Posts filed under “War/Defense”
The Terrible Handling of the Economic Crisis Is a Cause of the Ferguson Riots
We noted that:
A study this month by economists Hans-Joachim Voth and Jacopo Ponticelli showsthat – from 1919 to the present – austerity leads to violence and instability:
Does fiscal consolidation lead to social unrest? From the end of the Weimar Republic in Germany in the 1930s to anti-government demonstrations in Greece in 2010-11, austerity has tended to go hand in hand with politically motivated violence and social instability. In this paper, we assemble cross-country evidence for the period 1919 to the present, and examine the extent to which societies become unstable after budget cuts. The results show a clear positive correlation between fiscal retrenchment and instability. We test if the relationship simply reflects economic downturns, and conclude that this is not the key factor. We also analyse interactions with various economic and political variables. While autocracies and democracies show a broadly similar responses to budget cuts, countries with more constraints on the executive are less likely to see unrest as a result of austerity measures.
As CNN notes:
Studying instances of austerity and unrest in Europe between 1919 to 2009, Ponticelli and Voth conclude that there is a “clear link between the magnitude of expenditure cutbacks and increases in social unrest. With every additional percentage point of GDP in spending cuts, the risk of unrest increases.”
“Expenditure cuts carry a significant risk of increasing the frequency of riots, anti-government demonstrations, general strikes, political assassinations, and attempts at revolutionary overthrow of the established order. While these are low probability events in normal years, they become much more common as austerity measures are implemented.”
The looting and chaos in Ferguson, Missouri is not justifiable … but it’s largely caused and inspired by the looting on Wall Street.
One of the concerns for investors is how markets keep powering higher despite all of the geopolitical turmoil: The grinding Syrian civil war that has spilled into Iraq, the clash between Israel and Gaza, the Crimea annexation and now the confrontation between Russia and Ukraine. That thinking gets the issue precisely backward. The proper question…Read More
It’s Always Been about Oil and Pipelines The same issues which drove war and terrorism in the Middle East in the 1930s and 1940s are still driving it today The best way to see this is to start with today, and work backwards … The U.S. is bombing Iraq again in order to protect the…Read More
SKEW-VIX & The Fog of War David R. Kotok, August 10, 2014 This commentary will include answers to some questions from readers about the SKEW-VIX ratio and why it is important. Here are two issue notes before we address those questions. First, our alarm about the ratcheting up of military action falls into…Read More
All of the Countries which the U.S. “Regime Changed” – Iraq, Afghanistan and Libya – Have Descended into Brutal Chaos Since 2001, the U.S. has undertaken regime change in Iraq, Afghanistan and Libya. All 3 countries are now in chaos … and extremists are more in control than ever. Iraq In Iraq, hardcore Islamic jihadis…Read More
NSA Helps Saudi Arabia Crush Dissent … Like It Helps Crush Dissent at Home Numerous high-level NSA whistleblowers say that NSA spying is about crushing dissent and blackmailing opponents … not stopping terrorism. In addition, the NSA is giving the raw data on American citizens living in the U.S. to Israel. That doesn’t seem to be a…Read More
U.S. Sanctions Against Foreign Nations Are Hurting American Companies Who are the losers from U.S. sanctions? American companies. Two giant U.S. business groups – the U.S. Chamber of Commerce and National Association of Manufacturers – ran ads in the New York Times, Wall Street Journal and Washington Post protesting sanctions against Russia. These are not…Read More