Thoughts on Social Unrest

In America, hopelessness reigns supreme.

Over the past few years, this sad reality is evidenced by the explosion of social movements.  The rise of Black Lives Matter, the taking a knee to the National Anthem, reemergence of neo-Nazis and, most recently, the “safe space” movements on college campuses which embrace violence to protest conservative speakers.

All of these are symptomatic of an underlying frustration born of a lack of hope. This lack has manifested in race riots in Charlottesville and Baltimore as well as the more radicalized politics of Donald Trump and Bernie Sanders. At first, both of those candidates were considered so far removed from main stream politics that their supporters were the brunt of jokes and mockery. Yet here we are with Donald Trump as President and Bernie Sanders still supported by a loyal following.

While at first glance these protests seem to be about race, immigration or opposition to Donald Trump, I think they are really about hopelessness fueled by the dire state of our economy.

The U.S. economy has been growing steadily the last eight years. First, slowly under Obama, and now having taken off under Trump. The stock market is booming and job growth has begun. Yet, median incomes remain $60,000 and the average college debt is more than $30,000. The average cost of a house is upwards of $200,000. Even a decent apartment is beyond the financial reach of many.

Realizing that most Americans need more money in their pockets, the Trump Administration passed the new tax law which should help many Americans. Yet it sparked outrage among the Left. I think their reaction to the tax plan is based upon fear. With so many people living on the government dole, there is a general concern that since taxpayers will now be paying less taxes, less money will be going to fund these government dependency programs and that is the heart of the Left’s base. However, we are twenty trillion dollars in debt, with no solution in sight as private and public debt soar, so its beyond perplexing that the Left is worried about a new tax law rather than the massive amount of debt that hangs over all of our heads.

Not only is there little outrage over this massive debt, but there is virtually no outrage over the fact that Social Security is run as a Ponzi scheme. Everyone knows this. There are no segregated accounts and younger people pay for elderly peoples’ retirements. This farce could only be maintained in the public sector. Try to run a Ponzi scheme in the private sector, the way the government has run Social Security, and you’d likely wind up in prison.

Oh, right. Charles Ponzi did.

While the U.S. economy as a whole is not run as a Ponzi scheme, there have been many other schemes run on an unassuming and unaware public in order to keep the economy chugging along. These schemes have created massive advantages to the players who knew when, and how, the levers of profitability were being pulled. For example, the main beneficiaries of our economy have been people who had access to capital. Most recently, the wealthy have been able to benefit from the rise in the housing, stock markets and hard assets like gold. Those who cannot afford to play on the fields of banking, borrowing and investment, salaried employees who live on fixed wages, have (to the contrary) seen their purchasing power eroded at the same time those select few have been amassing fortunes.

The irony is that we are a nation with amazing economic numbers to be envied; yet, only a few have benefited from the boom.

It’s hard to wrap your brain around the reality that as asset prices soar so many are struggling and getting poorer. Even the mainstream media has a hard time understanding this paradox and, consequently, seems unable to accurately report it. So much so that when they cover the protests they report on the event (such as a Blacks Lives Matter march) as if in an intellectual vacuum while failing to report of the frustration that fuels the event.

Many years ago, I took a course on counter-terrorism presented by a British Royal Marine instructor who talked about how the British kept Northern Ireland in check. During one of the discussions, a senior U.S. Marine Officer made an observation about how U.S. Inner cities had become like war zones (think: downtown Detroit and parts of Baltimore). He  remarked on the steps our government took to make these places safer. One of things he cited was the role of the U.S. Post Office. It was, essentially, a jobs program for the underclass. The Post Office provided middle income jobs for people who really had no other economic alternatives. Those jobs acted as a stabilizing effect in the troubled cities.

The Officer’s comment bothered me. It was the first time I had grasped this notion: the U.S. government actually implemented jobs’ programs to pay off its citizens. What this Officer was really saying was that there would always be two economies: one for the poor and disenfranchised (who needed to be “paid off”) and one for everyone else.

Now twenty years later, as I reflect on his comments, the unrest and riots are getting worse.

I have often lived on the fringes of urban housing and substandard areas. As a result, I am intimately familiar with the frustration and rage that exists in those neighborhoods. Imagine how you would feel if you could look across the street and see your neighbors living the life of luxury while you knew your economic situation would never change. Many thought urban housing would provide a respite for families living in areas where typical housing was beyond their financial reality. However, all the project and subsidized housing did was assure that those who moved in stayed, or were stuck there, for generations. Like Lyndon Johnson’s War on Poverty, government largess creates more poverty.

What the U.S. economy really needs is a reality check and a return to normalcy. There are really only a few ways to do that and one is more likely that all the others. With twenty trillion dollars in debt resting on the backs of those least able to afford it, massive default is the probable outcome.

If you don’t think that causes hopelessness you’re just not paying attention.

Steve

sleeclark@gmail.com