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The Zombies are Coming...

When an economy contracts, governments can no longer afford to feed the zombies they've created. That doesn't please the zombies...

WE'VE BEEN moved to pen a ditty on Zombies today, writes Bill Bonner, founder of the Daily Reckoning.

Zombie, zombie in the night

Making cities burn so bright

What immortal hand could frame

Thy fearful symmetry?

Yes, dear reader, the mobs are getting angry. Here's the story from Germany:

Far-left extremists are specifically targeting German luxury cars, symbols of the country's wealth and power, bringing the total number of vehicles torched in the German capital this year to at least 138, more than double the figure for all of 2010.

The rise in Berlin car burnings coincides with widespread lawlessness that erupted last week across England. More than 1,500 people were arrested as rioters looted shops, attacked bystanders and burnt autos. In Berlin, far-left extremists are specifically targeting German luxury cars, symbols of the country's wealth and export prowess, police said.

"The arsonists want to hit what they say are 'Fat Cats,'" Berlin police spokesman Michael Gassen said. A special unit is investigating the fires as political crimes after the police received letters claiming responsibility that derided globalization, gentrification and rising rents, he said.

In England they steal clothes. On the continent, they burn cars. Thousands of Renaults and Citroens have been torched in France in recent years. Now, they're burning BMWs and Mercedes.

But what do zombies do in America? Do they steal clothes? Burn cars? Or join the Tea Party?

First, we need to define our terms. This is a serious matter. And people are beginning to use the word 'zombie' too loosely, causing it to lose its meaning. Poor Thomas L. Friedman, for example, managed to mix everything up...confusing the zombies on the streets of Croydon with Michelle Bachmann and the Tea Party crowd. He sees only that they are all "angry."

So, what's the difference between an angry zombie and a person who is angry because he's tired of supporting zombies?

In economic terms, a zombie is a parasite. He contributes less to the economy than he takes from it. He lives at the expense of others.

Almost any profession or career can be a nest for a zombie; an auto mechanic who rips off his customers, for example, is a zombie...at least in a sense. But most often, zombies are created, enabled, and supported by government. Government transfer payments create whole armies of zombies. Government bailouts turn whole industries into zombies. Government programs and government employment turn millions of otherwise reasonably honest and reasonably productive people into leeches. A guy who might have been a decent gardener, for example, becomes an SEC lawyer or a Homeland Security guard.

Politicians like zombies. Zombies are cheap. If you buy a vote from a man who is independently wealthy, it's gonna cost you. And the bourgeoisie – which earns its money from honest toil and enterprise – is hard to buy. But zombie votes? They're a dime a dozen. Just increase Social Security or Medicare; the zombies will line up to vote for you.

It's relatively easy to turn people into zombies. And it's fairly easy to support them when an economy is healthy and expanding. But when an economy goes into a contraction, you can no longer afford to give the zombies their meat. Then what?

Then, watch out. The zombies rise up.

Germany was the success story of Europe. Until this week. The latest numbers show the German economy has stopped growing. In fact, it is now trailing the rest of Europe...which is said to be growing at a very slow rate.

Friends in Berlin tell us that young people have gotten used to living off the government. Youth unemployment is high. Everybody wants to earn money and status in the easiest way possible. Even well-educated young people find they can live better by taking government support payments than by working a regular job.

What will they do when the checks no longer come? Look out.

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Bill Bonner has co-authored a number of New York Times Bestsellers including Financial Reckoning Day, Empire of Debt and Mobs, Markets and Messiahs. In his own opinion, Bill's most recent title, A Modest Theory of Civilization: Win-Win or Lose, is his best work yet. Bill also founded The Agora, a worldwide community for private researchers and publishers, in 1979. Financial analysts within the group have exposed and predicted some of the world's biggest shifts since that time, starting with the fall of the Soviet Union back in the late 1980s, to the collapse of the Dot Com (2000) and then mortgage finance (2008) bubbles, and more recently the election of President Trump.

See full archive of Bill Bonner articles

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