Paul Krugman warns severe austerity measures are pushing countries to brink of fascism

[Playinghardball]

he problem with ideologues is that they do not learn from their mistakes, not even after they repeat them and things go wrong again. Paul Krugman returns to one of his favorite subjects in his Friday column: the mismanagement of Greece’s fiscal crisis, which erupted five years ago and has ongoing terrible side effects that are damaging the whole world. “But I’m not talking about the side effects you may have in mind — spillovers from Greece’s Great Depression-level slump, or financial contagion to other debtors,” Krugman writes. “No, the truly disastrous effect of the Greek crisis was the way it distorted economic policy, as supposedly serious people around the world rushed to learn the wrong lessons.”

Greece is again in crisis and Krugman is wondering if (hoping that )the world will learn the right lesson this time.

The first time, the conversation became all about cutting government spending and obsessing over deficits. That this worsened unemployment and blocked any chance for growth was simply denied by fiscal austerity hucksters like British prime minister David Cameron and U.S. budget hawk Paul Ryan. We’re all going to be Greece, they hysterically warned. Minus the sunshine. Krugman:

In reality, Britain and the United States, which borrow in their own currencies, were and are nothing like Greece. If you thought otherwise in 2010, by now year after year of incredibly low interest rates and low inflation should have convinced you. And the experience of Greece and other European countries that were forced into harsh austerity measures should also have convinced you that slashing spending in a depressed economy is a really bad idea if you can avoid it. This is true even in the supposed success stories — Ireland, for example, is finally growing again, but it still has almost 11 percent unemployment, and twice that rate among young people.

More here: http://www.rawstory.com/rs/2014/12/paul-krugman-warns-severe-austerity-measures-are-pushing-countries-to-brink-of-fascism/

[PeoViejo]

1. It happened in Germany

The Reparations for WWI caused a lot of hardship.

Google 'Stabbed in the Back Germany'

[jmowreader]

14. The WWI reparations brought Germany Hitler

Adolf Hitler promised to end the depression caused by the reparations. He did it by recalling the Reichsmark, issuing the Deutschemark, and telling the victorious powers that the currency the surrender documents required to be paid no longer existed so the victors could go fuck themselves. For the first few years of Hitler's reign he was an All Right Guy...if he could have refrained from evil he would have gone down in history as a great leader. That isn't what happened, as we well know.

[PeoViejo]

15. I think his populist angle in the beginning helped him consolidate Power.

Once everything was under control, he eliminated anyone that might have been an internal threat to his Power.

[Ichingcarpenter]

2. Goldman Sachs stated this was their goal in a memo

that was leaked. Krugman needs to pay attention.





http://occupyobservations.blogspot.dk/2013/10/goldman-sachs-making-us-like-greece.html

[octoberlib]

4. They think that Democracy is inconvenient . It's got too many rules and regulations.

An oil company executive actually said this in a leaked Stratfor email.

[Ichingcarpenter]

6. I have a big problem with these economic hitmen

disaster capitalism shock doctrine banksters, privatization advocates for a system that causes real hardship and pain for the people.

There is even a newer memo out there from
JP MORGAN...

http://www.pauljorion.com/blog_en/2013/06/24/a-mail-exchange-about-jp-morgans-the-euro-area-adjustment-about-halfway-there-europe-economic-research-28-may-2013/


JPMorgan calls for authoritarian regimes in Europe
By Stefan Steinberg
17 June 2013

In a document released at the end of May, the American banking and investment giant JP Morgan Chase calls for the overturning of the bourgeois democratic constitutions established in a series of European countries after the Second World War and the installation of authoritarian regimes.

The 16-page document was produced by the Europe Economic Research group of JP Morgan and titled “The Euro Area Adjustment—About Half-Way There.” The document begins by noting that the crisis in the euro zone has two dimensions.


First, the paper argues, financial measures are necessary to ensure that major investment houses such as JP Morgan can continue to reap huge profits from their speculative activities in Europe. Second, the authors maintain, it is necessary to impose “political reforms” aimed at suppressing opposition to the massively unpopular austerity measures being carried out at the behest of the banks.


The report expresses satisfaction with the implementation of a number of financial mechanisms by the European Union to secure banking interests. In this respect, the study maintains, reform of the euro area is about halfway there. The report does, however, call for more action by the European Central Bank (ECB).
Since the eruption of the global financial crisis in 2008, the ECB has made trillions of euros available to the banks to enable them to wipe out their bad debts and commence a new round of speculation. In the face of mounting pressure from the financial markets, ECB chief Mario Draghi declared last summer that he would do whatever was necessary to shore up the banks.
This, however, is not sufficient as far as the analysts at JPMorgan are concerned. They demand a “more dramatic response” to the crisis from the ECB.


The harshest criticisms in the document, however, are reserved for national governments that have been much too tardy in implementing the type of authoritarian measures necessary to impose austerity. The process of such “political reform,” the study notes, has “hardly even begun.”
Towards the end

of the document, the authors explain what they mean by “political reform.” They write: “In the early days of the crisis it was thought that these national legacy problems were largely economic,” but “it has become apparent that there are deep-seated political problems in the periphery, which, in our view, need to change if EMU (the European Monetary Union) is to function in the long run.”
The paper then details problems in the political systems of the peripheral countries of the European Union—Greece, Spain, Portugal and Italy—that have been at the center of the European debt crisis.



The authors write: “The political systems in the periphery were established in the aftermath of dictatorship, and were defined by that experience. Constitutions tend to show a strong socialist influence, reflecting the political strength that left-wing parties gained after the defeat of fascism.


“Political systems around the periphery typically display several of the following features: weak executives; weak central states relative to regions; constitutional protection of labour rights; consensus-building systems which foster political clientalism; and the right to protest if unwelcome changes are made to the political status quo. The shortcomings of this political legacy have been revealed by the crisis. “ Whatever the historical inaccuracies in their analysis, there can not be the slightest doubt that the authors of the JPMorgan report are arguing for governments to adopt dictatorial-type powers to complete the process of social counterrevolution that is already well underway across Europe.


In reality, there was nothing genuinely socialist about the constitutions established across Europe in the postwar period. Such constitutions were aimed at securing bourgeois rule under conditions where the capitalist system and its political agents had been thoroughly compromised by the crimes of Fascist and dictatorial regimes.
The constitutions of European states, including those of Italy, Spain, Greece and Portugal, were elaborated and implemented in collaboration with the country’s respective Socialist and Communist parties, which played the key role in demobilising the working class and permitting the bourgeoisie to maintain its rule.


At the same time, however, Europe’s discredited ruling classes were well aware that the Russian Revolution remained a political beacon for many workers. They felt compelled to make a series of concessions to the working class to prevent revolution—in the form of precisely the social and constitutional protections, including the right to protest, that JPMorgan would now like to see abolished.


http://www.wsws.org/en/articles/2013/06/17/morg-j17.html

[octoberlib]

7. Jesus.

[Ichingcarpenter]

8. Wasn't in THE NEW YORK TIMES but

it was in european news and the memo is real and still on line.

Now why didn't Krugman include this in his writings?

[hifiguy]

9. This should be an OP.

And a plutocrat never, EVER has a better friend than a dictator.

[Ichingcarpenter]

10. I had it before but you know how that is

besides now I discovered we have three documented memos from three separate mega capitalist players saying the same thing more or less.


That would be a conspiracy and not a theory....

Krugman an't telling the story that's there .

[hifiguy]

11. It's like Auric Goldfinger said.

"Mr. Bond, once is an accident, twice, a coincidence. But three times is enemy action."

They mean to conquer the world without the inconvenience of world war. They probably will succeed where Napoleon and Hitler failed. It's far easier to corrupt from within than to physically conquer, and all the real estate is left in nice condition to boot.

[octoberlib]

3. I like to read the comments section at the GuardianUK

and it sounds like their social safety net is being destroyed , too. Granted, they're starting off from a better place than we are but they complain about the same things we do. Right-wing slanted media, politicians owned by corporations etc.

[n2doc]

5. It's not a bug it's a feature n/t

[Kablooie]

12. Slashing spending in a depressed economy is like telling a starving person he should fast.

[Aerows]

13. Paul Krugman once again

states that water is wet, and people pretend to be surprised that he has made such a heinous allegation - a blunt set of facts that have repeatedly, throughout history, proven to be absolutely right.

I wonder if people stay up at night attempting to concoct speeches and campaigns to make idiocy sound like sound government and acts of horror to be good foreign policy.

Never mind. I know they do.