Guardian UK: The facts are clear. This cruel austerity experiment has failed

[marmar]

The facts are clear. This cruel austerity experiment has failed
While the human cost of economic stupidity is all too visible, the world's leaders are paralysed by their dogma

Will Hutton
guardian.co.uk, Saturday 2 June 2012


Last week was an awesome warning of where go-it-alone austerity can lead. It produced some brutal evidence of where we end up when we place finance above economy and society. The markets are now betting not just on the break-up of the euro but on the arrival of a new economic dark age. The world economy is edging nearer to the abyss, and policymakers, none more than in Britain, are paralysed by the stupidities of their home-spun economics. Yanis Varoufakis, ex-speechwriter for former Greek prime minister George Papandreou and now an economics professor in the US, said last week: "There is precisely zero chance of austerity working. It is the same as thinking you can escape from gravity by waving your arms up and down."

It could hardly be more sobering. Money has flooded out of Spain, Greece and the peripheral European economies. Signs of the crisis range from Athen's soup kitchens to Spain's crowds of indignados protesting in the streets against austerity and a broken capitalism. Youth unemployment is sky-high. Less visible is the avalanche of money flowing into hoped-for safe havens in the US, Germany and even Britain. The last time the British government could sell government bonds at interest rates as low as today's was in the early 1700s.

George Osborne and his acolytes proclaim this as a triumph of the government's economic policies. They are gravely mistaken. Rather it portends fears that the international economic order may collapse because if so many countries are simultaneously pursuing austerity, where's growth to come from?

Virtually everywhere you look there are signs of a weakening world economy. At home, manufacturing suffered its biggest plunge for three years, and this in an economy already suffering its longest depression since the 19th century. American jobs growth is petering out. Unemployment in Europe averages 11%. Even China witnessed a sharp fall away in factory activity in May. ..................(more)

The complete piece is at: http://www.guardian.co.uk/commentisfree/2012/jun/02/austerity-failed-will-hutton

[ladjf]

1. Good. Maybe we can start really doing something about the economy. nt

[WCGreen]

2. Great article...

I think the hard, ruling right is desperately trying to make the economic situation worse so that it will be impossible for the lower classes to fight back any time soon.

Or they are completely insanse...

Remember, the definition of insanity is to keep trying the same thing and expecting different results

[Berlin Expat]

3. China is something

significant that is potential cause for concern.

It's long been rumored, and strongly suspected, that the Chinese government has been cooking the books for a long time vis-a-vis their purported economic growth.

With the EU in crisis, and America still in the doldrums, China really doesn't have anywhere to sell it's wares; their own domestic consumer market is still relatively small and most of the population is still quite poor, though it has improved over the last 25 years.

Add into this a Chinese real estate bubble as well as a credit bubble, and the downside possibility of a Chinese economic meltdown is one that can't be ignored or dismissed and certainly the ramifications of such an event could be significant.

If the factory of the world shuts down, a lot of businesses are going to have a hard time. There's really only one place left on the planet with a cheap labor source: Africa. BTW, I'm certainly not condoning the practice of shopping out for cheap labor, this is just the way the capitalist mindset functions.

[fasttense]

4. Why are our politicians and governments so unable to implement the obvious solution?

Why are our leaders going on and on about austerity, trickle down, free markets, voodoo economics, and neoliberal trade?

We have been following these crazy and ignorant economic theories for the last 50 years and it has led us to this economic crash that will not improve.

The most obvious and rational thing to do would be the opposite of what we did to get into this mess. But instead they double down on the same crap that caused the problem.

Why are they so paralyzed? Why are our federal and local governments not able to do anything to improve the economy? Why is it the only thing they can do is funnel more money to the uber rich and crush the real workers in our society? Why can't our politicians do their job?

[LiberalAndProud]

5. It seems to me that the answer to your questions is equally obvious.

You need only ask, who benefits from the policies.

http://www.marketingcharts.com/direct/wealthiest-americans-dramatically-increase-income-16296/