There’s a funny thing about austerity measures, typically promoted by conservative political elements during times of national fiscal crisis: when adopted alone without a balanced approach to investment in education, infrastructural improvement and other short-term and long-term economic stimuli, they don’t work.
In a piece published May 1 in the Hoover Institution Journal, writer Richard J. Epstein opines:
“Throughout the European Union, austerity programs have failed both politically and economically. In Spain, unemployment rates have soared above 24 percent. The Dutch government is on the edge of collapse because of the popular and political unwillingness to accept the austerity program proposed by its conservative government. Romania is not far behind. Greece, Italy, and Portugal remain in perilous condition…On the American front, the decline of GDP growth to 2.2 percent rightly raises fears that our sputtering domestic recovery is just about over.”
It is both ironic and appropriate that scholars at the Hoover Institute should draw such conclusions, as President Herbert Hoover himself is often cited as the most obvious 20th Century example of failure to lead through a combination of restriction and investment. President F.D. Roosevelt had Hoover’s short-sightedness to thank for his 1932 win as much as his own charisma and bold ideas.
But as we know, those who fail to learn from the mistakes of the past are doomed to repeat them. European Union leaders from Greece and France were reminded of three certain facts this past weekend, as citizens went to the polls to repudiate the post-financial crisis steps taken to try to the right the foundering Euro ship:
- It is never a good idea to let Germany call the shots (see almost every relevant historical event since 1900).
- You cannot simply cut your way out of a recession, and you most certainly cannot ask the general populace to suffer helplessly in every possible way in the quest for an improved bond rating. As NPR reporter Philip Reeves said yesterday, “Prosperous, smooth-running countries have been stripped of their coveted AAA credit ratings. The crisis started in the banks, whose executive are still pocketing huge bonuses. Europe’s public is paying the price.”
- If you fail to observe the first two rules, you will be tossed out of office eventually. Democracy has a way of having the last word.
In France, Nicholas Sarkozy, one-half of “Merkozy,” is out and Francois Hollande is in. “Merkozy” is the cute hybrid name bestowed upon the decidedly unadorable pairing of Sarkozy and German Chancellor Angela Merkel. The terrible twosome has led the way in the resurgence of Hooverism as a response to the collective financial meltdown experienced by the planet in 2008. New York Times’ columnist Paul Krugman, a virulent critic of austerity-only policy, has often wondered in his columns when the European Union, and certain disturbed elements of the U.S. Republican Party, will finally stop believing in the non-existent “Confidence Fairy.”
The idea promoted by Merkozy, Mitt Romney, Paul Ryan and other shysters of the one percent, is that starving the public will somehow promote growth and investment. Like if you stop eating, showering and brushing your teeth you will only look healthier and more attractive. This is a logical fallacy that a preschooler is likely to be able to identify, yet it doesn’t stop the interested parties from whoring it out at every opportunity.
The clear repudiation of austerity alone, the rejection of a status quo that promotes self-reinforcing, wide-ranging human suffering as a disingenuous path to prosperity, is a sign that the tide is turning. People are looking for true pro-growth policy, not open-ended sacrifice that reinforces corporate and political corruption.
I hope Mitt Romney and other GOP leaders are paying close attention to the electoral fallout that is only beginning to occur overseas. The proposed Paul Ryan budget is the ideological cousin of many of Greece’s current failed policies. What’s the definition of insanity again?