PeterWK's Periodical

CHART: How Austerity Is Squashing Europe’s Economic Growth

With Mitt Romney’s admission yesterday that — as progressives have been arguing — budget cuts depress economic growth, it’s worth looking at the effect austerity measures are having in Europe. As Nobel Prize winning economist Paul Krugman charts out, the economic picture of austerity in action is not pretty:

“The results are in — and they’re exactly what three generations’ worth of economic analysis and all the lessons of history should have told you would happen,” Krugman wrote. “None of the countries slashing spending have seen the predicted private-sector surge. Instead, the depressing effects of fiscal austerity have been reinforced by falling private spending.”

Shock Doctrine Opponents Revolt: The Austerity Backlash Across Europe

The truth is that the real world has paid the high priests of austerity an unwelcome visit

When I first read Naomi Klein’s The Shock Doctrine a few years ago, I had no idea how prescient the book was. It was a polemic about “disaster capitalism”, arguing that sudden crises are intentionally manipulated to push through extreme free market policies that were otherwise not politically possible. But early 2008 was a completely different era: although Northern Rock had just suffered the first bank run for 150 years, it seemed like a bizarre blip. The US sub-prime crisis was rumbling away, but it was like sheet lightning from a distant storm. “The deficit” was not an everyday term of political debate. It was not at all clear that the world was about to be utterly transformed.

And yet the past four years have proved a total vindication of Klein’s argument. A crisis of the market was cleverly transformed by free market ideologues into a crisis of public spending. Across Europe, the biggest slump since the 1930s has been used to push through policies straight out of some right-wing wet dream: the slashing of taxes on the rich and major corporations; the selling off of public services; and a bonfire of workers’ rights. It is disaster capitalism on speed.

But, this week, the great revolt against the Shock Doctrine began. That is exactly how we must understand the sudden sea change in European politics: not least, the election of Socialist François Hollande in France, and the stunning breakthrough of anti-austerity leftists in the Greek elections.

Before I am accused of a swivel-eyed left-wing conspiracy theory, it is worth pointing out that even some proponents of austerity are candid about their strategy. Last November, I was in Portugal, which – after being bailed out by the EU and IMF – is pushing through a far-reaching free market agenda. The first wave of the most radical privatisation programme in the country’s history is under way, including the selling off of energy, water, public transport and the national airline. VAT on electricity and gas has been hiked from 6 per cent to 23 per cent, driving up energy bills; many public sector workers are facing a drop in income of a quarter; and unemployment benefits have been slashed by nearly a fifth. Austerity has plunged the country into a deep recession, and debt-to-GDP ratio is soaring: but that is not the point. Portugal is being remade in the image of neo-liberal dogma.

“A modern European society is being dismembered by austerity.”

Free market economists in Portugal had long supported such policies, but knew they could not get away with them in normal circumstances. “The thing with deep reforms is that democracies have a strong bias in favour of the status quo,” I was told by Professor Ferreira Machado, the Dean of one of Portugal’s leading business schools, who boasted that he was just a phone call away from the country’s Prime Minister. When asked if there was a collision course between democracy and the radical reforms he thought necessary, he was candid. “I think there is a difficulty reconciling it,” he said, and mentioned an opposition leader who had caused a political storm by suggesting the suspension of democracy for six months. “Of course, she was not advocating that – she was actually expressing that collision course between the two things, and what she was saying was that it would be much easier to do the necessary reforms if we could put democracy in brackets.”

Democracy in Europe has not been suspended, and the collision course is more apparent than ever. “Stop the world, we want to get off!” was The Wall Street Journal’s verdict on the mounting European anti-austerity backlash. The truth is that the real world has paid the high priests of austerity an unwelcome visit. Their policies have sucked growth out of the economy, failed to tackle debt, dramatically increased unemployment, and devastated living standards. It would be utterly baffling if people did not fight back.

“For the first time since this crisis began, the momentum is with those taking on the Shock Doctrine. It has the potential to change the whole political climate here in Britain.”

No wonder Greece is at the forefront of the backlash. A modern European society is being dismembered by austerity. The economy has shrunk by nearly a fifth, and the country’s debt continues to mount. Over half of young people are without work; the minimum wage has been slashed to desperately low levels; and wages have fallen by a third since 2009. Then there’s the ultimate indicator of despair: the number of people taking their own lives. Greece had one of the lowest suicide rates in the world, but experts suggest it may have doubled since the crisis began. Austerity is literally killing people.

But, along with the booting out of France’s Nicolas Sarkozy, the Greek elections could mark the beginning of the end for Europe’s Shock Doctrine. “This is a message of change, a message to Europe that a peaceful revolution has begun,” declared Alexis Tsipras, the leader of radical left coalition Syriza, which trebled its seats in Parliament and came second. Given the failure of any party to form a government, new elections beckon, and Syriza can expect to do even better. But, already, the results have boosted the confidence of all those taking on the austerity offensive across Europe. In the Netherlands, the anti-austerity Socialist Party looks set to stage a breakthrough in the upcoming elections. Those calling for a “No” in the upcoming Irish referendum on the EU Treaty – slammed as an “Austerity Treaty” by opponents – feel momentum is on their side, too. “The people of France, the people of Greece are against the policies of austerity and it is now the moment for Ireland to add our voice to that,” declared Mary Lou McDonald, a leading anti-Treaty politician.

For the first time since this crisis began, the momentum is with those taking on the Shock Doctrine. It has the potential to change the whole political climate here in Britain. Polls show two-thirds reject the Government’s economic programme. The Tories and their Lib Dem allies got a kicking in the recent elections. Cameron’s approval ratings are in freefall.

Until now, Britain’s anti-austerity movement has been fragmented and lacking in direction. The new winds blowing from the Continent could change all of that. An attempt to use this crisis to transform society in the interests of the top is floundering here and across the Channel. The prospect of building alliances across Europe is no longer fanciful. It is a moment of transition: what happens next is uncertain. As the Italian Communist Antonio Gramsci put it as he languished in fascist jails in the 1930s: “The crisis consists precisely in the fact that the old is dying and the new cannot be born.”

Explaining Socialism To A Republican

I was talking recently with a new friend who I’m just getting to know. She tends to be somewhat conservative, while I lean more toward the progressive side.

When our conversation drifted to politics, somehow the dreaded word “socialism” came up. My friend seemed totally shocked when I said “All socialism isn’t bad”.  She became very serious and replied “So you want to take money away from the rich and give to the poor?”  I smiled and said “No, not at all.  Why do you think socialism mean taking money from the rich and giving to the poor?

“Well it is, isn’t it?” was her reply.

I explained to her that I rather liked something called Democratic Socialism, just as Senator Bernie Sanders, talk show host Thom Hartman, and many other people do. Democratic Socialism consists of a democratic form of government with a mix of socialism and capitalism. I proceeded to explain to her the actual meaning terms “democracy” and “socialism”.

Democracy is a form of government in which all citizens take part. It is government of the people, by the people, and for the people.

Socialism is where we all put our resources together and work for the common good of us all and not just for our own benefit. In this sense, we are sharing the wealth within society.

Of course when people hear that term, “Share the wealth” they start screaming, “OMG you want to rob from the rich and give it all to the poor!”  But that is NOT what Democratic Socialism means.

To a Democratic Socialist, sharing the wealth means pooling tax money together to design social programs that benefit ALL citizens of that country, city, state, etc.

The fire and police departments are both excellent examples of Democratic Socialism in America.  Rather than leaving each individual responsible for protecting their own home from fire, everyone pools their money together, through taxes, to maintain a fire and police department. It’s operated under a non-profit status, and yes, your tax dollars pay for putting out other people’s fires. It would almost seem absurd to think of some corporation profiting from putting out fires.  But it’s more efficient and far less expensive to have government run fire departments funded by tax dollars.

Similarly, public education is another social program in the USA. It benefits all of us to have a taxpayer supported, publicly run education system. Unfortunately, in America, the public education system ends with high school.  Most of Europe now provides low cost or free college education for their citizens. This is because their citizens understand that an educated society is a safer, more productive and more prosperous society. Living in such a society, everyone benefits from public education.

When an American graduates from college, they usually hold burdensome debt in the form of student loans that may take 10 to even 30 years to pay off. Instead of being able to start a business or invest in their career, the college graduate has to send off monthly payments for years on end.

On the other hand, a new college graduate from a European country begins without the burdensome debt that an American is forced to take on. The young man or woman is freer to start up businesses, take an economic risk on a new venture, or invest more money in the economy, instead of spending their money paying off student loans to for-profit financial institutions.  Of course this does not benefit wealthy corporations, but it does greatly benefit everyone in that society.

EXAMPLE  American style capitalistic program for college: If you pay (average) $20,000 annually for four years of college, that will total $80,000 + interest for student loans. The interest you would owe could easily total or exceed the $80,000 you originally borrowed, which means your degree could cost in excess of $100,000.

EXAMPLE  European style social program for college: Your college classes are paid for through government taxes.  When you graduate from that college and begin your career, you also start paying an extra tax for fellow citizens to attend college.

Question - You might be thinking how is that fair? If you’re no longer attending college, why would you want to help everyone else pay for their college degree?

Answer - Every working citizen pays a tax that is equivalent to say, $20 monthly.  If you work for 40 years and then retire, you will have paid $9,600 into the Social college program.  So you could say that your degree ends up costing only $9,600. When everyone pools their money together and the program is non-profit, the price goes down tremendously. This allows you to keep more of your hard earned cash!

Health care is another example: If your employer does not provide health insurance, you must purchase a policy independently.  The cost will be thousands of dollars annually, in addition to deductible and co-pays.

In Holland, an individual will pay around $35 monthly, period.  Everyone pays into the system and this helps reduce the price for everyone, so they get to keep more of their hard earned cash.

In the United States we are told and frequently reminded that anything run by the government is bad and that everything should be operated by for-profit companies. Of course, with for-profit entities the cost to the consumer is much higher because they have corporate executives who expect compensation packages of tens of millions of dollars and shareholders who expect to be paid dividends, and so on.

This (and more) pushes up the price of everything, with much more money going to the already rich and powerful, which in turn, leaves the middle class with less spending money and creates greater class separation.

This economic framework makes it much more difficult for average Joes to ”lift themselves up by their bootstraps” and raise themselves to a higher economic standing.

So next time you hear the word “socialism” and “spreading the wealth” in the same breath, understand that this is a serious misconception.

Social programs require tax money and your taxes may be higher. But as you can see everyone benefits because other costs go down and, in the long run, you get to keep more of your hard earned cash!

Democratic Socialism does NOT mean taking from the rich and giving to the poor.  It works to benefit everyone so the rich can no longer take advantage of the poor and middle class.

U.S. Tops Developed World in Income Inequality

@IPS_DC @SenatorSanders @CatholicDems
It looks like the last 30 years Neoliberal economics has done little to raise the economic conditions of working people. All it seems to have done is create a bigger gap between us and the rich. Even “socialist” social-democratic European countries have seen a bit of income inequality growth.

Unfettered global capitalism: chippin’ away at your social safety net, doin’ for the money, doin’ for the lulz… but mostly for the money.

It’s almost insane that Republicans can keep burying their heads in the sand when it comes to economic inequality.  The thing is, it’s not because they’re total idiots that they ignore charts like this.  It’s because this is exactly what they want.  From attempting to hack away at medicare and social security, to union busting on the State and Federal Level, Republicans are ratcheting up the “class war”.

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From the AFL-CIO blog (found via twitter @AFLCIO ):

by Tula Connell, Jan 30, 2012

There’s income inequality, and then there’s the United States. New research shows that within the developed world, no nation has seen the income share of the top 1 percent grow faster over the past three decades than the United States.

To qualify for the elite status of 1 percent in annual income, an individual makes somewhere in the mid-$300,000s per year (or way more, like Mitt!).

(H/t to the Institute for Policy Studies.)

European Socialists Are Better At Capitalism Than America

letterstomycountry:

I wrote a post recently in which I explained the idea that civil liberties and universal healthcare are not only compatible, but in many ways co-necessary to preserve and maximize personal liberty within a practical framework. You can see this exemplified in countries…

Democratic Socialist? You Bet!

Old article from The Progressive in 2009, but still very good.  Stats are a little off, the top 1% now owns 40% of the wealth, up from 34.3% in 2009.

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Some in the Republican Party are trying to re-dub the Democratic Party as the Democrat Socialist Party.

Nothing like getting out the old encrusted red paintbrush.

But I hope some Democrats don’t run from this label.

Running doesn’t get you anywhere.

Democrats have been running from the label “liberal” since the days of Michael Dukakis, and that hasn’t helped them.

And for those who, like me, are actually Democratic Socialists, it’s time to come out and say so.

Democratic socialism has brought a much better quality of life to the people in Scandinavia and France and Germany and Britain, and it has not erased one iota of the political freedoms we cherish in this country.

We need to move this country in the direction of democratic socialism.

We need a much sturdier social safety net.

It’s a sin that in this country, 35 million people do not have enough food to eat during at least part of the year.

It’s a sin that 47 million Americans are without health insurance.

It’s a sin that of the top 18 industrialized countries, the United States ranks last in the percentage of children (11.8 percent) who are not likely to live to age 60, and last in the percentage of people (17 percent) living on less than 50% of the national median income, according to the United Nations Development Program.

We need a much more egalitarian distribution of wealth and income.

The top 1 percent of Americans hoards 34.3 percent of the nation’s wealth, and the top 10 percent accounts for 71.2 percent of the wealth.

As far as income goes, the top 10% sops up 42.5 percent of the nation’s income.

(These stats are from the State of Working America, 2008/2009.)

We need much more control over the economic giants that dominate not only our economy but our political system.

Hell, it was just a few days ago when Dick Durbin said, “The banks own the place,” after Congress after ten Democrats joined the Republicans in voting against letting judges write down the mortgages of people in bankruptcy court.

And the people want universal health care, but the drug companies and insurance companies have been standing in the way for decades.

Right now, capitalism is eating away at our democracy.

So, thank you, Republicans, we do need democratic socialism.

Harder for Americans to Rise From Lower Rungs

Dear politicians, Reaganomics doesn’t work. All it seems to do is perpetuate class privilege.

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“By emphasizing the influence of family background, the studies not only challenge American identity but speak to the debate about inequality. Wile liberals often complain that the United States has unusually large income gaps, many conservatives have argued that the system is fair because mobility is especially high, too: everyone can climb the ladder. Now the evidence suggests that America is not only less equal, but also less mobile.”

“The United States is also less unionized than many of its peers, which may lower wages among the least skilled, and has public health problems, like obesity and diabetes, which can limit education and employment.”

—-

Labor law reform, universal healthcare, and path to socialist democracy needed.

Romania CIA Prison: Central Intelligence Agency Used Secret Makeshift Prison For Its Most Valuable Detainees

Click through the title link for the full article, and video.

WASHINGTON — One of the CIA’s most important secrets in the war on terrorism was hiding in plain sight, on a leafy residential street along a busy set of train tracks in Romania’s capital. There, tucked in the basement of a government building, the CIA ran a clandestine prison, former U.S. intelligence officials said.

For years, the building – codenamed Bright Light – housed some of the CIA’s most important terror suspects, including Khalid Sheik Mohammad, the mastermind of 9/11. Even after the detainees were shipped off to Guantanamo Bay in 2006 and reports about the prison began to surface, the Romanian government repeatedly denied any knowledge of its existence.

A joint investigation by The Associated Press and German public television, ARD Panorama, however, located the former prison and unearthed details of the facility where harsh interrogation tactics were carried out.

…

The CIA has tried to close the book on the detention program, which Obama ended shortly after taking office.

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Obama is far from perfect and he didn’t close Gitmo, but I will give him a +1 for closing the CIA’s European secret prisons.

The Revolution will be Tumbled: Why is anyone a communist? Did they like, forget the last 80ish years? Why waste your time.

amodernmanifesto:

onenationundergod:

It may work in your little commune in Vermont but not in the real world.

(That commune is Vermont thing was just a joke. Because I’m in a snarky mood :) )

We are communists, we are socialists, because we believe that human freedom is not merely political, but economic….

click the link for the full read, really good response to the person who posted first.

  But to the original poster:

“It may work in your little commune in Vermont but not in the real world.”

What about Europe then?  As a Democratic Socialist I’m disappointed by the third way policies of Social Democracy in Europe, however, I do see it as a potential foundation for real socialism.  Obviously even before these parties fell into third way-ism, they had other major issues (going all nationalist and supporting their monarchies in WWI for example), but there was a time when they were continually nationalizing industries and supporting their working class. 
Example 1945 UK elections, Labour wins big:

“Clement Attlee’s government proved itself to be one of the most radical British governments of the 20th century, implementing the economic theories of John Maynard Keynes, presiding over a policy of nationalising major industries and utilities including the Bank of England, coal mining, the steel industry, electricity, gas, telephones and inland transport including railways, road haulage and canals. It developed and implemented the “cradle to grave” welfare state conceived by the economist William Beveridge. To this day the party considers the 1948 creation of Britain’s publicly funded National Health Service under health minister Aneurin Bevan its proudest achievement.^[73] Attlee’s government also began the process of dismantling the British Empire when it granted independence to India and Pakistan in 1947, followed by Burma (Myanmar) and Ceylon (Sri Lanka) the following year.”

That’s not exactly a worker run participatory economy, but it was certainly laying down a great foundation for such a society.  A good chunk of the nationalization is gone now, but things like the NHS and other publicly held utilities/services are the beginnings of real socialism.  I understand why some on the left do not like reform as it can pacify workers struggling for a new society, but I’d champion anything that helps the working class.  While I’m not for stopping at the welfare state, it would be much much easier to develop a worker run participatory economy with a foundation of a welfare state in place rather than have to start from scratch.  Welfare capitalism and reforming capitalism are not the end goal, but if the reforms help regular people, I’m not going to fight them.  If you had to build socialism, would you want to start with an economy that had only 6% or so of nationalized services/industries, or an economy that had 30% + nationalization? 

Back to the point:  The whole “soviet union fail proves anything that is not uber free market capitalism is doomed to fail” is total bullshit.  Anyone who has studied other forms of economics knows this, and how would they explain why Europe hasn’t collapsed?  They’re having plenty of problems now, but that after making a right swing over to more pure market US ideology in the last three decades.  Also, what about Venezuela and other left leaning governments in South America are another example of socialist like policies improving the lives of many many people who were totally left out of the economy and society under imperialist puppet backed regimes. 

Socialism has not failed, people have failed.  Most assuredly monopoly capitalism is failing us now.

I believe we can build a better world, and that is why I’m proud to call myself a Socialist.

Socialists, Communists, Anarchists, and all Anti-Capitalists believe that we can change the world and build a new society that workers for everyone.  A society and economic system that puts people and nature before profits.  So if you could please stop being a fool and stop forcing us to reply to your foolish thoughts on tumblr, we’ve got workers to agitate, and a world to win!