What If The Austerity Measures Republicans Want To Institute Isn't To Grow The Economy At All, Perhaps It's The Elites (Huge Corporations) Wanting To Buy Up America? A 'Crisis' Happens, The Uber Wealthy Are
The economies of Europe are imploding, as conservative governments
continue to pursue exactly the wrong policies at exactly the wrong time.
But this is not really a surprise. It is exactly what was predicted. And now that it is clear that austerity is making things worse they are demanding more austerity as a cure.
Financial Elites Are Not Stupid
So here is the thing. Everyone can see that this is the result—the expected result—of austerity policies.
And Europe's financial elites are not stupid people—not by a long
shot! Perhaps they can see the obvious, because it’s obvious, and
therefore we might conclude that their campaign pushing austerity isn’t about growing the economy – it’s about something else -- they have a different agenda.
When smart people are forcing something to happen we need to look at what is happening, and realize perhaps this is what they wanted to happen.
Maybe economic growth wasn't austerity's goal at all. Maybe the
results we see— the results we all knew would come from austerity—are the results they wanted.
What Else Happened?
The above-listed effect of austerity are not the only results. Forced privatization is also occurring. Here are a few examples from recent news:
Three European railway companies are interested in buying
all or part of Greece's railway business, as the debt-laden country
sells assets to satisfy its lenders, people familiar with the
discussions told Reuters.
Greece says 14 companies, including a subsidiary of
Russian gas company Gazprom, have formally expressed initial interest in
buying Greek state gas firm DEPA under the debt-crippled country’s
mammoth privatization program.
As part of austerity measures, Greek government looking
to sell stakes in major companies, development projects; head of
privatization agency says Israeli investors already expressed
With the economic crisis plaguing the country, drastic
means have been taken to replenish the public coffers. It is in this
context that the Greek government has adopted a measure allowing the
use, for a fee, of the National Police and its equipment for private
While the Ministry of Citizen Protection (in charge of the country's
security services) said the move will help to "pay for the cost of using
police material and infrastructure, and allow modernizing them,” the
average citizen’s security is being seriously compromised and it raises
the question of how far Greece is ready to go to cut state funding.
ATHENS -- Greece invited bids for property in the popular
tourist destination of Afantou in Rhodes Tuesday, as part of a
long-awaited privatization program to raise EUR19 billion by 2015 in aid
of its huge debt crisis.
This is the fourth international real estate tender launched by the
Greek government-established Hellenic Republic Asset Development Fund
The country's privatization agency said Tuesday there was
strong investor interest in the planned sale of the former Athens
airport area, marking the latest step in the country's efforts to raise
some EUR19 billion from the sale of state assets by 2015.
Privatization is happening. Greece is being forced to sell off public assets as a condition of getting help with its debt.
Question: If these assets are contributing to Greece's debt problem,
why would investors want to buy them? If these assets are bringing
revenue that could help cover the debt, why would the financial elites
want Greece to sell them? Unless forcing Greece to sell them was the
Naomi Klein's book The Shock Doctrine
makes the case that financial elites have been following a strategy
where they take advantage of crises and the resulting panic (and
sometimes they make the crisis happen and whip up panic.)
Crisis and panic set up chaotic environments in which it is easy to
swoop in with pre-packaged "solutions" and take all the stuff.
We see this shock-doctrine cycle over and over again: crisis, panic,
panic accelerates, financial elites swoop in and take all the stuff.
(America had its own experience recently of a crisis that generated
terrible panic, with financial elites then swooping in and taking all the stuff. )
Debt often leads to such a a crisis. The book Confessions of Economic Hit Man
exposed the strategy of convincing the leadership of underdeveloped
countries to take on high debt. Then when it becomes difficult to carry
the debt, financial elites swoop in and take all the stuff.
In the United States our own financial elite are demanding "spending
cuts" and other austerity measures as well -- even though we can see in
front of our faces what resulted from European austerity policies.
Conservatives try to whip up panic,
claiming our national debt will force the country into bankruptcy (and
tried to prove it by nearly forcing the country into bankruptcy last
year.) After forcing tax cuts for the rich, again and again, they now say we have to "cut spending" (but not spending on oil company subsidies or military -- estimated upwards of $1 trillion this year.) They demand austerity -- cuts in spending on things democracy does for its citizens.
But remember, at the end of the Clinton presidency the United States was paying off its debt. Federal Reserve Chair Alan Greenspan greenlighted
the Bush tax cuts, saying that Clinton was paying down the country's
debt too fast! When the surplus vanished President George 'W' Bush said
that a return to deficits was "incredibly positive news" because it would lead to a debt crisis that would force cutbacks in government.
The cycle repeats, supposed crisis, panic is whipped up, elites offer their "solution", then swoop in and take all the stuff. Will we fall for it again?
In The Zombie Rises: The Return of Simpson Bowles CAF's Bob Borosage writes,
After experiencing the horrors of this misguided policy,
European leaders will eventually turn back to trying to get their
economies moving again. What we need this fall is a different grand
bargain—a global agreement, like that that was forged in early 2009, for
coordinated action by governments to reflate the economy —to borrow and
spend to put people back to work.
For this to occur, the bipartisan elite fixation about inflicting
austerity now must be challenged. If we are to avoid a lost decade or
worse, we need action to support still weak and staggering economies.
Global coordination would be the best way to achieve that. That requires
putting a stake in Simpson-Bowles, the Boehner-Obama grand bargain and
In America will not go the way of Europe
at the Washington Post, Ezra Klein says Greece's problem is that
lenders believe the government might actually default, which the US
In Ezra Klein: Barking Up The Wrong Tree Borosage responds that Greece's austerity is the problem—such cuts make economies worse. Jobs are the answer to deficits.
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