- Yet

Recently Karl Deninnger has been screaming for direct action in the streets of Washington D.C. He is understandably livid about the fraud and lying and theft that exist at the very heart and soul of our current financial crisis. He is apoplectic about the fact that scoundrels like Paulson and Bernanke and Kashkari are spending the taxpayers’ money and giving it away to who-knows-who, and that the banks and financial institutions who are receiving these ill-gotten gains are keeping everything a secret and hiding trillions of dollars in toxic assets from us, and that the FED is simply laughing at us as we hem and haw about how angry we are. And I could not agree with Denninger more. I too am beside myself. There are times when I become so enraged at how rotten these folks are that I have to take a break from my readings and studies and take a deep breath, throw back a big cup of Joe, and gobble down a few pieces of chocolate.

But as angry as I am, I need to point out that Karl Denninger’s calls for thousands of angry people to hit the streets in protest is not, at this juncture, a reasonable expectation. And I’m not talking about apathy here. There is no reason for people---other than a cadre of intellectuals and a few 401K losers---to take to the streets because there is little to no real suffering yet. Now would I be surprised if I read tomorrow that 2000 people had protested in front of the Capitol building in an effort to stop Barney Frank and his legion of idiots from giving Heinrich Paulson the “other” 350 Billion dollars of the TARP? No, I wouldn’t. Would I be surprised if 50 of them were arrested for blocking the doors, or sitting in the streets and chanting silly slogans like “hell no, we won’t go” until the cops came and carted them off to jail for a couple of hours. Nope, it wouldn’t surprise me in the least. I’ve been there. I’ve been to jail for anti-Apartheid protests and anti-war protests. A few hours in jail, maybe overnight, that’s all. And these actions may have felt like a big deal at the time, but it is important to note that I wasn’t suffering. I wasn’t a Black man living in South Africa. I wasn’t a soldier fighting in the war. I was an angry kid fighting for ideas in which I believed, but I wasn’t hungry or homeless or cold or unemployed or unable to feed my children.

Here’s my point: It is real suffering that precipitates civil unrest of a violent, widespread and chaotic nature. When the unemployment rate hits 20% in cities like New York and Houston and LA by the winter of 2010, and when the United States of America experiences its first cholera outbreak in over a century because the water supply in a major urban area becomes contaminated with raw sewage, and when there simply isn’t enough food to go around, and when homeless children begin dying in their parents’ arms---then and only then will Denninger see the streets of Washington D.C. running red with blood.

Take a close look at American history, at the past 150 years, give or take a decade or two, when have we witnessed the most virulent and radical moments of civil unrest. The Vietnam War? Not really. I mean the National Student Strike was pretty dramatic, as was Kent State, but the anti-war movement was not a movement of hungry, poor, homeless, cold, unemployed people. It was predominantly a movement of smart, angry students who were dovetailing on the civil rights movement and the free speech movement and who had become relatively radicalized though emulating the actions of such groups as The Black Panther Party. And what about the aforementioned Civil Rights Movement? Certainly the racist reaction against the civil rights protesters was violent, and yes there was rioting and civil unrest, but again this was a movement based to a great extent upon an idea---in this case the idea of freedom and equality---and not as much upon mass suffering. Yes, I am willing to admit that toiling under a racist regime is a form of suffering, and it is powerful, but it is still different from the physical, visceral suffering caused by hunger. And so I would posit that movements based upon ideas, while at times quite volatile, are simply not the same as actions taken by people who have nothing left to lose. The actions of those who are losing their homes, losing their jobs, losing their farms, losing their food---these are the actions of men and women whose reaction is based upon a direct threat to their actual survival! And the objects of their wrath are the people who both symbolize and represent their suffering. A couple of examples:

The anti-Renter movement of the 1830s and 1840s in upstate New York was a response to both the mass unemployment that followed the economic Panic of 1837 and the manorial system that existed in this part of US during this era. A few families owned virtually all of the land upon which the tenant farmers lived and worked. When money was tight the landlords could raise rents with impunity: that is until the renters began organizing and eventually battling against the landlord’s agents in a guerilla style “war” that lasted near a decade. The Baltimore Riots of 1835---which ignited in response to a bank collapse and a loss by depositors of all of their savings---saw the attacks upon and burnings of the homes of bank officials as well as of the mayor of the city. Battles in the streets with the police lasted for days. Now some might argue that this situation is absolutely synonymous with today’s financial collapse: but remember, in 1835 money had yet to become a digitized commodity. Additionally, this was a pre-insurance, pre-market diversified monetary environment. When the bank collapsed, that was that. And the folks who lost their money knew from bitter experience that soon enough they would be hungry and homeless. Not so today. While homelessness and poverty are sure to explode during the next few years, at this point there is still food to be had, social services to be tapped, shelters to be filled. You and I are not hungry….yet.

And there were more: The Flour Riots of 1837, The Unemployment Riots of 1857, The Labor Riots of 1863, The Railroad Strikes and Riots of 1877, etc.

I hope my point is clear: Civil unrest in the United States will occur again when people who are not accustomed to being homeless, hungry, unemployed and cold find themselves so. And this time it’s going to be far worse than it was 175 years ago, because we’re talking a helluva lot more people than we were in the mid-19th century, and we’re talking a society that has come to rely upon grocery stores and fast food restaurants and electric blankets rather than upon farming and milling and hunting and curing and chopping and building. And lest we forget: this is the Internet age, the YouTube society. One outburst of anger, one battle in the streets, one case of police brutality, and the whole thing blows. And when the shit hits the fan this time, it’s going to bring our federal government to the brink of collapse and failure. Because the government simply is not going to have neither the money nor the resources to house and feed 25 million hungry, homeless, unemployed people. And so of course George Bush sent the “Big 3” 20 Billion Dollars! It’s not that he gives a shit about the workers. It’s also arguable that he is not spending the money to preserve at least a small portion of his legacy from riding the Stygian ferry into the fires of hell. No, he’s spending the money because he doesn’t want to have to respond to mass civil unrest as his presidency comes to an unceremonious close. He doesn’t want to be the last President of the United States Republic!! And that’s why Paulson and his band of merry scumbags are throwing money at anything they can throw money at. It’s not simply because Paulson wants to send his cronies off in style: that argument, while partially true, is over-determined. The reason for the trillions and trillions being tossed hither and thither like beads at a Mardi Gras parade is because these guys really are scared that the rioters and looters could actually come to a city---and neighborhood---near theirs.

And the thing is folks, it IS going to happen. It’s not an “if”, it’s a “when”. There is of course no way to avoid the poverty and hunger and homelessness and mass unemployment that are going to hit the United States like a tsunami. The derivatives Ponzi scammers and the Madoff’s and the fraudulent lenders and the fraudulent mortgage companies and the fraudulent ratings agencies and the fraudulent accountants---all of these folks and more have created a situation in which the quadrillion dollar debt dam must eventually burst. And Paulson and his cronies are desperately trying to kick the can down the road, and Obama and his cronies will kick the can further with their trillion dollar stimulus packages and tra la la la, but at some point the can is going fall into the sea. No more kicking. The gig will be up. And that’s when Karl Denninger can sit back and watch Washington and New York burn to the ground.