"The corporate class" is the clear winner in the global austerity game, according to analysis from Zach Carter in the Huffington Post.
As austerity policies lead to cuts in government programs such as Medicare and public education, Carter writes that this "generates a tidy windfall for the corporate class, as government services are privatized and savings from austerity pay for tax cuts for the wealthiest citizens."
Blueprints for austerity in the U.S. are seen in measures such as the 2010 Simpson-Bowles deficit reduction plan, which "would allow U.S. companies to permanently avoid paying U.S. taxes on overseas income, including money stashed in offshore tax havens like the Cayman Islands," creating a banner situation for Wall Street banks while gutting Medicare and Social Security.
Dorian Warren, a professor of political science at Columbia University and a fellow at the think tank Roosevelt Institute, says that "Austerity policies are literally a redistribution from the bottom of the income spectrum to the top." Looking at state-level impacts, Warren states, "In Wisconsin, both wealthy people and businesses got tax breaks, while middle-class and working-class employees of the state essentially got crushed."
Carter also looks at global austerity as seen in countries such as Greece and Spain, which were given bailouts by the EU with harsh austerity conditions attached to them. But the banks got the bailout while the Greek people got the austerity. "The most vulnerable populations are harmed by the bailouts, while the well-paid financial professionals who made the deals to finance Greek and Spanish deficits in the first place continue profiting handsomely," Carter writes.
This is echoed by economist James Galbraith. "Imposing pain on Greeks is ... a blood price for the ever-repeated bailouts whose actual beneficiaries are said to be Greeks, but are in fact French and German bankers," said Galbraith.
As Wall Street Democrats join Repulican calls for more austerity, writes Carter, the corporate class has more profits to come.
