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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Seer's picture

"When are leaders going to start acting like leaders, and showing some accountabilty and responsibility for their actions?"

When people stop FOLLOWING them?  And at that point they'll ("leaders") will be out of "jobs" no?

EVERYONE is involved here.  It seems odd to, on one hand, say that blaming others is a problem and, on the other hand, THEN go about pointing to/at others!

Yen Cross's picture

     I agree. Let's wash our dirty hands and "Man -Up".  No person chooses his or her time to shine in the face of adversity.

  More often then not, individuals find their "true"self worth in times of crisis..

market le pew's picture

The middle class will riot when they are no longer middle class but belong to the "great unwashed". In fact, it's already starting in some countries. Look at the middle east. Look at the recent french elections. Eventually even the ignorant Americans will wake up. Having said that, I'll take that back about the Septics. The great nation of America is so ignorant they will never wake up.

F.A. Hayek's picture

I think a public school 6th grader wrote this article. 3 paragraphs in and my judgement is 'horrible.'

dark_matter's picture

Three paragraphs in? The first line:

"This idea that we live in a world where government cares about us is just the biggest propaganda ever"

sounds like a kid in junior high wrote it.  

Monty Burns's picture

Agreed, the article is riddled with errors in grammar and syntax. If he can'r write properly why doesn't he get some one to edit his material.

Tall Tom's picture

Perhaps he did. Perhaps he hired a Seventh Grader...

IllKeepMine's picture

We are tired of the Fed making our meager savings worthless.  We are tired of having our numbers diluted so our value as workers plumets.  We are tired of government creating programs to feed the lazy from our kitchen tables.  We are tired of being taken advantage of by the banks, stolen from by wall street and lied to by the government.  We are tired of the press being the propaganda arm of the government when they should be protecting the people from the tyrants in power.  For these transgressions and many others we, the middle class, find the aforementioned guilty.  

SmallerGovNow2's picture

+1,000.  and judging from your avatar, the government best not fuck with you...  (-:

SmallerGovNow2's picture

+1,000.  and judging from your avatar, the government best not fuck with you...  (-:

SmallerGovNow2's picture

+1,000.  and judging from your avatar, the government best not fuck with you...  (-:

Shizzmoney's picture

There isn't a middle class, what are you talking about?

Seasmoke's picture

Hank Paulson opened Pandoras Box......there aint no closing it now!

Ariadne's picture

The OECD lurks around zh...

Obaminator's picture

Here is a question: How exactly is the "Middle" Class supposed to revolt and cause an "Uprising" or Civil Unrest when:

a) 50% of families ALREADY receive food stamps and FREE Money (Revolt about what?)

b) 25% of ALL US workers are Government employees/police/etc (They sure as hell are not going to Revolt)

c) 20% of All US Workers are in the medical Field and thus Make WAY more than the "averge Hiew" - They sure as hell are not going to revolt.

d) 50% of the remaining workers STILL make more than the "Average"

e) That leaves about 1/3rd of the workers that earn junk to revolt against the other 2/3rd of working class AND the 50% of leeches that received FREE money.

In other words: WHO exactly is this mysterious "Middle Class" HAHAHAHAHA LMAOROTF

Good luck with that one guys...Good luck.

Yen Cross's picture

  The devaluation of the USD through the "Federal Reserve of Printing" to export inflation a defer interest owed, will take care of all your line items.

  The Fed isn't stopping QE because they want to. They just can't hide or justify the the creeping inflation through devaluation anymore. Unknown-employment is only( cough* cough*) 6.3-.1%

Obaminator's picture

I used to think that way...in 2008 I really thought it was the start of it. My thinking was flawed because I relied too much on "Rational" thinking, and not enough on the games being played, and just HOW FAR these fucks will go to continue playing. 98% devaluation in dollar since 1913 - 50X - in 100 yrs...and that wasnt ENOUGH to cause civil unrest...they suceeded in Boiling the frog alive, and the from ASKS for more still.

We aint seen nothing yet. And the people en mass will BEG for more. No unrest en mass.

No it wont. And if it does, it may take 20-30 years...by which time we wont be using money, we will almost ALL be living on govt dole somehow.

Game is fixed...there is no "Middle" class willing to uprsise...the real Middle Class is TOO BUSY working.

When Everyone Around you is worse off than you...you can afford to play these sorts of game.

No Civil Unrest in America unless a SUDDEN unexpected event happens...and the Federal reserves policies are neither Sudden, not unexpected.

Yen Cross's picture

  Great comment. Thanks for sharing some good thoughts and ideas with me.

   The only flaw in your argument is that we live in an "finite" ecosystem. When the government can't afford to provide for the serfs without sustaining it's own debtload the spigots will shut off.

  Endless printing only makes things more expensive, as we have limited availabilty to produce resources... Imagine a rope, "ïf you will"   with .gov on one end and useless eaters on the other end.

 At some point the centrifugal force will cause the rope to seperate. The force being "devaluation".

p00k1e's picture

We all indirectly live on the government dole now.

Where do your customers get their money? 

The party storeowner may buy your widget, but he gets his money from EBT. 
The banker may buy your widget, but his industry is supported by ZIRP. 
The white shirt guy may buy your widget, but he is a defense contractor or a subsidized farmer. 

Etceteras…

Yen Cross's picture

  Your argument is valid and I respect it. I'm self employed, from a very young age. (it would be virtually impossible with the regs. today)

 

Nick Jihad's picture

Agreed. It's not so easy to distinguish those on the dole from those under the yoke. My brother's family is a good case in point. He has worked in private-sector engineering all his life, and has coped with the offshoring, the downsizing, the H1-B competition and every other stress on that industry. His wife works for local education, and enjoys all the perks of government pay and benefits, plus feminine affirmative action, but every dollar she earns is taxed at his top marginal rate, and her pension fund is rated as one of the most underfunded in the nation.

Added together, and it's kind of a wash, for now.

boattrash's picture

Obaminator, It seems all of your points rely upon everything operating "as is".

Look at it through the glasses of a collapsed currency, where $1 FRN is worth less than 1 square of toilet paper.

a. most of this group live as neighbors, inner cities. What % would remain after 2wks of riots?

b. see above, a. If these people don't do right, they'll be targets (besides, a bankrupt Govt that can't pay employees won't Keep employees. What % of them remain?

c.Med. workers, somewhat stable, But, fewer people needed, as many will treat themselves and family. I've stitched myself before, and would again, as well as stitching others. ALL won't go in at first sniffle, (and cosmetic shit will be near nil. PS their FRNs will also lose out, resulting in lower standard of living, hence promoting revolt.

d. Not all things revolve around how much you make, but what you can DO.That changes those %'s.

e.See all above, a-d. IMHO, my #s add up differently than yours.

gcjohns1971's picture

The problem isn't the average.

The problem is that the efforts of about 15-20% of the working age population is directly supporting the ENTIRE population.

315 million people.

About 80 million wage earners.

About 55 million of them are private wage earners.

 

55 million people are the tit from whom the rest feed.

What if they simply took an unnounced week off?

MASTER OF UNIVERSE's picture

The 'middle class' BRICS are taking market share away from the shitty

USA petro-dollar 'Elites' and 1%er Americans as we write here. It's a done fucking deal, motherfucker, and I, for one, am watching how the Global 'middle class' are going to turn their backs on the American markets en masse and then watch as you scream bloody murder all over the Internet when you find that the American ruling 1%ers are preparing to move your sorry ass out to a concentration camp for enforced work detail and eventual death, smart ass. The 'middle classes' all over the world are going to be the last to laugh and not the Americans. Every country in the world wants to see the United States of America get just deserts for the oppression that the USA foisted upon everyone in the world for over a century now. You will be starved out of existence en masse and when the American masses finally figure it out they will go absolutely medievil on your ass for a fucking slice of day old bread.

Monty Burns's picture

Simple answer: The money won't last. Or else it will be vastly diluted due to QE-induced inflation.  Either way the FSA/Gov employees lose.

falak pema's picture

The idea that government serves the people died on Aldous Huxley day with a big Texas Bang.

From then on the State has been hijacked by Oligarchs pretending they serve the common good. 

Remember FDR gave the people the right to fight the Oligarchs. Tammany Hall was replaced by La Guardia...

Now La Gaurdia's ghost walks the street of NY like a hobo... 

Don't CONFUSE La Gaurdia and Lady Lagarde...That says it all ! 

Nick Jihad's picture

Why do we have to constantly debunk this conspiracy theory?  Let's look at the facts:

70% of Federal spending takes the form of "direct payments" - checks mailed out to individuals, for Social Security, Medicare benefits, WIC, EBT, etc etc. etc. As we all know, women cash most of these checks, and men pay most of these taxes.  And women comprise a majority of the electorate, so it's no mystery why government programs that benefit women, and taxes that fall mostly on men, succeed at the polls.

That is the foundation of the system, and you see it in any democratic state on planet earth. Now, do "Oligarchs" contrive to skim a lot of the money that flows thru this system? Yes they do, but don't mislead yourself. Big government continues to serve the people that vote for it.

Stuck on Zero's picture

Is Martin Armstrong a paid shill for Warren Buffet?

 

calltoaccount's picture

He had to promise to issue pro sociopath bankster drivel like this to get out of prison.  

Shows how almost anyone can be compelled to kneel before the throne of Mamon.

juggalo1's picture

Transfer of wealth upwards via rigged markets and government favoritism: Libertarians complain

Transfer of wealth downwards via progressive taxation and state intervention into the economy: Libertarians complain

Do you really think that non-intervention in the economy would be effectual or even possible?

Pareto's picture

It is this linear thinking that keeps this war of economic paradigms ideological and distractive as opposed to economic activity being practical and purposeful.  Intervention distorts markets, and misprices capital and the results are ALWAYS the same.  Those underserving remain rewarded at the expense of those who had no interest in playing the charade to begin with.  By all measures government has failed.  Hidiously.  What you are effectively saying is that without redistribution measures, or, price falsification measures we wouldn't be able to have an economy.  I would argue that it is intervention that is limiting the economy to sub 2% GDP.  Incentives matter.  Change the rules for some and not others and you change the incentives - usually away from voluntary production and exchange of scarce resources to something ALWAYS less efficient.  The Libertarian paradigm is not complicated nor should it be something feared as some economically dysfunctional or unfair process.  On the contrary, it promotes on its own - without intervention - the greatest value to everybody who participates and the least value to those who choose not to.  I will take this freedom any day over coercion and bullshit economics.  It is geting to the point where the price I pay for those that choose not to work is killing my ability to look after myself.  The current paradigm is morally bankrupt.  Bring on the reset because most of us really don't have a whole lot to lose.

curbyourrisk's picture

The Fourth Turning........ 

 

shit about to get real

kurt's picture

You can turn a piano but you can't turn a fish.

Yes_Questions's picture

 

 

Gary Richrath called..

TalkToLind's picture

Governments exist only to sustain themselves by stealing your wealth and productivity.  They serve no other purpose.

The End

grekko's picture

Here in the USSA, they exist only to serve their bankster and MIC masters.

Miggy's picture

The article says: "What if you take everything from the elites? Who will start businesses to create jobs?"

 

The answer to that would be you and me. Try selling fruit from a local farmer in your neighborhood. You would have government officials on you so fast. Make sure your ten year old daughter selling lemonaid has her permit.

 

John 3:16

optimator's picture

The Elites are dived into classes.  One would start by taking it away from the Bankster Cartel.  You know the money changers that have never done a productive honest days work in their lives.

knukles's picture

That's why the story of Jesus casting the moneychangers from the Temple.
Then again, Buddha did have an AMEX Black Card

Yen Cross's picture

  Jesus had tungsten and Buddha had titanium knuks...  For the bejesus get your story straight.  :-)

messymerry's picture

...and Confucious had cheesecake.  Good grief Yen, get your story straight.  ;-D

SilverMoneyBags's picture

What middle class? lulz

1stepcloser's picture

the newly minted American's flooding the boarder are the new middle class...

kchrisc's picture

Time for the farm animals to say enough and cook the farmers.

optimator's picture

We have our own "Lumpenpack".

Usura's picture

Martin Armstrong was broken during his incarceration.  Now he serves his former captors.

The notion of fair (increased) taxation on "financial elites" is an obvious red herring and Armstrong knows it.  Ill-gotten gains should not be taxed, they should be fully confiscated as the proceeds of crime.  Martin Armstrong is smart enough to know the difference between an investor and a thief; his attempt to blurr this obvious line makes him appear as a buffoon.

Usura's picture

Martin Armstrong was broken during his incarceration.  Now he serves his former captors.

The notion of fair (increased) taxation on "financial elites" is an obvious red herring and Armstrong knows it.  Ill-gotten gains should not be taxed, they should be fully confiscated as the proceeds of crime.  Martin Armstrong is smart enough to know the difference between an investor and a thief; his attempt to blurr this obvious line makes him appear as a buffoon.