Wednesday, 15 May 2013

The Myths behind the policy of "Austerity"

Our current economic woes were no accident - they are the result of the implementation of a flawed policy.

I would thoroughly recommend this book review by Paul Krugman - http://t.co/kDh7fZamHd

One of the books reviewed can be purchased using the link below. I thoroughly recommend it. The flawed ideas that the book exposes have had economic consequences - and a lot of people have been hurt. There may also be political consequences - the political parties who have implemented these policies (and they include the Democrats in the USA; the Labour Party in the UK and the Parti socialiste in France) are losing the confidence of voters. We saw it in the UK local elections - the Tories lost heavily because many of their voters fled to UKIP - but Labour failed to do as well as it should because it implemented austerity policies from 2008 onwards (though not as savagely as the Tories and their Lib-Dem collaborators) and has failed so far to make the case that a very different approach is needed. Hollande spoke the right language before his election - but has not turned his words into action - he has seemed to accept the arguments of the ""Austerians" in his policies.

The European Union's "democratic deficit" isn't because it lacks a directly elected representative parliament (it has that); that the Ministers who attend the Council of Ministers are not representatives of democratically elected governments (they are), that Commissioners are nominated by the democratically elected governments and confirmed by national representatives in the Council and elected members in the Parliament (they are) -

but because the austerity policies being pushed are hated.

The challenge to our politicians is to expose the arguments made to promote austerity - and implement policies that improve peoples' lives. Otherwise we'll see more and more people conclude that our present structures aren't "fit for purpose". I've long argued that the conservatives who attack Keynes and FDR should instead treat them as heroes. They saved capitalism the last time the lunatic ideas of unregulated free markets threatened to destroy it.  If we value the model of democracy that flourished in the latter half of the twentieth century - we'd better act quickly to stop the "blood letting" remedy that has been inflicted. It is as dangerous - and crazy - as the blood letting of medieval doctors.