A new stage in the attacks on the European working class

[Steven Gaal]

Britain's zero-hours army: How 1.4 million people are now 'trapped' on contracts with no promise of work

http://www.dailymail.co.uk/news/article-2616682/Zero-hours-army-1-4-million-trapped-contracts-no-promise-work.html

Edited April 30, 2014 by Steven Gaal

[Steven Gaal]

Police State and Mounting Poverty in Britain: David Cameron’s Concept of a “Big Society” is Continuing Jesus’ work Prime Minister Finds God, Bans Bishops, Priests, the Poor – and Crutches

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By Felicity Arbuthnot

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When Prime Minister David Cameron pulls a stunt, or indeed, announces a “ground breaking” new policy, it is pretty well guaranteed to back fire. Indeed, his coalition government policy U-turns are heading for encyclopedic.(1)

Is he opportunistic, spineless – or a lethal combination of the two? In opposition, to prove his “green credentials” he headed for the Arctic for a photo-op with Huskies, leaping: “aboard a Husky-powered sled to visit a remote Norwegian glacier to see first hand the effects of global warming.” As the (UK) Telegraph put it at the time: “Cameron turns blue to prove green credentials.”(2)

In office, the environment is an inconvenience rather than a concern. Protected historic sites of natural beauty, ancient woodlands and sites of special scientific interest are to be sacrificed to quick-build homes in their thousands and a multi billion £ train line that cuts mere minutes off journeys hours long. Homes are needed, but the country is filled with sturdily built abandoned office blocks, warehouses, large homes, smaller ones, which could be restored, converted, refurbished and landscaped at a fraction of the cost, without destroying the irreplaceable.

Ironically, homes across the country are anyway at threat. Cameron has thrown the country open to fracking with the manic enthusiasm of an alcoholic given the run of a liquor warehouse. Never mind that there have already been a few earthquakes linked to fracking and that the scientific evidence of the massive dangers are ever mounting.

Public and scientific concerns are to be over-ridden to the extent that Cameron is to rule that fracking companies can drill on privately owned land and even under people’s homes, with the land and home owners having no say. Huskies and “green” are a distant memory for the Prime Minister.

Last year Downing Street denied reports that David Cameron ordered aides to “get rid of all the green crap“ in policies. Never believe anything until it has been officially denied”, advised the late, great journalist, Claud Cockburn.

However, Husky stunts long forgotten, his new prop is God. And it is not going too well. Following an Easter reception for Christians at his Downing Street residence (3) he wrote an article in the Church Times (4) in which he argues that: “… faith … compels us to get out there and make a difference to people’s lives … the Christian values (include) charity, compassion … Christians … are the driving force behind some of the most inspiring social-action projects in our country (playing) a fundamental role in our society. So being confident about our Christianity we should also be ambitious in supporting faith-based organizations to do even more.”

Cameron urged:

“… supporting local projects. I welcome the efforts of all those who help to feed, clothe … the poorest in our society (inspiring) belief we can get out there and change people’s lives … to improve our society … tackle poverty …”

He also welcomed: “the debate with church leaders” on the issues, especially in the desire: “not to write anyone off” and anticipated seeing: “our churches as partners. If we pull together, we can change the world and make it a better place.” The article was entitled: “My Faith in the Church of England.”

As ever with Cameron words and deeds are a parallel universe. In his rural Oxfordshire constituency, on the day the article was published, the Bishop of Oxford, the Rt Revd John Pritchard and the Revd Keith Hebden were absolutely committed to helping “feed, clothe, tackle poverty” and making Britain, their part of the word, “a better place.” Indeed, Revd Hebden had fasted for the forty days and nights of Lent in solidarity with those who find themselves in the direst straights, often as the result of the Cameron led government’s ferocious welfare cuts.

In context, the cuts are cited as being largely responsible for nearly a million people, including over 300,000 children, having been given charity emergency food in the last year, by one charity alone, the Trussel Trust.

Shockingly, at least 4.7 million people living in food poverty in the UK, roughly one in thirteen – yet London has the fifth largest city economy in the world, is the world’s leading financial centre, regarded as a “command centre” for the global economy. (“Economy of London”, Wikipedia.)

The Trust cites the reason for people turning to food banks as the result of impoverishment by the welfare changes, with some recipients having had their only income completely severed. Ironically this by a Prime Minister and Cabinet largely comprised of millionaires and a Parliament whose meals and hefty £400 per head monthly food allowance are subsidized by the taxpayer.

Poverty figures:

“understated the likely level of people going hungry, because they did not include thousands of people helped by non-Trussell food banks and soup kitchens, those who had no access to a food bank, those too ashamed to turn to charity food, or those who were coping by going without food …”

Their figures, state Trussel, were the “tip of the iceberg.”

An astonishing eighty three percent of recipients reported resorting to the food bank because their benefits had been completely cut, with the Trust also: “providing essentials like washing powder, nappies and hygiene products to struggling families.”(5)

So as the Prime Minister’s fine words were published the Bishop of Oxford and the Revd Hebden, walked with parishioners to his constituency office to deliver a letter signed by forty five of the UK’s fifty nine Bishops and six hundred vicars, urging action on food poverty. The office had been courtesy telephoned ahead to expect their visit.

The letter cited, at Easter, a terrible rise in hunger in Britain, and urged society to “begin rising to the challenge of this national crisis.”

They wrote:

“Hope is not an idle force. Hope drives us to act. It drives us to tackle the growing hunger in our midst. It calls on each of us, and government too, to act to make sure that work pays … and that the welfare system provides a robust last line of defence against hunger.”

The parishioners waiting across the road, the Bishop and Revd Hebden approached to door. Not only was it closed, but the police were called. This, as Keith Hebden pointed out, shortly after Cameron had called on those of faith to be more “evangelical” and said that his concept of a “Big Society” was continuing Jesus’ work. A comment, of angry hundreds, in the Independent wrote: “Jesus could have gone to give the letter in. They would have done the same.” Another: “There is only one word for David Cameron and I can’t type it here.”

Speaking on BBC Radio Oxford, the following day the Prime Minister dug himself in even deeper.

“I wasn’t at the office, but my door is always open to the Bishop of Oxford.” Then: “The British government is leading the world in helping to end world hunger”, thus he had not even bothered to appraise himself that this was about British hunger, directly connected to his government’s policies.

Incidentally Britain has a “leading the world” complex. Successive Ministers and Prime Ministers are always “leading” it in declared scientific breakthroughs, medicine, agriculture, technology, childcare, dog walking, pencil sharpening, cheese grating, emery board development (I made the last few up) you name it. Then the latest pronouncement dies a death, never to be heard of again.

David Cameron’s constituency office, it would seem, has form in calling police on citizens attempting to bring about social improvement. In December 2010, twelve year old Nicky Wishart, who lives in the constituency was hauled out of an English class at school to be interviewed by the police.

Nicky had arranged on facebook, a protest of children of similar age outside Cameron’s office, against the closure of the local youth club, which also across the country were being targeted, in government cut-backs. His school was contacted by anti-terrorist officers.

He told the Guardian that the police officer:

“said even if I didn’t turn up I would be arrested and he also said that if David Cameron was in, his armed officers will be there ‘so if anything out of line happens …’ and then he stopped.”(6)

Three months later, in an address which should have shamed the Prime Minister the twelve year old spoke at a mass rally organized by Trade Union UNISON against the “catastrophic cuts” in youth and other services, including libraries.

He said of the youth club, a social life-line for him and friends:

“ I use it three times a week, which is a lot in a five-day working week. If it’s closed I won’t do anything – sit indoors, or hang around on the streets.

“I also use the local library which is also threatened with closure. I’ve got two younger brothers, one was born last Friday and one who is three, and both of them are never going to have a chance to know what a youth club is like.”

He told the Oxford Times of the Centre for which he had also raised £150 with various initiatives various towards it’s costs: “The youth centre means loads to me. It’s the only thing we have to do in Eynsham.” A twelve year old that should truly shame Cameron, his Cabinet and their shameful cuts.

In January this year, Nicky Wishart, now fifteen, with two friends, Tyler Walker and Ollie Hinchliffe were honoured by the same police force that threatened Nicky for his public spirited action over the youth club.

Sitting on a bench in the local park together, they noticed an elderly man in trouble in a nearby stream. They ran to help, called the emergency services and tried to revive him when he became unconscious. He died later in hospital.

The widow June Gwilliam, 85, called for an Award for the three, who had given help and comfort when it was so needed. They were honoured at a special presentation at police headquarters. David Cameron wrote to congratulate them. Another day, another bandwagon after a disgraceful response to a courageous and public spirited child who knew what conscience was.

Incidentally, the Prime Minister has come up with another cost cutting stunt: charging patients for crutches, walking sticks and neck braces – but he has reportedly personally intervened to keep the price of a gun licence at a mere £50 annually, static since 2001. See the full, mind stretching Cameron priority list at (9.) “Kill not cure” comes to mind.

Charity of any kind is clearly not Cameron’s brand of Christian faith. Oh, and of the barring of the Bishop and his colleague, Cameron told Radio Oxford: “Sorry if there was a misunderstanding, but to be fair to the police and people in the office, we get some interesting characters turning up from time to time.”

When in a hole, Prime Minister, stop digging.

Notes

1. http://www.theguardian.com/politics/2013/nov/28/coalition-u-turn-list-full

2. http://www.telegraph.co.uk/news/uknews/1516276/Cameron-turns-blue-to-prove-green-credentials.html

3. http://www.globalresearch.ca/tony-blair-george-w-bush-and-david-cameron-hi-jacking-god/5377707

4. http://www.churchtimes.co.uk/articles/2014/17-april/comment/opinion/my-faith-in-the-church-of-england

5. http://www.theguardian.com/society/2014/apr/16/million-people-britain-food-banks-religious-leaders-faith-groups

6. http://www.theguardian.com/uk/2010/dec/10/schoolboy-quizzed-cameron-office-picket

7.http://www.witneygazette.co.uk/news/national/news/8850063.Boy_voices_fears_over_service_cuts/

8.http://www.oxfordmail.co.uk/news/yourtown/witney/10976402.Teens_honoured_for_trying_to_save_man/?ref=rss

9. http://www.monbiot.com/2014/04/28/the-shooting-party/

Edited May 3, 2014 by Steven Gaal

[Steven Gaal]

^{France Approves Largest Austerity Package In Years}

http://rinf.com/alt-news/latest-news/france-approves-largest-austerity-package-years/

[Steven Gaal]

^{Half of young Spaniards have no money coming in}

^{published by Tom Sullivan on Mon, 2014-05-05 18:48}

^{http://wakeupfromyourslumber.com/news/half-young-spaniards-have-no-money-coming}

^{Almost half of all Spaniards aged 16 to 29 receive neither a salary nor government benefits while only one in five can afford to fly the family coop, the startling results from a new study reveal.}

^{A total of 47.5 percent of young Spaniards receive no formal income at all, the study by youth lobby group CJE shows.}

^{Youth unemployment is currently 55 percent but the CJE study shows the situation is made even worse by the precarious nature of that employment.}

^{With just 34 percent of people aged 16 to 29 in Spain actually working, more that half of people in this age group are on temporary contracts. Of those contracts, 46.4 percent are of less than 12 months duration.}

^{Meanwhile, just over a quarter of working Spaniards aged 16 to 29 are doing so part-time, the CJE results based on the final quarter of 2014 reveal.}

^-=-=

^{Source and full story: The Local (Spain), 5 May 2014}

Edited May 5, 2014 by Steven Gaal

[Steven Gaal]

May 08 11:06

Austerity Suicides: Desperate Greeks 'don't want to die, they want to kill pain'

By: malterwitty

http://www.youtube.com/watch?v=c9WZN2dWDSo&feature=player_embedded

Today, austerity and suicide go hand in hand in Greece. One study directly links most suicides in 2009 and 2010 to the budget cuts, saying over five hundred Greek men have taken their lives in this period. That's an average of almost one person per day. The country used to have the lowest rate in Europe - but that number spiraled when the economy crashed.

Edited May 8, 2014 by Steven Gaal

[Steven Gaal]

http://rinf.com/alt-news/breaking-news/irish-government-taking-medical-cards-poor/

Irish Government ‘Taking Medical Cards From The Poor’

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THE new head of the Irish Pharmacy Union said yesterday that that the Republic’s government may be denying that medical cards are being withdrawn but pharmacists know better.

Kathy Maher was elected as president of the IPU at the organisation’s conference in Cavan.

Speaking after her election, she said that there was no doubt that medical cards — the Republic’s main method of subsidising medicines for the less well off — were being withdrawn widely.

She said that pharmacists have reported significant numbers of vulnerable patients distressed at the loss of their means-tested cards.

Ms Maher criticised the government’s denials.

“It’s shocking that the government is still denying what every pharmacist in the country knows — medical cards are being withdrawn on a widespread basis and vulnerable patients are suffering as a result,” she said.

Via Morning Star

Edited May 12, 2014 by Steven Gaal

[Steven Gaal]

http://www.euractiv.com/sections/social-europe-jobs/millions-europeans-are-poor-despite-having-full-time-job-302189
((SEE LINK FOR ARTICLES BELOW))

Millions of Europeans are poor despite having a full-time job
Millions of Europeans can't make ends meet, even when fully employed.

Thirteen million Europeans fall below the EU's poverty line despite having fulltime jobs, especially in Germany, according to a new analysis by the European Trade Union Institute (ETUI).

At the same time, the number of 'poor' full-time workers has grown over the past five years, the study showed.

Workers can be counted as 'poor' if they earn 50% or less than the average in a specific country.

"The risk of living in poverty has increased in the past years and increased the most among workers in full-time jobs. It's a thought-provoking and worrying development. Previously we saw that if you had a full-time job, you would have a salary which you could live of, but this is no longer the case," Maria Jepsen, research chief at ETUI, told the Danish newspaper Politiken.

The trend is especially visible by Germany, where the economic crisis, jobs moving to Eastern Europe, and workers arriving from new member states has put wages under pressure particularly in the transport, hotel and cleaning industries.

In some sectors the real wage has fallen between 10-18% in only a few years, while growing almost 20% in other sectors.

Lars Andersen, director of the Economic Council of the Labour Market in Denmark, calls the situation in parts of the German labour market, 'the Wild West'.

"The consequence is that the German society will be so skewed that every fifth worker in Germany is low-paid. Even if they work full-time, they don't have a wage to give their family a decent life. It will be difficult to provide housing and food on the table, and they won't be able to afford vacations," Andersen said.

Thomas Rickers, chairman of the German metal workers at the Baltic Coast, told Politiken that the German labour market isn't a role model.

"It sounds good when you hear about the economic development in Germany - low unemployment and surplus in the trade balance. But one forgets that millions of workers have paid and still pay for 'the German model' with falling wages," Rickers said.

•Eurostat: People at risk of poverty or social exclusion
Trade Unions
•European Trade Union Institute (ETUI): Developments in inequality and social protection in Europe

Press articles
•Politiken: Millions of European go home poor from work [in Danish]
Henriette JacobsenSections: Social Europe & Jobs.Locations: Germany.Topics: povertysocial exclusion..

Edited May 20, 2014 by Steven Gaal

[Steven Gaal]

How the IMF Destroyed Greece: The Reality of the Greek “Success story”: On Its Way to Become a Third World Country

By Aris Chatzistenaou

Global Research, May 24, 2014

kontext-tv.de

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http://www.globalresearch.ca/how-the-imf-destroyed-greece-the-reality-of-the-greek-success-story-on-its-way-to-become-a-third-world-country/5383475

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While prime minister Samaras speaks of a “Greek success story” reality looks quite different: Public debt has increased from 120 per cent of GDP to 180 per cent. The suicide rate is soaring. The public health and education systems have already been largely destroyed, says Chatzistefanou. According to physicians existential fear and poverty would lead also to a heavy rise in cardiovascular diseases – often with deadly consequences. The alleged primary surplus were fictitious as government debts – including unpaid salaries – were not taken into account. The left – including Syriza – would only be able to counter neoliberal policies if a massive social movement will support a progressive government as in parts of Latin America.

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MORE SEE LINK

Edited May 24, 2014 by Steven Gaal

[Steven Gaal]

Fears for Portugal's 'lost' generation

published by Tom Sullivan on Fri, 2014-05-30 19:47

As a result of an economic downturn whose effects were compounded by government austerity measures, Portugal is now fearing for the future of its young, the jobless "lost generation".

Video of blYU4aXrcQM

http://www.youtube.com/watch?v=blYU4aXrcQM&feature=player_embedded

Edited May 30, 2014 by Steven Gaal

[Steven Gaal]

Thousands march against austerity in loud, lively determined protest

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Up to 20,000 people marched against austerity in central London today, Saturday, in a loud and lively protest called by the People’s Assembly.

Shoppers cheered and clapped, and cars and buses hooted their horns in support. People from all over Britain came to take on the Tories over a wide range of issues.

Beverley White from Cardiff People’s Assembly told Socialist Worker she was marching because of “bedroom tax, benefit sanctions, the lot”. Beverley, a single mother, hadn’t been able to afford any gas for two weeks.

Steve Bradfield from Shrewsbury said “People we’ve never seen before have come out today. because they worried about the cuts to services.”

There were anti-war, disability and benefit justice campaigners, and an international solidarity section taking part in a day of solidarity with detainees in Egypt.

And there were many workers preparing to strike together over pay on 10 July. Teachers from the NUT union made up the biggest contingent of trade unionists.

Sheila Wheatley from Nottingham NUT told Socialist Worker, “We’ve brought two coach loads from Nottingham, half of them teachers. We had big demonstrations during the last strike, and we want to see a programme of industrial action that can get Michael Gove out.

“We don’t want big gaps between strikes—the government’s attacks are going on all the time and we need to fighting back all the time.”

Simon Brett is a member of the PCS union at HMRC in Leeds. Workers there are set to strike next week, and could be part of the 10 July action too.

Simon said, “This demo is helping to build the idea of action. It’s particularly useful for newer activists in the union who haven’t seen solidarity like this before.”

The protest marched from outside the BBC headquarters to Parliament Square, with speeches at either end followed by a carnival of music and performances. Marchers booed as they passed 10 Downing Street, home of Tory prime minister David Cameron—and cheered at every mention of the strikes ahead.

Unite union general secretary Len McCluskey said it should “send a message to the leaders of all the main parties—we’re not willing to stand by while everything we hold dear is destroyed.”

UCU branch secretary Mandy Brown spoke about the all-out strike by UCU union members at Lambeth College. Roger Hutt, Unison steward at Care UK in Doncaster, said that workers there would “never surrender” after voting by 85 percent to continue their dispute.

Labour MP Diane Abbott had a message for Labour leader Ed Miliband about how to get rid of the Tories. She said, “We will not do it by posing with copies of The Sun. We will not do it by taking benefits from young people. And we will not do it by out-ukipping Ukip.”

Other speakers included a Ritzy cinema striker, NUT general secretary Christine Blower, Labour MP Jeremy Corbyn, Tower Hamlets mayor Lutfur Rahman, Lindsey German from Stop the War Coalition, Dot Gibson from the National Pensioners’ Convention.

Kate Hudson from CND contrasted the government’s argument about the need for cuts with the bottomless supply of cash for nuclear weapons.

The day was a clear show of opposition to the cuts. It can be a stepping stone to a more sustained fightback, starting with the strike on 10 July.

A demonstration called by the TUC on 18 October is a chance to bring thousands more onto the streets, and there could be even bigger strikes in the autumn.

Actor and campaigner Francesca Martinez spoke for many when she told the crowd, “The system is not broken. It’s working very well for those it was designed to benefit.

“They say that profit is sacred. Well you know what—xxxx profit.”

Reprinted with permission

Edited June 22, 2014 by Steven Gaal

[Steven Gaal]

Clashes, water cannon as 100,000 march in Brussels against austerity (PHOTOS) (CLICK LINK)

Violent clashes broke out in Belgium as more than 100,000 protesters marched in Brussels against the government’s austerity measures. Police deployed water cannon and tear gas as the protesters started upturning cars.

The violence flared up at the end of an otherwise peaceful protest, with tear gas deployed as some radical demonstrators hurled objects at riot police and launched attacks with metal barriers against officials. Some set off colored smoke flares.

[Steven Gaal]

Weekend Edition November 14-16, 2014

Three Blind Mice Economics

Why Austerity? It Clearly Doesn’t Work

by JACK RASMUS

All the advanced economies (AEs)—USA, Europe, Japan—have implemented some form of ‘austerity policy’ in the wake of the 2008-09 global financial crash and deep recession that followed. Five years later, austerity continues as a centerpiece of their policy mix even as their economies continue to struggle with recurrent double and triple dip recessions (Eurozone, Japan) and, in the case of the USA, periodic relapses into single quarter negative GDP and ‘stop-go’ recovery. Real investment continues to gradually slow everywhere in the AEs, with insufficient wage growth, stagnating household consumption, and a slow but steady drift toward deflation everywhere.

One of the key global economic questions today is: ‘why austerity?’ More specifically, why do AE capitalist policy makers continue with austerity policy when it clearly hasn’t worked? Indeed, what does it really mean to say austerity ‘hasn’t worked’?

Professional economists are generally confused about these questions. Mainstream liberal economists like Paul Krugman, Alan Blinder, and Martin Wolf scratch their heads, perplexed, and wonder out loud in their weekly newspaper columns why politicians in the AE economies continue with their austerity policies, when it is clear such policies are contributing to preventing economic recovery.

Three Blind Economic Mice

In one of the more recent of his many New York Times columns criticizing austerity policies, entitled ‘Revenge of the Unforgiven’, Krugman notes that “The world economy appears to be stumbling” and that “growth is stalling, and the specter of deflation looms”. For Krugman austerity policies are one of the big causes, perhaps the main cause of this global slowdown, and especially the cause behind Europe’s current emerging third recession since 2009.

Krugman condemns austerity and asks “why do governments keep making these mistakes? In particular, why do they keep making the same mistakes, year after year?” In other words, austerity policies are the consequence of some kind of error or bad economic judgment. That error in judgment is attributed in turn to a moral failure on the part of policy makers, according to Krugman. Austerity policies continue due to “an excess of virtue. Righteousness is killing the world economy”. In the Eurozone the root of that excess virtue and righteousness is Germany, according to Krugman. It insists on maintaining an attitude of “moral indignation” toward debtors who refuse to pay their bills. If Germany would only not insist its neighbors pay their debts (to Euro Commissions, the IMF, and of course to German banks), its Euro neighbors could then abandon austerity and re-stimulate their economies with government spending. Krugman’s solution therefore is to get German policymakers to overcome their excessive virtue and sense of righteousness toward their neighbors, and just let them forego paying their debts (to German bankers and others). Better yet, expunge the debts. But that’s not likely to happen, Krugman adds, until a recession in Germany “will finally bring an end to this destructive reign of virtue”.

So the loss of virtue, excess righteousness—i.e. moral failure—explains why AE policymakers in general, and in the Eurozone and Germany in particular, have stuck to austerity for so long and want to continue it. And it was just a ‘mistake’ to introduce it in the first place. In this Krugman view, there’s no need to consider an analysis of political or economic interests—and especially class interests—as the source of austerity policies, or to explain why such policies have continued for more than five years now, or why they don’t appear about to be abandoned anytime soon. It’s all been just a mistake and continuation of austerity is due to moral stubbornness.

The UK economist and feature writer for the Financial Times, Martin Wolf, echoes the same themes of Krugman with regard to the UK economic experience since 2010: Its origins circa 2010 in the UK were “ a blunder” and “a huge mistake”. Its continuation “worse than a crime”. And those who insist on still pursuing it, like US president Hoover in the 1930s, are “both stupid and wicked” (moral arguments).

In a similar recent editorial in the Wall St. Journal attacking austerity programs, in a piece entitled “Enough with European Austerity, Bring On the Stimulus”, economist Alan Blinder, a former vice-chairman of the Federal Reserve in the USA, also declared that Euro austerity policy was due to a ‘mistake’. Once again the focus of attack is “German obsession with austerity” that “is holding back growth”. Germany is again the ‘bogeyman’ here, standing in the way of the heroic European Central Bank chairman, Mario Draghi. Blinder laments that instead of QE and more liquidity for the Euro banks, Europe is instead moving toward more ‘structural reforms’. But structural reforms are just “a potpourri of pro-market policies”, in his view, and will not lead to recovery. True enough. But what Blinder, the former USA central banker, proposes is dear to the heart of all central bankers: more free money to bankers and investors in the Eurozone—that is, more QE. If only the Germans would let poor Mario do his job! But the German central bank president, Jens Weidmann, “won’t budge—at least not yet”, according to Blinder.

Explanations of why austerity originated and why it continues like the foregoing, that are explained by ‘mistakes’ and the ‘moral attitudes’ of policy makers, tell us really nothing about the origins of and reasons for austerity policy’s origins, or why it has continued for more than five years now and continues still to morph into new forms today.

In fact, Krugman & Co. are asking the wrong question. More precisely, they are asking only half of the right question. When they concur that ‘austerity doesn’t work’, the sentence is incomplete. They should be asking ‘For whom does it not work’? For austerity does work, indeed is essential—for bankers, investors, corporations and the wealthiest households. It just doesn’t work for the rest.

Monetary Policy as Capitalist Preferred Solution

Austerity is a blatant class-based program. Its purpose is to enable capitalist policy makers to pursue their primary and preferred economic recovery strategy. That preferred strategy is based on monetary policy—not fiscal policy.

Back in 2008-09 AE policy makers jointly decided to rely primarily on AE central banks—the Federal Reserve, Bank of England, Bank of Japan, and the European Central Bank—as the prime institutions for managing economic recovery. The central banks, led by the USA Federal Reserve, together pumped massive liquidity (money) into the their banking systems in the belief that capitalist finance will then lead the way to economic recovery. The central bank tools employed were quantitative easing (QE), zero interest loans (ZIRP), special auctions where needed in severe emergencies, and what was called ‘forward guidance’ whereby central bank bureaucrats signal bankers and other big capitalists their direction and plans beforehand. Tens of trillions of dollars and other AE currencies were printed and otherwise provided to the private capitalist banking system. Private banks were thereafter supposed to lend to non-bank businesses, who would in turn invest and expand and hire new workers. Incomes would subsequently grow, consumer spending would rise, and GDP and economic growth return. At least that was the theory. Fiscal stimulus as government spending was considered unnecessary for recovery. Even when offered, it was token, temporary, and soon withdrawn once again.

The problem was, and still is, that despite tens of trillions of dollars provided to the private banking system, the private banks were not eager to lend to the vast majority of businesses, especially small and medium businesses. They loaned their central bank provided funds to other shadow banks globally, who speculated in various financial asset markets instead. Of course, that didn’t generate much in the way of real investment, jobs, incomes, consumer spending, and economic growth in the AEs. Much of that lending for financial investment went off shore to emerging markets in any event. Bankers also loaned to non-financial investment projects, but mostly again offshore to multinational corporations and to China and emerging markets. That too did not generate much real recovery in the AEs. A third thing bankers did with the central bank trillions given them was to buyback their stock and payout dividends. That raised their valuations and got bank senior managers nice bonuses. Thereafter the banks sat on their remaining cash—not insignificant sums—and hoarded it. In the USA alone that remaining cash hoard is reportedly today at around $2 trillion.

Given this scenario of the trillions of dollars provided by central banks to AE private banks, that did not direct it to the real economy to create investment, jobs, incomes, etc., AE policy makers ‘doubled down’ and provided the private banking system and investors even more liquidity in the hope that more liquidity would ensure some getting through. Zero interest rates were continued year after year and even more quantitative easing (QE) programs were introduced. In short, more monetary policy has always been the preferred policy of choice of all the AEs, even when it has produced few results.

After five years, it is now absolutely clear that everywhere in the AEs monetary policy in the form of central bank massive liquidity injections have been the primary policy choice for attempting to restart their economies after the 2008-09 crash. Fiscal policy in the form of government spending or even household tax reduction has never been on AE policy makers agenda anywhere for the past five years, regardless how much Krugman & Co. wish it were so. Monetary policy has always been—and still continues to be—prime. It has been the preferred policy choice of AE policy makers from the very beginning in 2009-10, and continues to be so today.

Austerity Policy as Necessary Complement

But that still doesn’t explain why cutting government spending, ‘negative fiscal policy’, or fiscal policy ‘in reverse’—i.e. austerity—has been part of AE policy mix for the past five years. The general answer to that is that austerity has accompanied the massive central bank liquidity expansion, the prime strategy of the AE policy makers, because austerity functions as a necessary complement to central bank massive liquidity injections.

Austerity is about keeping the lid on rising government debt and making ‘the rest of us’ pay for that debt, while waiting for monetary policy to restart financial markets and for the market system itself at some subsequent point to eventually generate economic growth. The problem is that this ‘monetary policy first’ approach and path to recovery only results in recovery very slowly, with significant delays, and with repeated relapses into short and shallow recessions. Monetary policy based recovery thus takes potentially a long period of time, typically five to ten years. It may prove even longer, as Japan’s economy since the early 1990s is a prime example.

Capitalists and their policy makers truly believe that the capitalist market will ‘correct itself’ in the longer run. They believe that the way to jump start that market-driven recovery is to do it via supply side policies. They believe that pumping massive money injections into the banks starts the supply side process. It’s the first step. After that, banks will lend, businesses will invest, jobs will return and consumers will spend once again. To put money directly into workers’ paychecks and consumer households first by government spending and investing (i.e. Krugman & Co. ‘Demand-Side’ view) relegates bankers and businesses to a secondary recovery position. Demand-side government spending policy means households, consumers and workers recover first, then it spreads to bankers and businesses as the former buy their products. For capitalist policy makers it is preferable to reverse that process: ensure that bankers and big businesses recover first and rapidly, then wait for the market system to eventually bring the rest along. And if it takes long, 5 years, 10 years, if the recovery is slow and intermittent, then rising government debt must be contained in the meantime. That’s where austerity policy comes in. If that debt is not contained the government debt rise may offset and even negate the monetary policy’s effect. So austerity must accompany a preferred monetary driven recovery policy. It is complementary and necessary to the primary and preferred monetary policy.

To the extent that austerity policies serve this function of containing the rise in government deficit and debt, then austerity policies ‘work’. Austerity policy therefore is not an ‘error’ or a moral failing when class interests are considered. AE capitalists and policy makers are not blind fools, or excessively righteous, or ‘wicked’, as Krugman and others would suggest. It is Krugman & Co. who are blind—to the real class based origins and functional purpose of austerity policies. They think that austerity policy is about a failed strategy for stimulating the economy. But that’s not what austerity is about. Nor is it a ‘mistake’ or due to moral failings. To put it succinctly, austerity is about making the general populace and the working classes pay for the monetary policy strategy’s slow, often interrupted, and limited impact on the real economic recovery.

So has ‘austerity’ failed? The answer is ‘failed for whom?’ In other words, it can’t be determined if it has failed apart from a class analysis of it. And that’s where the Krugman and others miss the whole purpose of austerity in the first place. And why are austerity policies continuing? Because so long as monetary policy continues to fail to generate a sustained and normal economic recovery, AE policymakers will continue with some form of austerity policy.

Jack Rasmus teaches economics at St. Mary’s College in California. He is the author of the book, ‘Obama’s Economy: Recovery for the Few’, Pluto Press, 2012, and ‘Epic Recession: Prelude to Global Depression, Pluto, 2010. He hosts the weekly radio show, Alternative Visions, on the Progressive Radio Network. His blog is jackrasmus.com, his website www.kyklosproductions.com, and twitter handle @drjackrasmus.

Source: teleSUR English

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I Was a Teenage Europhile - But the EU's Sadistic Austerity and Lack of Democracy Have Changed My Mind

Posted: 20/11/2014 11:09 GMT Updated: 20/11/2014 11:12 GMT

"Any chance of a retweet?" the Conservative MEP and ardent Eurosceptic Daniel Hannan asked me on Twitter a few days ago. He was highlighting a video that singles out British politicians and business leaders who called for the UK to join the euro back in the late 1990s. The video is entitled, rather provocatively, Wrong Then, Wrong Now.

I politely declined Hannan's request, sheepishly confessing to him that... er... I happened to be one of those people who were "wrong then". In my defence, I was a mere undergraduate, rather than a Peter Mandelson or a Richard Branson, but I did nevertheless agitate for British membership of the single currency in countless articles, essays and public debates.

Fast-forward 15-odd years and my wild-eyed teenage Europhilia is a source of much embarrassment. Today, Europe is only marginally more popular with the public than ebola; hard-right parties are sweeping to victory in European elections in the UK, France and Denmark; and the eurozone has only narrowly dodged a triple-dip recession. With all this going on, it's pretty difficult to mount a credible defence of the single currency or, for that matter, the EU itself.

Let's start with the euro. What on earth were we thinking? How could anyone with the faintest grasp of economics have believed it was anything other than sheer insanity to yoke together diverse national economies such as Greece, Ireland, Germany and Finland under a single exchange rate and a single interest rate? And, lest we forget, without a US-style system of fiscal transfers or culture of labour mobility to compensate?

There were dissenting voices. Big-name US economists, from the Princeton University liberal Paul Krugman to the Harvard conservative Martin Feldstein, warned that the euro would be an "invitation to disaster" and an "economic liability". An internal EU report later summed up the view of US economists on the euro project as: "It can't happen, it's a bad idea, it won't last."

Then there's the fiscal self-flagellation of recent years, unnecessarily "inflicted in the service of a man-made artifice, the euro", to quote another US economist, the Nobel Prize winner Joseph Stiglitz. Has there ever been a better advert for the failure of austerity? Greece, Spain, Portugal and Ireland, in particular, have been brutalised by the fiscally sadistic policies demanded by the "troika" of the International Monetary Fund, the European Central Bank and the European Commission - and backed by the dead-eyed deficit hawks in Germany. In Greece, malaria returned for the first time in 40 years; in Spain, students in Catalonia had their toilet paper rationed; in Portugal, soup kitchens proliferated; in Ireland, suicides among men rose sharply.

While the eurozone continues its orgy of self-harm, the broader EU is in the midst of an unprecedented and existential political crisis: a crisis of democracy, accountability and legitimacy, with citizens feeling ever less connected to the decision-makers in Brussels and Strasbourg.

Did May's European Parliament election results - described as a political "earthquake" by the French prime minister, Manuel Valls - convince the continent's leaders, both elected and unelected, to take a step back and try to tackle the EU's "democratic deficit"? If only. Despite turnout declining in every single set of European parliamentary elections since they were first introduced in 1979 - and despite the European Commission's polling suggesting that trust in EU institutions, at 31%, is at an all-time low - members of the EU elite march on towards "ever closer union", incompetently, indifferently, in denial.

Consider Viviane Reding, the former EC vice-president. In a recent interview with me for my al-Jazeera show Head to Head, she urged her former colleagues on the (unelected) EU commission to behave "like [an] army" and a "government" moving forward at "full speed". "You cannot have 28 doing whatever they want," Reding told me.

It's as if the European elections never happened. As Bertolt Brecht once put it, "Would it not be easier... for the government to dissolve the people and elect another?" Or as the new EC president, Jean-Claude Juncker, pompously proclaimed, in reference to the 2005 French referendum on the EU constitution: "If it's a Yes, we will say, 'On we go,' and if it's a No, we will say, 'We continue.'"

That isn't a description of democracy that I recognise. To talk of a "democratic deficit" at the heart of the EU project would be a gross understatement. If the EU were a nation state and tried to join the EU, it would probably be rejected for not being democratic enough.

So, where have all of its progressive critics gone? The left across Europe has been seduced by the EU's promise of workers' rights - forgetting that you can't enjoy those rights if you don't have a job to begin with. Mass unemployment is now a fact of life across swaths of the EU and, especially, the eurozone. More than half of young people are jobless in both Greece and Spain, yet unelected Eurocrats still want more growth-choking austerity.

This is a political and economic scandal, not to mention a human tragedy. And progressives should be saying so. But the left in the UK has ceded all the Eurosceptic terrain to the xenophobes and the "Little Englanders", to Ukip and the Tory right. We were wrong then. Let's not be wrong now.

Mehdi Hasan is the political director of Huffington Post UK and a contributor writer at the New Statesman, where this column is crossposted

[Steven Gaal]

Rallies staged by several organisations in Madrid against high unemployment,

austerity and political corruption.

www.aljazeera.com/.../europe/.../spaniards-protest-against-austerity-cuts-2014113010656659213.html

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How Merkel's Austerity Plans Are Making Half Of Europe Sick – And The Way Out

Huffington Post - 3 days ago

The austerity policy has had especially dramatic effects on the Greek healthcare

system. Under pressure from the European Union, the government in Athens ...

‎

[Steven Gaal]

Italy comes to standstill amid boisterous protests (click link)

Tens of thousands of Italians took to the streets on Friday in boisterous protests against government policies that are struggling to haul the recession-bound country out of the economic mire.

Read more: whatreallyhappened.com http://whatreallyhappened.com/#ixzz3LkiGx7NC

Edited December 13, 2014 by Steven Gaal

[Steven Gaal]

Economic Depression in the European Union European Central Bank Meeting Downgrades Euro Zone Forecast

By Nick Beams

Global Research, December 05, 2014

World Socialist Web Site

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Forecasts of euro zone growth rates and inflation provided by the European Central Bank (ECB) at its monthly governing council meeting in Frankfurt yesterday indicate the accelerating downturn in the region’s economy.

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The ECB predicted that growth in 2015 would be just 1 percent, compared to its forecast of 1.6 percent made only three months ago. Inflation will be 0.7 percent next year, compared to the previous forecast of 1.1 percent, issued in September. Even these figures may turn out to be too high, with risks being characterised as on the “downside.”

The annual inflation rate in the euro zone was just 0.3 percent last month and is expected to fall again this month and into 2015 because of a drop in oil prices. The ECB is officially committed to lifting inflation to 2 percent but there is no sign of that target being reached. Falling inflation has a significant impact on the region’s economy because it increases the real level of debt and interest payments, despite the reduction in official rates to near zero.

While the euro zone has not entered a recession, it is on the verge of one. According to the latest purchasing managers’ index compiled by the data firm Markit, which is a fairly accurate indicator of future trends, economic activity in the euro zone was at its lowest level for a year and a half, with the index falling to 51.1 from 52.1 in October.

The most significant feature of the latest Markit data is that the downturn is concentrated in the so-called core economies, with Germany experiencing its worst result for 17 months and France its lowest level of economic activity for nine months.

The main focus of financial markets was whether the ECB meeting would soon begin a full-scale program of quantitative easing, involving the purchase of government bonds.

At present the ECB only buys asset-based securities and covered bonds, not sovereign debt. This is largely because of opposition from German representatives in the governing council, which again surfaced at yesterday’s meeting.

Setting out the central bank’s monetary policy, ECB president Mario Draghi said it “intends” to expand its balance sheet by around €1 trillion, back to the level it reached in 2012, rather than that it “expects” to reach this objective. However, even this slight change in wording produced divisions in the governing council, with opposition coming from German officials and possibly others.

In his press conference, Draghi spoke of “major decisions” where there was no unanimity. Firing a shot across the bow of his opponents, who maintain that the purchase of sovereign debt is beyond the powers of the ECB and could be challenged in the courts, Draghi said policymakers were not politicians and had to stick to their mandate of keeping inflation on track. “Not to pursue our mandate would be illegal,” he added.

Draghi indicated that all measures were discussed, including the purchase of sovereign debt. But he refused to specify when a decision might be taken, saying only that it would be some time “early” next year, following an assessment of the impact of the recent fall in oil prices. He was at pains to make clear that “early” did not necessarily mean the next meeting of the governing council, scheduled for January 22.

Financial markets are growing somewhat impatient with the ECB’s prevarication.

“At some point, they will lose credibility,” Mark Zandi, chief economist of Moody’s Analytics told the New York Times. “They still have time, but time is running out,” he said. The euro zone was “flat on its back and flirting with recession.” It might avoid outright deflation, but it was “close.”

The newspaper also cited Nicholas Spiro, the managing director of Spiro Sovereign Strategy, who said: “Draghi’s ability to buoy financial markets through his words (and his words alone) is diminishing with each passing day.”

Spiro warned: “The ECB’s inability to take meaningful action to avert the threat of deflation could become the trigger for a much more pronounced deterioration in market sentiment towards the euro zone.”

In other words, unless financial markets get their way and more ultra-cheap cash is pumped into the system, they could provoke a crisis.

The program of quantitative easing has nothing to do with boosting the real economy but is purely directed toward funding speculation on stock exchanges and other financial markets. This was made clear by figures provided in Draghi’s remarks following the meeting.

He said the annual rate of change to loans to non-financial corporations—money that is used in financing real economic activity—was down by 1.6 percent in October, following a decline of 1.8 percent in September.

The divisions among euro zone members, reflected in the disagreements on the ECB governing council, are indicative of increasing tensions globally. The talk of global cooperation and collaboration, which filled the air in the immediate aftermath of the 2008 financial crisis, has well and truly gone by the board amid the downturn in the world economy.

These tensions were exacerbated by last week’s decision of the OPEC oil cartel, led by Saudi Arabia, not to cut production in order to stabilise global oil prices, which have fallen by around 40 percent since June.

The decision threatens a financial crisis in a number of countries, including Nigeria, Algeria, Iran, Venezuela and, most significantly, Russia.

The impact of the deepening economic downturn on global politics was underscored in a speech delivered by Russian President Vladimir Putin on Thursday.

With the rouble now down almost 40 percent against the US dollar since the start of the year, Putin said the government would crack down on speculators and fight attempts by Russia’s enemies to bring it to its knees.

Fearing that the oligarchs upon whom he rests could withdraw their support, Putin’s speech was aimed at mobilising Russian nationalism against efforts by Western powers to undermine the country.

“Hitler with his misanthropic ideas tried to destroy Russia and throw us back to the Urals. Just remember how that ended,” he said. If the Russian annexation of Crimea had not happened, some other excuse would have been found to hold Russia down.

Putin said Western powers intended to “run a Yugoslav scenario in Russia.”

The break-up of Yugoslavia in the 1990s, orchestrated by Germany and the US, was preceded by a financial crisis, created in large part by the actions of the International Monetary Fund.

Putin’s direct linkage of Russia’s worsening economic crisis to the events of World War II is indicative of the interconnection between the gathering world slump and geo-political tensions. Those tensions can only increase as a result of the worsening economic situation in Europe, which was revealed at the ECB meeting.

Edited December 20, 2014 by Steven Gaal