Sunday, March 03, 2013

Are U.K. Conservatives Writing The Austerity Script For Boehner, Cantor And Ryan?


As Krugman explained Saturday (see below), Europe's embrace of the Austerity Agenda is failing-- and failing badly. That doesn't keep the elites from thinking that if they just squeeze working families even harder, it will magically prove them right. After his catastrophic electoral defeat in Eastleigh Wednesday, David Cameron encouraged his Defense Secretary, Philip Hammond to pressure the Conservatives' Lib-Dem coalition partners by insisting on more welfare cuts (to keep military spending high). Sound familiar?
In order to stick to his current deficit reduction timetable, George Osborne needs to announce another £10bn of cuts in this summer's Spending Review (which will set spending totals for 2015-16) and cabinet divisions over where the axe should fall are becoming ever more visible. After Danny Alexander declared that he is opposed to further cuts in welfare spending, which was reduced by £18bn in the 2010 Spending Review and by £3.6bn in last year's Autumn Statement, Defence Secretary Philip Hammond has given an interview to the Telegraph in which he says that he will not accept any significant reductions to the defence budget and that the burden of cuts should fall on welfare instead.

...As Hammond suggests, he is not the only Conservative who believes his department should be exempt from further austerity (a phenomenon dubbed "fiscal nimbyism" by Treasury minister David Gauke). Theresa May (Home Office) and Chris Grayling (Justice) are also reported to be pushing for deeper welfare cuts in order to allow their budgets to be protected. The stage is set for a dramatic confrontation with the Lib Dems, who have staked their reputation on preventing further benefit cuts.

The one area of the welfare budget that the Lib Dems would be willing to see reduced is that concerning universal benefits for the elderly, such as the Winter Fuel Allowance, free bus passes and free TV licenses. But Downing Street has already signaled that David Cameron's general election pledge to protect these payments will be extended for another year in order to cover the Spending Review. As a result, any further cuts to welfare will again fall entirely on the working-age poor.

Before last year's Autumn Statement, Tory ministers, including Cameron and George Osborne, floated policies including the abolition of housing benefit for the under-25s and the restriction of child benefit for families with more than two children only to see these proposals rightly vetoed by the Lib Dems. But the insistent Conservatives demands for further welfare cuts will likely see them examined again.
One twitter wag asked if Hammond might "make a start by giving up all troops' exemptions from welfare cuts." Another, David Frum, worries that the congressional defense hawks in the U.S. aren't being as hysterical as Hammond. Where's Buck McKeon when his defense contractor and drone manufacturer buddies need him most?

After Boehner and his cronies-- with the help of 95 Democrats-- forced through the vote on Sequestration, Paul Ryan, the GOP's most outspoken and clueless advocate of the failed European Austerity agenda, was jubilant. On ABC's This Week he celebrated by announcing that “What conservatives like me have been fighting for, for years, are statutory caps on spending, legal caps in law that says government agencies cannot spend over a set amount of money. And if they breach that amount across the board, sequester comes in to cut that spending, and you can’t turn that off without a supermajority vote.  We got that in law. That is here.” That was why Ryan undermined the Grand Bargain between Obama and the weak, drunken Speaker in the fist place-- to manipulate a situation that would bring about Sequestration. To the shills of plutocracy-- like Ryan-- unemployment for a million people, the threat of recession, even a threat to national security mean less than preserving loopholes like this one that further enrich a couple of hundred multimillionaires and billionaires. It was something the GOP was planning all along.

OK, back to Europe, and Krugman, for a moment. What he pointed out Saturday is that, "faced with a huge blow to private demand from a burst housing bubble and deleveraging, Europe has responded not as 75 years of economics said it should, with temporary stimulus, but with Herbert Hoover-- or, better, Chancellor Brüning-- policies of retrenchment. And policy makers pronounce themselves shocked both to find that the bottom is dropping out of Europe’s economy and that their perceived authority and wisdom is being rejected by voters." It's horrifying that the low level of talent attracted to GOP politics doesn't allow Republicans to step away from their ideological preconception for a moment and what's unfolding in real time.

Krugman reminds us that "those preaching austerity probably do not see themselves as contributing to a crisis of democracy, but they are. The Italian elections should remind eurozone leaders to pay attention to their voters. Economic fixes have failed to staunch a political crisis that has the capacity to harm not only EU integration, but the legitimacy of the continent’s democratic order itself." Is that what the Paul Ryans, Eric Cantors, John Boehners and Miss McConnells want spreading to our shores? I'm not certain. But the Tea Party idiots and the John Birch Society money that finances them certainly do.

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