It’s wild to see the protests going on in France. Driven largely(?) by the younger generations and their dissatisfaction of their immediate future prospects. France, like most mature Western democracies, is in lots of debt, high inflation, with no chance to austere their way out of it due to entrenched obligations that largely benefit the older generations. A financial quagmire that is robbing Peter to pay Paul. Peter - the younger generations - is not having it any longer.
This leads to the question: can similar protests happen here in these United States? The same combustible factors certainly exist here. Just this year our national debt crossed the 40 trillion mark, an unfathomable level of indebtedness. There’s fewer and fewer workers to support an increasing aging population dependent on social security. Inflation remains high thanks to that Strait of Hormuz business. The prospects here don’t look all that difference from France.
I think a big buffer against potential small-scale anarchy that exists in America is the ease of credit. I would say easy credit is the new opiate of the masses. As social media can attest, it’s rather easy to attain the finer trappings of life entirely on debt. That lever is as large as it can comfortably fit inside a monthly balance statement. A new BMW M3 is imminently affordable when it is financed for 10 years at an enormous interest rate. The $1,000 Disney vacation is only really $250 when Klarna allows you to split that payment into four.
Should that lever become too burdensome on the other end, there’s bankruptcy to discharge all of it. A reset button like spawning anew in Call of Duty.
Now imagine if credit isn’t so freely available - if at all, and bankruptcy requires more vigor than writing a check to an attorney. The imbalance in our so-called K-shaped economy would be felt acutely. A whole class of people who cannot attend a Taylor Swift concert because there’s not mecahnism to put that $1,000 on a credit card. There’s going to be some disgruntlement! Perhaps violently like the ones in France currently.
Free-market capitalism cannot survive a lower class that feels completely neglected. I gesture at the various revolutions in history. Good news for the US is that we’ve implemented just the thing to satiate the lower rungs of the economic ladder: widely available credit, and bankruptcy back-stop. Mix in with all the gambling-adjacent products like prediction markets and the actual stock market, there’s enough hope and facsimile of abundance to temper any pitch-fork fantasies.
Speaking of revolutions…