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Friday, October 21, 2016

Austerity policies are the last thing Europe’s economy needs, and voters are making sure their leaders get the message.

Can democracy be raising its wonderful, if often lazy, head in Europe? Too often there is skepticism that democracy itself — the will of the people — can lead to wise economic decisions and that the American founding fathers were all fearful of the rule of the masses. I have long held the opposite view.

We all know examples of populist uprisings that have failed. The French Revolution was hardly an adulterated success. Populism in the U.S. in the 19th century led to many an ugly idea and many a bad economic solution.

But democracy creates demands for more equal wages, for social goods that reinstate confidence in a nation, and for the spread of opportunity. Democracy often also demands rights for minorities. It was democracy in America that fostered progressive income taxes, Social Security, Medicare, and government financing of education and roads. In my view, equal and strong wages are a source of growth, not a disadvantage that reduces profits as many orthodox economists see it. There is no growth without adequate demand. After 40 years of neglecting this basic idea, it is making a comeback.

Now the people of France may be saying they have had it with austerity. They may well vote out Sarkozy in favor of the Social Democrat Francois Hollande. Hollande beat Sarkozy in the first run-off and, according to the pundits, is likely to win the two-person run-off in two weeks. And Hollande is running an anti-austerity and anti-big finance campaign, if a mild one. Can this break the ice and reverse the trend toward austerity? One former European leader I spoke to thinks it could.

But there is more than just a reaction against austerity in France. The Netherlands is dealing with a backlash against its austerity programs, and the Dutch have been stalwart supporters of German single-mindedness on this issue. The prime minister felt obliged to resign. Even in Germany, the Social Democrats who are increasingly voicing concerns with Angela Merkel’s policies will gain more confidence. There are left-wing soundings in Spain as well.

All this is refreshing and highly welcome. Austerity policies are dead wrong for Europe right now. It is sliding into serious recession, and it may eventually upset the fragile U.S. recovery. The rebelling left is correct about economic policy, even if it is most motivated by economic justice. Could democracy and justice be policies for prosperity? Start believing again.

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Copyright 2012 The National Memo
  • ObozoMustGo


    You should change the headline to read “French Grow Weary of Fiscal Responsibility, Prefer Government Handouts: May Elect Socialist”

    Dont you think that’s more accurate?

    Have a nice day!

    • EdC


    • rustacus21

      In America, over the last 30 years, the only time the government really ‘worked’ on behalf of ALL Americans was… I don’t have to say what we ALL already know, do I? Hint: it has NOTHING to do w/trickle (on) down economics, but alot to do w/diverse voices among administration leadership & an intelligent, capable & COHERENT representative as President, leading the rest of the legislature, along the path DEMANDED by the nations citizenry. Compare GDP, GNP, Womens wage gains, minority’s wage gains, drops in poverty, illiteracy, increases in H.S. & college graduation rates, home ownership (& ABILITY to PAY FOR THEM!!!), costs on war, benefits of peace, any measure U choose, compared by the 4 administrations between 1981 & 2001. U may be startled, but the truth has that quality…

  • EdC

    When economies crash, more often that not, it becasue the rich get too rich and renig on responcibility.

    • montanabill

      And you would know because…?

  • Well, I’m not sure I believe the idea that the US economy is recovering, but I can smell a subtle disdain for democracy and the intelligence and reason of the people, not withstanding the stated point of this article. In any case, our economy here in the US will not recover until and when this government does something to get real estate and the enormous destruction that the foreclosing on the American people has caused is brought under control. An economy cannot recover when the people of that economy have lost trillions of dollars in collective wealth and real estate, the primary means of most people’s wealth, continues to lose value and fall deeply in a hole. That’s just insane to think otherwise. There are millions more new foreclosures expected in the wake of that fraud settlement of the robo signing insanity. I also think Europeans are skeptical of democracy (American style) because of the fear of immoral, out of control capitalism. The United States offers a frightening example to many I know there.

    • montanabill

      I guess they would rather have immoral, out of control government. When U.S. capitalism is finally allowed to bring our economy back, will the Europeans still be trying to feed welfare programs more money than they have, on their way to prosperity?

      • CrankyToo

        If they wanted immoral, out-of-control government, they’d adopt the George Dubya Bush model. To find a better example of a regime as insidious and destructive to the global society as Bush’s, they’d have to look all the way back to the period 1932 – 1945, during which period another fascist government known as the Third Reich rose to power, either murdered or caused the deaths of 20 million people and burned Europe to ground. Thank God Bush and his minions were “compassionate” conservatives; where would we be if they’d been as vicious as Adolf and his minions?

        And what’s holding capitalism back? Obama? Well, I guess, in a manner of speaking, Obama is to blame for the capitalists sitting on their 4 trillion in cash. The greedy f##ks don’t want to invest in our future until they’re sure Obama’s not going to be part of it anymore. Or maybe you think Dodd-Frank is what’s stifling capitalism. Is that it? I don’t think so. Dodd-Frank doesn’t legislate against credit default swapping, “too big to fail”, or the kind of rampant market speculation that, right now, makes $2.40 a gallon gasoline cost $4.00 a gallon. In other words, “regulation” doesn’t really constrain the capitalists (to the extent that it protects our economy) any better now than a complet lack of regulation did four years ago.

        Get it thru your thick head, an immoral and out-of-control American capitalism, unrestrained by the corrupt Bush administration (during the period 2002 – 2008) is what brought the world to the brink of economic collapse. And it continues to be responsible for the perpetuation of our economic woes despite, not because of, Barack Obama’s good effort to pull our economy out of the ditch (without any Repugnican help, I might add).

        A day or two ago, one of Romney’s PR pukes described his fiscal plans as an “update of Bush’s policies”. If that’s the case, and enough of you morons vote for that moron, then 99% of us are gonna find ourselves in deep shit again.

        I suspect that the crux of your problem is too much Fox Noise and too little brain activity. But as far as I’m concerned, you can keep it up because Repugs like yourself and that other clown, Bozo, are always good for a few laughs. LOL.

        • montanabill

          Wow! A lot of bitterness. Too bad you really don’t know anything about the effect that regulations or Dodd-Frank are having on the economy and I doubt you would take the trouble to acquire real knowledge because you would believe it to be ‘capitalist propaganda’. Same for gasoline. In your mind, the latest version of ‘blame the speculators, 2012 edition’ is to blame for high gas prices. It probably wouldn’t occur to you that the treasury’s funny money (quantitative easing) is boosting the price of everything. If you are having a tough time economically, you have one person to blame and it is not W.

    • rustacus21

      Please look up Edward DeMarco & his role in helping banks continue gouging home owners w/astronomically criminal payment rates, while refusing to allow them (the homeowners) to refinance. What’s even more shocking, this HOLDOVER from the previous administration hasn’t stopped dealing in the same crimianlly corrupt manner he did during the previous administration. Why he’s still on the job is any 1’s guess, but I’m certain that w/a Progressive/Liberal majority in both houses, there will be Congress persons anxious to have this question answered IMMEDIATELY!!! Another hint: that means we need to vote in a Progressive/Liberal Congressional majority. We’ve tried it the Conservatives way for what, 11 years now & still stuck in the same rut? Progressive/Liberals have more than EARNED this opportunity from the voters. But it’s up to us. Those of reasoned intelligence & common sense, that is. Qualities which can be acquired by 1’s OWN initiative, I might add…

      • Progressive/Liberals had their chance in 2008 and 2009 to look into this and instead they wasted their time ramming down an unconstitutional healthcare law down our throats. They had their chance and they blew it.

  • quasm

    Mr. Madrick;

    How much do the Europeans need to spend to buy prosperity?

    Dik Thurston
    Colorado Springs

  • There are TWO qualitatively distinct forms of austerity:
    1. Austerity for the ordinary worker and citizen. This is easy; governments hold their citizens hostage.
    2. Austerity for the secret citizens of the GLOBAL CORPORATOCRACY. This will take a massive war, and is well worth it.

  • rustacus21

    Austerity. A fancy word for ‘trickle down’. If the reports are any indication of what “austerity” has done to Greece, Spain & the other nations that had it ‘imposed’ upon them, it looks similar to the ‘rich-only’ tax cut scam we’re trying to unchain the nations economy from & get some real recovery going – Clinton administration style!!! Viva La France!!! America needs alittle ‘Viva’ it appears, this November!!!

  • Christian Martin

    The will of the people usually has good intentions but is often accompanied by a blissful ignorance of how simple economics works. Everyone wants utopia-like security and benefits and wants to save the world and for noone to ever suffer or struggle…..and then there is the real world. The world in which that is an astronomically expensive proposition that capitalism is supposed to pay for while keeping it’s “greedy” mouth shut? This isnt Star-Trek folks. I’m one of the many that wishes it was…..but it’s not.