Weekend Economists Give Two Thumbs Up for Roger April 5-7, 2013

[Demeter]

24. Austerity Is Killing Europeans -- Literally. Why Are We So Determined to Follow In Their Footsteps?

http://www.alternet.org/austerity-killing-europeans-literally-why-are-we-so-determined-follow-their-footsteps?akid=10273.227380.XDbxHE&rd=1&src=newsletter818648&t=6&paging=off

How much sicker does the patient have to get before the doctors stop prescribing poison?

Here are some selected news stories out of Europe:

New York Times: ”Unemployment in Euro Zone Reaches a Record High”
WSJ: “Sixth Quarter of Contraction Looms for Euro Zone”
Der Spiegel: “Shredded Social Safety Net: European Austerity Costing Lives”
WSJ: “Spain Says Budget Gap Is Wider Than Reported”
New York Times: “European Car Sales Point to Continuing Slump”
WSJ: “Italy Unable to Form Government”
New York Times: “Debt Rising in Europe”

Paul Krugman’s right: This isn’t a recession. It’s Europe’s Second Depression, and it’s on track to last even longer than the first one. Austerity economics has been imposed across most of the Eurozone, to a greater or lesser degree, with devastating economic results: This is Europe’s sixth consecutive quarter of economic contraction. Europe’s Austerity Recession (or Depression) has now lasted longer than the one brought on by the financial crisis of 2008.

The first downturn was brought on by private greed and public negligence. This one’s been brought on by public insanity fueled by private interests. And the austerity poison is literally deadly: The Lancet, a respected medical journal,reports a sharp increase in suicides and epidemics as the rest of European austerity measures...Meanwhile, manufacturing output is plunging across the Eurozone. Spain saw the worst decline in employment since 2009. Unemployment hasn’t been this high in the Eurozone since record-keeping began in 1995. And Europe’s infrastructure has a dimming future.

“Europe’s carefully maintained autobahns, high-speed TGV trains and vast network of modern airports have long been the envy of the world,” writes Reuters. “But thanks to austerity budgets that are slashing infrastructure spending …, that may not be true for much longer.”

No wonder last month’s European Union summit was marked by protests and Italy’s leaders still can’t form a government. What can we learn from Europe’s misery? For our political leaders the answer seems to be: Nothing. In fact, Washington seems determined to follow in Europe’s footsteps. We’ve already had a couple of rounds of austerity ourselves – in the last deficit deal, and now in the “sequester” cuts. The President and the Republicans both employ pro-austerity rhetoric which argues that deficits are our biggest problem. They just disagree about where and how it should be imposed. The President occasionally offers half-hearted stimulus programs, but he never actually fights for them. The Republican platform has become increasing extremist, emphasizing the radical dismantling of our social contract and a deregulated environment in which citizens would become the hapless prey of corporate predators. President Obama may challenge the GOP verbally on a couple of points, but he continues to propose pre-“conservatized” ideas, which the GOP promptly and predictably pushes further to the right. (His new budget is likely to be the next example of this.) And by endlessly repeating the false idea that deficits are our most urgent economic problem, he has performed an invaluable service to the cause of harmful austerity economics.

In other words, The Republicans want to place the country on an express train to hell, and the President usually suggests we take the local instead.

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Richard (RJ) Eskow is a blogger and writer, a former Wall Street executive, an experienced consultant, and a former musician. He has experience in health insurance and economics, occupational health, benefits, risk management, finance and information technology.