Austerity Has Nothing to do With Solving Economic Crisis; All About Ideology And Revenge

Remember my post from not too long ago? How those in power (entrepreneurs, governments, etc) simply cared about making a working class so desperate as to allow themselves (in many, if not most cases, anyway) to stripped of any powers they may have gotten over the years?  Yes, about getting those uppity workers beaten down & driving wages down, basically.    It has already begun to happen. How many who saw their working conditions and/or their standard of living deteriorate are going to stand up and say “Enough!!”?  Near impossible. Many are probably already feeling desperate enough to not want to rock the boat.

Not to mention, non-unionized workers are pitted against unionized workers. Unionized workers, after all have been one of the biggest scapegoats of the economic crisis as the propoganda machine keeps pushing, rather than the truth regarding deregulation of the financial industry,  and the games bankers, big corporations and governments play.

I caught this article from David Atkins of Alternet, who contends austerity measures are nothing more than revenge from Conservatives. That sounds about right.

The political history of the last thirty years is of the revenge of the right wing after finding itself discredited for a generation after the Great Depression and the fall of fascism. We’re living in a grand period of conservative revanchism, one that I fear will not end without entire economies and and civilizations being destroyed in the process.

I would say that revenge is exactly what fuels Stevie Spiteful and his Harpercon puppets to a tee.  After all, wasn’t his agenda all about not only destroying his opposition, but to get back at former Liberal governments of Pearson and Trudeau, propped by the NDP often for supposedly ruing their version of CAnada? After all, wasn’t that whole “You won’t recognize Canada…” the mantra of  Stevie Spiteful? The tone certainly smacks of revenge politics.

Atkins was basing his article on a most recent must read from Paul Krugman, simply called The Austerity Agenda, where he contends that austerity measures happening have more to do with “using a crisis and not solving it”.  I would argue that many of these governments, the Harpercons included, don’t care about lowering their debts–it’s more about implementing their own agenda. While Krugman concentrates more on PM David Cameron and the US,  we can see some paralells with the Harpercons, as well as other leaders.

First off, for those who are comparing the economy of a nation to that of a family,  time to learn the difference between basic mico-economics and macro-economics.

The bad metaphor — which you’ve surely heard many times — equates the debt problems of a national economy with the debt problems of an individual family. A family that has run up too much debt, the story goes, must tighten its belt. So if Britain, as a whole, has run up too much debt — which it has, although it’s mostly private rather than public debt — shouldn’t it do the same? What’s wrong with this comparison?

The answer is that an economy is not like an indebted family. Our debt is mostly money we owe to each other; even more important, our income mostly comes from selling things to each other. Your spending is my income, and my spending is your income.

So what happens if everyone simultaneously slashes spending in an attempt to pay down debt? The answer is that everyone’s income falls — my income falls because you’re spending less, and your income falls because I’m spending less. And, as our incomes plunge, our debt problem gets worse, not better.

This leads me to some questions of my own. If unemployment is high and/or wages are lower, how does this help drive an economy? I mean, many of those austerity packages being forced on Eurozone countries also have that mandatory lowering of minimum wage. Again, how does this help?  Those who hire at minimum wage are from the private sector, not the public, thus, tax payers aren’t any savings by driving down the minimum wage. I mean, do Stevie Spiteful, Deficit Jimbo and Diane really think a strong economy will come from a majority earning minimum wage or perhaps even less, as labour standards are being clawed back? Are they that stupid? Perhaps. However, I would lean more toward that whole revenge scenario, that and instilling fear in the population.

When questioned further, those pushing austerity use another typically old talking point:

For when you push “austerians” on the badness of their metaphor, they almost always retreat to assertions along the lines of: “But it’s essential that we shrink the size of the state.”

Now, these assertions often go along with claims that the economic crisis itself demonstrates the need to shrink government. But that’s manifestly not true. Look at the countries in Europe that have weathered the storm best, and near the top of the list you’ll find big-government nations like Sweden and Austria.

It is true that those European nations, such as those Scandinavian countries, who don’t use the Euro and have generous social safety nets, have been weathering the crisis quite well.  More from an interview  The European did with Joseph Stiglitz.  Here is one question asked and answered:

The European: What do you say to someone who argues thus: Demographic change and the end of the industrial age have made the welfare state financially unsustainable. We cannot expect to cut down on our debt without fundamentally reducing welfare costs in the long run.
Stiglitz: That is absurd. The question of social protection does not have to do with the structure of production. It has to do with social cohesion or solidarity. That is why I am also very critical of Draghi’s argument at the European Central Bank that social protection has to be undone. There are no grounds upon which to base that argument. The countries that are doing very well in Europe are the Scandinavian countries. Denmark is different from Sweden, Sweden is different from Norway – but they all have strong social protection and they are all growing. The argument that the response to the current crisis has to be a lessening of social protection is really an argument by the 1% to say: “We have to grab a bigger share of the pie.” But if the majority of people don’t benefit from the economic pie, the system is a failure. I don’t want to talk about GDP anymore, I want to talk about what is happening to most citizens.

I suggest that you read this link from that interview.  Stiglitz goes into more detail regarding how and why austerity is a failure. Something most of us know already, but that interview really goes into detail.

What will it take for us to realize we’ve been had? Slowly, but surely, we’re seeing folks wake up. The student protestors here in La Belle Province is a good start, but it’s only a start.