The conservatives of the world howl and gnash their teeth in the face of imagined debt and the IMF seek to impose punitive austerity on what had once been the workers of the developed world before capitalism descended into voodoo abstraction. All economists to whom I care to pay attention tell me that that current drastic cuts to public spending are nothing short of suicidal. In the instance it’s Robert Reich – formerly Bill Clinton’s Secretary of Labor (remember peace and prosperity?)
“Not only is the United States slouching toward a double dip, but so is Europe. New data out today show even Europe’s strongest core economies – Germany, France, and the Netherlands – slowing to a crawl. We’re on the cusp of a global recession. Policy makers be warned: Austerity is the wrong medicine. We all know about the weaknesses in Europe’s “periphery” – Greece, Ireland, Spain, Portugal, and Italy. But the drop in Europe’s core is dizzying. Germany grew at an annualized rate of just half a percent last quarter, down from 5.5 percent in the first quarter of the year. France didn’t grow at all. What’s going on in Europe’s core? Partly it’s a loss of confidence due to debt crises in the periphery. But that’s hardly all. Europe depends on exports – especially to Asia, India, Latin America, and the United States. But exports to China and other emerging markets have been dropping. China, worried about inflation, has pulled in the reins on its sizzling economy. Brazil has been pulling back as well. And as the United States economy sputters, exports to America have been slowing. But chalk up a big part of Europe’s slowdown to the politics and economics of austerity. Europe – including Britain – have turned John Maynard Keynes on his head. They’ve been cutting public spending just when they should be spending more to counteract slowing private spending.” (Click here for more)
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The secret word is Clueless
