Soaring unemployment, cuts to pensions and benefits, rising fees for diminishing services, across-the-board value-added tax increases and declining minimum wages are all common factors to some degree, he says. Combine those with the numbers of young people who are still living with their parents, struggling to find work and not seeing much hope for the future, and Celente says you've got some powerful reasons to not only get angry over the growing gap between rich and poor, but to do something about it.
So far this isn't crystal ball stuff; economies around the world bubbled to unsupportable levels and have now imploded to greater or lesser degrees. A key problem is expectations, and those can be explained by history and human nature, things I have more confidence in figuring out.
The BabyBoomers had the Golden Age that for some reason everyone today thinks is the norm for human existence. There were very specific conditions which led to that suburban Shangri-La:
When the war ended in 1945, millions of veterans returned home and were forced to integrate. To help the integration process, Congress passed the G.I. Bill of Rights. This bill encouraged home ownership and investment in higher education through the distribution of loans at low or no interest rates to veterans.
Returning G.I.’s were getting married, starting families, pursuing higher education and buying their first homes. With veteran’s benefits, the twenty-somethings found new homes in planned communities on the outskirts of American cities. This group, whose formative years covered the Great Depression, were a generation hardened by poverty and deprived of the security of a home or job. Now thriving on the American Dream, life was simple, jobs were plentiful and babies were booming. Many Americans believed that lack of post-war government spending would send the United States back into depression. However, consumer demand fueled economic growth. The baby boom triggered a housing boom, consumption boom and a boom in the labor force. Between 1940 and 1960, the nation’s GDP jumped more than $300,000 million. The middle class grew and the majority of America’s labor force held white-collar jobs. This increase led to urbanization and increased the demand for ownership in cars and other '50s and '60s inventions.
"The middle class grew" is the giveaway snippet in that excerpt; if it grew, it was previously smaller. Unrest in developing countries is due to educated people being denied that opportunity, and in the declining developed ones people see their chances to belong to the comfortable middle class being eroded away.
Enter democracy. If you already have it and the middle class (backbone of good government) declines, you have what we see in the USA where access to entitlements "buys" votes (ACORN, other "community organizations") from the poor, and as there are more people in that group the power of the party that controls those votes becomes entrenched. See demagogy on where that leads.
The middle class is what allows a stable democracy to exist and flourish; the more people have a stake in the country, the more they will care how it is governed. This of course is well known, but even the soundest principles can be horribly subverted by those with Good Intentions. The housing boom and collapse in the US was due to government policy which forced banks to make loans to people who couldn't afford them with the laudable goal of encouraging home ownership. We see today how well that worked.
Owning a house is very expensive, and generally requires a good and steady income. There are those who argue that it's not a good investment and that you're better off renting, and this can certainly be true. An effective democracy needs a population which has a stake in how the country is run, not merely a mob which bays for bread and circuses. These days I guess that would be union jobs, welfare, and a "right" to high-speed Internet. Politicians are largely self-interested and short sighted, so a responsible electorate is the only way to have them look past the next election.
Energy costs are driving up the price of everything, which when coupled with the unemployment caused by "outsourcing"everything to the cheap-labour developing world you disgruntle a lot of people. The rampant credentialism of the modern workplace forces anyone who wants a job into debt bondage via their student loans, resulting in a latter-day feudalism which eviscerates the middle class. This is where we are right now.
My prediction? It's going to get worse, and by worse I mean decreased prosperity for the bulk of the population. We're already there, and it gets worse every week. Gas prices go up (for no good reason, I'll add) and the demand for that being non-elastic means less disposable income. This in turns means either less consumption (the prudent course) or increased debt, with knock-on effects throughout our interconnected world.
As for "hanging the rich", the big problem is the politicians who rig the rules for them. Governments need to regulate capitalism effectively to prevent unhealthy monopolies while maintaining the profit motive to foster innovation. The dystopian future of soulless Multinationals and co-opted or irrelevant governments can be avoided. I'm fairly certain that a day of reckoning with public sector unions is coming, and will hit in waves throughout the First World (started already). The quarter-century of Boomer prosperity (roughly 1945-1970) can be looked back at as a gilded age of employment and home ownership, but current and upcoming generations will have to modify their expectations. That however isn't much of a prediction, because it's already here.
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