By now, it should be official: austerity in the midst of a jobs crisis doesn’t work.
The elections in the Netherlands, Greece and France show that Europeans have figured this out from bitter experience, even if their leaders haven’t.
France, Great Britain, Ireland, Spain, Portugal, Italy – practitioners of austerity all -- are either experiencing a second recession, or they are well on their way toward one. As for creating jobs? Fuhgeddaboutit. In Spain, unemployment reached more than 24%; in Portugal and Ireland it stands at 15%; in Italy, it is nearly 10%.
And now that the money from the stimulus program is drying up and Tea Partiers and other assorted austerity mongers have begun to savage our budgets, the US economy is showing signs of swooning.
The anemic growth in US jobs in April should have been the death knell for imposing austerity measures in an economy when unemployment is high and buying power is weak.
And yet the Republicans press on, slashing budgets whenever and wherever they can; drumming up bogus fears about deficits to justify it.
So how’s it working for us?
Not so good.
Until the austerity mongers gained control, the private sector had been producing jobs at a pretty good clip – about 4.25 million since the trough of the Bush recession in 2009 – but the public sector has been losing jobs.
Most of that job loss is happening at the state and local level, with a disproportionate share of the losses coming from states controlled by the Republican Party. Many of the jobs being cut are in critical areas like education and infrastructure investments, both of which are key to future job growth.
And now, as the austerity peddlers’ policies take effect, even the private sector job growth is slowing down.
But the austerity lemmings are intent on causing a much larger march of folly. For the last thirty years, starting with Ronald “government is the problem” Reagan, Republicans have been the arsonists posing as firemen.
The latest rise in oil prices is a case in point.
As Matt Taibbi points out, beginning in 2005, a series of semi-secret exemptions allowed an influx of capital from non-market players like Goldman Sachs into futures trading.
When markets were composed primarily of parties within the field, there was a balance of interests that worked to keep prices relatively stable.
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Outside players exert no such balance. In fact, large financial institutions make money on bubbles by going long on the upside, and going short on the downside. As we saw with the housing crisis they can and do take advantage of bubbles, often at the expense of the country in general and the middle class in particular.
So here’s the deal. In 2005, Republicans played arsonist by weakening government controls on futures markets, unleashing a speculative bubble in oil prices that collapsed in Great Recession of 2008. In 2012, when the economy was recovering, a vague threat about the Straits of Hormuz became the pretext for the next inevitable speculative bubble in oil prices and Republicans ditched their matches and gas-soaked rags, donned their fire hats, and blamed Obama, the federal government, and government regulations for the price increases their policies caused.
Talk about audacity. Create the problem by weakening regulations, then use the problem as a justification for further weakening government regulations.
Are oil markets an isolated case? Hardly.
Austerity serves as a pretext for an overall assault on government: Starving the SEC and the CFTC to give their fat cat sponsors free reign; assuring that financial “reform” didn’t really reform by failing to restore Glass-Steagall and leaving too-big-to-fail banks intact… on and on it goes.
But it’s not just deregulation. The firemen/arsonists pass up no chance to discredit or disable government in general.
The list is endless: economically sabotaging the highly visible Post Office; undermining government scientists on a wide range of issues; assaulting social security, as well as gutting Medicare, Medicaid, Pell Grants, unemployment, job retraining … on and on it goes. All for the purpose of funding more tax cuts for the obscenely wealthy.
So once again, Republicans are whipping out the matches and gas cans, starving the government of resources, then donning their fire hats and using the deficit caused by lack of resources as a reason to cut the programs “we can’t afford.”
The same kind of con is taking place at the state level. Look at Wisconsin Governor Scott Walker’s stunningly obvious two-step. Step one, cut corporate taxes and turn a budget surplus into a deficit. Step two, take the budget deficit thus created and use it as a pretext for attacking unions and government employees.
This politically pornographic playbook, funded by the Koch brothers and designed by ALEC, is being applied in nearly every Republican controlled state.
Notice who wins and who loses in Walker’s Wisconsin scam, or Ryans’ proposed federal budget. Corporations and the uber-rich get tax breaks and regulatory “relief;” students, the elderly, children, unions, government workers and government functions like environmental protection, unemployment, and research get gutted. In short, the rich get huge gifts, and the rest of us pay for them with lost services.
And basically, that’s the whole point of discrediting government: make it politically safe to continue to take power and money from the poor and middle class and give it to the rich and corporations without suffering repercussions at the polls.
Certainly, absent a cogent counter argument from the Democrats (don’t hold your breath) and more accurate reporting by the corporate-owned media (definitely don’t hold your breath), your vote won’t matter. Not in the least.
Doubt that? Then stand back and watch the flow of money into the campaigns and SuperPACS. See where it comes from, who wins, and who benefits once the winner gets in.
Hint: it won’t be you.