Tuesday, April 23, 2013

Let's Highlight More Austerity Stupidity

From the Financial Times:

José Manuel Barroso said that while he still believed in the need for sweeping economic reforms and drastic cuts in budget deficits, such policies needed to have “acceptance, politically and socially”, which was now at risk.
“While this policy is fundamentally right, I think it has reached its limits in many aspects,” Mr Barroso said. “A policy to be successful not only has to be properly designed. It has to have the minimum of political and social support.”

Mr Barroso’s comments come as advocates of the eurozone’s austerity-led crisis response are on the defensive following a voter revolt in Italy, a deepening recession in much of the bloc and the tarnishing of a highly-influential academic treatise arguing high government debt severely hinders economic growth.

Let's look at the above statements.
  1. "While this policy is fundamentally right..."  No, it's not.  In fact, it's fundamentally wrong.  Deeply wrong.  The UK and Europe have been trying this for a few years now and it's leading to lower growth.  As the article goes on to note, Spain, Portugal and Ireland all saw their debt/GDP levels increase last despite implementing austerity policies.  This means the data contradicts the statement.
  2. The deepening recession -- yes, the EU area is in a deep recession.  Raise your hand if you have and idea what caused it.  
  3. "A tarnishing of a highly influential academic treatise..."  No, it wasn't a tarnishing.  It was a complete fuck up on the part of the researchers.  They coded the sheet wrong and they made data assumptions that were highly questionable.  And -- the policies advocated in the paper have led to a recession.  What more information do you actually need?
  4. We're lacking the political will to do this -- gee, y'think?  There's just so much recession I can take before I want some expansion.  
These statements are evidence of pure stupidity.  Plain and simple.