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US Economy Still on Life Support

Zombies Born of Government Spending

Politics / Government Spending Aug 21, 2011 - 01:52 PM GMT

By: Bill_Bonner

Politics

Best Financial Markets Analysis ArticleZombie, zombie in the night
Making cities burn so bright
What immortal hand could frame
Thy fearful symmetry?


Yes, dear reader, the mobs are getting angry. Here’s the story from Germany:

Far-left extremists are specifically targeting German luxury cars, symbols of the country’s wealth and power, bringing the total number of vehicles torched in the German capital this year to at least 138, more than double the figure for all of 2010.

The rise in Berlin car burnings coincides with widespread lawlessness that erupted last week across England. More than 1,500 people were arrested as rioters looted shops, attacked bystanders and burnt autos. In Berlin, far-left extremists are specifically targeting German luxury cars, symbols of the country’s wealth and export prowess, police said.

“The arsonists want to hit what they say are ‘Fat Cats,’” Berlin police spokesman Michael Gassen said. A special unit is investigating the fires as political crimes after the police received letters claiming responsibility that derided globalization, gentrification and rising rents, he said.

In England they steal clothes. On the continent, they burn cars. Thousands of Renaults and Citroens have been torched in France in recent years. Now, they’re burning BMWs and Mercedes.

But what do zombies do in America? Do they steal clothes? Burn cars? Or join the Tea Party?

First, we need to define our terms. This is a serious matter. And people are beginning to use the word ‘zombie’ too loosely, causing it to lose its meaning. Poor Thomas L. Friedman, for example, managed to mix everything up…confusing the zombies on the streets of Croydon with Michelle Bachmann and the Tea Party crowd. He sees only that they are all “angry.”

So, what’s the difference between an angry zombie and a person who is angry because he’s tired of supporting zombies?

In economic terms, a zombie is a parasite. He contributes less to the economy than he takes from it. He lives at the expense of others.

Almost any profession or career can be a nest for a zombie; an auto mechanic who rips off his customers, for example, is a zombie…at least in a sense. But most often, zombies are created, enabled, and supported by government. Government transfer payments create whole armies of zombies. Government bailouts turn whole industries into zombies. Government programs and government employment turn millions of otherwise reasonably honest and reasonably productive people into leeches. A guy who might have been a decent gardener, for example, becomes an SEC lawyer or a Homeland Security guard.

Politicians like zombies. Zombies are cheap. If you buy a vote from a man who is independently wealthy, it’s gonna cost you. And the bourgeoisie – which earns its money from honest toil and enterprise – is hard to buy. But zombie votes? They’re a dime a dozen. Just increase Social Security or Medicare; the zombies will line up to vote for you.

It’s relatively easy to turn people into zombies. And it’s fairly easy to support them when an economy is healthy and expanding. But when an economy goes into a contraction, you can no longer afford to give the zombies their meat. Then what?

Then, watch out. The zombies rise up.

Germany was the success story of Europe. Until this week. The latest numbers show the German economy has stopped growing. In fact, it is now trailing the rest of Europe…which is said to be growing at a very slow rate.

Friends in Berlin tell us that young people have gotten used to living off the government. Youth unemployment is high. Everybody wants to earn money and status in the easiest way possible. Even well-educated young people find they can live better by taking government support payments than by working a regular job.

What will they do when the checks no longer come? Look out.

Bill Bonner
The Daily Reckoning

Bill Bonner [send him mail] is the author, with Addison Wiggin, of Financial Reckoning Day: Surviving the Soft Depression of The 21st Century and Empire of Debt: The Rise Of An Epic Financial Crisis and the co-author with Lila Rajiva of Mobs, Messiahs and Markets (Wiley, 2007).

http://www.lewrockwell.com

    © 2011 Copyright The Daily Reckoning, Bill Bonner - All Rights Reserved
    Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2015 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

dr ray
24 Aug 11, 04:33
Car torching as economic stimulus

Bill,

You might have got it wrong about the car burning and rioting.

Surely this is a form of economic stimulus to the economy and should be welcomed by Keynsian economists and western politicians. All those luxury cars will need to be replaced and the shops restocked. At the end of the day it is the uncomplaining schmuck with a job or savings who is going to have to pay through higher insurance, higher taxes and higher prices. It may be that the lack of rioting in Japan has held it back for the last 20 years

Economic stimulus - Bring it on!


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