The Austerity Bomb

 Posted by on November 17, 2012 at 7:18 AM
Nov 172012
 

Citizens of Milan react to austerity measures enforced by the EU and IMF 

In his NY Times blog Wednesday, Paul Krugman suggests replacing the misleading moniker “fiscal cliff” used to describe the US government’s fiscal situation, with the more accurate term “austerity bomb”:

Brian Beutler of Talking Points Memo seems to have been the first to use the phrase “austerity bomb” for what’s scheduled to happen at the end of the year. It’s a much better term than “fiscal cliff”. The cliff stuff makes people imagine that it’s a problem of excessive deficits when it’s actually about the risk that the deficit will be too small; also and relatedly, the fiscal cliff stuff enables a bait and switch in which people say “so, this means that we need to enact Bowles-Simpson and raise the retirement age!” which have nothing at all to do with it.

And it can’t be emphasized enough that everyone who shrieks about the dangers of the austerity bomb is in effect acknowledging that the Keynesians were right all along, that slashing spending and raising taxes on ordinary workers is destructive in a depressed economy, and that we should actually be doing the opposite.

Meanwhile, in Europe, which has had much more austerity in aggregate than we have, grim new industrial production numbers and a worsening unemployment crisis…

About Europe. Z Communications provides a roundup of this week’s mass protests:

Europe’s Mediterranean rim trembled on Wednesday as violent clashes broke out following the largest coordinated multinational strike in Europe ever. In the hope to stave off decades of austerity, precarity and unemployment, European labor unions united for the first time since the start of the European debt crisis to organize strikes and protests in a total of 23 EU member states, with millions of workers walking off their jobs and marching on parliament buildings across the continent. Bloody street battles ensued across Spain, Portugal and Italy.

In Italy, over 300,000 protested in over 100 cities as workers observed a 4-hour stoppage in solidarity with Greek, Spanish and Portuguese workers. In Milan and Rome, scenes of street “guerriglia” were witnessed as thousands of students clashed with riot police, bringing traffic to a standstill and leading to dozens of injuries. In Sardinia, industry minister Corrado Passera and Fabrizio Barca, minister of territorial cohesion, had to be evacuated by helicopter after angry protesters besieged a meeting and started burning cars all around them.

In Naples and Brescia, thousands of students occupied railway tracks; in Genoa, the entrance to the ferry port was blocked; in Florence, Venice, Trieste and Palermo, banks were smeared with eggs and banners unfurled from monuments; in Padua clashes broke out between students and police; in Bologna 10.000 students took to the streets and attempted to march straight through a line of riot police; and in Pisa protesters occupied the leaning tower, unfurling a banner that read “Rise Up! We are not paying for your Euro crisis!

Deficit hawks in the US, including the Bowles-Simpson Catfood Commission and former investment bank manager Pete Peterson‘s Peter G. Peterson Foundation (Peterson’s personal worth is estimated at $3 billion), will be in for a rude awakening if they succeed in enforcing an austerity regime on US citizens (who, unlike their European counterparts,  are armed to the teeth and remember  Network‘s Howard Beale.) Besides being unnecessarily cruel in its effects on the poor and middle class, it also make zero economic sense in the short and medium run, as Krugman never tires of explaining. Something to keep in mind every time your hear self-dealing fiscal scolds piss and moan about the debt that they created but want others to pay for.

Z Com concludes:

And so Southern Europe continues to tremble on its very foundations. As smoke rises from the streets of Madrid, Lisbon, Rome and Athens, one thing is becoming ever more clear: the question is no longer if but when the social explosion will hit. The outrage is building up, and with unemployment rising, austerity deepening, and a generation of Europeans increasingly disillusioned by state intransigence and outraged by police violence, such an outburst of popular rebellion seems ever more inevitable. All it will take is a spark.

Coming to a continent near you.

PropagandeeI Wrote This.

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