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No Austerity Has Helped Any Economy


US Politics & Gov't  (tags: abuse, americans, Austerity, congress, corruption, cover-up, democrats, dishonesty, economy, ethics, freedoms, Govtfearmongering, lies, media, obama, propaganda, republicans, politics, war )

Kit
- 604 days ago - truth-out.org
In other words, it's certainly true that the baronial class and its servants and administrators listen only to each other, and thus reinforce in each other the comforting cover story that they're only doing what's in our ultimate good.



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Kit B. (276)
Monday February 4, 2013, 11:05 am
(Photo: Andrea Bruce/The New York Times) ** Men and women line up for a free meal at Saviour's Anglican Church in Riga's old town in Latvia, Dec. 15, 2012. Some experts are hailing the country's progress as proof of the healing properties of austerity measures - while the country still has 14% unemployment.**



Paul Krugman’s recent column looks at the romance between the “austerians” — the promoters of austerity for economically troubled nations — and the need to inflict pain to get economic gain. His bottom line — no country that has tried austerity has seen a major economic benefit.

My bottom line — add “to its people” to the end of Krugman’s bottom line and you’ve got it exactly. There is an obvious economic benefit, but only for a few.

Let’s start with Krugman. He begins (my emphasis):

Looking for Mister Goodpain

"Three years ago, a terrible thing happened to economic policy, both here and in Europe. Although the worst of the financial crisis was over, economies on both sides of the Atlantic remained deeply depressed, with very high unemployment. Yet the Western world’s policy elite somehow decided en masse that unemployment was no longer a crucial concern, and that reducing budget deficits should be the overriding priority."

That’s a familiar story, one we’ve detailed before. The answer to economic crisis is always budget cuts and austerity. Then he pivots to austerian attempts to find an example.

In recent columns, I’ve argued that worries about the deficit are, in fact, greatly exaggerated — and have documented the increasingly desperate efforts of the deficit scolds to keep fear alive. Today, however, I’d like to talk about a different but related kind of desperation: the frantic effort to find some example, somewhere, of austerity policies that succeeded. For the advocates of fiscal austerity — the austerians — made promises as well as threats: austerity, they claimed, would both avert crisis and lead to prosperity.

The column is interesting because it lays out that history. First the example was Ireland, which the head of the European Central Bank said in 2010 was “the role model for all of Europe’s debtor nations.” But events proved them wrong; Ireland is worse off today than it was back then. So then the U.K. became the touted model, until it wasn’t. Then little Latvia, which has recovered some, was pushed forward; but Latvia still has 14% unemployment. Hmm.

Krugman’s conclusion — nowhere in the world is there an example of austerity that works as the austerians said it would. The policy is “wrong on all fronts.” Yet they (Our Betters) still promote it.
“All your money are belong to us” — the song of the predator class

Krugman stops there, but I’ll continue with the obvious question. Why do they still promote it? Krugman’s answer, from elsewhere, is the Beltway Bubble and its international equivalent:

my side of the debate is actually paying attention both to the numbers and to the arguments of the other side, while the Very Serious People only listen to each other.

In other words, the poor darlings are just deluded, bubbled, sealed from understanding.

Those whom he calls Very Serious People, I call Our Betters. This difference in language (between his and mine) is indicative of the difference in analysis between Krugman and people like me. The language “Very Serious People” speaks to their role as pundits, opinion-generators and insider-echoists. “Our Betters” speaks about their power role — the role these people play in running our lives (at the Obama and Robert Rubin level) or in serving those who run our lives (at the David Gregory and Joe Scarborough level).

In other words, it’s certainly true that the baronial class and its servants and administrators listen only to each other, and thus reinforce in each other the comforting cover story that they’re only doing what’s in our ultimate good.

But the baronial class is also the predator class and they know precisely where the benefit (for them) always lies. This is the predator class in operation:
***See Chart here at Visit Site***

The Predator Class in action. If you added the Top .001% to this chart, it would have to be taller than you are.

If you added the Top .1%, the Top .01% and the Top .001% to that chart, you’d need a chart as tall as your room. What the chart calls the “Highest Fifth” includes what I call the “retainers” — administrators, enablers (that’s you, CNN producers) and professionals needed to keep the system working. Everyone else is workers, and look what their hard work got them.

All of the gains of worker productivity (the harder smarter computer-enabled work of the lowest four-fifths) have gone into the pockets of the highest fifth and especially the very top earners. Note that these are individual incomes, not corporate incomes; as I’ve argued elsewhere, the corporation is just the collection device, the force extender, for the CEO class that wholly controls it; shareholder-ownership is the comforting cover story.

This is what James Galbraith calls “the predatory state” — and he means that economically. The predatory state is a state that enables and is controlled by economic predators, extremely wealthy vampires who feed on their fellow citizens. Galbraith (my emphasis):

That the looming debt and deficit crisis is fake is something that, by now, even the most dim member of Congress must know. The combination of hysterical rhetoric, small armies of lobbyists and pundits, and the proliferation of billionaire-backed front groups with names like the “Committee for a Responsible Federal Budget” is not a novelty in Washington. It happens whenever Big Money wants something badly enough.

Big Money has been gunning for Social Security, Medicare and Medicaid for decades – since the beginning of Social Security in 1935. The motives are partly financial: As one scholar once put it to me, the payroll tax is the “Mississippi of cash flows.” Anything that diverts part of it into private funds and insurance premiums is a meal ticket for the elite of the predator state.

By “elite” of the predator state, Galbraith means “owners” of the predator state, the top predators themselves. It’s that predatory feeding that produces policies, promises and pronouncements like these that Krugman describes:

Not only have we been ruled by fear of nonexistent threats, we’ve been promised rewards that haven’t arrived and never will.

They’ll say and do anything to get at more dollars; they’ll destroy the planet’s ability to support life itself, all for more dollars. Look again at the chart above. They’ve been looting the country, the government, the schools, the pension plans, your wages, the equity in your home, everything they can get their hands on since Reagan Days. Their only goal — All your money are belong to us. These are true monomaniacs, in the clinical sense.

So yes, they’re self-deluded. But like every feral beast, they also know where the food is. That food is us unless we stop them. And stopping them starts (in my most humble opinion) with naming them and shaming them.

An example of naming — does Obama serve the predators who finance his elections and his looming Legacy & Library Project or does he serve the people who elected him? Ask it loud and proud. The “debt ceiling–sequester” deal is his next chance to show us. As is Keystone, for those who are watching at home. But he can’t show us if we don’t ask him to, and in no uncertain terms.

My advice — dare to be bold, progressives. This game has a fourth quarter, and we’re in it. At some point, the predator will destroy all the prey and then die. Justice for the beast perhaps, but no fun for the already dead.

****Go to VISIT SITE for additional information in links****

By Gaius Publius, America Blog | News Analysis | Truthout |
 

Jae A. (323)
Monday February 4, 2013, 11:14 am
Interesting / enjoyable read even if much of it could lead one to thinking...we are in at least the fifth course of a seven course predator meal. I doubt there will be time or anything left to call dessert....at the rate they are consuming everything,even themselves..
 

JL A. (275)
Monday February 4, 2013, 1:22 pm
Sad that so far Japan is the only country with leaders paying attention to this evidence, the facts and what Krugman and even the IMF are telling everyone. I thought the US wanted to be a world leader, but it is letting Japan do so instead in this area critical to economic health and citizens' prosperity.
 

Gene Jacobson (253)
Monday February 4, 2013, 2:01 pm
Paul has been saying this for a very long time. And he's right. Further, republicans used to know he was right, in recession you expand government spending even at a deficit and work on the deficit when you have the economy moving again. Always has it been so. Nixon, Reagan and both Bush presidents used Keynesian economic principles successfully. It is only NOW that a Democrat is proposing them that the republicans are against them. Austerity in these conditions will bring the house of cards crashing down around us. And the rich will get richer while everyone else does not. Same song, umpteenth verse. The tragedy is that this incarnation of the republican party really is this stupid, this mean and this enslaved to their 1% owners to let our economy fall if it means they have a shot at 2016. It is egregious enough that it ought be called treason at worst, malfeasance in office at best. Sigh.
 

Thomas P. (468)
Monday February 4, 2013, 4:13 pm
Noted...thanks Kit. Great article. Paul Krugman is one of the most accomplished economists in the world and he has been saying this since before the stimulus (that the problem with it is that it's not big enough). I wish more people would listen to what he's saying and implement his suggestions.
 

Angelika R. (143)
Monday February 4, 2013, 4:14 pm
it IS a form of treason, I agree. and I refuse to believe that anyone-not even the rethugs-could be that stupid to think that empty pockets of the people could boost the economy when it would hurt it.

Get the tax felons,I assume you have enough of those!
We are rather lucky because Switzerland often offers our govt CDs exposing thousands of names of tax refugees and with the consent of our "congress", i.e. Bundestag, we have bought those CDs and brought back enormous revenues. None of those crooks has prefered jail time!
 

Kit B. (276)
Monday February 4, 2013, 4:24 pm

That Angie is one of many proposals to amendment the tax loopholes. People making millions a year should be paying taxes, that is the primary form of income for any government.

Exactly, Gene and J L - Japan is moving forward, while our country is standing stagnant while republicans argue over basic economics.

True Thomas, the stimulus was not enough to give the economy the boost it needed.
 

Rooibos Bird (237)
Monday February 4, 2013, 4:30 pm
"Austerity" as an economic concept was never intended to help anyone except the wealthy. It's their way of "telling" the other classes they are tired of contributing to society (though they reap by far the most rewards from a stable society), they are tired of paying taxes in a fair, equitable rate (though taxes are the dues we all pay for the benefits of living in a stable society), and that they monetary and speculation interests (the stock markets) are more important than the daily lives of the "other" classes" because paying back (supposed) debt is by far more important than ANY other thing. It trumps educating the next generation, taking care of the senior generation after they worked their entire lives, it trumps modest safeguards for today's generation or people who actually DO the work and make things happen. Yes, the wealthy want to remind us that because they are more important because of their bank balances and they "want their money" through stocks and debt, if you can't pay, you don't have the right to...you know...continue living.

Seeing the patterns yet, folks??
 

Angelika R. (143)
Monday February 4, 2013, 5:10 pm
I know Kit, but the proposals are for the FUTURE, NOT for past tax fraud like in our case. The entire Cayman islands should be sacked.
 

Dandelion G. (385)
Monday February 4, 2013, 5:52 pm
They’ll say and do anything to get at more dollars; they’ll destroy the planet’s ability to support life itself, all for more dollars. Look again at the chart above. They’ve been looting the country, the government, the schools, the pension plans, your wages, the equity in your home, everything they can get their hands on since Reagan Days. Their only goal — All your money are belong to us. These are true monomaniacs, in the clinical sense.

As Bernie Sanders has said, "it is never enough for them, they are like alcoholics".....

As to Rooibos Bird. You are right on target my dear. I agree 100%. Too many don't want to look that truth in the eye. George Carlin said it too. He was right on target. Watch this 3 minute video. He said TRUTH!
They Want More For Themselves and Less for You They Don't Give a F about You
 

Angelika R. (143)
Monday February 4, 2013, 5:54 pm
And I just found this :-) http://www.reuters.com/article/2013/02/04/us-usa-tax-fatca-idUSBRE91312W20130204

Exclusive: Foreigners' accounts in U.S. banks eyed in tax crackdown GOOD!
 

Kit B. (276)
Monday February 4, 2013, 6:19 pm

From the first paragraph in the article referenced by Angie (above):

(Reuters) - The Obama administration may soon ask Congress for the power to require more disclosure by U.S. banks of information about foreign clients' accounts to those clients' home governments, as part of a crackdown on tax evasion, sources said on Monday.

Great idea, with no traction, Congress will do nothing.
 

Brian M. (192)
Monday February 4, 2013, 6:23 pm
Austerity is another weapon used by wealthy elites to profit from the suffering that such policies inflict upon all the rest of us.
 

Angelika R. (143)
Monday February 4, 2013, 7:04 pm
wish your admin was as fast as ours, now taking action. This new law is being discussed right now:
Berlin eyes jail time for reckless bankers - source

2013-02-04 11:36 (UTC)

BERLIN, Feb 4 (Reuters) - The German government will discuss a new law to imprison bank executives for up to five years if they are found guilty of reckless behaviour that put a bank at risk.

'We've found a regulatory gap here that we want to close,' a senior government official in Berlin said on Monday.

According to the draft regulation to amend Germany's banking law, which the cabinet will discuss on Monday, a manager may face a jail sentence if he deliberately ignored risk rules and thereby risked the collapse of a financial institution.

The cabinet is also due to take up Finance Minister Wolfgang Schaeuble's plans to force big banks to separate their riskier trading activities from their deposit-taking business.

'We want to send a signal to Europe with this,' the government source said, adding that EU moves in this direction 'have not been fast enough'.

 

Vicky P. (464)
Monday February 4, 2013, 7:30 pm
no, it hasn't but Conservatives think it has somehow
 

Kit B. (276)
Monday February 4, 2013, 7:33 pm

Oh Vicky that is funny you used the words Conservatives and think in the same sentence.
 

Dandelion G. (385)
Monday February 4, 2013, 7:35 pm
hee hee hee......
 

Christina G. (11)
Monday February 4, 2013, 8:40 pm
the only sensible nation has been Iceland who refused to enslave their people to the international bankers!
Hurrah Iceland - let's all follow suit!
 

Judy C. (107)
Monday February 4, 2013, 9:37 pm
I can't believe they keep trotting out this tired austerity crap. Like the equally tired "trickle down", the fact that it doesn't work is no deterrent to the Republicans continuing to spout it. It doesn't help that the general public is so anesthetized they let it slide on by. I'm afraid that half of them probably don't even know what it means.
 

John Gregoire (255)
Tuesday February 5, 2013, 5:47 am
A form of austerity galvanized this nation in WW II and we could surely use such a national commitment now. Instead we rely on a false economy with interest rates held low by the Fed and seem to think that we can continue to spend in an unrestrained manner by printing more money. It's funny how, despite the President's pleas to stop the name calling, so many liberals can't live without being nasty, vindictive, snide, etc. better all should work together as we all did during WWII and never since.
 

Dandelion G. (385)
Tuesday February 5, 2013, 6:29 am
I'm all about working together, hence being an Independent, but the extremist on the far right were given a very generous name by me....whack a doodles. I stand by it.

Also when the top percenters start doing some austerity measures upon themselves then we can say we are working in this "all together". Right now a great deal of the population has been sucked dry, more are still loosing what they had, they have already "given" a lot for a "few" to do well. If I felt this "austerity" was shared equally then I don't think people would have such an issue, but it isn't. And many Economist have stated, austerity alone is not a way to fix the problem anyways.
 

Kit B. (276)
Tuesday February 5, 2013, 8:02 am

Austerity in World War II was not universal, first by using any one that could work the government put them to work in factories, most were paid very low wages for long, hard hours. The upper percentage gave up nothing but continued to make piles of money from their factories. And...there was a Depression, so everyone was only too eager for work. The Federal government either supplied some form of child care, or neighbors helped each other with child care.

But if what you meant was that War Profiteering was reeling in big profits for the few, than I would agree,

Basic economics - in times of economic woes - the only way out is to increase taxes and increase spending, then when the economy is back up and running, work on the never ending budget or debt problems.
 

Mary Donnelly (47)
Tuesday February 5, 2013, 1:17 pm
Thanks Kit.

Isn't this an example of not letting the facts spoil a good story?
 

Rooibos Bird (237)
Wednesday February 6, 2013, 5:12 am
Dandelion - Yes, Carlin certainly did tell it like it is, just thinly veiled in humour (I've seen that clip you listed, it's very truthful). It's how he got the message out...and his contemporary, Lewis Black, is taking up the reins (Black is one of my favourite comedians).
 

Dandelion G. (385)
Wednesday February 6, 2013, 5:25 am
Comedians are able to say alot, as you say, thinly veiled. Aesop, who was a slave, also did this in his "fables" and I'm also a fan of Lewis Black.
 

Pat A. (116)
Wednesday February 6, 2013, 6:44 am
I tried to send stars to Kit and Angelica and Gene and Dandelion and Brian and..... gasp! I succeeded in sending a star to Rooibos B and Judy C - excellent article and I agree with their comments wholeheartedly. Sensible investing in public works that the public benefitted from was one of the hallmarks of FDR's recovery (God bless him!).
 

Munro Tapper (80)
Thursday February 7, 2013, 7:31 pm
How can these advocates of austerity believe themselves?
 
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