Subj : Austerity Failed To : ALL From : BOB KLAHN Date : Mon May 20 2013 08:01:06 http://www.counterpunch.org/2013/05/07/ financial-institutions-admit-austerity-failed/ Financial Institutions Admit Austerity Failed Thursday, 09 May 2013 13:32 By Ken Klippenstein 2013 has been something of a confessional period for the economic managerial class. The IMF's chief economist perhaps demonstrated this point best when he conceded that "forecasters significantly underestimated the increase in unemployment and the decline in domestic demand associated with fiscal consolidation (a polite term for "austerity)." ---------------------------------------------------------------- IOW, business is not hiring and expanding because they got no customers. Funny, I do believe Paul Krugman has been saying that for years. ---------------------------------------------------------------- ... Meanwhile, Carmen Reinhart and Kenneth Rogoff, the Harvard economists responsible for one of the more influential studies used to defend austerity have admitted "austerity is not the only answer to a debt problem." ---------------------------------------------------------------- Since it doesn't work at all, it's probably not the only answer. ---------------------------------------------------------------- the failure to recognize that austerity didn't work during the Great Depression and won't work now, during the Great Recession. ---------------------------------------------------------------- I do believe I mentioned that before. And referenced www.snipurl.com/fdr1937 ---------------------------------------------------------------- ... They simultaneously demand stimulus and deficit reduction. As Treasury Secretary Jack Lew put it, "We shouldn't choose between growth and job creation and getting our fiscal house in order." This is like a child wishing he could stay up all night and get a good night's sleep: ---------------------------------------------------------------- IOW, no matter how much they admit they were wrong, they never actually quite admit they were wrong. ---------------------------------------------------------------- In elite circles, "simplistic" explanations are any which involve elementary truths: that ---------------------------------------------------------------- Like: Unemployment bad... full employment good. ---------------------------------------------------------------- ... suggest any sort of human agency behind these downturns - namely, a relationship between the wealth and poverty - is to commit the dreaded error of viewing economics as a zero-sum game. ---------------------------------------------------------------- Of course, it is a zero sum game to the rich, just us poor workin folks ain't allowed to think of it that way. ---------------------------------------------------------------- This of course is a fallacy, because economics is a magical process by which the concentrated wealth simultaneously diffuses its wealth (i.e. trickle-down theory). ---------------------------------------------------------------- Ah, yes, magic. That's how economics works. ---------------------------------------------------------------- BOB KLAHN bob.klahn@sev.org http://home.toltbbs.com/bobklahn .... The 2nd million is easier than the 1st, so I'm workin on the 2nd, 1st. --- Via Silver Xpress V4.5/P [Reg] * Origin: Fidonet Since 1991 Join Us: www.DocsPlace.org (1:123/140) .