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Massive General Strikes Portend Possible Collapse

By   Follow Me on Twitter     Message Scott Baker       (Page 1 of 1 pages)     Permalink    (# of views)   30 comments

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From Belgian protest against austerity turns violent Tens of thousands of trade unionists have staged a general strike across Belgium on Thursday.
Belgian protest against austerity turns violent Tens of thousands of trade unionists have staged a general strike across Belgium on Thursday.
(Image by YouTube)
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div style="margin-bottom:12px;width:300px; font-size:80%;text-align:center;">From Unions want to 'reverse' austerity with strike in Belgium As European leaders discuss the eurozone debt crisis in Brussels, Belgium's three largest unions want their government to reconsider.
Unions want to 'reverse' austerity with strike in Belgium As European leaders discuss the eurozone debt crisis in Brussels, Belgium's three largest unions want their government to reconsider.
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Click on Youtube links above to see videos of protests

Virtually uncovered on this side of "the pond" are the country-wide general strikes taking place in Belgium, which have virtually shut that country down.
On Monday, Dec. 15, all of Belgium was completely shut down from a nationwide general strike in protest of economic reforms that largely punish working people. The strike cancelled 600 flights for 50,000 passengers at the Brussels airport. High-speed trains to France, Netherlands, and the UK were all cancelled, buses didn't run their routes, workers didn't come to the office, and nobody went to school. While numbers aren't yet available, Belgian workers certainly demonstrated that they are the ultimate deciders of whether or not the economy works for everyone or grinds to a halt. The U.S. should take a page from the Belgian playbook if we want to beat back the corporate assault on our livelihoods, homes and futures.
It's great that Belgium workers are able to muster a general strike, and great that major media like the BBC are covering it. Full stop.

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We need more of these, as the article says, and in the scattered, virtually unionless U.S. too. Of course, here workers' rights are much less and strikers are likely to be imprisoned, beaten or worse. But since our poverty rates are the highest in the industrialized world, and imprisonment rates already the highest, there is fast becoming little to lose.

Those of us with less courage, more to lose, or simply a different bent, need to continue to call out the complete corruption of the system, including the economic system. Two of the links provided in the above article go to other excellent articles on this:
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Big Banks and Derivatives: Why Another Financial Crisis Is Inevitable (In Forbes Magazine!!!) and (this contains one of the best videos (in 2 7-minute parts) on derivatives I've ever seen (somewhat dated now from 2012). One of them supports the current figure reported elsewhere that the derivatives market is now north of a quadrillion dollars. Even a 1% default on that is 10 trillion dollars, and probably beyond the capacity of any government to "bail out" even if the public would stand for it, again. This is, as the professor states, not just likely but inevitable (far more than 1%, actually).

In 2009, I wrote a brief article recommending making unpayable derivative contracts "null and void" even retroactively (to disincentivise creating them in the first place). In 2012, Paul Craig Roberts came up with the same solution independently. You can read about both articles here: A necessary addendum to Paul Craig Roberts' Article: Financial Collapse At Hand.
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I no longer believe this is enough.

The entire derivatives market needs to be made illegal now.

The argument that some airline or family farmer can't hedge against oil price shocks or grain price changes is specious. The major banks are virtually the entire market in derivatives, and they are gambling with the global economy. Further, since every bet has a buyer and a seller, the hypothetical small business using derivatives - to the extent it even exists - has a net of zero winners and losers, but minus the very large fees for buying derivative contracts (this is where the major banks make most of their money day-to-day). This is not only a useless market, it is a socially destructive one. It's as if we are making the world safe for jugglers of dynamite. To what purpose does that serve?

The articles and videos I referred to above show leverage of 30-40 times by all the major banks, probably more in this virtually unregulated market. Well, that's what brought down Lehman Brothers, which many experts say triggered the final stages of the 2008 collapse. It only took 10X leverage to trigger the Great Depression.

When the institutions trading in these "financial weapons of mass destruction" as Warren Buffet called them (while still trading in them through his holdings in Wells Fargo, a supposedly "good bank" but not really), implode, they will create a vast hole in the money supply since banks create virtually all of the money in the U.S. (or the world) now. This needs to be filled, and to be seen as ready to be filled, by debt-free Sovereign Money, issued as allowed by Congress under the constitution's coinage clause. If Congress won't do it, then the President, via his Treasury Secretary, must at least "keep the lights on" by paying all previously authorized spending with new United States Notes, or their computerized equivalent. These are legal tender and banks and other institutions are obligated to accept them for everything but the national debt or for foreign debts, which would continue to be paid through the usual means.

Since the private economy will have virtually collapsed if all or most of the Systemically Important Financial Institutions (SIFIs) fail, government will have to take over with new public works jobs to temporarily provide employment to the masses of newly unemployed. These jobs will employ people in fixing infrastructure, adding schools and a power grid, etc. on a scale not seen since FDR's New Deal Programs. They will create REAL wealth, not the phony wealth we have today. With such apparent real wealth, the world will come to respect the dollar again. The strength in the dollar today is largely an illusion, pumped up in part by the Fed's own buying of Treasuries here and abroad (ironically, especially in Belgium, even as Belgium is slashing services and jobs enough to trigger a General Strike).

Then, the banking system can be rebuilt, almost from scratch, with the FDIC rescuing the depositors in the small banks, exactly the opposite of government policy now, which has let the small business supporting small banking system collapse (the FDIC will need hundreds of billions in new U.S. Note money to do this, to supplement its quickly exhausted $25B insurance fund). Some of the SIFI banks can be remade into state public banks, using emergency powers to extend their existing licenses to become public banks (it can normally take 1-2 years to get a license to create a bank, and this will simply be too long to wait during a collapse).

To prevent massive deflation as we had in the Great Depression and the 1836 depression (even worse than the so-called "Great Depression) when president Jackson didn't renew the charter for the Second National Bank of the U.S., we need to produce enough money to meet the productive capacity of the U.S. Even now, we are about a trillion short of that, every year (slightly less now, supposedly), says the Congressional Budget Office, but it'll be much more than that in the next collapse. We simply cannot afford a second lost generation of skills resulting from the underemployment of Americans. We are already behind the first world in infrastructure, and near the bottom in education, and actually at the bottom in poverty, and it will take a full mobilization just to start to climb back to the position we used to take for granted.

Some anti-government types will decry such intervention, even when the economy ceases to function, but Occupy, and other such groups, some of which will not come up until the collapse, will have to organize and get the "president's back" (and those in Congress and on the court's (which are NOT neutral and never have been)). TINA - There Is No Alternative.


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Scott Baker is a Managing Editor & The Economics Editor at Opednews, and a blogger for Huffington Post, Daily Kos, and Global Economic Intersection.

His anthology of updated Opednews articles "America is Not Broke" was published by Tayen Lane Publishing (March, 2015) and may be found here:

Scott is a former President of Common Ground-NYC (, a Geoist/Georgist activist group. He has written dozens of articles for (more...)

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