Thursday, April 26, 2012

Austerity vs Democracy


European political elites-- who know who ultimately keeps them living high off the hog-- seem to have persuaded themselves that they know better than the hoi polloi in their countries. In country after country they're either forcing Austerity on an unwilling population (Greece) or scaring the population into thinking there's no alternative (Spain)... or a mixture of both (Italy). Over the weekend you may have seen stories about how the right-wing Dutch government (not right wing like Republicans and Nazis, right wing like Democrats) collapsed over Austerity. And, more likely, you saw the President of France humiliated in the first round of balloting as French citizens decided they're not walking into austerity without a fight. Especially because they sense that it doesn't work-- at least not for middle and working class families. European countries now officially in recession: Greece, Italy, Portugal, Ireland, Belgium, Denmark, Holland, the Czech Republic, Slovenia. Spain and Germany will probably announce their economies are in recession again within days and now the U.K.-- bastion of Austerity under the Conservative Party-- just dropped back into recession as well, the economy contracting by 0.2% in the first quarter.
There were fresh calls for the Government to scale back its austerity measures today after figures confirmed the UK had returned to recession.

And it was claimed that the grim official figures could hit confidence and lead to more pain in coming months... TUC general secretary Brendan Barber said: "There has been no growth over the last year, and the economy is 0.5 per cent smaller than six months ago. Austerity isn't working.

"The Government should look across the Atlantic and follow President Obama's alternative that has reduced unemployment and brought growth back to the USA."

Although Cameron-- a kind of British Mitt Romney kind of character, although not as craven and not as extreme right-- is hoping to be saved by a burst of growth around the London Olympics, more thoughtful observers "expect the economy to contract for a third successive quarter in April to June, and with the economic picture across Europe forecast to deteriorate further, our already below-consensus UK GDP forecast for 0.2 per cent growth in 2012 is already appearing a little bullish." But as Krugman pointed out this morning, the conservative consensus that rules DC certainly rules London as well. The Financial Times is just fine with some more Austerity for the proles, even if it doesn't work.

Forbes has a little warning for Romney and the Republican rightists who are so, so, so eager to wreck America with a Koch-funded Austerity program far more extreme than the one Obama is already employing, Republicans routinely deride Europeans as nothing but a bunch of Commies who oppress their wealthiest and most aristocratic citizens. But GOP policy makers and propagandists (as though there were some meaningful differentiation) recently discovered something they love about the Old World: Austerity, a way to justify their war on working families, war on education, war on healthcare, war on Social Security, war on... well, you know the litany... the conservatives' wars against everything.
Since the moment English Prime Minister David Cameron instituted his government austerity program in the belief that taking huge sums of money out of the British economy would get England back on more solid financial footing, American conservative leaders have been fawning all over their Conservative Party counterparts-- if not the actual nation that the British Conservatives lead.

Today, the report card is in and the results are clear-- the GOP has been backing the wrong horse…again.

The British Office for National Statistics confirms that the country’s GDP fell 0.2 percent in the first quarter of this year after contracting by 0.3 percent during the last quarter of 2011. These two, consecutive contractions make it official-- England has doubled-dipped itself into another recession.
This headline in the Guardian says it all:

“UK government stands accused of over-cooking austerity and killing off tentative recovery that was under way two years ago.”

Numerous British economists had warned against the deep budget cutting, arguing that the government was heading down a dangerous path with potentially severe consequences. Steve Benen over at Maddowblog cites the advice of London Business School economist Richard Portes who warned one year ago, “My view is that we are in serious danger of a double-dip recession. This is going to be a cautionary tale.”

A cautionary tale, indeed.

The question that remains is whether our nation’s conservatives will get the message or continue to fervently pursue the austerity agenda that, while playing nicely to their base, would threaten to send this country spiraling into yet another recession as it has done in the United Kingdom.

If the insistence of those who continue to try to persuade us that supply-side economics actually works is any indication-- despite the endless reams of evidence that proves beyond a shadow of a doubt that it most certainly does not-- I would not expect much change in the conservative approach. While the results of the British experiment should shed endless light on the mistaken path the GOP would put us on, in the mind of the Republican Party, there is no substitute to the appeal of peddling a message that produces votes-- if not actual prosperity.

And now I have an excuse for republishing my favorite election song in years.

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