Tag Archives: austerity

“Nobody in Europe” sees a “contradiction” between austerity and growth

By William K. Black

The two most revealing sentences about the gratuitous Eurozone disaster – the creation of the deepening über-Depression – was reported today.  The context (rich in irony as I will explain) is that U.S. Treasury Secretary Lew spent his Spring Break in Europe meeting with his counterparts.  The Wall Street Journal’s article’s title explains Lew’s mission and its failure: “U.S. Anti-Austerity Push Gets Cool Reception in Europe.”  Here are the sentences that capture so well why Germany’s destructive economic policies caused the über-Depression:  “Nobody in Europe sees this contradiction between fiscal policy consolidation and growth,” said Mr. Schäuble. “We have a growth-friendly process of consolidation.” Continue reading

The New York Times Thinks Bleeding Cyprus is “Strong Medicine”

By William K. Black
(Cross posted at Benzinga.com)

I’m announcing the New York Times award for incompetence in macroeconomic reporting (IMR, pronounced like “screamer”).  I suggest that the paper offer as a prize to awardees a two hour lunch with Krugman in which he provides a remedial economics lecture.  My premise is that it is impossible to be a NYT reporter and fail to know that the paper has a Nobel Laureate in economics who writes a regular column for the paper and frequently discusses making economic downturns worse by inflicting self-destructive austerity.  Even the most casual reader of Paul Krugman’s columns would know that opposition to austerity has long been the dominant view among economists and that over the last five years events here and in Europe have again confirmed that view.  Continue reading

Comparing Unemployment During the Great Depression and the Great Recession

By William K. Black

Barry Eichengreen’s and Tim Hatton’s January 1988 paper entitled “Interwar Unemployment in International Perspective” is a useful starting point for any effort to compare unemployment during the Great Depression and the Great Recession.

It is useful to begin by recognizing three related cautions that the authors make in that paper.  First, the modern sense of the term “unemployment” (willing and able to work, but unable to find a job commensurate with the worker’s skills) was not common until the decades before the Great Depression.  The prior assumption was that people were unemployed because they were lazy.  There was little understanding of business cycles or inadequate demand, little sympathy for the unemployed, and no sense that business or government were primarily responsible for the the level of unemployment.  This meant that keeping data on unemployment was rarely a concern of government.  Data on unemployment in Europe was largely collected through industrial trade unions.

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Euro-da-Fé

By Dan Kervick

(Brussels)  Nonplussed by this week’s unemployment report showing the Eurozone jobless rate rising to an unprecedented 12%, members of the European Parliament and Europe’s national governments pressed ahead on Wednesday with passage of a stringent new package of austerity measures.  Dubbed “hyperaustérité” or “Übersparpolitik” by its backers, the new program of ruthless cuts and social demolition promises to deliver even higher levels of joblessness, misery and hopelessness than has been achieved so far by earlier rounds of austerity.

Along with the new economic measures, the European Union (EU) also announced its intention to change its name to the “European Sadomasochistic Cult.”  The new ESC will take the leading role in the implementation of European hyperausterity.

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The Love of Money

NEP’s Randy Wray appeared on radioLitopia discussing Money, Banksters, Austerity and other issues. You can listen using the player below or visit radioLitopia’s site [some have reported having problems with the embedded player].

The NY Times Calls Third Way “Center-Left” and Turns a Study on its Head

By William K. Black

Some lies will not die.  As I have demonstrated repeatedly, Third Way is Wall Street on the Potomac.  It is funded secretly by Wall Street (it refuses to reveal its donors), it is openly run by Wall Street, and it lobbies endlessly for Wall Street.  Third Way, like every Pete Peterson front group, is dedicated to shredding the safety net as its highest priority and throwing the Nation back into a gratuitous recession through self-destructive austerity.  Continue reading

O’Donnell Thinks Krugman is “a lonely voice opposing austerity” because he listens to MSNBC

By William K. Black

On March 18, 2013, Lawrence O’Donnell stated that John Boehner’s admission that the U.S. faces no current debt crisis vindicated Paul Krugman, who O’Donnell described as “a lonely voice opposing austerity.”  It is true that Krugman has been a strong opponent of austerity and has been proven correct.  It is also true that MSNBC has frequently portrayed Krugman as an isolated, virtually sole opponent of austerity.  Continue reading

Slate Agrees that Obama’s Vanity Drives the Grand Betrayal – and Praises the Betrayal

By William K. Black

Slate’s John Dickerson leads its (and CBS’) political reportage so his specialty is in examining what is actually driving politicians’ policies and their efforts to “spin” those policies.  Dickerson authored an article entitled “Why Obama’s Outreach to Republicans is All About Obama” (March 12, 2013).   

Dickerson’s theme is one I have long emphasized:  Obama is driven by concerns for his “legacy.”  In more human terms, he is intensely vain about how history will perceive him.  That is common, particularly in politicians’ final terms, and it can be a positive influence on policy.  Dickerson also agrees with my warnings that Obama sees inflicting the “Grand Bargain” on the Nation as his means of achieving his legacy.  Here is Dickerson’s introduction to his article. Continue reading

IN PRAISE OF POLITICAL DYSFUNCTION

By Marshall Auerback

The lamentable state of American political parties has become common sport amongst the chattering classes in DC and beyond. Although, one wonders whether this dysfunction has really been such a bad thing, when considering how united bipartisan “responsible” action always seems to result in yet more budget cuts.

By virtue of the fact that Congress and the Obama Administration couldn’t agree on much for the past few years, America’s deficits got large enough to put a floor on demand. The transfer payments via the automatic stabilisers worked to stabilise private sector incomes and allowed a general, albeit tepid, recovery in the economy.

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Our Fiscal Anorexia

By J.D. Alt

Many years ago, I had occasion to spend a long weekend at Ramuda Ranch in Arizona—a rehab facility where young women are helped to learn how to want to eat food again. Anyone who has had a personal encounter with Anorexia Nervosa knows what a mystifying and frightening experience it is. The young women I saw there—all of them well above average intelligence-wise, many of them stunningly beautiful in a physical sense—all suffered from the same delusion: they had convinced themselves that eating, taking nourishment into their bodies, was pathological. The delusion had variations: some of the adolescent girls looked into the mirror and—in spite of the fact they were five feet eight inches tall and weighed only 75 pounds—SAW a body that was grotesquely over-weight and fat. Others seemed to have a disconnected relationship with their bodies, as if they personally were one thing and their body another—and the “other” was something that, for complex, obscure, and compelling reasons, deserved punishment and starvation. For those of us who were visitors, observing this irrational and self-destructing behavior in young women, who otherwise seemed perfectly normal and healthy, was perplexing and painful.

I was reminded of Ramuda Ranch last Friday as I watched our nation’s leaders explain to the American people why America must now impose a new austerity upon itself. By what process, I wondered, have we convinced ourselves that we do not have enough U.S. Dollars to pay ourselves to create the goods and services we need to prosper as a society? What exactly is the “fiscal crisis” that we see when we look in the mirror? How is it that we view our national community with such detachment that we can knowingly impose upon it a painful—and unnecessary—deprivation? How can it be that we view the spending of our OWN sovereign currency to create public goods and services—the essential nourishment of our private economy—as creating a “deficit” that we must somehow repay to someone in the future? How have we bought into this massive delusion? And where is the rehab center, the clinical psychologists and counselors, who will help us overcome it?

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