The Systemic Risk No One Sees

Desultory Heroics

The unraveling of social cohesion has consequences. Once social cohesion unravels, the nation unravels.

By Charles Hugh Smith

Source: Of Two Minds

My recent posts have focused on the systemic financial risks created by Federal Reserve policiesthat have elevated moral hazard (risks can be taken without consequence) and speculation to levels so extreme that they threaten the stability of the entire financial system.

These risks are well known, though largely ignored in the current speculative frenzy.

But there is another systemic risk which few if any see: the collapse of social cohesion.

President Carter was prescient in his understanding that a nation’s greatest strength is its social cohesion, a cohesion that America’s unprecedented wealth / income / power inequalities has undermined. Consider this excerpt from his 1981 Farewell Address:

“Our common vision of a free and just society is our greatest source of cohesion at home and strength…

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