A protest in France in January of 2009
The economic crisis – which will probably have some sort of formal name by the time it’s finally over – is entering it’s third year as we move on through 2009 (depending on when you start, I pick the fuzzy date of early 2007). The casualty list of this crisis is too long for anything but a history text to cover, but it includes worldwide the loss of millions of jobs, the plunging into poverty of millions more, countless companies of all sizes, and – so far – two governments.
Fortunately the two governments that have been brought down by this crisis – Iceland and Latvia – look to be heading the normal political route to resolution of their governments in crisis, that is to say they will be voting to choose a new government. So far there hasn’t been mass-scale violence, but the simmering is out there even in the cold months of this winter.
- There have been clashes in Iceland stemming from government handling of the crisis.
- Hundreds of thousands protested in across France in late January
- Greece was shut down by a nationwide strike in late February
- Protests bordered on rioting in Lithuania
- Communists dared to speak out across Putin’s Russia, seeking the ‘stability’ (however false) of the Soviet days
- In China, where they aren’t even in a recession – just a period of slower growth – there have also been protests
The crack about it being cold is not at all meaningless – it is statistically much easier to draw a larger, more annoyed crowd in the summer than it is in the winter. With what is sure to be an economically-charged May Day still weeks away, and a long hot summer coming up after that, one has to wonder exactly how far this could go.
Of course by then things could be getting better. All the untold trillions of dollars pumped into the world economy by every central bank left with the firepower to do such things might finally unclog the financial system, get lending moving again which would in turn get businesses hiring and the economy world-round recovering once more. This is assuming, of course, that things start going right – starting yesterday. All the stimulus in the world still needs time to work through the system, and a jobless & hungry breadwinner is not going to care that the latest x-billion pledged by whatever government will solve the crisis in a few months, that jobless & hungry breadwinner is going to want answers and now. That jobless & hungry breadwinner is going to want to feed his family and know that there is a job around the corner because all he wants to do is simply provide for his family. He doesn’t want to day trade, he doesn’t want to bother himself with nationalization, he doesn’t want to chant and cheer along with rich investors in Chicago, he just wants his family to have a roof over its head and food in their bellies.
A government’s ability to provide concrete assurances of both of the goals of that man will be the measuring stick by which the ultimate stability of that government will have over the course of 2009 and 2010, and to think any differently is simply foolish. Governments that are unable or unwilling to provide convincing assurances to their people that things are going to be okay, and show proof that they are trying to look after the needs of their people, those governments will falter and those governments will fail over the next two years.
Now of course I am not advocating that these governments will fall to violence and blood of yesteryear (or now if you happen to be on the African continent); these government failures will more than likely take the shape of elections bringing sweeping changes to the political landscape of whichever country in question. If there is a conservative or center-right leaning government in that country, it will be replaced by a center-left or liberal government. If there is a coalition government in power, the side that appeals most to the rights of workers (typically left/liberal) will sweep to power. In countries where immigration is an issue, anti-immigration governments (right/conservative) could come to power, promoting regional xenophobia.
While I don’t believe that this economic crisis will drag on long enough to completely reshape the world’s political landscape, I would be flat out lying if I said the chance for such change was zero – it is most assuredly not.
Aftermath of food riots in Hati in 2008
Just last year, when the price of oil took aim at $150 per barrel, the cost of shipping anything and everything was spiking through the roof with disastrous effects on third world economies. Violent protests rocked countries from Egypt to Indonesia as people could not deal with the doubling and tripling of basic staples like rice or water. As the price of oil subsequently dove (due to the death of demand, no less), those fires were collectively put out before their eventuality could be seen – but what would that eventuality look like? Salon.com’s Michael Klare postulates more eloquently than I can:
As people lose confidence in the ability of markets and governments to solve the global crisis, they are likely to erupt into violent protests or to assault others they deem responsible for their plight, including government officials, plant managers, landlords, immigrants and ethnic minorities. (The list could, in the future, prove long and unnerving.) If the present economic disaster turns into what President Obama has referred to as a “lost decade,” the result could be a global landscape filled with economically fueled upheavals.
Indeed, if you want to be grimly impressed, hang a world map on your wall and start inserting red pins where violent episodes have already occurred. Athens (Greece), Longnan (China), Port-au-Prince (Haiti), Riga (Latvia), Santa Cruz (Bolivia), Sofia (Bulgaria), Vilnius (Lithuania) and Vladivostok (Russia) would be a start. Many other cities from Reykjavik, Paris, Rome and Zaragoza to Moscow and Dublin have witnessed huge protests over rising unemployment and falling wages that remained orderly thanks in part to the presence of vast numbers of riot police. If you inserted orange pins at these locations — none as yet in the United States — your map would already look aflame with activity. And if you’re a gambling man or woman, it’s a safe bet that this map will soon be far better populated with red and orange pins.
For the most part, such upheavals, even when violent, are likely to remain localized in nature, and disorganized enough that government forces will be able to bring them under control within days or weeks, even if — as with Athens for six days last December — urban paralysis sets in due to rioting, tear gas and police cordons. That, at least, has been the case so far. It is entirely possible, however, that, as the economic crisis worsens, some of these incidents will metastasize into far more intense and long-lasting events: armed rebellions, military takeovers, civil conflicts, even economically fueled wars between states.
The idea of what is at stake here is so incredibly lost on some out there that it boggles the mind. We are truly all at the whims of the butterfly effect now, for who really would have thought the idea of subprime lending would eventually spiral into an economic crisis that would cause major political change in two countries and counting, and riots in more than a dozen others. Every decision and delay made now on the part of everyone who has a hand in this cookie jar will have very real ramifications on the rest of the world in the decade to come. Also, to those who think that the world’s political stability has nothing to do, really, with our stability and how our nation fares in the next decade, history and logic are so lost on you that there surely is no hope.
While in the final analysis it may be revealed that the final ten years of the post-World War II boom were in fact built on a mountain of false hope and fake assets that propelled the world to a level of affluence it was never supposed to obtain, the fact is that we are slowly coming off of that bubble now and this situation needs to be handled with the utmost care and consideration to potential future impacts, for we are truly dealing with a situation that could spiral out of control at any point in time.
It’s a lot easier with the red of a stock’s loss on your hands than the red of a rioter’s blood.
