that provide essential services, support military infrastructure or produce food. However, for America, new opportunities are going to appear when, finally, the U.S. dollar collapses. Local manufacturing will suddenly become a good idea, but at the expense of working conditions. Belonging to the military will suddenly become an obviously bad idea. What exists now in Mexico is prehaps a foretaste of things to come for those who are North of the Border. Who knows, there may not even be a border anymore.

Rephrasing Bloomberg

July 6, 2009 1 comment
Men In Suits

Men In Suits

Articles on Bloomberg are entertaining, juicy, and just a tad biased. That’s what makes Bloomberg a much better read than most news outlets (since the news is additionally entertaining and juicy).

In a recent article with the understated and rather misleading title “Goldman Sach’s Investment in Trading Code Put at Risk by Theft”, a computer geek employed at the company is accused of running off with a vital piece of company software, it is quoted:

Aleynikov transferred the code, which is worth millions of dollars, to a computer server in Germany, and others may have had access to it, Facciponti said, adding that New York-based Goldman Sachs may be harmed if the software is disseminated.

The man was travelling. Anyone who knows about travel in the United States understands that one must not, under any circumstances, carry any information on a hard drive that could be worth something to anyone. So it is standard practice to transfer one’s information (including any projects one might be working on) in a secure manner to the Internet, like a VPN, and securely wiping the hard drive prior to leaving for the airport.

But the comment that makes one laugh comes from the prosecution:

The prosecutor added, “Once it is out there, anybody will be able to use this, and their market share will be adversely affected.”

The proprietary code lets the firm do “sophisticated, high-speed and high-volume trades on various stock and commodities markets,” prosecutors said in court papers. The trades generate “many millions of dollars” each year.

In other words, the software allows Goldman Sachs to, basically, cheat. And if the software was released, it would let everybody, well, cheat. And that would not be fair, because it goes against the whole principle of, err, cheating. That is, if everybody cheats the same way, then it ceases to be cheating.

The defense attorney is also quoted:

“If Goldman Sachs cannot possibly protect this kind of proprietary information that the government wants you to think is worth the entire United States market, one has to question how they plan to accommodate every other breach,” she said.

The defense is right of course, but it’s not that the government has any more dignity to lose. Many know very well how Wall Street operates and how the government helps, but not everybody believes it yet.

Perhaps George H.W. Bush’s infamous 2006 quotation will some day come true:

“if the American people knew what we have done, they would string us up from the lamp posts.”

Perhaps the real worry for Goldman Sachs is that the leakage of such sensitive software would reveal just how the markets are rigged by the big players, and how the honest majority is swindled at every turn.