Consider: if we are starting to see signs of resistance to austerity measures in the US, it would suggest that they are not going to go over too well in other countries that have debt overhangs either. Defaults and/or restructurings are usually more palatable, politically.
And before suggesting that bondholders won’t stand for it, guess what, they can and do. Our Chapter 11 regime is widely praised and admired among the economically orthodox. That is a system for organized partial default and restructuring. Banks and investors are happy to lend to companies post Chapter 11.
Note we are not endorsing violence, and perhaps more important to note, the destruction that occurred at UC Berkeley was not planned, but instead grew as tensions spun out of control.
The outbreak appears to result from two sources of discord: one, the student objections to tuition increases and program cuts, the second a series of racist incidents: first a “Compton Cookout” on President’ Day in protest of Black History Month, followed by a noose on display in the UC San Diego Library. Students objected to the university’s failure to respond to these incidents, which led to a series of dance parties to show solidarity being organized at other UC campuses to show support. The blog Occupy California claimed the dance parties were followed by the occupation of several university buildings t UC Santa Cruz.
A crowd of more than 200 people swarmed the streets of Southside early Friday morning in a riot involving seven law enforcement agencies, runaway dumpsters, flaming trash cans, shattered windows and violent clashes between rioters and police.
What began as a dance party on Upper Sproul Plaza led to an occupation of Durant Hall at around 11:15 p.m. Thursday to raise support for the March 4 statewide protest in support of public education…
UCPD Captain Margo Bennett said the occupiers “cut a lock to get into the construction area and then cut a lock to get into the building [Durant Hall]” before vandalizing the area.
“There were windows broken, there was spray painting and graffiti on the interior, there was construction equipment that was tossed around,” she said.
The occupation evolved into a riot as it moved onto streets south of campus…
Bennett said the occupiers were able to leave Durant Hall without police confrontation because UCPD did not have adequate staffing and the Berkeley Police Department had not responded to the scene per UCPD request before the occupiers left.
She added that UCPD believes many of the occupiers were not UC Berkeley students….
The tone of the gathering changed at about 1:55 a.m. when a dumpster was pushed into the center of the intersection and set on fire by members of the crowd. The Berkeley Fire Department responded as people danced on top of the dumpster and shouted, “Whose street? Our street!”…
Officers physically pushed the crowd back so that Berkeley fire personnel could extinguish the flames. Sporadic fights broke out within the crowd, causing police to advance their line on the growing mob and use batons to push it back…
Members of the crowd hurled glass bottles, plastic buckets, pizza and other objects at the police line. The crowd’s size and intensity fluctuated as the police and protesters clashed and multiple members of the crowd were detained by police..