4 Responses

1. Marco Fante says:

   October 1 2015 at 7:10 pm

   Well, it sort of is true to a limited extent (unless your in Spain or Greece). The problem being of course that the neo-libs keep cutting away at the automatic stabilisers while making stupid gestures toward balancing the budget.
   As it stands the powers that be seem content to persist with a form of permanent limited depression (‘tolerable’ stagnation) where some but not all of the counter-cyclical measures are allowed and the 1% continue to prosper.
   Thankfully, this is unlikely to be a sustainable state of affairs (for reasons that you have already identified).
2. Pilgrim Slight Return says:

   October 2 2015 at 8:14 am

   I agree with Marco and – taking it a bit further if I may – I still think that this is done on purpose to help the City by creating the conditions for the sale of businesses and assets at cheap prices. It is Disaster Capitalism at work.

   But also, it helps to create the aura of unsustainability in the public sector so that further privatisation or reduction of hard won rights and services can take place.

   In times of drought, only the vultures and out an out carnivores seem to win.

   What still frustrates me is how too many of the public fall for it. Austerity reduces activity in the real economy which actually stifles income for everyone – including the Government. Said Government then turns around and says that it can’t afford to do this and that and cuts more because of its own deliberate policy of austerity it set out on in the first place!!

   A lot of the public – told there is still a crisis – go along with it. And more public assets and a greater part of the economic output just end up being swallowed up and transferred to those at the top instead of being shared. This is what austerity means to me.

   As for the economics text extract above – it seems that the wishful thinking the profession is known for can even extend to the concepts we know are actually good for us!! This also indicates what a bad situation we are still in unfortunately.
   • Barry says:

     October 2 2015 at 12:52 pm

     “Austerity reduces activity in the real economy which actually stifles income for everyone — including the Government. Said Government then turns around and says that it can’t afford to do this and that and cuts more because of its own deliberate policy of austerity it set out on in the first place!! – ”

     Just remember though, if Osborne can convince things are looking good, out come the credit cards, up go tax receipts more private debt, crash, bang, wallop!
3. Simon says:

   October 2 2015 at 8:52 am

   if I remember rightly, Minsky’s sequence goes:

   1) hedging
   2) Speculation
   3) Ponzi
   4) Looting

   It seems pretty clear we’re at the looting stage