"Four Signs Neoliberalism is (Almost) Dead"

[applegrove]

Four Signs Neoliberalism is (Almost) Dead

by SAMEER DOSSANI at the Daily Beast


http://www.counterpunch.org/2013/04/22/four-signs-neoliberalism-is-almost-dead/

"SNIP........................................


But the neoliberal era may finally be nearing its long-awaited end. Here’s why.

1) The IMF has admitted that budget cuts are not always the answer.

The IMF has for over three decades forced countries to restructure their economies to be in line with neoliberal tenets. In particular, they have forced indebted countries to cut budgets before they can borrow from capital markets to pay off creditors. The phrases bureaucrats and politicians invented to sell this ideology are by now clichés. “Governments can’t spend more than they earn,” “We all need to tighten our belts,” etc. etc. By cutting government spending, the story goes, countries make room for increased private sector spending, and the economy grows.

Though earlier IMF studies had come to similar conclusions, it wasn’t until January 2013 that the IMF’s chief economist published what amounts to a “mea culpa”. Turns out that decreasing public investment is actually a pretty good way to hurt prospects for economic growth rather than increase them. Oops.

And there’s another twist in the story. For the last few years, decision makers have been citing a paper by Harvard economists that ostensibly highlights the dangers of countries borrowing too much in order to finance public expenditures. The paper specifically suggested a cutoff – when the debt hits 90% of GDP – beyond which economies would suffer for their overspending ways. The paper has been cited by public officials around the globe to justify budget cuts. But it turns out that the paper’s conclusions were a result of a series of errors, one of which was forgetting to update a calculation on an Excel spreadsheet. When the correct data is put in place, the conclusions more or less disappear.


........................................SNIP"

[freshwest]

1. K & R. In memory:

[Benton D Struckcheon]

2. As Krugman keeps pointing out,

every day they get closer to the fundamentals of Keynes again. Maybe Keynes needs to be reframed, because in actuality all he said was that instead of being like the grasshopper, be like the ant: save for the winter. BUT, when winter comes, spend it.
The only problem is restraining people from voting in drooling morons like Bush, who spend when the sun shines and thereby make it tough to do what you have to when it starts snowing.

[reformist2]

3. But even with this stimulus, the lion's share of the benefit went to the 1% - something is wrong.

[Benton D Struckcheon]

4. No private sector unions anymore pretty much, that's what's wrong. n/t

[leftyohiolib]

5. yup organize or die

[Baitball Blogger]

6. Very important.