9 June 2013



In any society there are always sleaze-balls who make a career out of being toadies for the rich. In today’s world they avoid the ravages of austerity by championing austerity for their fellow peasants. Two American examples are the disgraced Harvard hucksters Ken Rogoff and Carmen Reinhart. Two British examples are Carl Emmerson, and Julian McCrae, who are discussed in the UK Telegraph item below.



Carl Emmerson and Julian McCrae say the U.K. faces another decade of austerity, because the U.K. still has a “national debt” (which is meaningless and irrelevant).

They say that both the 2015 and 2020 General Elections are likely to center on increased austerity, and that the economy will contract even further with the decline of North Sea oil and the rising costs of healthcare.

Essentially the two toadies say the peasants need permanent poverty, so they had better get used to it.


Carl Emmerson said that one of the first actions of whoever is finance minister after the next election in 2015 may be to increase taxes.

Julian McCrae praised Mr. Osborne for following through on the austerity threats that Osborne made after the last election in 2010, but McCrae said that Britain’s (meaningless and irrelevant) “national debt” remained unchanged. (Thus the U.K. needs more austerity.)

Mr. Osborne has already said that austerity will continue into the first two years of the next parliament, but Julian McCrae says it will continue far longer, since the U.K. will still have a national debt (which is meaningless and irrelevant).

The Office for Budget Responsibility, the official financial watchdog, has forecast that by 2017, austerity would result in 1 million public sector workers being terminated.


Ned Simons discusses this in the Huffington Post:

Carl Emmerson and Julian McCrae say that while the government has “held its nerve” in keeping departmental spending down, the lack of growth in the economy meant it was taking much longer than George Osborne expected to balance the budget.

Translation: Since austerity sustains recessions, the solution is more austerity.

McCrae and Emmerson said, “Austerity Fiscal consolidation is taking longer than planned. George Osborne announced in the 2010 Emergency Budget that the budget deficit would be eliminated within four years, but this is now forecast to happen in 2017-18. We are still as far away from the target as we were in 2010. Indeed, it would not be surprising if not just 2015 but also 2020 was an ‘austerity’ election.”

Translation: Since austerity means an endless recession, the solution is endless austerity. And since a balanced budget causes a drastic reduction in tax revenues (which the UK government does not need or use) the solution – again – is endless austerity.

McCrae and Emmerson added: “The problems for the consolidation have come through a lack of growth in the economy, resulting in lower than expected tax revenues.”

Translation: Again, because austerity reduces tax revenues (which the UK government does not need or use), the solution is to impose more austerity.

And then comes some major bullshit by McCrae and Emmerson:

They also found that the public has become more willing to accept austerity measures as necessary. The percentage of those who think the Government is cutting spending too quickly has steadily declined from its level near 60% in early 2011 to 44% in May 2013.

Whoa! The British public increasingly approves of austerity? Yeah, RIGHT!

Like I said, McCrae and Emmerson are toadies for the rich. They are the U.K. equivalent of Reinhart and Rogoff.


The McCrae — Emmerson report comes as Osborne pressured Whitehall departments to accept a further 10% of spending cuts in order to free up money for infrastructure investment and the NHS.

“Whitehall” is the British equivalent to Washington DC. As we all know, there is no need for the British government to “free up money,” since the British government creates money out of nothing.

The lies never end, aye? Maybe they are an inevitable byproduct of society. Most socities are built on lies. As long as a society continues, so do its lies.





The IMF has existed for 68 years, and consists of 188 member nations who collectively made a “mistake”?

Nonsense. Austerity is a calculated ploy to increase the gap between the rich and the rest, and between the financial economy and the real economy.

If austerity is a “mistake,” then will the IMF stop preaching austerity? Of course not.


Alexis Tsipras, leader of the opposition Syriza party in Greece, said the IMF’s comment is meaningless, since Greece will continue to have austerity.

“The Troika admits making a mistake, and at the same time advocates the implementation of that mistake.”

Tsipras said Greece has served as a model for European politicians determined to destroy the welfare state.

“Greece was the guinea pig for this historic change. And it was tried out with full force: canceling the social pact, destroying social welfare and selling off the country’s entire productive capacity. Now that experiment is ready for export to the rest of Europe.”

(Ready for export? Evidently Mr. Tsipras has never heard of Spain, Portugal, Ireland, Italy, Cyprus, Slovenia, etc.)





The article above gets a half-stamp because it mixes truth with lies.

The true parts basically say that during recessions, governmnents should increase their spending, and that austerity makes recessions worse.

And here are some of the lies:

Fiscal contraction can backfire. If premature, austerity (spending cuts and tax increases) can make deficits worse.

Austerity can never be “premature.” Yesterday, today, tomorrow, austerity always causes severe recessions.

Elected officials should explain that debt can sometimes be useful, and then pushing hard for belt-tightening once recovery seems solid.

There it is again: the insulting claim that austerity today is bad, but austerity tomorrow is good. Let’s not impose austerity until the economy recovers from its recession, at which point we can use austerity to cause another recession.

Austerity isn’t always bad. Excessive government borrowing can push up interest rates. If the rate exceeds the pace of GDP growth, the level of debt becomes a concern. Every country has its own point at which austerity becomes necessary to avoid rattling the bond markets. It’s best if governments don’t test where that line is.

WRONG! For Monetarily Sovereign nations, austerity is always bad. (Euro-zone nations have no choice but to impose austerity, since they continually go deeper into debt.)

Meanwhile the stuff about bond markets and interest rates is garbage, since basic interest rates (e.g. the overnight rate and prime rate) are chosen by the Federal Reserve, not by “bond markets.”

Note that a couple of paragraphs before, the article dismisses the false belief that, “If parsimony is good at home, it’s also good for government.” Then the article contradicts itself, implying that the US government is like a private household after all, saying that “Government borrowing can push up interest rates.”

Happily, the European Union, with 27 million unemployed, is backing away from austerity. Last week, it released seven countries from deficit targets and other budget obligations.

WTF??? The Troika and Germany merely gave their victim nations two extra years to continue amassing debt. During that time, the victim nations are expected to radically accelerate their “structural reforms” — i.e. mass privatization, mass firings of public workers, and a mass changing of laws that until now protected private workers. At the end of the two years, the Troika will  demand more spending cuts and tax increases.

There will be no “backing away from austerity” as long as nations continue to use the euro currency. It’s not mathematically possible.








During a recent five-day visit to China (16 to 20 May 2013), Greek Prime Minister Antonis Samaras eagerly invited Chinese investors to “join Greece’s success story,” telling them that Greece’s financial problems were about to end. (!!!)


“I wouldn’t be here if we in Greece hadn’t turned our ship around,” Mr. Samaras lied told the Chinese during his visit, flanked by 71 Greek businessmen and members of his cabinet.

After six years in recession, Greece’s unemployment is the worst in the euro-zone. In the first quarter of this year, the economy contracted 5.3 percent, the fifth consecutive year of negative growth.

Hoping to stay afloat, Greece signed an agreement with its creditors, which hold billions in Greek debt, to raise $67 billion by 2022 by selling off public assets at fire sale prices with no conditions. The Chinese have expressed interest in buying Athens International Airport, plus some of Greece’s 12 ports for lease.

Officials from the China Development Bank promised to finance Chinese companies interested in buying Greek public assets, while Chinese investors promised to soon visit Greece.

Antonis Samaras

Earlier this month, Greek lawmakers passed a bill offering a 5-year residence permit to rich foreigners investing in property worth more than 250,000 euros ($320,000).

Greek officials hope to replicate the partnership between the Greek government and state-owned Chinese Shipping Company COSCO, which has leased half the port of Piraeus for 14.3 million euros per year. The Greek government now wants to lease the other half, and COSCO officials have said they are interested.

Of course, once a public asset falls into private hancds, all workers usually become slaves. Whistleblowers at the port of Piraeus say that COSCO has violated Greek labor laws by underpaying them and not allowing them to form a union. Some ex-workers have even sued the company for those violations of Greek law.

Greece used to be one of the leading shipbuilders until the 1990s. Recently Greek shipping magnates agreed to buy 142 new ships from Chinese shipbuilders.



An article in the UK Guardian says, “Talk of recovery in Greece is premature – and is all about justifying austerity.”

Over the past few weeks, Athens’ politicians have been trying to convince the world that happy days are here again. Prime minister Antonis Samaras now talks of the Greek “success story”. The boss of the central bank and the finance minister claim that Greece has turned a corner. Editorialists in the national press and parts of the international financial press dutifully nod their assent. And those with Greek or European assets to sell clap along: “Forget Grexit – it could be Greecovery instead.”

By lying that Greece is fine, we lie that austerity is fine. More than one in four Greeks are out of a job; of young Greeks, nearly two in three. Around 60% of those out of work haven’t been employed in more than a year. The health system has all but collapsed. Journalists are persecuted for telling the truth — e.g. Kostas Vaxevanis, severely attacked for publishing a list of super-rich tax dodgers.

While the Greek economy remains catatonic and civil society is in crisis, all such boosterism amounts to is a version of claiming the operation was successful, but the patient died.

Two summers ago, I sat with economist Yanis Varoufakis on his balcony overlooking the Acropolis, and asked him to sum up the outlook for Greece. “It’s in freefall.” Last night, I asked him the same question. “It’s still in freefall.”




2 Responses to 9 June 2013

  1. Jerry B says:

    Bow, Bow, ye lower middle classes!
    Bow, Bow, ye tradesmen, bow ye masses!
    We are peers of highest station,
    Paragons of legislation,
    Pillars of the British nation!
    Tantantara! Tzing! Boom!

    March of the peers from Gilbert & Sullivan’s Iolanthe. First performed in 1882 when the middle class was small, weak & disorganized. All money and power was at the top. Much like 2013 in the UK and USA, isn’t it?

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