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OECD Fears Middle Class Civil Unrest Is Coming

Tyler Durden's picture




 

Submitted by Martin Armstrong of Armstrong Economics blog,

tax it

This idea that we live in a world where government cares about us is just the biggest propaganda ever. Everyone one will only pursue their own self-interest. The OECD has interesting come out and warned that if governments are unable to stop the transfer of wealth to a small financial elite, the displeasure of the dispossessed middle class could easily turn and go against the prevailing governmental systems. The OECD has claimed to have discovered the existence of a veritable “lumpenproletariat” in the supposedly rich Germany. Even though the systems attempt to provide citizens with bread and circuses in the traditional Roman style to keep them quiet, such  tactics they warn may have now become obsolete after the ultimate circus is over – the World Cup.

The problem with all of these studies is the look at class warfare and not at the consumption of government. They do not follow the breadcrumbs. What if you take everything from the elites? Who will start businesses to create jobs? Who will be left to take as government pensions keep ticking away. In Germany, it has now surpassed 50% of the average persons labor goes to taxes.
 
There are a host of books coming out all about just taxing the rich more ignoring reducing the cost of government. The German bestseller “The plunder of the world” presents just another socialist agenda arguing that the rich get richer even in times of crisis, while the consequences of a crisis are always carried by the lower-income groups and the middle class. It fails to explain that the rich get richer from investment, not wage income. This is an argument to effective tax investment substantially to even out the disparity? But who then creates the jobs that produce anything? Is it that those who invest unfairly make money when the others pay too much in taxes and do not invest? Anyone who thinks that these books are real must be insane. If you think for one second raising the taxes on the rich will mean your taxes will decline – good luck. In Germany, Tax Freedom Day has passed the 50% and even in Canada it is now June 9, 2014. In the United States it is April 21st for 2014.
 
In France, the magazine Challenges has determined that the richest Frenchmen saw their assets in 2013 rise by 15% since they benefit from the profits in foreign companies. There is no discussion that government consumes too much – EVER!
 
German Debt Int%
 

The consequences of unequal distribution of wealth in the world is becoming the tipping point argued and funded by governments to blame the rich – never government. Nobody seems to be doing the math that if you confiscate all that wealth you end up with communism with taxation and government just keeps growing until it consumes everything. We borrow with no intent of paying anything back and that about 70% of the national debts is all interest that built no schools, reduced nobody’s tax bills, and did nothing for the middle class. This is fairly consistent in all major countries. Governments are trying to push interest rates exceptionally lower to reduce their deficits exploiting the middle class creating a disincentive to save even for retirement when it pays next to nothing.

The OECD is now warning like Picketty that a growing gap between rich and poor will erupt into revolution – not that government is taxing too much. According to the words of the OECD Secretary General Jose Angel Gurria, the problem since the global financial and economic crisis has exacerbated massive. “In the first three years of crisis, inequality increased more than in the twelve years before, “he told the Business Week”. On average across OECD countries, the top 10% of the population now earn 9.5 times as much as the lowest 10% but fail to explain this is from investment. Inequality has grown by 35% because stock markets are rising to escape from the craziness of government. The higher they rise, the greater the disparity.

The OECD claims this is clearly felt in the USA more so than Europe omitting the fact that the disparity comes from investment not wages. They they compare that to Europe claiming there is no welfare state in Europe so somehow this is implied to be better. The OECD then highlights supposedly rich Germany as a dangerous development with a rising disparity stating this is “namely that it is a lumpenproletariat, a very poorly trained and poorly paid part of the Arbeiterschich.

The argument now is the middle class civil unrest they know is coming is simply because they have not confiscated the wealth of the investors they call the financial elites. So if you invest and make any money, you are the new financial elites – sorry it is anyone who now invests. Michael Maier’s The plunder of the world is another book released to justify plundering the financial elites without actually identifying who they are. Sorry – it is you.

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Sat, 07/19/2014 - 11:05 | 4976885 Griffin
Griffin's picture

The elites control government and government controls the people. We get a chance to pretend to influence the system every once in a while by voting for one of the options presented to us in this left/right system.

On the other hand the elites influence the govt constantly, they fund politicians, political parties and are involved in every aspect of politics from start to finish.

Like for example in Iceland, recommendations to law changes made to the parliament by the Chamber of commerce had reached a 90% success rate in 06, just prior to the collapse.

The Chamber of commerce is like a interface that links the elites to the government.

If there is a law that stands in their way they simply change it, or if one is needed to help funds flow from the public to private parties, then it is simply created.

It can be in the form of bailouts, Quantitative easing or what ever you want to call it, its basically just taxes.

 

The so called elites in Iceland are starting to crawl from under the stones they have been hiding under for several years now.

They are not as confident as before and the illusion of being untouchable is gone. Some of them are being prosecuted for various scams, like market manipulation and similar types of fraud.

Fatcat being interrogated  https://www.youtube.com/watch?v=DGpQBxpfTBg

 

 

Sat, 07/19/2014 - 12:59 | 4977184 logicalman
logicalman's picture

Not been watching very closely, have you?

 

Fri, 07/18/2014 - 18:41 | 4975632 centerline
centerline's picture

For sure herd.  He really hurts his credibility by doing so.

Fri, 07/18/2014 - 20:59 | 4976047 JR
JR's picture

The American Empire and the American people now exist only to serve the needs of the Federal Reserve System, i.e., the international banking families who own and operate it.

The Fed is at the core of the world's secret power structure as described by Dr. Carroll Quigley in his 1,300 page book, “Tragedy and Hope.”

Never has so much power and wealth been generated by such a massive scam -- by a cartel of international bankers right under our noses and protected by law…

To understand the Fed, its deceptions and the trillions in unearned wealth it generates for the Fed-connected, “just remember that it is a scam” and “then you’ll have no trouble comprehending what’s going on…”

America's Rothschild-birthed monetary system, its central bank, is why the finance industry, the exchange bankers and the stock market grow rich upon currency manipulation – i.e., smoke and mirrors - while today's productive industry and the middle classes grow poorer.

Professor Frederick Soddy in 1943 had the solution to the England’s monetary system problems and the City of London; it still holds today:

“As regards transition stages, fix a price-index on the cost of the more important expenses of an average middle-class householder, require the banks always to keep pound for pound of national money against their current accounts drawable by cheque, set up a national advisory statistical bureau on an independent scientific basis [to see to the stability of the price-level], and reconstitute the mint for the issue of all money. Avoid as the plague schemes for nationalizing banks. The object is to stop private minting and nationalize money itself.”

Or as St. Thomas put it: “The first point of reform is that the creation or issuing of exchange-medium must be taken out of private hands.”

Enduring as the Fed may seem, destroy the faith in the U.S. dollar and its power “will dissolve like mist on a warm morning.”

Fri, 07/18/2014 - 22:35 | 4976296 pods
pods's picture

Exactly right JR.  At the turn of the 19th century, the seed money from the Rothschilds and their ilk led to prosperity (or coincided with prosperity). So much so that many corporations were self-financing our of profits (the horror.)  The large NY banks were actually losing power as the pump was primed and economics was up and running. 

Enter the panic of 1907, which just so happened to set the seed about "regulation" of the moneyed class for the people.

Fast forward to a central bank you have a decade of bubble economy, a crash, national bankruptcy, and a private currency regulated by the very banks who caused it.

Fucking A history books (independent ones) will look back at us with pity.

When the dollar goes, so goes modern America.  From cheap oil, to the rentier class skim America is built on debt creation.  And it will fall with it as well.

pods

Fri, 07/18/2014 - 19:52 | 4975840 Bossman1967
Bossman1967's picture

How will they continue all their excesses if they wipe the middle out.the rich pay the min. And the poor is taking then what. They need us to keep being their slaves

Sat, 07/19/2014 - 16:41 | 4977846 Miggy
Miggy's picture

They will pillage another land. Ukraine is in their sites right now as it holds the infastructure for the vast resources of Russia to all of Europe as we have learned here at ZH.

Skimming is the name of the game. Either through slow melting inflation where the newly printed money has long been spent or high frequency trading the skim game goes on and on.

 

John 3:16

Fri, 07/18/2014 - 20:17 | 4975911 gatorboat
gatorboat's picture

Middle class civil unrest?

You're joking right?

Fri, 07/18/2014 - 20:18 | 4975915 Jumbotron
Jumbotron's picture

More like Fat Ass Resting.

Fri, 07/18/2014 - 16:34 | 4975216 Shocker
Shocker's picture

That might be the new word.. Bottom class

 

Fri, 07/18/2014 - 16:51 | 4975321 toady
toady's picture

Call me when you have no class.

Fri, 07/18/2014 - 16:56 | 4975337 wee-weed up
wee-weed up's picture

 

 

Yep, that's the goal of all totalitarian societies...

The Elites...

And everyone else.

Fri, 07/18/2014 - 18:43 | 4975638 centerline
centerline's picture

hunger games... almost there.  the regions already defined.  just need the roadblocks.

Fri, 07/18/2014 - 19:53 | 4975843 Bossman1967
Bossman1967's picture

Ring ring wont you answer lol

Fri, 07/18/2014 - 16:29 | 4975225 Serfs Up
Serfs Up's picture

My time.  It is coming.

Sat, 07/19/2014 - 01:00 | 4976448 G-R-U-N-T
G-R-U-N-T's picture

You've been smoken' crack 'wee-weed up'? It is precisely economic pain that will cause civil unrest, it will probably be the public sector first as pensions and municipalities begin to fail. They will demand that Washington bails them out and the residual effects will cause yielding tension between the parasites and the producers. This will not end well or perhaps it's the beginning of the end.

Sat, 07/19/2014 - 09:54 | 4976454 G-R-U-N-T
G-R-U-N-T's picture

.

Sat, 07/19/2014 - 09:55 | 4976456 G-R-U-N-T
G-R-U-N-T's picture

.

Sat, 07/19/2014 - 09:55 | 4976459 G-R-U-N-T
G-R-U-N-T's picture

.

Sat, 07/19/2014 - 09:56 | 4976743 G-R-U-N-T
G-R-U-N-T's picture

/

Sat, 07/19/2014 - 11:25 | 4976928 Franktastic
Franktastic's picture

I may be poor, but am rich in brass n lead

Sat, 07/19/2014 - 14:14 | 4977442 TheReplacement
TheReplacement's picture

That is all well and good but what do you do when people have lost everything and they realize they have nothing left to lose?

Sat, 07/19/2014 - 20:31 | 4978506 G-R-U-N-T
G-R-U-N-T's picture

My point, exactly!

Sat, 07/19/2014 - 16:20 | 4977797 Errol
Errol's picture

I don't know what 'douchey' means, but Armstrong sure does need an editor...

Sat, 07/19/2014 - 03:29 | 4976514 matrix2012
matrix2012's picture

@ bunz3x

I do believe those crypto currencies are NSA ones or controlled by the Tribe! Go ahead at your own perils.

Sat, 07/19/2014 - 13:05 | 4977133 shouldvekilledthem
shouldvekilledthem's picture

This site needs moderation. Scammers like this make bitcoiners look bad.

https://www.google.com/webhp?sourceid=chrome-instant&ion=1&espv=2&ie=UTF-8#q=freebitco.in%20scam%3F

 

Legit information on bitcoin:

 https://bitcoin.org/bitcoin.pdf

https://www.weusecoins.com/en/

Popular exchanges:

bitstamp.net, bitcoin.de, bitfinex, coinbase, secondmarket (minimum quatity 25BTC).

Some places accepting btc:

coinmap.org

https://spendbitcoins.com/places/

Price charts:

http://bitcoinity.org/markets 

https://bitcoinwisdom.com/

http://bitcoincharts.com/markets/

Fri, 07/18/2014 - 16:00 | 4975090 Anusocracy
Anusocracy's picture

I favor the Cost of Government Day over the Tax Freedom Day.

It attempts to take into consideration all the Broken Window costs of government.

Fri, 07/18/2014 - 16:50 | 4975319 Kirk2NCC1701
Kirk2NCC1701's picture

Agreed.  By the same token... just WTF are WE doing on ZH to bring about results?

Unless ideas and discussion are translated into Organized Action, it's just "keyboard wanking". 

Lest I be one of these 'wankers', here's one suggestion:  Local ZH chapters that lobby local Congressmen.  Like certain societies, a person can have a public persona, image and activities, and a private (secret) one.  The former is and appears to be part of a grassroots Reform movement, and the latter has a more hidden agenda of completely transforming and re-staffing people in positions of power and influence.  IOW, we outdo TPTB with their Public/Private dichotomy.

p.s. Note that "Democracy is NOT for the scared, dumb, lazy, uninformed or the disorganized."  TPTB are the antithesis of these Loser-attributes, and love sheeple who fit into that mold.

Kirk out

Fri, 07/18/2014 - 17:01 | 4975350 Herd Redirectio...
Herd Redirection Committee's picture

Kirk, when virgins start reforming whorehouses, you know what happens, right?

Fri, 07/18/2014 - 18:19 | 4975572 Cobra
Cobra's picture

Price discovery?

Fri, 07/18/2014 - 20:19 | 4975921 Jumbotron
Jumbotron's picture

No one wants to pay the price on ZeroHedge.

Fri, 07/18/2014 - 19:15 | 4975720 blu
blu's picture

You discover that there are no actual virgins.

Fri, 07/18/2014 - 20:01 | 4975863 Raymond K Hessel
Raymond K Hessel's picture

I'm right there with you Kirk.  

Just one problem on my end.

I know democracy for what it is and what it ain't.  

  • Democracy is mob rule, majority wins, minority loses.  It has no inherent moral compass and is open for manipulation by anyone with the charisma to run it.
  • Democracy ain't protecting freedom or liberty.  It ain't what's needed to run a civil society.  It ain't anything but trouble for people who want to be left alone. 

But I do want to sign up and join some local political office or NGO, say all the right things, let them think I'm on their side and with my fellow ZHers take it all down.  Democrats and Republicans all the same.  Replace them with something better, something new.

O P E R A T I O N   M A Y H E M  !  !  !

When do we start? 

Fri, 07/18/2014 - 20:21 | 4975928 Jumbotron
Jumbotron's picture

There will be nothing new.  Only different.  Soon enough a new elite class will come to the top.

And it won't be you.

And if it IS you....you're neck should be strung up. 

Sat, 07/19/2014 - 14:43 | 4977537 TheReplacement
TheReplacement's picture

Life is a democracy.  The mob either does what it wants or it accedes to a ruler(s).  Either way, it is the mob that decides. 

You can sit back and let the mob do whatever it will, you can join it, or you can try to influence it and guide it toward a goal you can accept.  The choice is yours.

Fri, 07/18/2014 - 22:28 | 4976280 boodles
boodles's picture

I'm in.

Sat, 07/19/2014 - 10:49 | 4976854 Zadig
Zadig's picture

re: Local ZH chapters that lobby local Congressmen.  "Congressman" are puppets.  They will invariably respond to whatever entity has the most guns, money, or blackmail when something important is at stake.  Those entities are currently Sauron, Oligarchs, and the Nazgul respectively.  They will never be "us" under the current despotism.

Sat, 07/19/2014 - 14:26 | 4977481 TheReplacement
TheReplacement's picture

That is a good idea.  I'll take NH.  zhnh@hush.com for contact.

Fri, 07/18/2014 - 15:53 | 4975053 Harbanger
Harbanger's picture

The middle of anything is last to go, it defines and strengthens the whole, the middle expels from both ends and outlasts all.

Fri, 07/18/2014 - 17:10 | 4975374 bbq on whitehou...
bbq on whitehouse lawn's picture

Things fall apart when the center does not hold.

Fri, 07/18/2014 - 17:33 | 4975430 Harbanger
Harbanger's picture

Yes

Sat, 07/19/2014 - 14:56 | 4977566 Amish Hacker
Amish Hacker's picture

And when "The best lack all conviction, while the worst / Are full of passionate intensity..."

Fri, 07/18/2014 - 17:04 | 4975359 Urban Redneck
Urban Redneck's picture

Marx was just couldn't grasp the true utilitarian value of the lumpenproletariat.

Fri, 07/18/2014 - 18:09 | 4975539 Theosebes Goodfellow
Theosebes Goodfellow's picture

Thanks Urban! I couldn't have said it any worse myself.+100

:)

Fri, 07/18/2014 - 17:54 | 4975492 ArkansasAngie
ArkansasAngie's picture

Maybe we should call it bankruptcy distribution instead of tax.

The economy is the biggest tax of all.

Screw'em

Moral Hazard.  It is the .01% that are insolvent

Fri, 07/18/2014 - 19:00 | 4975680 TheGardener
TheGardener's picture

Germany`s Lumpenproletariat toils away at wages not seen since the fall of the Berlin Wall. Adjusted for purchasing power, wages in middle Germany ( commonly referred to as the East) are well below the socialist subsistence earning
days people had to adjust to. Now pay means shit nothing,
single income just pays the families rent.

Daddy out , the welfare queen gets his equivalent earnings and added benefits. Sorry kids.

Fri, 07/18/2014 - 18:45 | 4975622 TheGardener
TheGardener's picture

What a f` of an article. No consistency, no argument, no stringent narrative of any sort. Stupid whinging from an entirely absent minded point of view.

Yes there is an obvious obnoxious Lumpenproletariat developing while the destruction of free capitalism is in it`s finals, but none of your arguments Weakarm make the case. None.

Fri, 07/18/2014 - 14:57 | 4974754 max2205
max2205's picture

Invest and lose money gives you a pass on the group beating?

Fri, 07/18/2014 - 15:47 | 4975018 Matt
Matt's picture

If you invest in government bonds, you are a good guy and are A-OK. It's those evil speculators investing in equities that must be punished.

Fri, 07/18/2014 - 17:31 | 4975425 wee-weed up
wee-weed up's picture

Jackboots will continue on necks until morale improves.

Do NOT follow this link or you will be banned from the site!