Three governments around the world have now stepped down as a result of ongoing citizen protests arising from the economic crisis:  Iceland, Latvia, and Czechoslovakia.  Hungary looks like it could be number four, but there are several other candidates. Gordon Brown looks like he may not last too long.  In the meantime, President Obama is thrilling the populace wherever he goes, including another well received speech in front of 20,000 Czechs on Sunday.  What does this mean, and how can it translate into reaction in economic and market terms?

I don’t have the answer — nobody does (yet), but I am not as concerned about the lack of an answer as the fact that few seem to be asking the question, or caring.

There are protests around the world, in virtually every part of the world.  They are increasing in frequency and numbers of people.  I watched TV news last week during coverage of the G20 summit.  There were three topics:  protests, Michelle Obama, and some of the actual substance and style of the summit itself.  Coverage of the protests was as inane as coverage of Michelle Obama.  On several network shows the anchors and reporters casually shrugged off the protests as “there they go again.”  The analysis was:  in Europe there are protests all the time.  When they referred to the national strike in France a couple of weeks ago, they did mention that three million people were involved nationwide.  They also observed that the French people protest regularly, sort of like a type of recreation or entertainment.  What the anchors and reporters missed was that polling in the nation showed that more than three-quarters of the national population supported the reasons for the protest.  They also missed relating the protests they saw to the other protests that were happening around the world, and that have happened over the past few months.

The protests around the world are different this time.  They share three core common denominators.

1. They are comprised largely of the middle/working class.




2. Rather than focusing on a single issue, they are protesting because of their discontent with government, bankers, the investment community and certain corporations and executives they believe to have disrespected them, failed them and exploited them.




3. They share the same want: more government money to the middle/working class as a priority over bailouts for those the protesters deem responsible for the economic crisis in the first place, regardless of their government’s financial wherewithal.  Without question, there are single issue “hooligans” (as Sarkozy called them) and anarchists and extremists of all varieties in the mix — and they are exploiting and inflaming the protests — but it is too easy and a big mistake to dismiss these protests by virtue of the involvement of the “professional” protester.

Within this global mix of political instability comes Barack Obama, appealing directly to the people.  Indeed, this was his path to victory for the US presidential election — he appealed to and won the support of people in the broad economic and political middle — the large core of some 80 percent of our nation that believed the nation was going in the wrong direction at the time of the election.  Recall: there really was no single issue in the election — no passion over ERA or gun rights, abortion or any other hot topic that drove so many previous campaigns.  It was about “change” and that meant discontent.

So now Obama holds speeches in Prague’s central square and town hall meetings in Strasbourg, France, and on the Internet.  He is building a global constituency.  Rather than trying to captivate the leaders, he is appealing directly to their citizens.

While saying to the political leaders at the G20 that the U.S. leads best when it listens and is humble, to the citizens in Prague he is clear about what he believes the other leaders in the world should do about nuclear weapons.  To the people in Strasbourg he admonishes political leaders for allowing a “drifting apart” of Europe and the U.S.  In other words, while he promotes the idea that he is just another government leader with his peers, he positions himself as a global populist leader with citizens of the world.

In return, at the G20 summit, the political leaders tried to obtain some of the Obama political strength by cozying around him.  Why?  Because Obama has achieved what has eluded them:  massive support of the middle/working class around the world who relate directly to what he says and how he says it.

So here are some questions that really need to be asked:  How does the political environment evolve?  As protests increase in frequency and number, are more governments in jeopardy?  And the governments that replace them: will they echo the words of Obama about the greed and shamefulness of the acts of those the protesters disdain, or will they react the other way, seeking the support of the traditional “king makers” in politics – those with money and power?  Will Obama’s popular support with people around the world force other governments to adopt the Obama policy of throwing more and more money at the situation without regard for the long-term consequences from the build-up of debt?  And, whichever way it goes, what will that mean to the political and economic philosophy of capitalism in the future?  As the world moves forward in whatever direction, will it go there peacefully or violently?  If the headlines around the world morph from news about the economic crisis to news about political and cultural crises around the globe, who in the U.S. will have the confidence needed to buy a new car or flat screen TV or home?

In the meantime, the market continues to chug along, apparently not even considering the political upheaval that is real and growing and could have enormous economic and market impact.  Sort of like the market disregarded all that was going on with Freddie and Fannie and AIG and sub-prime loans etc etc. that led to the market collapse.  Will the market once again disregard fundamental problems that they could see if they only look around beyond their charts of highs and lows?  All it would take is a keen sense of the obvious.