Saturday, May 26, 2012
Joe Stiglitz on the brutal reality of Angienomics austerity in EuropeJoseph Stiglitz describes the consequences of the suicidal austerity policiies during this depression that are being forced on the eurozone by Angela Merkel's Germany, the European Central Bank (ECB), and the International Monetary Fund (IMF) in After Austerity Project Syndicate 05/07/2012:
The consequences of Europe’s rush to austerity will be long-lasting and possibly severe. If the euro survives, it will come at the price of high unemployment and enormous suffering, especially in the crisis countries. And the crisis itself almost surely will spread. Firewalls won't work, if kerosene is simultaneously thrown on the fire, as Europe seems committed to doing: there is no example of a large economy – and Europe is the world’s largest – recovering as a result of austerity.Neoliberalism, the brand of free market fundamentalism not dominant in the US and Europe, doesn't take much account of human costs - except for financial costs to the One Percent. It primarily listens only to the dogmas of the Great God Free Market. But, as Stiglitz explains:
This we should know by now: markets on their own are not stable. Not only do they repeatedly generate destabilizing asset bubbles, but, when demand weakens, forces that exacerbate the downturn come into play. Unemployment, and fear that it will spread, drives down wages, incomes, and consumption – and thus total demand. Decreased rates of household formation – young Americans, for example, are increasingly moving back in with their parents – depress housing prices, leading to still more foreclosures. States with balanced-budget frameworks are forced to cut spending as tax revenues fall – an automatic destabilizer that Europe seems mindlessly bent on adopting.This is not anything exotic or new. It's basic macroeconomics. The cost of ignoring it in Europe have been enormous and continues to grow.
Tags: angela merkel, austerity economics, eu, euro, european union
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No subject for immortal verse
That we who lived by honest dreams
Defend the bad against the worse."
-- Cecil Day-Lewis from Where Are The War Poets?
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