Links 6/15

• The Bush doctrine, economic warfare and your investment portfolio (FSU, hat tip Zero Hedge)  The only thing this gets wrong is inflation—not happening anytime soon.
• Contours of Crisis III: Systemic fear and forward-looking finance (Bichler & Nitzan, hat tip ZH)
• Optimism is not enough for a global recovery – Wolfgang Munchau, FT (h/t Yves)
• Depression Dynamic Ensues as Markets Revisit 1930s – Eichengreen (March), Bloomberg (h/t Yves)

Today’s reflection:

Those who oppose fiscal stimulus and welfare/workfare/health coverage for the unemployed may or may not realize they are supporting the existing system’s inequities.  The people at the bottom are the ones getting hurt.  Some of these writers are libertarians who just oppose government in almost any form.  Some are financial professionals who are representing, consciously or unconsciously, the interests of their moneyed clientele, who hate paying taxes.  Some have observed that the government simply doesn’t work anymore, that the military-industrial-financial complex has too many fingers in the pie for tax dollars to be spent on anything other than more of the same.  If the next big nonlinear event in America is a renegotiation of the social contract that is likely to occur over the next decade, it may begin with a tax revolt like that in California.  But without a change of the social contract as embodied in government policies and income distribution, a tax revolt merely cements the power of the ruling elite and punishes those at the bottom for being there.  This is a recipe for social unrest.  It cannot be the end of the story.

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