Tag Archives: austerity

The Tories Refuse to Take Responsibility for the EU “Fault Lines” They Decry

By William K. Black

The Tory insider and journalist Matthew D’Ancona has written a remarkably disingenuous op ed in the New York Times entitled “Europe’s Dangerous New Fault Line.”

The setting for the op ed is three related crises that D’Ancona’s dogmas have helped create (and a fourth one that is likely in the process of being created).  D’Ancona, of course, ignores causation and his responsibility for the policies that caused each of the crises.  The three crises are the Great Recession, the gratuitous second recession (Second Great Depression in the case of Spain, Greece, and Italy), and the rise of fascist and racist parties in the EU.  The fourth crisis that may be developing is the troika’s austerity policies forcing several EU nations back into a third recession.

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Where Do the Troika, WSJ & NYT Think Deflation Comes From?

By William K. Black

If the troika (the European Commission, ECB, and IMF) taught sex education students would believe that storks brought children, that sex had nothing to do with pregnancy, that confident women never got pregnant, and that women should be forced to lose weight when they became pregnant.  The Wall Street Journal and the New York Times would repeat these myths as science. The NYT would employ one of the world’s top gynecologists (Dr. Krugman).  Dr. Krugman would debunk these myths nearly every week – and neither the troika nor the reporters for the NYT and the WSJ would ever listen to him.

The last several days have led to a flurry of WSJ and NYT stories about “deflation.”  I just posted critiques of some of the earlier stories here and here.

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The Troika Continues to Harm the Eurozone and the WSJ continues to Miss the Story

By William K. Black

The European Central Bank’s (ECB) written policy is to maintain the eurozone inflation rate at just under two percent.  The ECB has consistently failed to achieve that goal.  Indeed, its failure has been growing steadily.  The ECB’s failure tells us something enormously important about what is wrong with the eurozone’s economy and the troika’s bleeding of that economy through austerity.  The ECB’s increasing inability to even come close to its inflation target demonstrates that demand remains woefully inadequate in the Eurozone – making austerity an insanely self-destructive policy. The Wall Street Journal (WSJ) reported on the ECB’s latest failure in an article entitled “German Inflation Rate Plummets as Manufacturing Slows.”

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The Troika Attack Italy for Refusing to Bleed the Economy

By William K. Black

The title to the latest Wall Street Journal article on Italy is “EU Tells Italy to Adopt More Austerity Measures.”  It’s an old, stupid remedy.  If you hit your carburetor with a hammer and it doesn’t fix it – hit it harder and more often.  Italy is the troika’s carburetor and austerity is its hammer.

The Troika’s Response to Renzi’s Electoral Success: Crush Him

The general context of the troika’s latest act of depravity is particularly interesting.  The troika consists of the European Commission, the IMF, and the ECB.  The troika’s insistence that the periphery inflict austerity caused not simply a gratuitous second recession through much of the EU but a Second Great Depression in Italy, Spain, and Greece.  One-third of the eurozone’s population – 100 million people – was kicked into a Great Depression due to the troika’s long-falsified economic dogmas.

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Spain’s “Stimulus” Plan: An Oxymoron Crafted by Regular Morons

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

Spain’s conservative government, eager to change the media’s emphasis on its repudiation in recent EU elections, has launched a media campaign stressing its adoption of an aggressive “stimulus” program.  Spain’s conservatives – and their predecessors the so-called socialists – are infamous for embracing the troika’s demands for austerity.  Why have the Spanish conservatives finally admitted that austerity is a disaster and stimulus is essential?  They have not done so.  Instead, they have rebranded “austerity” as “stimulus.”

“MADRID—Spanish Prime Minister Mariano Rajoy is planning to launch a €6.3 billion ($8.59 billion) economic stimulus package, a move to keep sky-high unemployment and the risk of deflation from derailing the country’s recovery.

Mr. Rajoy told 200 business leaders at a conference in Sitges, near Barcelona….”

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Will the EU’s Austerity Prove as Radicalizing as the Washington Consensus?

By William K. Black

President Rafael Correa of Ecuador owes a triple debt to John Williamson, the economist who coined the term “the Washington Consensus” in a paper he first presented in 1989.  His paper is open about the focus of that consensus: Latin America.  Latin America was to be transformed through policies on which the United States Government, the International Monetary Fund (IMF), the World Bank, and the Washington “think tanks” had reached a consensus.  Those policies had four key components.

  • Require a sufficient stream of payments of interest by Latin American debtors to U.S. banks to ensure that the banks would not have to recognize large losses on their loans
  • Require Latin American nations to adopt austerity
  • Require substantial deregulation, and
  • Require substantial privatization

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The Dangerous Lure of Austerity to Progressives Seeking to Reduce Pentagon Spending

By William K. Black

William K. Black

I spent today in Washington, DC presenting and attending a conference put together by Ralph Nader on left-right convergence.  The theme was that there were many issues on which large elements of the left and right agreed and could change existing policies if they worked together.  I spoke about the desirability of effective financial regulation to break the Gresham’s dynamic and prevent or at least minimize the damage of future financial crises and the desirability of prosecuting the elites that run financial “control frauds.”

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Peterson/CBO Beat for Austerity Goes On!

By Joe Firestone

Recently, I’ve been writing about oligarchs advocating for entitlement cuts and austerity. I’ve discussed attacks on entitlement benefits for the elderly from Abby Huntsman (of MSNBC’s The Cycle) and Catherine Rampell (a Washington Post columnist), both the children of well-off individuals. These posts have come in the context of the English language release of Thomas Piketty’s Capital in the Twenty-First Century, and the more recent pre-publication release of a study by Martin Gilens and Benjamin I. Page using quantitative methods and empirical data to explore the question of whether the US is an oligarchy or a majoritarian democracy. They conclude:

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Heard (but not understood) On the Street: The WSJ and Deflation

By William K. Black

A brief update is in order after my three part series on how the troika (the ECB, EU, and the IMF) was acting contrary to its stated policies on deflation, Mario Draghi’s (the head of the ECB) confession that he favored deflation in the eurozone periphery because he wanted these nations to have lower prices and wages so that they could increase exports, and the disgraceful reporting of the subject in the New York Times and the Wall Street Journal.  The WSJ’s Heard on the Street” feature is out with an April 3, 20014 story on deflation that epitomizes each of these defects.  The title of the article foreshadows the analytical black hole that follows: “Inflation, Euro Test Draghi’s Resolve at ECB.”

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The Kamikaze Economics and Politics of Forcing Austerity on the Ukraine

By William K. Black

We all understand why Russia is waging economic war on the Ukraine, but why is Obama doing so?  The New York Time’ web site has posted a remarkable Reuters story (dated April 5, 2014) entitled “Ukraine PM Says Will Stick to Austerity Despite Moscow Pressure.”

“The Kiev government will stick to unpopular austerity measures ‘as the price of independence’ as Russia steps up pressure on Ukraine to destabilise it, including by raising the price of gas, Prime Minister Arseny Yatseniuk told Reuters.”

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