And another one bites the dust.
French President Nicolas Sarkozy just became the latest politician to lose his job because he wouldn't let economic experience -- or political common sense -- sway him from the path of austerity.
Will Sarkozy's downfall help Democrats learn what he never could? Democrats should consider Sarkozy's fate a cautionary tale -- and a call to action. If they rally around the cause of growth, jobs, and optimism, the nation will benefit and they'll rewarded at the polls.
But if they keep pushing their own brand of "austerity lite," they -- and we -- will have gained nothing from the lessons of Europe. iI won't matter how much more extreme the Republicans are. Democrats, who hold the White House and the Senate, will still be seen as the party in charge -- the one that presided over a terrible economy and, if the "Grand Bargainers" have their way, the one that cut popular government programs.
They'll also run the risk of paying the same price Nicolas Sarkozy paid.
The Austerity Democrats
This should be the Democrats' moment, a time to make political gains in the most honorable way possible: by fighting for what's right. Today's radical Republicans want to destroy government and slash the very spending that's needed to rescue the economy. The GOP is even rejecting the common sense spending on roads and bridges embraced by past Republicans from Dwight D. Eisenhower to George W. Bush. As austerity measures eviscerate Europe's economy and undermine the political popularity of its leadership, this should be the Democrats' finest hour.
Unfortunately, too many Democratic leaders have preferred to echo the austerity rhetoric of their Republican opponents -- and of Europe's embattled leaders. The president's last debt deal with John Boehner was a milder version of European austerity, and it slowed our country's tentative growth. And yet he's reportedly pushing for another "Grand Bargain," leaving him with a muddled economic message, and Americans in a prolonged state of fear.
Even Nancy Pelosi, a long-time stalwart of traditional Democatic liberalism, said that she would vote for the Simpson-Bowles plan, a set of personal opinions about deficit reduction which was submitted by the co-chairs of the Deficit Commission after they failed to lead it to a successful conclusion.
The Simpson-Bowles plan is nothing more than an American blueprint for repeating Europe's failed policies.
The Right Time to Go Left
These Democrats should have taken a cue from the surge in popularity the President enjoyed after he began fighting for jobs -- jobs that can only be created through government spending. But they didn't seem to get the message. The president still repeats the meaningless conservative analogy between governments and families -- that governments should "cut their budgets in tough ties, just like families do when they sit around the kitchen table..."
Nonsense. A better analogy, although still imperfect, would be between government and a business... a store, let's say, that has good workers and good merchandise, but no customers Nobody's shopping there because the showroom is falling apart and it's running low on inventory. The only way for that business to get back in the black tomorrow is by spending more today.
It's called "investment," and it's nothing more than common sense. That's what our government needs. Polls show that the public understands this common sense solution.
Too Clever by Half
But too many Democrats seem to think they don't have to fight for jobs or spending to get us through these tough times -- that they just have to be less extreme than the other guys. And they seem to have the too-clever-by-half notion that they can offer "bargains" which the Republicans won't take, proving themselves to be more "reasonable" than the other guy.
One problem with that idea is that the Republicans might take their deal, as Boehner did last year. A bigger problem is that they're repeating the false austerity mantras of the right instead of explaining what's really happening, leaving the public confused and in despair.
But the biggest problem with that idea is the economy itself. More sluggish performance from the economy will sow more doubt on the president and his party while spreading even more pain among the general population.
Nowhere is the madness more self-evident than on the topic of Social Security. Its trustees' latest projections are seen as proof that the program's benefits must be cut, in classic austerity-economics fashion. But the lion's share of the changes to its long-term fiscal projections were due to an ongoing recession caused by... austerity economics!
The Summit
Next week former President Bill Clinton, whose "triangulating" brand of Democratic centrism places him slightly to the right of Sarkozy economically, will join radical right-wing Rep. Paul Ryan for the second time at a "Fiscal Summit" funding by conservative billionaire Pete Peterson and his foundation. Even more disturbingly, Clinton will be joined by a key Pelosi aide, Rep. Chris Van Hollen, as well as Treasury Secretary Tim Geithner (who will also be making a return appearance).
Will Democrats use the "Fiscal Summit" and other upcoming events to challenge the failed austerity policies of Europe's leadership, or to mimic those leaders by leading us down the same road?
If it's the latter, they'll cause incalculable harm to our economy -- and their political futures.
Poison
Austerity economics imposes sharp cuts in government spending in an attempt to restore economic growth. That's like putting leeches on a patient to draw the blood out: Instead of curing the disease it makes it much, much worse. Any lingering doubts about that have been dispelled by Europe's experience , where it has turned struggling economies have been turned into shattered economies.
And now Sarkozy's fall has given us yet more confirmation that the austerity which he co-promoted with Germany's Angela Merkel is a political career-killer. (Gallic pride made it impolitic to point out that France was clearly the junior partner in that duo, with Sarko playing Bob Hope to Merkel's Bing Crosby.)
Now he's paid the price. But Sarkozy's not the first to fall, and he won't be the last. Two leaders have already been defeated in Greece because they bowed before the austerity diktats of European power brokers. In the latest round of elections there, where democratic processes were initially all but overruled by the international financial sector, Greeks repudiated that country's externally imposed, "bipartisan" austerity consensus by soundly rejecting all the major political parties.
Would-be Washington "centrists," take heed.
Great Britain's Austerian Tory/Liberal Democrat coalition felt the pain this week too, as Labour made massive gains in local elections throughout England, Scotland, and Wales.
The "fiskalpakt" that the Germans are pushing on their reluctant continent is even becoming political poison in Germany itself, where Merkel's center-right coalition just took a drubbing in a state election.
That's not just a repudiation of economic policy. It's a rejection of the false "bipartisanship" that's forged when political insiders from the right and the mild left come together to follow unpopular policies dictated from powerful unelected forces.
As the guy in the cell phone ads used to say: Can you hear me now?
Warning Signs
Let's hope so. Because another disturbing trend to come out of Europe reflects an age-old pattern: When people feel fearful financially they turn in ever-larger numbers toward xenophobia, racism, and rage. The most dangerous situation in Europe today is probably the one in Hungary. The government of Prime Minister Viktor Orban shows all the signs of incipient totalitarianism, fueled by and reinforced by its practice of using thinly-disguised code words to reinforce hostility toward any citizen who is not "ethnically Hungarian."
Even after Greece's "bipartisan" leaders trampled on the public's needs and preferences, this week's election results were still somewhat shocking. The Socialists led other Greek parties for many years and won 44 percent of the vote in 2009. But this time around they trailed a party called "the Coalition of the Radical Left," which won between 15 and 17 percent of the vote to its 12 or 13 percent. That may be understandable, since the increasingly bland parties of European socialism have lost their bite -- but what's truly frightening is the rise of the anti-immigrant and Nazi-saluting "Golden Dawn Party," which achieved its first parliamentary presence with 5 to 8 percent of the vote.
In France the racist, far-right party of Jean-Marie Le Pen, now led by Le Pen's more telegenic and less blunt daughter Marine, performed exceptionally well in the first round of this year's elections. Sarkozy openly appealed to xenophobia himself in the runoff. Had Ms. Le Pen not urged her supporters to abstain from voting, his ugly race-baiting appeals might very well have worked.
It can't happen here, somebody's probably saying. But it can -- and we're already seeing the warning signs. Our elected officials have an obligation to do the right thing for the sake of our social order, as well as our economy.
Showtime
Republicans are already using our poor economic performance to argue that Keynesian economics and stimulus spending don't work, when the exact opposite is true: We're doing better than parts of Europe because we did have some stimulus spending, but it wasn't enough. Call our policy "austerity lite" -- but if we switch to the hard stuff we'll have a hangover that will last for generations. And if the Democratic Party doesn't clearly and forcefully map the case for the policies we really need, the president and his party could find themselves following in Sarkozy's footsteps.
At last year's Fiscal Summit Bill Clinton repeated the austerity-economics claptrap of the right, especially on Social Security, telling the radically right-wing Rep. Ryan that Republicans and Democrats should "break out of theology" and push for "bipartisan cooperation." Now Nancy Pelosi's saying she would have voted for the draconian Simpson-Bowles plan, which is more of the same austerity madness.
If we hear more austerity talk at the "Fiscal Summit" rom party leaders like Clinton, Administration officials like Tim Geithner, and Pelosi ally Chris Van Hollen the result will be disastrous -- for the economy, for ordinary Americans, and for the electoral prospects of Democrats everywhere. It would mean that the lessons of Europe, and the fate of Nicolas Sarkozy, has taught them nothing.
It's almost showtime. Will the Democrats meet the moment and fight for the future -- or follow in Sarkozy's footsteps and walk blindly toward the failures of the past?
Follow Richard (RJ) Eskow on Twitter: www.twitter.com/rjeskow
- Lift the cap on FICA tax so that Romney, Trump and the Koch brothers pay the same rate as you and me.
- Tax capital gains like any other income
- Apply the Buffet Rule to billionaires.
Then let's talk about austerity.
Dodging your taxes is not "work", Mitt.
The problem the Dems have is that they cannot meet the standard above with the same failed policies of the last 3+ years. We have spent $5T more than we have and we have nothing to show for it except higher unemployment, less people in the workforce, more so discouraged they have stopped trying to find jobs, etc. The quote above spoken by the Obama admin would ring very hollow indeed.
The path of spending has not worked and it is the definition of insanity to assume the same course will provide different results.
Wow. What complete and utter nonsense. We CAN'T keep going further and further into debt. It costs even more money to go further into debt. Interest rates are super-low now and we're still paying hundreds of billions of dollars JUST IN INTEREST on the debt. WHEN interest rates double or triple (and it is coming), the amount of money that we waste IN INTEREST ALONE will double or triple. We may as well print trillions of dollars and set them on fire in front of the White House.
You thought Europe was hurting? A short slide back into recession was expected. Now, the whole world's economy is in danger of collapsing. Greece CAN'T sustain itself. Italy, Spain, Portugal -- they're all on the brink of collapse. NO ONE WILL LEND THESE COUNTRIES MONEY because of their debt levels. And soon, America will find no one willing to finance our debt, either. You think austerity is bad? Wait until these European countries collapse. Then, every big-government program they have will go broke and the real pain will start.
Your suggestions are dangerous and irrational.
BTW, our "austerity" programs are nothing of the sort. They simply call for a REDUCTION IN THE GROWTH of spending. Those aren't cuts.
But this is precisely what they are not doing-- rather than making an effort to win such governing power, they are already making noises about working with their adversaries to cut social programs, within reason of course, and regrettably, blah blah blah.
The gridlock works wonders: it estranges the citizenry from seeing politics as a means of making real changes, and leaves the day to day business of influence and backroom dealing to the usual suspects and beneficiaries-- career pols and their bankrollers.
The Democratic Party is a pitiful stand-in for a vital political force which would take its agenda and its power from its voters. It's not the party of working people or minorities or the young. On the hustings, it impersonates such a party when advantageous, but on the Hill, it occupies the left vest pocket of the business interest, and cannot from such a position organize itself to serve anyone else. Nor does it wish to.
You can tell by looking: at what it's not doing to achieve majorities.
We wouldn't need austerity if we didn't spend $2 billion a day on war and military.
The wars in Iraq and Afghanistan cost about $150B per year and the budget deficit is $1300B!!!!! That a little over 10% of just the deficit, and only 4% of the federal budget. If you want to make any dent at all in the budget crisis, that is not the place to start.
Also, military spending is a little more than 5% of GDP which is only slightly higher than the average for the last 40 years. Once the economy gets going it will fall back to below 5% as before.
The real issue is the rest of the budget. That is where the major growth has come from and will continue to come from -- entitlements.
The electorate is dumb. They actually do believe that the government can single handedly go against global shifts in the economy and magically make things better. It has not been able to do it over the past five year, but who cares, right? There is still that hope that the next guy peddling snake oil will be the one that can actually do something.
The sad reality is that many of the lost jobs are not coming back. Ever. Technology is eliminating the need for labor in many areas. Which is actually a good thing. It allows a society to focus upon areas of need and to innovate. People of the west (people I generally despise for their selfishness and ethnocentrism) should not be working in factories. There is no benefit there. they should be developing new products, services, and ideas that are produced elsewhere.
But people do not want to hear this. They want to believe in their magic government savior. So what if the world has changed? the government can use its magic wand to make things like they were in the olden days. I just know that they can. If everyone believes, then it will happen!
Instead of endless laments about the mess we're handing future generations the current leaders of both parties need to tear up Norquist's no tax pledge and sign an adult behavior pledge. First, we need to spend on jobs, infrastructure in particular. Spending should be huge. Secondly, bail out the states so they can restore public sector jobs. (How about taking Medicaid off their hands by mergin it into Medicare). Three, reform and raise raise taxes, especially the top brackets. (No tax preferences). It won't retire our debt, but it won't have the slightest adverse impact on the super-rich either, who have pospered mightily the last 30 years. When the economy really gets going start paying down the debt (30 year amortization) and covering the projected costs of the entitlements until our balance sheet shows that we can service these programs and our debt without massive deficits.
Government spending only produces temp jobs because once the funding is ended/cut, the jobs go away. That's what happened with all the "shovel-ready" jobs Obama promised with the first stimulus. We need more people working creating value in the private sector, not taking value to keep their jobs.
Without BIG CHANGE THERE IS NO HOPE!
The problem today is that the working class has no political leverage. The decimation of organized labor in this country directly parallels the decline of the middle class and the huge transfer of wealth to the top. Unless and until the tens of millions of people who comprise the bulk of workers in this country unite in a common front for economic justice, they will continue to have nothing but scraps thrown to them from a table where they no longer have a seat.
I guess people can long for the olden days. It will not do any good. But they might feel better knowing that things can get better if only society would regress instead of moving forward...
We seem to be stuck in some stupid, naive, 50s postcard where our politicians are our friends and want the best for us. They are not. We live in as much a dictatorship of the wealthy as any Latin American. We have to drop this incredulity.
And it takes a dynamic leader to alter that consciousness in the minds of Americans.
Whether we like to admit it or not, on account of much of mainstream media buying the notion we have a huge deficit and debt problem, many Americans have been convinced it is so.
Media has never really challenged that assertion, despite the fact that our debt, as a percent of GDP, was far, far higher in the few decades immediately after WW2, than today.
And those years after WW2 and into the 1970s were the most prosperous period in our history..
Europeans have been suffering under the weight of austerity measures to a much greater degree than Americans, for at least we had the stimulus(which even the CBO said did create some jobs).
The Congress for the most part controls our nation's purse strings.
And I think Obama is cautious. He is a moderate, after all.
In that scenario, I don't see there is much the administration will or can do, if some now advocate huge government expenditures to stimulate the economy.
That is being realistic.
I agree with Eskow that austerity not only is a loser politically, but in addition it damages the economy.
If Obama is reelected, maybe we can get some commonsense policies enacted....if enough rightwing bagger congressmen are defeated.
To see those days again the US needs to institute rationing of everything and destroy the infrastructure (particularly that dealing with production) of all competing economics.