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Economic sanity is being called austerity

IMFUber-footballers, unter-economists and marketplace insanity
 
After a month of tribal solidarity, of total adherence to our own soldier-footballers fighting for that quadrennial trophy in the ultimate international team sport, football – sorry, but I refuse to call it soccer – the World Cup has finally found its temporary Olympian home in Spain or, if you prefer, Iberian lands.

It could easily have been the Netherlands or, if you prefer, the Low Countries, but it was the turn of “La Roja,” the indomitable furia roja wearing colorful red jerseys, to invade Flanders once again three and a half centuries after the Peace of Westphalia… this time, however, without shedding blood, peacefully – even if the game incited too many yellow cards from Howard Webb, the English Premier League referee so unreasonably feared by the Spanish side.
 
Now, after this respite from the economic woes befalling much of the world – a distraction understandably welcomed by governing politicians – we are back to the reality of the economy’s empty cup most nations have on display courtesy of a short-sighted system that we mistakenly refer to as democratic capitalism when in essence it is nothing but stealthy, and predatory, corporate enterprise.
 
In the ongoing debate as to whether the economy will fare better – in order to achieve the so-called “economic recovery” – via austerity measures or more economic stimuli, the leadership in the European Union and that of the United States do not quite see eye to eye, Europeans opting for tightening their belts while in America the key proposal is additional spending.
 
Before we take sides on this debate, we should first agree as to what economic recovery is, or is mistaken to be, and exactly what we mean by austerity measures.  We may be in for a great surprise, at least here in the US, as to what most folks in Main Street mean by recovery and austerity… which is unfortunately a watered down version of the existing reality.    
 
By economic recovery, most people I know, regardless of political sentiments, social status or even education, think of the return to prior times… to what they call normalcy; never mind that for an entire generation prior to this crisis we had built a society spending somewhere between 5 and 10 percent more than it produced… and that somehow such accumulated debt, whether personal or as indentured members of their community, remains outstanding, to be paid in the future.  Shouldn’t recovery, instead, mean the return to economic sanity and not the temporary return to untamed greed and the fraudulent financial dealings of recent times?
 
As for austerity, do we really mean a level of non-indulgence and asceticism that will permit us to live within our means and pay back our debts?  It is doubtful, but keeping expenditures in line with revenues is a crucial first step that must be taken.  If need be, let economic sanity be enhanced with a slight touch of sacrifice by calling it austerity.
 
During this past month, we have seen many national sport heroes make their countries proud in South Africa; from David Villa with his five goals for Spain in the tourney, to Andrés Iniesta and his winning goal in the championship game which gave the World Cup to Spain… to the entire team from Ghana which “almost” made the semi-finals.  These were uber-footballers in this World Cup that made us feel good as human beings in contrast to politicians and unter-economists who through ignorance or deceit fail to give us the necessary leadership and knowledge to maintain the economy viable.
 
At least the Europeans seem to be taking the right path with their quasi-austere method of keeping their deficits down as suggested by both the International Monetary Fund (IMF) and the wealthier and often more frugal EU members.  Unfortunately, the method does often require a greater sacrifice from those less able to afford it.  That, however, is something which needs to be addressed at the initial distribution of earned wealth via appropriate taxation, the place where greed and motivation can best be set in balance.
 
In contrast to the Europeans, Obama and his corporate contingent of advisers still treat our economic malaise with stimuli-aspirin.  More spending of money that will need to be borrowed… from China, of course.  America is using China as its own cash machine (ATM), just like Americans had been doing in recent past by using their over-valued real estate as worthy collateral.  Even Nobel Laureate Paul Krugman doesn’t seem to get it… talking nonsense about the myths of austerity from his bully pulpit.  Has it occurred to the good columnist-professor that only resource-strong developing nations can afford to do that long term?  And that, given the shifts which have occurred in the international marketplace during the last two decades, our rate of growth as a fully matured economy is bound to decrease… and not increase?
 
We should also ask… is America chiefly to blame for the existing marketplace insanity?
 
© 2010 Ben Tanosborn


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