Guest post by MARC SAXER
Ten reasons Why Austerity is Dangerous Fallacy
Another European summit without any resolution has passed. Even if a last minute settlement for this round can be reached, it would most likely continue the austerity policies of the last years. In any event, the next showdown would be just around the corner. Instead of tackling the risks of a global financial crisis, the collapse of the European integration project or the undermining of democracy, Europeans are fraying over olive tree subsidies and pensions. The debate over Greece is out of touch with the real challenges, and leads to flawed policy responses.
It is infuriating to watch Europe tumble down the path of austerity. Frugality! Discipline! Rules! The guardians of virtue seem to have turned a deaf ear to all expert advice. One Nobel Prize Laureate after the other cautions that too much fiscal bloodletting might just kill the patient. Amartya Sen. Paul Krugman. Joseph Stiglitz, Jeffrey Sachs. In Europe, Jürgen Habermas, Ulrich Beck and Thomas Piketty chimed in. Even the chief economist of the International Monetary Fund, Olivier Blanchard had to admit that the tax hikes and spending cuts have created more havoc than the architects of austerity have ever deemed possible.
Austerity is tomfoolery. Here are ten reasons why. Continue reading Greece – The Story of Wrong lessons Learnt: Marc Saxer
Guest post by CENAN PIRANI
Though the US has seemingly bounced back from the 2008 financial crisis, southern European countries like Portugal and Greece are currently dealing with debt situations that were once only characteristic of the “developing world”. In order to stabilize their economies after the 2008 crisis these European countries took on a series of IMF and European Central Bank loans in which rates of interest were higher than the countries’ rates of GDP growth, thus stagnating their economies for the foreseeable future.
This situation that currently befalls these countries’ economies was explained by Thomas Piketty in a recent interview he gave for the major Portuguese newspaper, PÚBLICO. Piketty, who has become a prominent public intellectual due to the popularity of his recent work, “Capital in the 21st Century”, was in Portugal this week in order to discuss the economic future of the country with some of its political figures. Besides outlining the problem, he discusses possible courses of action for the countries to release themselves from perpetual debt and austerity. These ideas ironically enough come out of the paths once carved by those now economically dominant countries in the Euro Zone, specifically France and Germany. Continue reading Piketty and the Economic Crisis in the Euro Zone: Cenan Pirani
The New Democratic Upsurges
The mainstream Western media that celebrated the democracy movements in the Arab world not very long back, is relatively silent now. For, then it was the Arab youth’s striving for the ‘western values’ of democracy that it was celebrating. Now that the cry of ‘democracy’ is arising from its very midst, it does not seem to quite know what to do. From May 15 on, for almost two weeks Madrid and other Spanish cities have been witnessing some of the largest demonstrations in recent memory. Protesters have thronged the Puerta del Sol, virtually camping there. As government forces started cracking down, demonstrations began to grow in an ever expanding scale spreading to many other Spanish cities. When the government moved to ban demonstrations on May 20, in the run up to the regional and municipal elections, the protests acquired an even more militant form. A ‘snapshot’ of the rallies in defiance of the ban:
The initial protests against the planned multibillion euro bailout plan for banks, austerity measures and against high unemployment almost 45 percent among the youth), according to reports, were not very large but when the government responded by arresting several activists and demonstrators, things started going out of hand. That was the ‘spark that lit the prairie fire’. As Ryan Gallagher’s report in the New Statesmanput it:
A demonstration against the arrests was organised in the city’s main square, Puerta del Sol, and numbers soon snowballed when word got out over the internet. What began as a group of fewer than a hundred activists reached an estimated 50,000 within less than six days.
The protesters whose arrests had sparked the initial demonstration were released and immediately returned to the square. By the time they arrived, the demonstration was no longer just about their treatment at the hands of the police. It was about government corruption, lack of media freedom, bank bailouts, unemployment, austerity measures and privatisation.
Here is another video of a fierce battle being fought on the streets of Madrid: Continue reading The ‘Viral’ Revolutions Spread Across Europe