Skip to main content

For years now I have been pointing out the stupidity of introducing austerity in the advanced capitalist world in the middle of an economic crisis. What has put me in a rather fine bit of pique was something that I read earlier this week:

“Sharp spending cuts and tax increases have long played a central role in the International Monetary Fund's prescriptions for governments in financial distress -- most recently for the struggling members of the euro area. Now, officials at the world's primary arbiter of fiscal prudence are recognizing that such austerity can do a lot more damage than previously thought.

[…]The authors [Blanchard and Leigh] focus on a number known as the fiscal multiplier -- the amount a country's economic output changes for each euro of change in government spending or revenue. They estimate that for European austerity measures started in 2010, the multiplier was significantly greater than one, meaning economic output shrank by more than one euro for each euro in deficit reduction. That's much higher than the multiplier of 0.5 that the IMF and other forecasters typically used in 2010 and that had proven more or less accurate in the years before the 2008 financial crisis.

The upshot: Fiscal multipliers can be a lot higher in times of distress than in normal times. The logical conclusion is that Europe's austerity policies were founded on faulty assumptions and should be eased -- something Bloomberg View has advocated. To some extent, that has happened in recent months with the loosening of demands on Greece and with European leaders' tentative discussions of fiscal transfers to stimulate growth in stricken economies (http://www.bloomberg.com/...).”

My increased level of fury is not due to the admission of incompetence by Blanchard and Leigh, it was not even due to the horrific impact of these policies on so many; heck, it was not even due to the fact that this argument is the only economic policy currently articulated in various forms by all mainstream politicians. It was due to the fact that in reality, the problems are not only due to gross incompetence of an incorrect fiscal multiplier being used, rather the true problem is that mainstream economic analysis is based upon an ideological position favouring private over public sectors and that these authors and all mainstream economists know this and hence the reasons for the failures of the policies are due to that. Moreover, that this admission of incompetence is in fact a lie to cover up the failings of mainstream economic theory deriving from a lack of understanding of the manner in which the capitalist economic system actually functions both in the short run and long run.  

To go even further, Blanchard and Leigh are lying, they know damn well what these policies are for, and to pretend that they made a mistake in calculation is an attempt to disguise the true purpose of these policies and those of the economists and politicians that advocate them.

I am wondering if the impunity of economists and politicians and their immunity to prosecution for what they have inflicted on so many is yet another reason for my frustration; the introduction of these policies, the claims that there is no alternative by so many mainstream politicians (all three major parties in the UK), and the lies to stated purpose of these policies demonstrates the crisis in bourgeois democracy clearly as there is no mainstream political party that is willing to abandon neoliberalism and austerity … the need for left-wing unity and the creation of left-wing anti-austerity parties is great and yet breaking through the morass of the political system in many countries is proving almost impossible.

1)    What is the purpose of austerity?

Austerity is not a new concept in economic theory and policy. In the context of mainstream Keynesian economic theory it has a rather specific role in recognition of the booms and busts that are an inherent part of the capitalist economic system. Specifically, in the short run, it was meant to cool down an economy in a boom to keep booms and busts not too large. What it does is actually decrease income of working people to slow demand and economic growth to keep booms from being too large. Essentially, it causes a wage squeeze: decreases in government spending and payments lead to increased unemployment and lower incomes for the poor and working class. Since demand is what drives the system in the short-run in these theories, decreases in demand will slow down the economy. It is not meant in the short-run to lead to growth, in fact, the sole purpose of these measures is to contract growth in the economy.  Hence, the insistence on the part of David Cameron that you can have austerity and growth is merely a demonstration that he simply does not even understand bourgeois economic theory; that is why they laugh at him in Europe as they know exactly what they are doing. In the context of a capitalist economic system, the introduction of austerity, decreases in government spending, the public sector and decreases in the social welfare state means a decrease in demand, a slowing down of the economic system.

You are probably asking why are mainstream economists and politicians advocating introducing austerity in the middle of an economic crisis.  That is an excellent question and that has to do with the long run role of the introduction of austerity.

In the long run, it is meant to shift the imbalance between the public and private sector in favour of the private sector, by decreasing public control over some sectors in favour of privatisation. It shifts, money to the wealthy through tax cuts for the rich on the pretext that in the long-run, what is saved is invested (that is, Say’s Law is supposed to hold in the long-run) and hence that it is supply rather than demand that is the constraint for economic growth in the long run. To say that this is debatable is an understatement; Say’s Law was an assumption in classical economic theory which was incorporated wholesale into neoclassical economic theory and there is little evidence that it holds either in the short or long run. In fact, the idea advocated by many post-Keynesians that capitalism is a demand constrained system clearly holds more weight historically. For the purposes of this discussion what does this mean when we are giving tax cuts to the rich and lowering incomes for the working class and poor?  It means a further concentration of wealth and income in the hands of the upper class, nothing more, nothing less and this is justified upon the ideology that it is investment by the wealthy that keeps the system growing in the long run.

But as we know, there is obviously more going on. For that we need to go beyond mainstream economics and look at what it is doing and not what they are saying that they are doing. That has to do with destroying the power of the last bastion of trade unionism (and hence decent wages, work contracts, work conditions and pensions) in the public sector. For the private sector, there is the possibility of actually making profits off of things that are demanded due to privatisation; health care, water, energy, sanitation, education, fire and policing. There are significant problems to this obviously, as the consumers of these services will not have the money income to purchase them privately and in most cases where these services fall into social reproduction, they essentially fall on women to take up the slack in the home. These policies hit women doubly: 1) losing jobs in the public sector; 2) losing benefits which we are more dependent upon and especially for poor and working class women, reprivatisation of social reproduction in terms of care for children, the sick, and the elderly back into the home.

As such, I would argue that Blanchard and Leigh are lying; austerity is working exactly as it was meant to work. It is leading to the deliberate creation of a depression in Spain and Greece due to the destruction of the public sector, it is destroying the social welfare state, creating rising unemployment and it is impoverishing the working class and poor in the advanced capitalist world. The shift in the balance of the economy between public and private is being accomplished and yet we are still in an economic crisis.

So, why is that? What is not happening is that the private sector is leading the way towards economic growth by taking up the control over newly privatised industries and services and increasing output, employment and growth and leading the wonderful free-market system to new heights due to the availability of new sectors of exploitation. This is due to the lack of understanding of why capitalists in the private sector increase investment, employment and hence economic growth in mainstream economic theory which derives from the interrelation between production, consumption and exchange.

2)    So what is happening?

In advanced capitalist economies, high levels of productivity in manufacturing and industrial sectors mean less workers are needed relatively and absolutely to produce what is needed for domestic and international demand. This leads to the tendency towards the creation of a reserve army of labour available if needed in case of economic growth; but essentially redundant to requirements of the system. Moreover, since these sectors were highly unionised and workers had far better working conditions, incomes linked to productivity, and decent pensions, it meant that unless growth continued at that level, profits would fall. The decrease in profits in these sectors caused a shift of these industries to underdeveloped and emergent capitalist economies where wages and work conditions were not protected. So, there are two things that led to the rise of persistent unemployment: 1) high levels of productivity; 2) outsourcing to cut both wage costs and costs of raw materials.  

Given profitability criteria of the capitalist economic system, the private sector will only increase output, employment and growth if it is perceived that there is sufficient expected demand for an increased amount of goods and services produced. In the absence of that, they will not do so. That is where the public sector’s importance lies:

1)    Government purchases of goods and services provide a guaranteed demand for the goods and services produced by the private sector. Uncertainly is eliminated, producers know exactly what the government demands.  Cut that and guaranteed demand disappears and economic growth along with that;
2)    Given the redundant labouring classes, government benefits provide incomes to those that would not be demanding goods and services. The attempt to replace government benefits with access to easy but expensive credit added additional instability to the system.
3)    Government provision of goods and services created jobs in a system in which unemployment is a by-product of how the system worked. This then not only provided essential things to citizens, but also created demand for goods and services produced by the private sector.
So what happens in the context of an advanced capitalist system when you cut government spending and the size of the public sector? The economy shrinks, that is obvious, that was what they were trying to do and that is why the advanced capitalist world is in an economic crisis. So, why, oh why, is it that Blanchard and Leigh are pretending that they made a mistake? Because they are lying and they are doing so to cover up the ideology present in the model and the failures of the mainstream economic model.

And this is not only an issue that is relevant for advanced capitalist countries as we know that the IMF and World Bank have been forcing the same policies of privatisation on the capitalist periphery and have been trying to do this in emergent economies. Again, they are doing so because there is an ideological bias in mainstream economic theory towards the private sector and free market capitalist solutions. The public sector removes areas and sectors of potential profitability from control of domestic and international capital and that cannot be allowed. This is why they advocated creation of free-trade zones owned and operated by MNCs or domestic capitalists serving MNCs and export-oriented production rather than development of domestic resources. This is why privatisation of water, energy, and health care has been so strongly advocated. It has nothing to do with the inefficiency of the public sector; it has everything to do with control over resources and production possibilities by international capital and exploitation of labour and resources in those countries.

Moreover, as is well known, all emergent economies have utilised strong controls over the private sector to be where they are, i.e., emergent economies; industrial policy, control over export and import have enabled emergent economies to be emergent. Free market capitalism provides the goods and services that are profitable for it; it does not serve the needs of individuals, it does not guarantee access to clean drinking water for all, access to food for all, access to jobs for all. Its sole purpose is to generate profits and as such skews production away from needs towards what will ensure profitability and continuance of the system.

However, the best laid plans do not always work, and the capitalist system is one that is inherently unstable, its requirements for profitability and continual accumulation of capital lead to inherent tendencies for crises. In fact, what we are seeing now in the advanced capitalist world demonstrate the limits of the internal needs of the system for continual high profits on investment. Capitalism is a demand constrained economy in both the long and short run (contrary to the insistence of mainstream economics). Cutbacks in jobs in the public sector and benefits are leading to the current realisation crisis that the system is facing. What is a realisation crisis? It is a crisis caused by the fact that the capitalists cannot sell their goods and services at a high enough price to realise the potential profits contained in them; in other words, it is generalised over-production (or underconsumption) brought about by insufficient income to purchase goods and services. The only ways out of the crisis in the context of a capitalist economic system is to take the exact opposite approach than that advocated by the mavens of mainstream economics:

1)    Increase wages to increase demand;
2)    Direct government job creation  to decrease persistent unemployment;
3)    Increased progressive income tax for the ruling classes, increased corporate taxes (instead of playing beggar thy neighbour by lowering corporate taxes to lure capitalist investment), financial transaction taxes to stabilise the financial system and to shift income towards the poor and working class, and taxes on wealth to start reducing wealth inequality.
4)    Finally, resocialisation of privatised industries, creation of nationalised sectors providing water, electricity, healthcare and food production, increased creation of social housing, and spending in public schools, crèches and the provision of services for all; the social welfare state is not only for the poor, it is supposed to be for all classes.
Conclusion:

The introduction of deficit reduction in a period of economic crisis has no other purpose except to increase unemployment (due to decreased government spending in the private sector, cuts to employment in the public sector), increase the probability of impoverishment (cuts in benefits to the poor, disabled and unemployed), and to introduce a wage squeeze to prop up profits in periods of no or low growth. Privatisation of public services undermines access to these services, making availability dependent not upon need but upon ability to purchase their services. The concomitant introduction of flexible labour markets as part of these policies lead to loss of job protections, lower wages and undermining of working conditions in an attempt to permanently shift distribution of income in favour of profits and increase exploitation of the working class.

So, to answer the question posed in the title, this is more than incompetence, this is even more than being about an ideological position built into mainstream economic theory. Instead, I would argue that they are lying, what is happening is exactly what was meant to happen and that is the consolidation of an attempt to reverse all the gains of labour since WWII. This is a long-standing re-consolidation of a failed economic ideology whose consequences will be the same as those which led to the great depression; rising income and wealth inequality will lead the system into the next crisis and this is a crisis made by mainstream economists and politicians representing the interests of international capital.

Originally posted to NY brit expat on Sun Jan 06, 2013 at 03:12 PM PST.

Also republished by Anti-Capitalist Chat, Global Expats, and Income Inequality Kos.

EMAIL TO A FRIEND X
Your Email has been sent.
You must add at least one tag to this diary before publishing it.

Add keywords that describe this diary. Separate multiple keywords with commas.
Tagging tips - Search For Tags - Browse For Tags

?

More Tagging tips:

A tag is a way to search for this diary. If someone is searching for "Barack Obama," is this a diary they'd be trying to find?

Use a person's full name, without any title. Senator Obama may become President Obama, and Michelle Obama might run for office.

If your diary covers an election or elected official, use election tags, which are generally the state abbreviation followed by the office. CA-01 is the first district House seat. CA-Sen covers both senate races. NY-GOV covers the New York governor's race.

Tags do not compound: that is, "education reform" is a completely different tag from "education". A tag like "reform" alone is probably not meaningful.

Consider if one or more of these tags fits your diary: Civil Rights, Community, Congress, Culture, Economy, Education, Elections, Energy, Environment, Health Care, International, Labor, Law, Media, Meta, National Security, Science, Transportation, or White House. If your diary is specific to a state, consider adding the state (California, Texas, etc). Keep in mind, though, that there are many wonderful and important diaries that don't fit in any of these tags. Don't worry if yours doesn't.

You can add a private note to this diary when hotlisting it:
Are you sure you want to remove this diary from your hotlist?
Are you sure you want to remove your recommendation? You can only recommend a diary once, so you will not be able to re-recommend it afterwards.
Rescue this diary, and add a note:
Are you sure you want to remove this diary from Rescue?
Choose where to republish this diary. The diary will be added to the queue for that group. Publish it from the queue to make it appear.

You must be a member of a group to use this feature.

Add a quick update to your diary without changing the diary itself:
Are you sure you want to remove this diary?
(The diary will be removed from the site and returned to your drafts for further editing.)
(The diary will be removed.)
Are you sure you want to save these changes to the published diary?

Comment Preferences

  •  Tip Jar (115+ / 0-)

    "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

    by NY brit expat on Sun Jan 06, 2013 at 03:12:19 PM PST

  •  Austerity Kills (32+ / 0-)

    We have seen it over time after time.  Politicians crying we need austerity.  Every time it has led to a depression.  I only hope that President Obama and democrats are not so stupid to lead the US into a depression.  If anyone thought a recession was bad wait until they see a depression.

    "Don't Let Them Catch You With Your Eyes Closed"

    by rssrai on Sun Jan 06, 2013 at 03:23:54 PM PST

    •  agreed! (23+ / 0-)

      I am also thinking that it is time that we stopped using the term recession and start using the term crisis instead. Talking about recessions made some sense in the context of Keynesian stabilisation policies, but now that they are being eliminated along with the public sector and the social welfare state, we need to start talking about crises.

      The UK is about to enter a triple-dip recession; service sector is down for the first time in two years ... triple-dip recession sounds like an ice-cream dessert. Reality is an economic crisis as this is not something that will disappear with small tweaks here and there.

      We need to do exactly the opposite of what all politicians and extra-governmental economic agencies are articulating; that is not going to happen. I have little faith in the people doing economic policy for the gov't in the US ... but if they increase austerity they will send the world into another great depression rapidly

      "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

      by NY brit expat on Sun Jan 06, 2013 at 03:34:23 PM PST

      [ Parent ]

      •  'Crisis' is exactly the term they want us to use (2+ / 0-)
        Recommended by:
        ozsea1, elwior

        and exactly the term that lets the technocrats take over and provide "solutions" such as austerity.

        The revolution will not be televised. But it will be blogged, a lot. Probably more so than is necessary.

        by AoT on Sun Jan 06, 2013 at 06:21:07 PM PST

        [ Parent ]

        •  no, crises are a normal part and parcel (6+ / 0-)

          of the capitalist system. Crisis theory was part and parcel of economic analysis both on the mainstream and in alternative economic analysis until Keynes; then they started talking about recessions and short-term blips in the normal stability of the system. We are no longer following stabilisation policies of Keynes and that is why we are seeing bigger booms and busts ... that takes us to crisis and cycle theory. Since what this is is a structural problem in the system, and neoliberal arguments like austerity are what caused it, advocating more of the same will only lead to more and deeper crises.

          It is time to start talking about the reality of the impact of neoliberal free market economic theory on the capitalist economic system whose instability is no longer reined in by Keynesian stabilisation policies.

          "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

          by NY brit expat on Sun Jan 06, 2013 at 06:26:31 PM PST

          [ Parent ]

          •  I'm sure you've seen this (4+ / 0-)

            but I'll link to it anyway.  Our Brand is Crisis.

            The reason that calling it crisis doesn't work is because everything is a crisis.  Government is crisis.  The only thing that government does is deal with crisis now.  This crisis, that crisis.  And meanwhile we lose control over our lives as te government takes more control because the crisis demands it.

            The revolution will not be televised. But it will be blogged, a lot. Probably more so than is necessary.

            by AoT on Sun Jan 06, 2013 at 06:37:46 PM PST

            [ Parent ]

            •  We are seeing an economic crisis, (0+ / 0-)

              a crisis of bourgeois democracy and an environmental crisis. It has a specific meaning ... we need to start using the term and not let them talk about recessions, it is far more than that; their policies have created the crisis ... calling it what it is makes it clear that we know that it is not a small blip in the normal functioning of the system.

              "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

              by NY brit expat on Mon Jan 07, 2013 at 04:54:25 AM PST

              [ Parent ]

      •  Even in the Great Depression (6+ / 0-)

        there were movements up and down. You are right to say "talk about crisis" as what we really have is not a cycle of recovery/recession, but a Depression. The quarter-by-quarter convention of so-called economics is as misleading as the rest of it.


        The Internet is just the tail of the Corporate Media dog.

        by Jim P on Sun Jan 06, 2013 at 06:55:17 PM PST

        [ Parent ]

  •  Yes (20+ / 0-)

    yes, and yes.

    I am wondering if the impunity of economists and politicians and their immunity to prosecution for what they have inflicted on so many is yet another reason for my frustration;...
    ...and they keep nattering on and on as if real people in the real world weren't sinking under their pompous drivel.
    And where is the outrage when the man behind the curtain turns out to be a charlatan from the Kansas boonies who doesn't even have a spare hot air balloon in an out of the way trunk?

    "We are monkeys with money and guns". Tom Waits

    by northsylvania on Sun Jan 06, 2013 at 03:31:21 PM PST

  •  It's Obviously for a Tiny Oligarchy to Take Over (14+ / 0-)

    but to what end?

    It doesn't seem that it's for the purpose of them profiting off running a huge global economy. Clearly they're destroying significant fractions of that economy.

    It still looks like survivalism to me.

    We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

    by Gooserock on Sun Jan 06, 2013 at 03:43:32 PM PST

    •  I am thinking that they are (16+ / 0-)

      simply upholding a system that benefits them. They are hoping that in the long-term that the system can survive and this is where we need to look at emergent economies. The loss of demand in the advanced capitalist world and the temporary slow-down of the system there perhaps can be made up by increasing profitability and access to the markets of China, India and Brasil.

      The problem lies in the fact that political leaders in the advanced capitalist world are tied into the capitalist system and that means serving international capital. Look at all economic policies since Reagan, they are all reinforcing this trend. No one is saying that perhaps impoverishing their citizens may not be a good idea. I think that the governments believe that there is nothing that we can do and that they can manage temporary unrest until it consolidates. For international capital, our importance only lies in the fact that we can be exploited as workers and buy their goods and services as consumers. If we cannot be either, we have limited use to them. MNCs are multinational, governments are unwilling and unable to regulate them unless they work together and as yet they have not understood the ultimate implications of their policy actions.

      "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

      by NY brit expat on Sun Jan 06, 2013 at 03:52:09 PM PST

      [ Parent ]

      •  Lose money gain marketshare. (4+ / 0-)

        Better to go out while you own the powers of production, information, and the State than to fade away.

        Democracy - 1 person 1 vote. Free Markets - More dollars more power.

        by k9disc on Sun Jan 06, 2013 at 03:58:26 PM PST

        [ Parent ]

        •  exactly ... (4+ / 0-)
          Recommended by:
          k9disc, aliasalias, elwior, tardis10

          they are also hoping that the loss in profitability will be temporary and it will be recovered in emergent economies.

          "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

          by NY brit expat on Sun Jan 06, 2013 at 04:16:29 PM PST

          [ Parent ]

      •  I think that one of the important pieces (14+ / 0-)

        to where things may be going is the impact of increased productivity that you alluded to. The technology exist for vastly increasing that leverage. It is possible to build factories that churn out vast quantities of goods with very few humans involved in the production. So far the more short range strategy of moving the production to low wage economies has tended to prevail. As global wages eventually move toward a point of equilibrium, investment in advanced technology will become more attractive.

        That all sounds like a tidy answer to an exam question. However, there is a small unanswered question. Who is going to buy all the shit that the robots are turning out?

        •  That is literally exactly why they are (12+ / 0-)

          unable to eliminate labour no matter how much capital they use; someone has got to buy the crap that they are producing or the system shuts down! This is a point that every person learns in elementary marxist economics and it used to be taught in macroeconomics until Keynes was eliminated from the curriculum.

          One of the reasons that Marx argued for socialism to be created in an advanced capitalist country is that the productive resources are there and less labour is needed; as such people would be freed from being tied to work and would have time for leisure and to develop themselves. We need less time to produce what is needed to feed, clothe, house, and provide other things ... education, just leisure, nuturing your creative and mental abilities. If people did not have to worry about covering their needs, they would have more time to do other things, humanity is not just an input to production, we are and can be so much more!

          "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

          by NY brit expat on Sun Jan 06, 2013 at 04:06:41 PM PST

          [ Parent ]

    •  Sheer greed explains much more about (8+ / 0-)

      behavior than one might think in this life.

      It seems to have some perverse association with the lust for immortality.

      "To recognize error, to cut losses, to alter course, is the most repugnant option in government." Historian Barbara Tuchman

      by Publius2008 on Sun Jan 06, 2013 at 03:57:12 PM PST

      [ Parent ]

    •  It's the classic (6+ / 0-)
      Recommended by:
      NY brit expat, JayRaye, BYw, Jim P, kyril, elwior

      "Killing the Goose That Laid the Golden Egg" story, in real life. Funny that your user ID in conjunction with what you wrote brought this fable to mind, and it is so apropos to this situation.

      •  yes, it really is ... I was thinking of alluding (4+ / 0-)
        Recommended by:
        chantedor, JayRaye, kyril, elwior

        to the fable in a comment, but thought maybe it was misplaced. Thank you! :)

        "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

        by NY brit expat on Sun Jan 06, 2013 at 04:53:17 PM PST

        [ Parent ]

    •  Consumer capitalism has been (4+ / 0-)
      Recommended by:
      JesseCW, kyril, elwior, NY brit expat

      a device to mollify the plebes, who'd get restless otherwise. It would take far less effort to get rid of Capitalism and just go straight to serfdom and slavery. Then all the hassle is taken out of life.

      I always remember what I read about Peru's conquistadores in The Last Days of the Incas by Kim MacQuarrie

      In a sense, New World conquest was about men seeking a way around one of life's basic rules–that human beings have to work for a living, just like the rest of the animal world.

      In Peru, as elsewhere in the Americas, Spaniards were not looking for fertile land that they could farm, they were looking for the cessation of their own need to perform manual labor.

      To do so, they needed to find large enough groups of people they could force to carry out all the laborious tasks necessary to provide them with the essentials of life: food, shelter, clothing, and ideally, liquid wealth.

      Conquest, then, had little to do with adventure, but rather had everything to do with groups of men willing to do just about anything in order to avoid working for a living. Stripped down to its barest bones, the conquest of Peru was all about finding a comfortable retirement.


      The Internet is just the tail of the Corporate Media dog.

      by Jim P on Sun Jan 06, 2013 at 07:00:30 PM PST

      [ Parent ]

  •  They are lying through their platinum capped (5+ / 0-)
    Recommended by:
    NY brit expat, annieli, JayRaye, kyril, elwior

    teeth, but first you have to clean out the caviar to be able to see what's in there.

  •  And the thing I would repeating to people (13+ / 0-)

    is there is no financial crisis for the 1%.  Impose austerity upon them and their apparatuses and none of us would have a crisis.

    I feel like the X-files:  "The Money . . . is out there."

    "To recognize error, to cut losses, to alter course, is the most repugnant option in government." Historian Barbara Tuchman

    by Publius2008 on Sun Jan 06, 2013 at 03:55:36 PM PST

    •  I keep on thinking that for the ruling (6+ / 0-)

      classes and their mouthpieces (both politicians and economists) that it sounds so much better to say you made an error than to openly admit that you deliberately and intentionally destroyed so many peoples' lives! They are horrible liars and it does not take someone trained as an economist to be able to call them out!

      "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

      by NY brit expat on Sun Jan 06, 2013 at 04:01:39 PM PST

      [ Parent ]

  •  well said (7+ / 0-)

    they're doing more than lying in the interests of international capital because liars might not be evil. They have no conception of deceit when it is the norm. I don't use austerity as a concept because it is empirically vacant

    The introduction of deficit reduction in a period of economic crisis has no other purpose except to increase unemployment (due to decreased government spending in the private sector, cuts to employment in the public sector), increase the probability of impoverishment (cuts in benefits to the poor, disabled and unemployed), and to introduce a wage squeeze to prop up profits in periods of no or low growth. Privatisation of public services undermines access to these services, making availability dependent not upon need but upon ability to purchase their services. The concomitant introduction of flexible labour markets as part of these policies lead to loss of job protections, lower wages and undermining of working conditions in an attempt to permanently shift distribution of income in favour of profits and increase exploitation of the working class.

    “If someone has a gun and is trying to kill you, it would be reasonable to shoot back with your own gun.” - Dalai Lama XIV (-9.50; -7.03)‽ Warning - some snark above‽

    by annieli on Sun Jan 06, 2013 at 04:09:47 PM PST

    •  Agreed that the term austerity is empirically (7+ / 0-)

      vacant, but it is the term that they are using. They are lying when they are saying they made a mistake, this was the whole purpose of the introduction of these measures; agreed that the problem lies in the analysis and that self-deceit is the norm, but they are sycophants of capital and of the capitalist economic system. But quite honestly, this is a rather pathetic lie on Blanchard and Leigh's part ... too easily demonstrated to be false.

      Being a liar does not make you evil, destroying people's lives is what makes them evil and doing it in the name of this system that is destroying so many and the planet is evil. But they are only serving their master, it is the system and the ruling classes that benefit from it whom they serve.

      "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

      by NY brit expat on Sun Jan 06, 2013 at 04:27:42 PM PST

      [ Parent ]

  •  International Capital?? But they call it democracy (7+ / 0-)

    "Furthermore, if you think this would be the very very last cut ever if we let it happen, you are a very confused little rabbit." cai

    by JesseCW on Sun Jan 06, 2013 at 04:21:21 PM PST

  •  Incompetent, ideological, or lying? (8+ / 0-)

    Why do we have to choose?

    •  we don't ... it is a combination of all three (7+ / 0-)

      however, I would argue that the statement that they made a mistake in calculating the impact of the introduction of austerity measures is an out and out lie; the measures are working exactly as planned, there was no error. They are trying to say you can trust us, we admit to errors, but that is not the truth!

      "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

      by NY brit expat on Sun Jan 06, 2013 at 04:37:22 PM PST

      [ Parent ]

    •  IMF economists are Clueless (5+ / 0-)
      Recommended by:
      NY brit expat, joanneleon, FG, Jim P, kyril

      Its forecast for 2013 Greek GDP will have been off by at least 22%.

      22% !!!!!!!!!!!!!!!!!!!!!!!!!

      Nov 01 2012

      Greek government acquires more realistic crystal ball

      http://ftalphaville.ft.com/...

          The IMF forecast for 2013 nominal GDP has been reduced by an astonishing 22% in the two years since Nov 2010. In our opinion it is this unanticipated decline in economic activity that has surprised the Fund, and driven a stake through the heart of the programme. We would be interested to hear if someone else knows of a bigger or more significant 2-year forecasting revision for an industrialised economy.

      Learn about Centrist Economics, learn about Robert Rubin's Hamilton Project. www.hamiltonproject.org

      by PatriciaVa on Sun Jan 06, 2013 at 04:58:34 PM PST

      [ Parent ]

  •  There are so many liars; Its hard to pick just one (11+ / 0-)

    I like your diary. I agree with it.

    The problem: There are so many liars. Its hard to pick just one.

    The economists are one small piece of the bigger system of lies that we currently must deal with.

    In the U.S. (not even getting into the lies going on in Europe), we have two Neoliberal parties, but we are told the lie that we have a choice between "Right" (the GOP) and "Left" (the "Democrats") but we have a choice between cultural issues of the GOP and cultural issues of the Democratic Party. The economic choices with either of the cultural choices remains the same.

    There are the voters, in the U.S., and from what I can tell of the UK and Spain, who lie to themselves. "Its all short term." Things will go back to the way they were for the last 50 years. "Nothing has to change" "If I just believe in the party lies enough" "Everything will be okay." This is what is behind the lies that voters tell to themselves I believe. Its the "middle class lie"

    Then we have the political activist lie. If I participate in the system, the sytem will change. But will it? I suppose they would ask me- what choice do they have?

    My point is that while the lying you mention is extremely important, it thrives in a great ecosystem of lies. Without that ecology of lying, we wouldn't be where we are in the West. The lies of the people you describe here would not matter. They only matter because we want to believe, need to believe or gain from the lies being told.  The later "gain from" comes down the politicans. Again, in the U.S. both parties thrive on the big lies. Keeping the narrative narrow. Keeping it just on the "choices" that they want us to have.

    One of the things that I did recently was to go back to compare Obama-Romney debates to Reagan-Bush debates. Check this out:

    The lying on economic issues is omnipresent in every aspect of our U.S. and European societies, and I suspect the globe. You had the Ny Times yesterday lying by claiming that the tax bil llast week was the most progressive since the 70s. It takes about a few minutes to google the subjct to realize that this is a lie, and that the real goal is to starve the sytem of revenue to create furtehr austerity:

    http://www.nakedcapitalism.com/...

    Yet you have people both here and elsewhere on the "Progressive" side pushing this lie as truth.

    I honestly don't know what to do. Between the corruption, liying and denial (the later being the public), I am not sure anything can be done. Do you?

    •  I agree with you, there are so many liars, (4+ / 0-)
      Recommended by:
      JayRaye, aliasalias, ozsea1, kyril

      and so many people lying to themselves that it is difficult to even begin to get a handle on it.

      We really need a unified left anti-capitalist anti-austerity party! I talk with people all the time and everyone knows that what is happening is going to increase hardship; some will even tell me that it cannot get much worse. The bad news is that it is only going to get worse, it cannot get better if these policies are applied by governments. We are headed towards another crisis and this will be caused by the income and wealth differentials caused by these policies.

      I think that we can fight it or I would have not bothered to write anymore and would stop organising and simply stay at home. But I think that the fight-back  cannot and will not work unless it is fought by those whose lives are being destroyed. I listen to the Labour party continue the demonisation of the poor and disabled, I hear them say that they are not going to reverse any changes made by the current government. I think that there is no reason to vote for these people. I would argue a two-pronged strategy is needed, and it is not going to happen in the short term:

      1) a grass-roots movement against the system which will organise the opposition;
      2) building a united left anti-austerity, anti-capitalist party to test our ideas and to give people that believe in the political system a place to cast their votes.

      We also need to link up internationally with other countries and with parties advocating a similar end. This must be fought internationally as the system is international. It cannot be fought in one country at a time, it will not work.

      "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

      by NY brit expat on Sun Jan 06, 2013 at 05:02:43 PM PST

      [ Parent ]

      •  I don't share your faith (3+ / 0-)
        Recommended by:
        JesseCW, Odysseus, NY brit expat

        Who are these Leftist that you are referencing?

        Are they out there somewhere hidden under the population in some way that I can't see?

        Talking I don't get the sense they are. I am very pessimistic.

        I would like to make a series of unconnected observations:

        (1) I talk to people too. My sense is that even if they realize there is a problem they aren't willing to do anything about it.

        (2) Most of the people I talk to are delusional. They think things are going to get better right around some mythical corner.

        (3) You are on site that is not exactly known for radical change.  So, I would like to know where you would suggest one go to see some real change other than rhetoric? You got people here who are clear out and out radical conservatives calling themselves "Progressive." Its like your debate, if you want to call it that, the other day with Cedwyn (a classic conservative pretending not to be because she supports Obama who is also a conservative but they have decided to label as "left of center" which I guess is true if you don't realize "left" now means where George Bush was in 1980 (hence the video).  Here she was at first lying about the chained CPI issue, and following up with b.s. that was clearly so false that multiple people had to correct her. Yet she is allowed to continue to post her clogging up the exchange with things that aren't sort of lies, or sort of spins, but just up and up lies. No one says "okay this is the line here" No one says "You know we are for Democrats, b ut only Democrats who are going to move the party to the left so that we can have a course correction." No one does anything bout bad faith actors at all. So, where are ou going to find folks who do care and have enough popular support to get things done?

        (4) I look at things like OWS, and I think: What a joke. Forget all the government stuff about watching them. There was nothing to see. Essentially you had a "movement" that wasn't interested in in being political. They believes as most of the working class that calls itself middle class in the U.S. that the problem is that no one understands the problem. That if we all just sit around and create a list then the pols will suddenly just give up that pay day after they leave off to do the right thing by us while in office. Its the delusional of privilege. Someone once told me that most great boxers do not come from the middle class and the wealthy because only the poor understand. I would say that a real movement isn't going to happen because the people you need to get on board either don't know how to fight or don't want to fight.

        (5) I am in agreement with your assessment of Labour. I would say the same about the Socialist parties in Europe such as in France and in other countries. They have been neutered.

        I am extremely pessimistic about the future. I think in the U.S. demographic changes may move the country to the left , but there are so many forces aligned against such a move that it is more likely that it can also be co opted by rhetoric as it already has been that's about identity rather than about economic issues affecting people of color. The reactionary NeoLiberal party in the US is already reacting to the Conservative Neolberal Party's ability to woo those voters based on identity. I don't see any effort to woo them from a real left that says "we know you want medicare for all" and we agree with you." It jsut does not exist here.

        I don't sense it exists in Europe either.

        The Core problem: The "middle class" (which is really workign class) bought into the Faustian bargain because from the late 40s until the 80s-90s or so, it seemed on paper like a good bargain, even if it wasn't perfect. They could point to and count on a history of ever increasing wealth for themselves.

        The delusion still exists. There are forces in our society that keep the delusion going. The appearance of recovery for example seems real. It may be a bubble, but as a bubble is occuring it feels real.  The real estate market in the US appears to be recovering.  NEvermind if it may be another bubble.

        I don't know. I just don't know if you are giving option that reflect reality.

        I wrote a diary recently- most people are in denial. How are you going to address teh denial? Because if you don't I don't see you suceeding. Articles like this are great for someone like me. I am choir. Most people- in every day conversation- when I try to break it down- either don't have the education (even with college degrees) to get it, or don't want to get it.

        •  hey bruh1, it was 2:30 am (0+ / 0-)

          when I saw your excellent post and needed to give more of a response than I was able to at that time.

          The way that I am seeing things, is that we are in the earliest stages of a fightback in both the US and UK. The vast majority of people still believe that their politicians have their back and still think that this is a small problem as that is what they are being told every day on the news, in newspaper and by their politicians and economists.

          Building a fight-back on all levels is essential. Articles like this which try to explode the lies and myths are only ammunition which can be used against them. We do not lead, we can only provide ammunition. It is the people that are being destroyed by these policies that must move; we can only participate.

          I look at Greece and Spain. What are the differences between these two countries where the level of struggle is far higher than where we are? The main difference I can see is the impact of an anti-austerity party that people can vote for ... SYRIZA has displaced PASOK which introduced these measures. In Spain, there is demonstration after demonstration, strike after strike, but once those are over, all that is left is anger.  At this point, the ruling class in Spain and international capital is not threatened enough to change; look at the impact of SYRIZA ... the troika was hysterical.

          As such, that is why I say, build the movement, build the fightback and then also offer an anti-capitalist anti-austerity party so that those that believe in the system have a party to represent their interests. We are very far from a revolutionary situation, but things change fast; 4 years ago, SYRIZA was a small party, now it is a mass party. The combination of a movement and a party are very powerful and that can bring change about ...

          I thought your diary was excellent; we need to keep writing these pieces. Tonight, I go to a meeting where we are working on building a movement ... the NHS is under attack and we think we can unite people to protect it. The struggle occurs at all levels, it will take time, we are fighting against people's delusions, their cognitive dissonance and the fact that the horrific is seen as normal. To change that will take a major transformation in people's consciousness.

          "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

          by NY brit expat on Mon Jan 07, 2013 at 05:38:38 AM PST

          [ Parent ]

      •  Follow up (2+ / 0-)
        Recommended by:
        ozsea1, NY brit expat

        I also think democratically as long as people in the general population are in denial, that this will continue because of how our political system is structure (both again in the US and Europe):

        Whereas in Nazi Germany the state dominated economic actors, in inverted totalitarianism, corporations through political contributions and lobbying, dominate the United States, with the government acting as the servant of large corporations. This is considered "normal" rather than corruption.[6]

        While the Nazi regime aimed at the constant political mobilization of the population, with its Nuremberg rallies, Hitler Youth, and so on, inverted totalitarianism aims for the mass of the population to be in a persistent state of political apathy. The only type of political activity expected or desired from the citizenry is voting. Low electoral turnouts are favorably received as an indication that the bulk of the population has given up hope that the government will ever help them.[7]

        While the Nazis openly mocked democracy, the United States maintains the conceit that it is the model of democracy for the whole world:[8] Wolin writes:
        Inverted totalitarianism reverses things. It is all politics all of the time but a politics largely untempered by the political. Party squabbles are occasionally on public display, and there is a frantic and continuous politics among factions of the party, interest groups, competing corporate powers, and rival media concerns. And there is, of course, the culminating moment of national elections when the attention of the nation is required to make a choice of personalities rather than a choice between alternatives. What is absent is the political, the commitment to finding where the common good lies amidst the welter of well-financed, highly organized, single-minded interests rabidly seeking governmental favors and overwhelming the practices of representative government and public administration by a sea of cash.[9]

        http://en.wikipedia.org/...

        How do you reverse course on the above is the population is in denial?

        •  agreed! no doubt about it ... (0+ / 0-)

          "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

          by NY brit expat on Mon Jan 07, 2013 at 05:39:33 AM PST

          [ Parent ]

      •  Looking at things from US soil (3+ / 0-)
        Recommended by:
        JesseCW, kyril, NY brit expat

        I have to also confess a strong sense of pessimism. We just went through the circus of the fiscal cliff and you have people sounding like Nevil Chamberlin. I get the impression that things look somewhat differently in Europe, but despite the street protest th governments seem to be playing the same games.

      •  Time to think outside our coffin. (1+ / 0-)
        Recommended by:
        kyril

        Drop left-right. Completely. Drop Marx, Smith, Ricardo, the world's political parties and everything else that has happened to form our view of the world, and our coffin, since the French Revolution.

        There is no meaningful left/right anymore, as it's been long and thoroughly co-opted to keep people divided and conquered. Rhetoric from either side just serves to help keep us that way, as all these semantic reactions kick in and real thought gets buried.

        There's the Humanly Decent, the Sleeping, and Shitstains. There's all of politics for you.

        Organize on the basis of the Humanly Decent and stop playing the old tired materialist loops that have helped us win battles, but lose wars.

        Though I think the belief that the Internet will be the thing that sets us free of mass-reach propaganda is pretty silly, I cannot deny that for the first time in history, pretty much everywhere, people are waking up to the fact that their local Rulers are... Shitstains. Yours, mine, India's, Russia's, Egypt's, Israel's... name the country and throw in the Pope... shitstains all.

        We need relevant categories for these days, imo. Ones that can't be blinded away with the tricks of abstraction and rhetoric. Everyone recognizes the humanly decent when they see it. Immediately. Doesn't need a frame or an argument: it's there or it isn't. Even those who revile human decency as weakness know it when they see it.


        The Internet is just the tail of the Corporate Media dog.

        by Jim P on Sun Jan 06, 2013 at 07:39:09 PM PST

        [ Parent ]

        •  Disagree ... there are significant (0+ / 0-)

          differences between how the left and the right approach things ... while you are arguing to drop the distinction and put forward a moral analysis, it is actually a left-wing one.

          There is no reason to drop our principles and slip into a discussion of morality independent from our aims; our aims are what we build upon.

          "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

          by NY brit expat on Mon Jan 07, 2013 at 05:41:56 AM PST

          [ Parent ]

          •  The disagreements, and predilections of (0+ / 0-)

            people will never disappear. You'd only get there by cloning one person and eliminating the rest. And even then, after a generation, those clones would disagree.

            But what is your aim except a humanly decent life? Goes for most ordinary people, whether of an adventurous and tolerant tendency, or a timid and intolerant one.

            Psychology precedes, and trumps, ideology and intellectualism. Always has, always will.

            Ideology is death to us as The Powers That Be have long ago learned to master tricks of language to misdirect and defeat us. "Left" and "right" are useful in only a completely limited way to us; and almost indispensable for TPTB. I mean, one day, you wake up and you're a "kulak" (word didn't even mean anything the day before), or a little West of there you're a "threat to the State" and now you and your neighbors are at each other's throats. And the tyrants consolidate their position.

            I read one "right" guy being candid about global warming to the effect: "Look, you'll never convince me that this problem is man-made, so I ain't interested in stopping coal. But, if you told me the pollution it makes is bad for me and my kids, well, I can smell that, some days I can see that. I'd join with you in stopping that. So why insist on making me believe in global warming? Push the pollution part of it and we'd both be working to the same end, whether you're right about warming or not."

            We have to make alliances broadly across the entire political spectrum. All of whom, objectively, are standing in the same sewer we are whatever their predisposition. Why use the mindset, the semantic triggers, the deadening rhetoric, the Elite's tools of division which have only brought us to precisely where in are? And cannot possibly get us advantage; instead keeps the divide-and-rule strategy effective?

            It might be fun, or intellectually satisfying, or profitable, to a specialist, this business of analyzing things from the classic materialist right or left perspectives.

            But it's inarguably something that works to TPTB's advantage. If you want a real revolution, well, you've got to do something really new. The Assemblée nationale is dead over 200 years now.

            Form alliances on Human Decency. People get that right away, and can't be easily bamboozled.

             


            The Internet is just the tail of the Corporate Media dog.

            by Jim P on Mon Jan 07, 2013 at 08:32:06 AM PST

            [ Parent ]

  •  All of the above in your title are true (2+ / 0-)
    Recommended by:
    NY brit expat, JayRaye
    •  but some truths are more true and (1+ / 0-)
      Recommended by:
      JayRaye

      relevant than others ...

      "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

      by NY brit expat on Sun Jan 06, 2013 at 05:18:25 PM PST

      [ Parent ]

  •  Great work (2+ / 0-)
    Recommended by:
    NY brit expat, Aunt Martha

    -1.63/ -1.49 "Speaking truth to power" (with snark of course)!

    by dopper0189 on Sun Jan 06, 2013 at 05:07:42 PM PST

  •  All that is left (4+ / 0-)

    is for our own party leaders who have been pushing austerity to reverse course and admit they're wrong.

    Democratic Leaders must be very clear they stand with the working class of our country. Democrats must hold the line in demanding that deficit reduction is done fairly -- not on the backs of the elderly, the sick, children and the poor.

    by Betty Pinson on Sun Jan 06, 2013 at 05:12:20 PM PST

    •  hah! that gave me a good lol! (4+ / 0-)
      Recommended by:
      JayRaye, aliasalias, ozsea1, Aunt Martha

      the first question is who do they serve? the second question is why change course when they have no vested interest in doing so? In the absence of anyone forcing them to abandon course or an outright threat, this is exactly where they want to be. We are more than a bit confused if we think that any mainstream party is serving our interests and unless a new hard left arises and an alternative political party that threatens their power arises, then they will continue. Pitchforks may help, but we will need a lot of pitchforks.

      It is indeed possible that the IMF has done this to give them an out, the question is whether they will take it. They have far too much invested in neoliberal argumentation at this point, but we shall see whether in the absence of a movement and alternative political groupings, they will retreat ...

      "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

      by NY brit expat on Sun Jan 06, 2013 at 05:17:40 PM PST

      [ Parent ]

      •  Citizen's United has had a toxic effect (4+ / 0-)

        on our own party  as well as the GOP.

        But there are a lot of Dems in Congress who know they face re-election in 2 years and will have to explain to voters if the economy hasn't improved.  I don't think they're willing to let themselves be steamrolled by Dem leaders who are still clinging to the belief they can BS voters about a bad economy.

        Democratic Leaders must be very clear they stand with the working class of our country. Democrats must hold the line in demanding that deficit reduction is done fairly -- not on the backs of the elderly, the sick, children and the poor.

        by Betty Pinson on Sun Jan 06, 2013 at 05:34:40 PM PST

        [ Parent ]

        •  Most of the people in DC were elected (2+ / 0-)
          Recommended by:
          Aunt Martha, NY brit expat

          into office before Citizen United. Most of the Democratic Party is willing to sign on to anything Nancy Pelosi, Harry Reid and Barack Obama tells t hem to sign on to. Including the only so-called Socialist. I can point to their voting records. What can you point to?

          When will the excuses run out?

  •  Follow the money (5+ / 0-)

    The IMF works for the elites who want to get a hold of our Social Security money in the U.S. and the various pots of social welfare money in Europe.

    The elites are willing to take a small loss today to get big profits at your expense tomorrow.

    look for my eSci diary series Thursday evening.

    by FishOutofWater on Sun Jan 06, 2013 at 05:19:06 PM PST

    •  yep! the problem is that this (4+ / 0-)

      temporary loss for them, will be permanent for the rest of us in the advanced capitalist world; but we are really irrelevant to their calculations as long as they think that they will be able to make up the loss of the advanced capitalist world from the emergent economies.

      "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

      by NY brit expat on Sun Jan 06, 2013 at 05:46:43 PM PST

      [ Parent ]

  •  NY brit expat, Thanks! (6+ / 0-)

    You are my hero! This is awesome diary. I love the way you get to the truth!

    if we pretend like they have our best interest at heart and focus on creating better methods we are wasting our time. As long as Clinton is in charge of rebuilding Haiti it will be "failure"but somehow 1% manages to makeout like bandits.
    Particular methods are a diversion an matter little when predators are in control.

    To go even further, Blanchard and Leigh are lying, they know damn well what these policies are for, and to pretend that they made a mistake in calculation is an attempt to disguise the true purpose of these policies and those of the economists and politicians that advocate them.
    I miss you and am really grateful for all your help on the Haiti diaries. You are awesome. And great diary!!
    •  hey allie love! I miss you also! (1+ / 0-)
      Recommended by:
      kyril

      we need to make the vast majority in the advanced capitalist world, emergent economies and the capitalist periphery realise that we are in this together and that the ruling class and their mouthpieces are trying to impoverish all of us and destroy the planet. We need to call them out at every possible opportunity; of course, it is far easier when they lie so badly!

      "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

      by NY brit expat on Sun Jan 06, 2013 at 06:30:03 PM PST

      [ Parent ]

  •  They did this - cruelty then apologies - already (6+ / 0-)

    Go back to the 1980s and 1990s.

    The IMF and World Bank (i.e., the organizations run by their US and Western investor-interest 'experts') imposed cruelty upon Latin America, Africa, and Asia ("Austerity" for the first, "Structural Adjustment" for the latter two).

    They promised it's what the 3rd world needed to develop, and grow, and produce jobs, and blah blah blah.

    Then, once net hundreds of billions were extracted from the impoverished 3rd world to the investors served by the IMF & WB in the name of helping those irresponsible, doggone-it 3rd world poor states.

    Then, after disaster, and overthrows, and societal collapse (the Tim Geithner-assisted WB-imposed structural adjustment punishing Indonesia for being assaulted by foreign currency speculators, excuse me, helping them with austerity, ended up prompting the overthrow of US stooge & genocidalist Suharto) they deeply express regret, and new insight into more important factors of growth, blah blah blah.

    Continental South America, led by Venezuela, Argentina, and then nearly all the rest, said "FUCK YOU" at the end of the '90s and early 2000's and from then on, the IMF / WB advised subjugation and destruction of South American economies and populations ended.

    Gone.  Finis.  Hit the bricks.  Don't let the door hit you in the ass.

    So, fine.

    New territory:  Let's get those fresh dopes in the home nations (Western Europe) who didn't go through all this a generation ago.

    Maybe we're lucky and these nations will be able to not just wise up but somehow act upon that wisdom more rapidly than the earlier, poorer victims did.

    •  yep, said that in the piece ... this is (4+ / 0-)
      Recommended by:
      aliasalias, ozsea1, el cid, kyril

      the big lie that they are using to impoverish the vast majority on the planet; do not let them lie and say  that they have miscalculated, the whole purpose of these measures are exactly what we saw in Latin America and the  Caribbean, in Eastern and Central Europe, in Asia in the Tigers and Japan and now they are coming for the advanced the capitalist world ... and guess what, we need allies in the fight and it is not the MNCs, not the extra-governmental agencies like the IMF and WB and it is not our political leaders.

      "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

      by NY brit expat on Sun Jan 06, 2013 at 06:32:34 PM PST

      [ Parent ]

    •  "Austerity", "Structural Adjustment", "reform"? (3+ / 0-)
      Recommended by:
      el cid, kyril, NY brit expat

      that's why they talk of reforming the entitlements

      the question is how do we stop the fuckers, the press passes on any lies they spout

      fact does not require fiction for balance (proudly a DFH)

      by mollyd on Sun Jan 06, 2013 at 08:11:56 PM PST

      [ Parent ]

  •  OTOH, the 3 are not mutually (3+ / 0-)
    Recommended by:
    FishOutofWater, kyril, NY brit expat

    incompatible, and the IMF might have the trifecta ...

    LBJ, Lady Bird, Anne Richards, Barbara Jordan, Sully Sullenberger, Ike, Drew Brees, Molly Ivins --Texas is no Bush league! -7.50,-5.59

    by BlackSheep1 on Sun Jan 06, 2013 at 06:39:04 PM PST

  •  Excellent. Thank you. (4+ / 0-)
    Recommended by:
    aliasalias, ozsea1, mollyd, kyril

    However, I suspect the aim is different that what you conclude.

    ...what was meant to happen...to reverse all the gains of labour since WWII.
    I think it's more about reversing all the gains since the Magna Carta.

    Since any one with a modest reading of history knows that economic crises lead to greater crime, more radicalization, greater incidence of rightist and eliminationist speech and actions, and ultimately to unrestrained tyranny ... it's a big stretch to believe that the movers and shakers are unaware of the obvious future austerity will bring. Just look at what's happening in the first test-case of Greece.

    That Britain and the US, among other states, are instituting practical measures to treat every citizen as a suspect, and at breakneck speed... it's hard to credit that all these measures are in place to protect us from some guys on scooters in Afghanistan or Yemen.

    I think TPTB are playing for the whole enchilada, and doing it right now.

    In the States, the Neo-Liberals (who pose as "liberals" here) have often expressed the need to "get America competitive in the global marketplace." As economist Michael Hudson pointed out on a radio show I heard recently, this means wages have to be driven down. And you have to have long-term, and high, unemployment to drive wages down.

    Hence, all our politicians talk about "deficit crisis" and such, and not a one harps day after day on the Jobs Crisis which dominates the minds, and lives, of the voters they all are supposed to be so eager to pander to.

    Meanwhile, I note that "competitiveness" with slave-labor, and thisclose to slave-labor, ultimately brings us down to ... as near slave-labor as possible.

    Leave the survivors with as much as they need to not rise in rebellion and to afford entertainment, and you've got an ideal world. For sociopathic wealth and power accumulators.


    The Internet is just the tail of the Corporate Media dog.

    by Jim P on Sun Jan 06, 2013 at 06:46:12 PM PST

  •  Exactly right. (1+ / 0-)
    Recommended by:
    NY brit expat

    And exactly why Obama is not to be trusted.

  •  recced this (0+ / 0-)

    but it seems like a lot of work to say that the rich just want to enslave everyone else in every clever way they can.

    oh, I guess I am just in a bad mood tonight.

    •  thanks for the rec, but we need to (0+ / 0-)

      understand exactly what is going on and simply saying that the rich are trying to enslave us is opinion, we need to understand exactly what they are doing and how they are doing it.

      "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

      by NY brit expat on Mon Jan 07, 2013 at 05:51:45 AM PST

      [ Parent ]

  •  The "dismal science" (1+ / 0-)
    Recommended by:
    NY brit expat

    Why do they call it that? Dismal -- OK. But to qualify as science theories must be validated, and it seems that too many serious economic theories are highly impervious to fact.

    When I'm feeling cynical I think modern economists are engaged in the moral justification of looting. When I'm not so cynical, I think that selection pressures at IMF/WB, banks, think tanks, etc result primarily in economists who are engaged in the moral justification of looting.

    •  It was called the "dismal science" (1+ / 0-)
      Recommended by:
      alefnot

      because all economic theories recognised that the capitalist system was prone to crisis and some argued that it was doomed to stagnation. In the case of Malthus, he argued that we cannot fight poverty as if we change income distribution, all that will happen is that the poor will breed too quickly and create more poverty for themselves and everyone will be poorer.

      Economics is not a science, it is a social science; that is a very important distinction. The use of numbers and modelling does not mean that you have created a science; the theories are not internally consistent and the models are far too abstract to explain how the system works and are inherently ideological as they are meant to support the system itself rather than understand it critically.

      "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

      by NY brit expat on Mon Jan 07, 2013 at 05:50:40 AM PST

      [ Parent ]

  •  All 3. (1+ / 0-)
    Recommended by:
    NY brit expat

    If... the machine of government... is of such a nature that it requires you to be the agent of injustice to another, then, I say, break the law. ~Henry David Thoreau, On the Duty of Civil Disobediance, 1849

    by shigeru on Mon Jan 07, 2013 at 01:32:15 AM PST

  •  Between Taibbi's latest (1+ / 0-)
    Recommended by:
    NY brit expat

    and this diary, I feel like I understand our problems better than ever - thank you!

    Now, what to do about it....

    "Mediocrity cannot know excellence." -- Sherlock Holmes

    by La Gitane on Mon Jan 07, 2013 at 02:05:17 AM PST

    •  thank you! We need to continue (1+ / 0-)
      Recommended by:
      La Gitane

      fighting, we need to build a movement and an anti-austerity left-wing party at least in my humble opinion! :D easier said than done, but that is what needs to be done.

      "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

      by NY brit expat on Mon Jan 07, 2013 at 05:47:18 AM PST

      [ Parent ]

  •   Good analysis. Important to call gov on hypocrisy (1+ / 0-)
    Recommended by:
    NY brit expat
  •  Need to get this off of my chest. (0+ / 0-)

    I have posted this to another diary in more or less the same form, but it fits here even better and I am actually always riled up about this issue (austerity) when it comes up so I need to get this off of my chest.

    Oh, how Keynes fought against the idea of the IMF because he knew they were pro-austerity from the very beginning! He wanted a worldwide organization for economic affairs to make international cooperation easier as well as try and remedy the tragic financial differences between industrialized nations and "third world countries". He was a vocal advocate of the creation of global institutions that he envisaged as managing an international trade and payments system with strong incentives for countries to avoid substantial trade deficits or surpluses - but he knew that the IMF's policies would lead to economic crises that could be prevented relatively easily and that the poorer countries would be suffering disproportional from the debt created by the richest countries' excesses (and thus inevitably regress).

    Instead of listening to the most influential man in Economics, the person who revolutionized the world economy of the 20th Century on his own - with the obvious exception of America, which has always used his theories as pointers for establishing economic policies that were the exact opposites of what he concluded would be beneficial - the IMF was established solely because the US was the world's biggest creditor after WWII and thus had more political influence.

    Keynes was also adamantly against the Bretton-Woods system but again, the world was forced to snub his fantastically researched and progressive theories because of the powerful force of the American Right. US Conservatives were actually his biggest critics, mainly because his conclusions included much tighter regulations of private entities when it came to putting out safe products and providing safe conditions and fair pay for its workers - he was called a Communist frequently just for stating this. Sound familiar?

    He was the original anti-austerity and demand-not-supply guy. He predicted the Great Depression among so many other things but economic innovation and genius never trumps political power. I always get indignant when some people try to call the field of economics a "pseudoscience" - most of these people always do turn out to be Americans, unfortunately - because the blame for the absolute failure of the US economic system and its policies should be placed squarely on the shoulders of American figures who have ingrained the antithesis of modern economics into American society (people masquerading as economists such as Ayn Rand et co. come to mind, but there are many others). Social Darwinism and serious, scientific economic theory have been irreconcilable concepts and diametrical opposites for more than 90 years at the very least.

    Even ADAM EFFING SMITH, author of the Wealth of Nations and "father of capitalism" recognized to a certain extent in the mid-18th Century that a totally free market is actually anything but for its participants when left totally unregulated (and he's the one who came up with the concept of the invisible hand).

    A lot of (if not most) economic policies instated by US administrations over the last 6+ decades have been a blatant mockery of modern economic theory more than anything else. Keynes shaped the gist of global economic policy during the 20th Century and helped improve innumerable people's lives because of it. The US, however, has always used his highly influential and revolutionary work as a manual to read closely but to then do the complete opposite of what it says - all because of a perverted, ugly, inhuman view of what economic prosperity means (read: total and unchecked capitalism). Don't thrash the science; trash the ones who pervert it or implement its antithetis because the truth doesn't serve their own personal goals and greed.

    Capitalism is the astounding belief that the most wickedest of men will do the most wickedest of things for the greatest good of everyone.
                        - John Maynard Keynes
    •  For someone that really wants to defend (0+ / 0-)

      Keynes, I would suggest you read the piece ... I am an historian of economic thought, I would say that knowledge of economic theory and its development from the Physiocrats forwards is pretty good; I know economic theory and I know what its purpose is. It is not a science, it is a social science ... we cannot discuss the economy independently from politics and social conditions. It is impossible and that is one of the greatest problems with economic theory from 1870 forwards.

      Keynes wanted to ameliorate the inherent instability in the capitalist economic system. His arguments stated in the General Theory kept the theory of effective demand in the short run; the keynesian synthesis was far closer to what was stated in the GT than the post-Keynesian arguments that capitalism is a demand constrained system. The elimination of Keynesian stabilisation policies from the late 1970s on has led us exactly where we are. However, Keynes's policies do not eliminate crises, they ameliorate them. The only way to get rid of crises is to get rid of capitalism, which is something that Keynes never argued.

      "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

      by NY brit expat on Mon Jan 07, 2013 at 08:38:38 AM PST

      [ Parent ]

      •  Of course I read the diary. (0+ / 0-)

        I did, obviously, and this comment was actually an unrelated rant pertaining to a lot of comments I hear and read every single day - I should probably have made that more clear in the first place.

        I may only be a Behavioral Economics student, but I do view this field as a science and don't pigeonhole it as as a social science only. Of course it's not an exact science like astrophysics or quantum mechanics, but a huge problem with economic theory in the past was that it's always been way too narrow in focus - if you look at sociology, history, philosophy, mathematics and neurobiology, even, you see that economics tends to be insulated. When merged with these other areas of study that I mentioned (as much as is prudent, of course) would help elevate its status as just a "social science" without much factual, non-contextual backing to something more universal. The field is changing in this direction though, from what I know, which is why I can't agree with you as to looking at economics as based on present social and political environments only. Analyses, when trying to adjust and apply them to tangible policy, do need political and social context (did I say that was not the case in my post? If I did, that was not my intention). I believe that pure economic and econometric theory can be studied independently, with as much distance and objectivity as is possible with any other science.

        Yes, the elimination of Keynesian stabilization policies in the 70's has led us where we are now. As to your last point that Keynes' GT and other Keynesian principles would ameliorate crises... I do know this, and wonder why you're telling me this? I did not suggest crises could in any way be gotten rid of - I studied Kondratiev et co. as well, of course. Keynesian principles would indeed soften the blow quite a bit, which is almost exactly what I was ranting about! In the US, any and all financial crises (which are inevitable) are obviously prolonged and made worse by the Conservative policies that have plagued the country for decades and decades. Short of removing its roots, like doing away with capitalism as a whole like you suggested, the elimination of crises is not possible. But so much hardship could've been avoided by implementing at least a few things the rest of the world considers actual economic theory.

        If my comment sounded like I was singling you out, I want to apologize. If anything, I was adding my own rant to it as an afterthought, because your diary reminded me of what the US has done and how the public gets misled on what economic theory actually is, not because you are one of those who need to be lectured, but because you sound like a lone, sane and informed voice.

        •  What is the difference between the theory (0+ / 0-)

          of evolution and the theory of supply and demand? One can be proven historically to explain reality, the latter is a theory which is not only internally inconsistent but historically non-demonstrable. We cannot talk about economics independently of politics and sociology; it is sheer arrogance that human beings are reduced to numbers. That is what mainstream economics does; meanwhile economists propose policies whose sole purpose is to impoverish billions to increase wealth and income inequality based upon the erroneous belief that it is the capitalists that create wealth (that was David Cameron's lastest piece of dribble today) as though wealth is capable of being created w/o human labour as producers and human beings as consumers.

          There is nothing wrong about being a social science; it is a recognition that there are limits to the explanation of quantitative analysis.

          I was wondering why you were ranting to me about Keynes as I addressed the theory of effective demand and argued that it was actually correct in the long-run and not only the short-run as stated by Keynes, the neoclassical synthesis and neo and new Keynesianism. I spoke about how the current policies are designed to contract growth and to shift income and wealth to the upper class which is an incredibly stupid policy in the context of an economic crisis (which keynes would agree) and then I advocated measures which are the exact opposite of what is being advocated by politicians and the mouthpieces of international capital. Have no problem with you adding your rant, I just was wondering why it was aimed at me; now I know that it was not. It's cool.

          Read Keynes, he knew that he could not eliminate crisis, they are inherent to the nature of the system; what he did was propose policies to cool it down when boiling and heat it up when cold.

          "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

          by NY brit expat on Mon Jan 07, 2013 at 09:39:10 AM PST

          [ Parent ]

          •  I really wasn't clear. (1+ / 0-)
            Recommended by:
            NY brit expat
            We cannot talk about economics independently of politics and sociology; it is sheer arrogance that human beings are reduced to numbers. That is what mainstream economics does; meanwhile economists propose policies whose sole purpose is to impoverish billions to increase wealth and income inequality based upon the erroneous belief that it is the capitalists that create wealth (that was David Cameron's lastest piece of dribble today) as though wealth is capable of being created w/o human labour as producers and human beings as consumers.
            This is exactly what I meant with my last post, that economics as a subject has always been so very narrow and never incorporated any valuable knowledge of the many fields of study that would enrich it tremendously - this has lead to a sort of (pardon my French) self-masturbatory calculating in what could just as well be a complete vacuum.

            I know there's nothing wrong with social sciences. I don't use it as a denigrating word, I'm not defensive about this issue which, I agree, many people actually are. But I was just arguing that, as someone who is studying Economics but who has courses in subjects as far apart as Neurobiology (in function of human behavior) and Philosophy, Organization Theory, Mathematics (some related and some not related to Econometrics), Sociology, Philosophy and Managerial Economics/Global Governance etc. I don't see why the field, when combined and improved like this (which seems to be a trend that will hopefully last!) would fall short of being a more exact science than previously presumed. I'm seeing a change worldwide that I very much approve of, which is why I came to study Behavioral Economics in the first place.

            I was wondering why you were ranting to me about Keynes as I addressed the theory of effective demand and argued that it was actually correct in the long-run and not only the short-run as stated by Keynes, the neoclassical synthesis and neo and new Keynesianism. I spoke about how the current policies are designed to contract growth and to shift income and wealth to the upper class which is an incredibly stupid policy in the context of an economic crisis (which keynes would agree) and then I advocated measures which are the exact opposite of what is being advocated by politicians and the mouthpieces of international capital. Have no problem with you adding your rant, I just was wondering why it was aimed at me; now I know that it was not. It's cool.
            Thanks. I must apologize again, I should've stated my intent and been clear that I wasn't talking about your vision in the least. High-blood pressure because of previous political discussions on DKos combined with some physical pain-related problems never helps one's brain when it comes being sharp. ;)

            I know you were advocating the opposite of what is being done now and that the roots of your propositions lie in Keynesian principles. It triggered something in me, having met many people who dismiss my current education as nothing tangible or a "pseudoscience" and I felt relieved to hear something else for a change - something I absolutely agreed with.

            Read Keynes, he knew that he could not eliminate crisis, they are inherent to the nature of the system; what he did was propose policies to cool it down when boiling and heat it up when cold.
            That's really well put in just one sentence, wow. That's a great summary. I've read GT and plan on reading A Treatise on Probability, Tract on Monetary Reform and The End of Laissez Faire and the Economic Consequences of the Peace very soon.
  •  I think we can do better than capitalism as our (0+ / 0-)

    primary economic system. What we're suffering from is a paucity of imagination and the will to make it happen. What is the actual definition of "economy"?....Efficiency. There is nothing efficient about capitalism.

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site