A few days ago, I opened a newspaper to the “World” section and read a headline that said something like…
French Presidential Candidate Promises to end Austerity
Well, from that moment I knew who was going to win.
I mean, who’d vote for austerity? Pain, suffering and discipline aren’t exactly vote winners – never have been. Winston Churchill made his famous “Blood and Toil” speech, but that was in the face of an immediate and painfully obvious threat.
Actually, the current crisis is also painfully obvious. Governments have been spending more money than they’ve taken in as tax for years. Debt in many European countries is now at crisis levels. But bizarrely, some have convinced themselves that to rectify this situation, the solution is to increase tax, and avoid cutting spending. This in spite of the lessons of history, which tell us that the only sure way to balance a governments books is to cut spending, and the dubious net value of increasing taxes on a small, mobile, minority of “others”.
So now that the French have a new president, it’s all roses.
In addition to Greece – where the pro-austerity quislings have officially lost their majority – there was another important election today: France. And there, Socialist candidateFrançois Hollande has trounced Nicolas Sarkozy to become France’s first left-wing President in 17 years.
This is going to make a big difference. Hollande is opposed to austerity, so he’ll be running a better economic policy in France. But he’ll also be opposing German attempts to impose an austerity straitjacket at a European level – and that will be enough to make sure it won’t happen. The result is …[snip fantasy]
The markets are not going to like this of course (let alone the austerity cultists at the European Central bank), but they are just going to have to learn to cope. The people have spoken, and their message is clear: they are not willing to crucify themselves for the profit of bankers. Politicians elsewhere should take heed.
(The silly thing is that what the French have voted against isn’t austrity at all, but rather a few spending trims around the edge and hikes in taxes. So of course, these programs are going to crash the economies where they’re implemented. It’s just that “removing” such policies is actually going further down the same path and will thus make the situation worse.)
But let’s pretend for a while that it’s real austerity. Even then, there’s a small fly in the ointment.
Liberty Scott spells it out here.
But that’s rather lengthy. I prefer the blunt version.
Dear Greece: you can vote against austerity all you want. Austerity doesn’t give a s**t about election results.
You can chose not to live within your means. But eventually, you’ll have to pay – if not by paying the debt, then by defaulting on it and losing your ability to loan any money at all.
But hey, have fun with those celebrations. You really stuck it to those bankers.