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An article by William K. Black... he must be some kind of commie or something
Austerity during a serious recession is economically insane. It is a pro-cyclical policy that makes the recession more severe. A more severe recession is a mass destroyer of wealth and quality of life. It is pure waste. It is the primary cause of dramatic increases in public deficits and debt. Unemployment reduces tax payments and increases demands for public spending. One cannot decide to end a budgetary deficit during a recession by adopting austerity. Austerity (some combination of cutting government spending and increasing taxes) reduces private and public sector demand. This means that imposing austerity is likely to deepen the recession and can make the national deficit and debt larger. It is analogous to the medical insanity of bleeding patients to cure them of disease – and then bleeding them more because the prior bleeding make them sicker.
I would agree. Most of government spending is generally waste so that would not really count as decreasing public sector demand by cutting. Unless a country really decides to go totally the socialist or communist route, austerity should not be postponed.
Sorry but I don't share the same view of Krugman as that guy does.....I might agree on the austerity thing but just saying austerity doesn't mean a lot unless it's spelled out on what and how much gets effected.
Naturally if you say slashed every program by 50% it would likely have a very negative impact. In some smaller amount whatever it might be or a gradual reduction of spending should be fine and actually necessary in my view. To sum it up I think it's a question of how much and not one of all or nothing.
Italians hold candles as they demonstrate against government policy in front of the Pantheon, in downtown Rome, on April 18, 2012. Trade union's anger is growing in Italy over the government's reform measures and public outrage over a series of suicides linked to the economic crisis.
Spain coming unglued. Huge unemployment rates with no solutions in sight, apparently Austerity means gradually killing off the excess population. Who's next?
We already have situations like this, or worse in most American inner cities and decrepit rural backwaters. But our diabesic and ignorant sheep population has no idea what is happening to them.
"For sixty years we have heard of the great communist threat around the world. And, how the U.S. polity has fought the good fight against the threat of communism. Today, we hear that same argument extended to include “enemies” in the Muslim community, socialism and the like. In other words, any convenient boogeyman.
If the American form of social and economic justice was the beacon on the hill that we are told it is, then people suffering injustices and tyranny around the world would have been overthrowing tyranny not for communism but for capitalism and democracy. And our economic and political system would not create blowback or hatred were it a system of social and economic justice without equal. But, the reality is most of the destabilizations of tyranny for the past fifty years were people rising up against American-backed police states and dictators benefiting from American-style deregulated, private, for-profit capital. And, in those corrupt systems of control, American corporations, Americans weapons manufacturers and American private, for-profit capital were highly complicit of the exploitation and tyranny by the ruling elite."
How could anybody say crazy things like that, call in a drone strike! We need to be protected from such rubbish with internet censorship!
Merry Christmas everyone...
Rupert
"If we don't loosen up some money, this sucker is going down." -GW Bush, 2008
“Lack of proof that something is true does not prove that it is not true - when you want to believe.” -Humpty Dumpty, 2014
“The greatest shortcoming of the human race is our inability to understand the exponential function.” Prof. Albert Bartlett
"By blaming the crisis on public spending, politicians’ and bankers’ only solution was to impose austerity. This has predictably worsened the debt crisis."
Excerpt via the Transnational Institute in Amsterdam.
“We are punishing the innocent through austerity, and we are rewarding the guilty because the banks are continuing to receive huge privileges and subsidies from our governments. That is why we must defeat this austerity treaty, and all the measures that come with it unless we want Europe to be retrograded to, shall we say, the 19th century.”
Susan George, President of the Board of the Transnational Institute, author of Whose Crisis, Whose Future?
Austerity measures have never worked, and have led growth to collapse across the EU. Greece witnessed its battered economy shrinking by 6.2% in the second quarter of 2012, and is forecast to enter its sixth straight year of recession in 2013. Austerity means less national income from taxation, reducing governments’ capacity to pay back spiraling debts, leading to even higher debts.
Even the International Monetary Fund (IMF) has warned against austerity measures during recessions, saying they will cost the UK an extra £76bn (€94bn) by 2015. Additionally, speculators have encouraged doubts about certain countries’ abilities to pay, causing rates of interest to soar for countries like Greece and Portugal, making their debts completely unaffordable.
“If you diet when you are sick, it’s quite probable you’ll get a lot sicker so it’s not a good idea.” Nicoletta Batini, one of the authors of the IMF report, on austerity during recessions
The EU Crisis Pocket Guide:
Contents
How a private debt crisis was turned into a public debt crisis and an excuse for austerity
The way the rich and bankers benefited while the vast majority lost out
The devastating social consequences of austerity
The European Union's response to the crisis: more austerity, more privatisation, less democracy
Map of resistance across the EU in 2012
Ten alternatives put forward by civil society groups to put people and the environment before corporate greed
Resources for further information
"HSBC just got away with knowingly laundering billions of dollars for global drug cartels, simply because regulators consider the bank “too big to fail”.
In what the New York Times declared as a “dark day for the rule of law” on December 11, 2012, HSBC, the world’s second largest bank, failed to be indicted for extensive criminal activities in laundering money to and from regimes under sanctions, Mexican drug cartels, and terrorist organizations (including al-Qaeda).
While admitting culpability, and with guilt assured, state and federal authorities in the United States decided not to indict the bank “over concerns that criminal charges could jeopardize one of the world’s largest banks and ultimately destabilize the global financial system.” Instead, HSBC agreed to pay a $1.92 billion settlement......
....The fact that the Justice Department refused to prosecute HSBC because of the effects it could have on the financial system should be a clear sign that the financial system does not function for the benefit of people and society as a whole, and thus, that it needs to be dramatically changed, cartels need to be destroyed, banks broken up, criminal behaviour punished (not rewarded), and that people should dictate the policies of society, not a small network of international criminal cartel banks.
But then, that would be rational, so naturally it’s not even up for discussion."
Deutsche Bank Says Co-CEO Fitschen Subject of CO2 Probe
"Deutsche Bank AG (DBK) co-Chief Executive Officer Juergen Fitschen and Stefan Krause, the firm’s chief financial officer, are subjects of a tax probe involving the sale of carbon-emission certificates that led to five arrests and police raids on the lender’s Frankfurt offices.
Fitschen and Krause’s approval of value-added tax statements for 2009 is being reviewed by prosecutors, Deutsche Bank said today in an e-mailed statement.
The bank’s headquarters were searched and prosecutors are investigating 25 employees, Guenter Wittig, a spokesman for the Frankfurt General Prosecutor, said in a statement. Five workers were arrested over obstruction of justice and money laundering allegations, he said. He declined to identify any suspects.
“There’s suspicion the bank employees withheld evidence from the authorities and failed to report potential money laundering,” Wittig said, in reference to the obstruction of justice portion of the case. The bank was previously raided in 2010 as part of the case.
Global investment banks are the subject of probes from Japan to Canada as regulators intensify their scrutiny of the industry.
At Deutsche Bank, the CO2 probe adds to subpoenas and litigation stretching from alleged rigging of interbank lending rates to claims the bank misrepresented products tied to U.S. mortgages.
Raids were also conducted in Berlin and Dusseldorf, Wittig said today. About 500 federal police and tax investigators were involved. The authorities also raided private homes.
The prosecutors said last year they’re investigating as many as 170 people, seven of whom work at Deutsche Bank. The scheme deprived the government of 300 million euros of income, the court said in a December 2011 ruling.
The case is part of the biggest crackdown on emissions- related tax crimes since Europe opened the cap-and-trade system in 2005. German authorities enlisted assistance from 10 countries in 2010 and froze 100 million euros in funds as part of the probe. "
"With 500 families being evicted in Spain every day, foreclosures have become a source of great suffering.
But luckily, there are still those who resist.
Throughout this crisis, there has always been a certain alienating quality to the pronouncements of European leaders and technocrats.
Sometimes one is led to wonder if these people are actually talking about the same continent — or the same universe, for that matter.
Just today, for instance, the European Central Bank announced that “the eurozone is starting to heal.”
Indeed, the major weakness the central bankers could detect from the commanding heights of their glass-and-steel tower in downtown Frankfurt was “falling bank profits...
Recent months have seen a wave of high-profile suicides by people who were about to be evicted from their homes.
The most paradigmatic case was that of a 53-year-old woman in the Basque Country, who jumped from her balcony and plunged to death as foreclosure agents made their way up the stairs of her apartment.
The Wall Street Journal, meanwhile, tells the harrowing story of a Spanish locksmith who was taken aback when he pried open the door of a foreclosed apartment for police, and encountered a woman giving birth inside.
According to the locksmith, it was “evident that the stress of the foreclosure had induced premature birth.”
Since then, a number of high judges have spoken out against the “inhumane” foreclosure laws in Spain, which they consider to be “overly protective of the politically influential banks”. Under immense media pressure, the conservative government finally passed an emergency law allowing the most vulnerable families to be spared from eviction.
Still, the new law will only cover some 120.000 people and does not tackle the root of the problem, which is the fact that the government keeps squeezing workers, students, homeowners, pensioners and the sick and disabled in order to pay for the folly of a tiny elite of gambling bankers.
The human tragedy, after all, is only part of the story. The other part, as the Spanish indignados rightly point out, is the estafa: the fraud. Many of the mortgages that now shackle millions of families to unpayable debt loads, came about under highly dubious circumstances to begin with.
The banks never cared if people would be able to repay their debts: as long as house prices kept rising, a defaulting family could still be evicted and replaced by another. After the bank reclaimed the property, it could just re-sell it at a profit. The fact that lives are being destroyed and families shattered in the process is wholly irrelevant for the financial imperatives of the bank.
And thus, the people end up paying the banks triple:
first through the usurious interest rates they pay on their mortgage loans (which are essentially conjured up out of thin air by the banks);
second through the tax-payer-funded bailouts of the same banks, after many of these mortgages started going bad;
and third through the homes they are losing and which subsequently fall back into the property of the bank, which can — a few years down the line, when real estate prices will have recovered somewhat — sell on the property to a third party.
The idiocy of Juana’s situation is clearly beyond words, and the sheer injustice of the evictions is so blatant as to render the story utterly incredulous. Yet it’s true. And it’s happening on a truly massive scale. Luckily, however, there are those who resist.
Today, as the technocrats at the European Central Bank pretended once again that everything is under control, a few dozen indignant Spaniards came together and decided to take matters into their own hands. They occupied the doorstep of Juana’s home and refused to let police enter. And they won. Juana can keep her home. For now.”
Madrid On The Brink: S25 → S29
Something from Greece:
ROAR presents ‘Utopia on the Horizon’, a documentary on the Greek debt crisis and anti-austerity movement, dedicated to those who chose to struggle.
