Unemployment soars to record highs in France and Spain after austerity measures (Krugman was right)

[Cali_Democrat]

So the austerians said cutting government spending would reduce debt and improve confidence which would lead to a booming economy and falling unemployment.

Not so much:

Austerity blamed as unemployment soars in Spain and France
Phillip Inman and Giles Tremlett in Madrid

Unemployment has soared to records in both France and Spain as the impact of government spending cuts and a collapse in consumer confidence forced employers to shed thousands of workers.

Spain's persistent rise in unemployment reached new heights over the first three month of this year, leaving a record 27% of the workforce jobless.

Spain now has 6.2 million unemployed after a 23-month run of falling employment figures, with the young and those living in the south of the country particularly hard hit as the economy continues to shrink.

Almost six out of every 10 people under the age of 25 who are not studying are now jobless, with the rate at 57%.

http://www.guardian.co.uk/world/2013/apr/25/austerity-unemployment-spain-france-eurozone

Krugman was right:

The Economic Argument Is Over — Paul Krugman Has Won

On one side were economists and politicians who wanted to increase government spending to offset weakness in the private sector. This "stimulus" spending, economists like Paul Krugman argued, would help reduce unemployment and prop up economic growth until the private sector healed itself and began to spend again.

On the other side were economists and politicians who wanted to cut spending to reduce deficits and "restore confidence." Government stimulus, these folks argued, would only increase debt loads, which were already alarmingly high. If governments did not cut spending, countries would soon cross a deadly debt-to-GDP threshold, after which economic growth would be permanently impaired. The countries would also be beset by hyper-inflation, as bond investors suddenly freaked out and demanded higher interest rates. Once government spending was cut, this theory went, deficits would shrink and "confidence" would return.

<...>

So the empirical evidence increasingly favored the Nobel-prize winning Paul Krugman and the other economists and politicians arguing that governments could continue to spend aggressively until economic health was restored.

And then, last week, a startling discovery obliterated one of the key premises upon which the whole austerity movement was based.

http://www.businessinsider.com/paul-krugman-is-right-2013-4

[CTyankee]

1. It looks like Dr. Krugman has not been alone in condemning austerity.

The tide has turned on this one. The handwriting is on the wall and, unfortunately, claiming real victims. This is not just an intellectual exercise, it's the moral consequences of economic policy.

[Cali_Democrat]

5. Exactly

there are so many people suffering because of these policies.

It's madness.

[closeupready]

2. Krugman won the battle but lost the war.

For the most part, Republicans and 3rd Way Dems do not care what works, and never did. They care about preserving what material possessions they have, at any cost. If that means they hire Congresses to lie about what measures they believe will lower unemployment - since those same measures will lower their taxes - then that's all you need to know.

In other words, he was right, but it won't change a damn thing. Austerity will continue to be sold to the American people, right along with discredited trickle-down.

[CTyankee]

6. I don't understand what you are saying. Krugman is part of a general war against the VSP

and he has been at it for a long time. He talks about it all the time in his NYT column and in his daily blogs. He goes on TV and talks about it. He debated his "lesser" Joe Scarborough, who was shameless in his shiftiness in that debate.

You are right about the people who hire Congress to lie because that is the case. But Krugman is one who stands out there and calls them out on what they do. We should applaud him, not condemn him...

[djean111]

13. I don't think Krugman is being condemned at all -

Krugman is right, he is proven right, but no one in Washington (or the world) cares - the object was always to pay less taxes, not create jobs. So - Krugman wins the battle for who is right, but he and all of us lost the war against inflicting austerity - because it was never about improving anything but the 1% bottom line.

[CTyankee]

15. Oh, I think you are right, but now the mask has been torn off...

and the truth to which you so rightly refer is revealed. It is just a matter of time until this has been revealed and then we will see...

[closeupready]

18. Yes, thank you for putting it much better than I did.

[noiretextatique]

20. you are absolutely correct: they don't care

the goal is to continue to loot wealth from the middle class for their tax cuts. that's the only reason for something as stupid as austerity. i'm not an economist, and even i know the austerity pimps are full of

[HereSince1628]

3. It's not enough to enjoy the schadenfreude, it's time to insist on global policy reversals

to save the world from lazy experts who bought into confirmational bias.

The IMF, Euro Banks, and major world economies MUST reverse course.

THE WORLD HAS BEEN HAD BY PEOPLE TOO LAZY TO CHECK THE DETAILS OF THEIR SPREADSHEETS!

That is NOT a reason to drive people into misery and death.

REVERSE ECONOMIC POLICY NOW!

[Rex]

4. Well the supposed experts missed an obvious error

and now look like a pair of Keystone Cops or better comparison Paper Pinkertons.

[CTyankee]

7. I don't know who you are referring to but Krugman has been out there telling everyone

that R-R are wrong for a long time. We here at DU are just waking up to that. How easy then to say someone else didn't blow the whistle. Well, yes,they did and it wasn't just Dr. K. Plenty of others did too.

[Rex]

8. R-R

The fact that every one of the status quo lovers went along blindly and nobody checked their work, before it was decided on as rock solid and expected policy, makes me furious.

I think they omitted parts on purpose. I don't consider them researchers, but opportunists.

[CTyankee]

10. Oh, I agree that R and R are opportunists. I don't indict Krugman as such.

For one thing, he has been flogging this meme for a LONG time. He has done his own models and found something different and he has talked about them in his NYT column and in his NYT blogs. He is also all over TV with his appearances in support of his economic theories that denounce austerity.

What more do you want?

[Rex]

12. You are right, Paul has been hammering away for years

I WANT the M$M to stop pretending he is an enemy combatant, just because he is right. Hell I want him to be an anchor on a main station of the M$M along with others like Greg Palast.

[CTyankee]

14. AND, he's not alone like the right wing MSM likes to portray him.

There are other distinguished economists out there who are in complete agreement, but they are not as well known as he is. The MSM just fell in love with the PTB and their enablers in the academic economics world, and that was that.

PK has a great perch at Princeton. He's a Nobel Prize winner. He's happy doing Meet the Press and various other media stuff and his daily chirps via his blogs from the NYT, not to mention his OpEd pieces that appear regularly in the NYT. He goes all over the world on speaking engagements and has best selling books. What's not to love about his life?

[reformist2]

9. I wish other economists would get on TV - Keynesian theory is still the prevailing one.

[DCBob]

11. The austerity crowd still think they are right.

They dont care about short term pain and disaster.. they are convinced that long term it will work. eg... the poor and sick will eventually die off and only the wealthy andh healthy will survive and then things will improve.

[Starry Messenger]

16. Yup. Anyone still confused can refer to this handy infographic:

[midnight]

21. K&R

marmar posted an article that had this in it:A growing private sector and shrinking public one does not bode well for people who have little economic value

http://www.democraticunderground.com/?com=view_post&forum=1016&pid=61892

[JEB]

17. Some people just love

the race to the bottom, but the bottom is still the bottom. Sooner or later it will dawn on them how bad it's going to get.

[riderinthestorm]

19. .

So many people falling into despair (and even death) before this ship is turned around though (if it hasn't already hit the iceberg - fatally). The PTB don't care to do the right thing and reverse themselves before they've stolen everything they can...