Wisconsin Comes To London

I woke up to a CNN report about moving scruffy-looking protesters camped out at Parliament Square-- some for over a decade-- out of sight of the cameras for The Royal Wedding. I bet if CNN could get away with it they would report on nothing but The Royal Wedding from now 'til the cows come home. I even learned today that The Queen is upset because her grandson is marrying a mere commoner, albeit a rich one.

But there actually is more news going on than CNN's favorite story-- even in England-- easily avoidable by all the American "news" channels. I mean who wants to talk about austerity and the conservative consensus-- on a weekend (or a weekday)? Paul Krugman, thank God.

Portugal’s government has just fallen in a dispute over austerity proposals. Irish bond yields have topped 10 percent for the first time. And the British government has just marked its economic forecast down and its deficit forecast up.

What do these events have in common? They’re all evidence that slashing spending in the face of high unemployment is a mistake. Austerity advocates predicted that spending cuts would bring quick dividends in the form of rising confidence, and that there would be few, if any, adverse effects on growth and jobs; but they were wrong.

It’s too bad, then, that these days you’re not considered serious in Washington unless you profess allegiance to the same doctrine that’s failing so dismally in Europe.

It was not always thus. Two years ago, faced with soaring unemployment and large budget deficits-- both the consequences of a severe financial crisis-- most advanced-country leaders seemingly understood that the problems had to be tackled in sequence, with an immediate focus on creating jobs combined with a long-run strategy of deficit reduction.

Why not slash deficits immediately? Because tax increases and cuts in government spending would depress economies further, worsening unemployment [exactly what Paul Ryan & the GOP are proposing]. And cutting spending in a deeply depressed economy is largely self-defeating even in purely fiscal terms: any savings achieved at the front end are partly offset by lower revenue, as the economy shrinks.

So jobs now, deficits later was and is the right strategy. Unfortunately, it’s a strategy that has been abandoned in the face of phantom risks and delusional hopes. On one side, we’re constantly told that if we don’t slash spending immediately we’ll end up just like Greece, unable to borrow except at exorbitant interest rates. On the other, we’re told not to worry about the impact of spending cuts on jobs because fiscal austerity will actually create jobs by raising confidence.

How’s that story working out so far?

Self-styled deficit hawks have been crying wolf over U.S. interest rates more or less continuously since the financial crisis began to ease, taking every uptick in rates as a sign that markets were turning on America. But the truth is that rates have fluctuated, not with debt fears, but with rising and falling hope for economic recovery. And with full recovery still seeming very distant, rates are lower now than they were two years ago.

But what does this have to do with The Queen, David Cameron's increasingly unpopular Conservative government and CNN's refusal to cover England's massive demonstrations against the austerity/conservative consensus monster? They didn't cover Wisconsin at first either, and seem to play what's happening there as down as they can. Yesterday afternoon:

3.36pm: Here's a mid-afternoon round-up of the huge protest in London against the government's public sector spending cuts.

•Around 500,000 people have joined the TUC's rally against the government's public sector spending cuts in central London.

•The main group of the marchers demonstrated peacefully and walked along the pre-planned route from Embankment to Hyde Park.

•Anti cuts and tax avoidance protesters closed down more than 13 shops on Oxford Street whilst many more shut their doors

•The protest has been largely without violent incident but a breakaway group of protesters attacked shops and banks in the Oxford Street area. A scuffle broke out between a handful of activists and police in New Bond Street.

The news reports in the U.K., where they can't not cover it, estimated the turnout at 250,000, then grudgingly nudged it up to 400,000-- after it had already passed half a million. Sounds like Wisconsin or Michigan or Ohio or something:

In what looks like being the largest mass protest since the anti-Iraq war march in 2003, teachers, nurses, midwives, NHS, council and other public sector workers were joined by students, pensioners and direct action supporters, bringing the centre of the capital to a standstill.

Tens of thousands of people streamed along Embankment and past police barriers in Whitehall. Feeder marches, including a protest by students which set off from the University of London in Bloomsbury, swelled the crowd, which stretched back as far as St Paul's Cathedral.

The biggest union-organised event for over 20 years saw more than 800 coaches and dozens of trains hired to bring people to London, with many unable to make the journey to the capital because of the massive demand for transport.

"I'm sure that many of our critics will try to write us off today as a minority, vested interest," said Brendan Barber, the general secretary of the Trades Union Congress, which organised the march.

"The thousands coming to London from across the country will be speaking for their communities when they call for a plan B that saves vital services, gets the jobless back to work and tackles the deficit through growth and fair tax."

Barber is expected to tell this afternoon's rally in Hyde Park that there is an alternative to the "brutal" spending cuts, which have already led to the threat of 170,000 council job losses and another 50,000 elsewhere in the public sector.

"No part of our public realm is to be protected. And don't believe it when ministers say that the NHS is safe in their hands. With over 50,000 job cuts already in the pipeline-- nurses, doctors, physios, midwives-- in the name of so-called efficiency savings of £20bn, the NHS as we know it is already in intensive care.

"With David Cameron talking about selling it off to any willing provider out to make a profit, the NHS is facing the gravest threat in its history. Today let us say to him: we will not let you destroy what has taken generations to build. Let's be brutally clear about these brutal cuts. They're going to cost jobs on a huge scale-- adding to the misery of the 2.5 million people already on the dole."