Symptoms of how the economic crisis is affecting countries across the globe are starting to threaten the existing socio-political order and stability. The conditions, in fact, appear to becoming endemic. From the United States to South Africa increasing proportions of the population are losing faith in the existing order.
One of the latest alarm bells -- that there is an urgent need to come to grips with the plight of ordinary people – was rung by the deputy governor of the Bank of England, Paul Tucker. Banks must be allowed to fail without taxpayer bailouts or else the next rescue will provoke almost uncontainable levels of public anger. This according to Tucker who is tipped to be the next governor of the Bank.
Speaking at the Institute for International Finance's annual meeting in Tokyo (where the South African Reserve Bank was named the best central bank), Mr Tucker said, “The objective is to get to a position where public money is never used to provide solvency support for a bank failure. This is hugely in the interests of the industry because the effect is to politicise banking.
“If there is to be another episode of massive taxpayer solvency support to sort out a crisis once we’ve eventually got through this one, I think the backlash would be almost uncontainable.”
Other symptoms of the fears that social stability and political systems can come under threat if the global economy and financial system continue to deteriorate, as we reported last week, include:
•Already, in May this year, the British Home Secretary disclosed that the government of the United Kingdom was drawing up plans for emergency immigration controls to curb an influx of Greeks and other European Union residents if the euro zone should collapse. There are growing concerns that if Greece were forced to leave the euro, it would effectively go bankrupt and millions could lose their jobs and consider looking for work abroad. The crisis could spread quickly to other vulnerable countries such as Spain, Ireland and Portugal;
•There has been an upsurge of extremist political right wing activity in even Germany as the German economy started showing vulnerability in recent months. In Greece, so-called “Black Shirt Fascists” have made their appearance on the political scene during protest marches organised by the Golden Dawn movement;
•In South Africa, a report by the National Credit Regulator revealed that the shocking exploitation of vulnerable mining communities by unscrupulous micro-lenders, with practices that include docking debt repayments straight from a worker’s wages, may have played a role in creating the conditions leading to the current unrest in the mining sector;
•In Spain, the integrity of the state has come under pressure as the ruling parties of Catalonia have sought guidance from the European Union in Brussels on the legality of secession from Spain, requesting a “route map” for membership of the European Union and the euro as an independent state. They are demanding an independent treasury for the rich Catalan region, with control over its own tax base akin to the model already enjoyed by the Basques;
•“Democracy is in death, agony, and we are witnessing post-democratic processes taking over at the national and supranational level. EU leaders have further concentrated decision-making power on public and fiscal policies in the hands of an oligarchy of governments, technocrats and the European Central Bank,” wrote Italian anti-privatisation activist Tommaso Fattori in a recent article for Global Research; and
•In the United States there are increasing signs that a huge percentage of Americans might register their loss of faith in the present political system during the November presidential elections by simply staying away from the polls. American economist and 2001 Nobel Prize winner, Joseph Stiglitz. also said in a recent media interview that the so-called American dream has become a myth. “In the last election we had a voter turnout among young people of around 20%. These are the people whose future is most at stake, and 80% of them think it's not worth to vote because it is a rigged system and in the end the banks are going to run the country anyway,” he said.
These examples are only a small cross-section of the symptoms of a dispensation in trouble. There have been numerous examples of economically driven violent protests in both the developed and developing world in recent times. Unless solutions are found soon and the world drops back into recession, widespread feelings of discontent might just transform into an unstoppable global revolutionary spirit.