Tags
austerity, crisis, debt, economic growth, economy, employment, jobs, labor, NYT, Paul Krugman, political discourse, politics
“Austerity is inflicting vast pain now, and killing our future, too.” says economics Nobel Prize laureate Paul Krugman in his NYT OpEd The Bleeding Cure. Yesterday on his blog he was justly complaining that on both sides of the Atlantic a “Very Serious” narrative is obfuscating the truth and systematically eluding facts about the economic situation. This is driven by both ideological sentiment and also a generation of particularly incompetent public leaders. The reason for this widespread incompetence is to be found in the way we are selecting, promoting and electing them. The systematic intellectual impoverishment of the majority of the mass media has led to public debates that use simplistic and populist topics as alternative to serious debate. This way, real competence, that is as much part of the public elites as it ever was, becomes irrelevant. We need to find a way to turn away from pseudo debates and look into the reality of the crisis. And it’s about time because this is as serious as it gets. Unfortunately, facts have been just a nuisance in the political discourse on the current economic crisis. From the beginning of the Euro/Debt crisis so many governments in the EU have been using this Very Serious narrative they dubbed the “failed social state” to create policies that are bound to make matters worse on the short term and terrible on the long term. The austerity mantra has come to replace any economic argument. Beyond Milton Friedman and ignoring Keynes, too many political leaders with powerful economic decisions and bully pulpits have effectively banned any discussion on alternative solutions. Choices undermining growth and recovery are coupled with dismantling unions and labor protection, reducing spending in education and social services directly impacting long-term competitiveness. This has taken ridiculous forms in former communist countries like Romania and Hungary. The leadership of both is engaged in a crusade against the “social state” and the new enemy of the people is the “socially assisted”. Of course this conveniently includes minorities like the Roma and social categories like the unemployed, and unemployable because of failures of the education system. It is this ideologically driven narrative that has vested interest in obscuring facts and treating reality like an imaginary construct. The logic of selective austerity coupled with low taxes for the rich and a wreaking of social nets is costing Romania dearly. The country already had some of the most abysmal levels of budgetary spending in the UE on public education, healthcare system and social services. That does not deter from a mix of ultra-liberal and populist fiction to be churned out daily by the minions of the government and subservient media. When armies of pensioners (in a country where life expectancy makes the vast majority of them into net contributors – 69 for men and 77 for women!) are what stands between a competitive economy and a failed economic policy you know something is deeply amiss with the narrative. It is time to replace this destructive and simplistic narrative and return to job creation and spending. This requires income to spend and it requires a careful mix of cutting unnecessary and often ineffective spending and replacing it with spending that has return in competitiveness improvement and economic growth. Unless we escape the anti-government and austerity only narrative we will be facing a downward spiral I terms of consumer and investors trust. Not a good thing for returning to sustained growth and meaningful employment. This is why jobs in the public sector are good. This applies to Greece, the US and Romania alike. Otherwise we will crumble under the 1 billion Euro a month extra debt we add without any visible short-term or demonstrable long-term impact on jobs, growth or productivity. Andrei Tarnea