Thursday, September 30, 2010

Austerity and the Impoverishment of Population

This post addresses how austerity is being imposed upon western populations in a deliberate attempt to lower living standards for the bottom 80% of the population.

I look at several articles, beginning with Greg Palast's interview with the economist, Joseph Stiglitz. Stiglitz explains how austerity was imposed in the developing world, giving us a good sense of how it will be imposed in the US and Europe.

I then examine David DeGraw's strongly worded but excellent polemic about the implications of financial collapse and austerity for the U.S.

Michael Hudson's essay on austerity in Europe follows.

I conclude by examining escalating defense spending, which contrasts starkly with dramatic cuts in wages, social welfare benefits and living standards:

Greg Palast
The Globalizer Who Came In From the Cold
Wednesday, October 10, 2001

The World Bank's former Chief Economist's accusations are eye-popping - including how the IMF and US Treasury fixed the Russian elections
"It has condemned people to death," the former apparatchik told me. This was like a scene out of Le Carre. The brilliant old agent comes in from the cold, crosses to our side, and in hours of debriefing, empties his memory of horrors committed in the name of a political ideology he now realizes has gone rotten.

Step One is Privatization - which Stiglitz said could more accurately be called, 'Briberization.'

After briberization, Step Two of the IMF/World Bank one-size-fits-all rescue-your-economy plan is 'Capital Market Liberalization.

This leads, predictably, to Step-Three-and-a-Half: what Stiglitz calls, "The IMF riot." The IMF riot is painfully predictable. When a nation is, "down and out, [the IMF] takes advantage and squeezes the last pound of blood out of them. They turn up the heat until, finally, the whole cauldron blows up," as when the IMF eliminated food and fuel...

The IMF riots (and by riots I mean peaceful demonstrations dispersed by bullets, tanks and teargas) cause new panicked flights of capital and government bankruptcies. This economic arson has it's bright side - for foreign corporations, who can then pick off remaining assets, such as the odd mining concession or port, at fire sale prices....

Majia here: Read the article and also how all this is going to lead to WWIII, according to David DeGraw of Amped Status
Here is an excerpt from DeGraw's Article:

"This crisis is the direct result of a strategic economic attack on the existence of a middle class and democracy worldwide. The stock market and economy have become weapons of mass oppression manipulated by an imperial banking cartel to impose order and exploit the masses. This crisis boldly represents the manifest evolution of the fascist spirit reasserting itself as the dominant ideology.

Any fairytale notions of the United States being a democratic republic built on the rule of law have been utterly dispelled. As a nation we have been bred and conditioned to be dangerously naïve to the darker forces which operate beyond the spotlight of the mainstream media. We have been blinded to what has been developing throughout the world.

The economic imperialism that has now blown-back to the United States and Europe has been evolving for decades and can be directly traced back to the end of World War II, to the birth of the CIA, International Monetary Fund (IMF) and World Bank. ..."

Majia Here. The war against workers isn't just happening in the US but is occurring all over Europe as well, as explained my Michael Hudson in a recent article found at Economic Perspectives from Kansas City
Hudson writes: "From Brussels to Latvia, neoliberal planners have expressed the hope that lower public-sector salaries will spread to the private sector. The aim is to roll back wage levels by 30 percent or more, to depression levels, on the pretense that this will “leave more surplus” available to pay in debt service. It will do no such thing, of course. It is a purely vicious attempt to reverse Europe’s Progressive Era social democratic reforms achieved over the past century. Europe is to be turned into a banana republic by taxing labor – not finance, insurance or real estate (FIRE). Governments are to impose heavier employment and sales taxes while cutting back pensions and other public spending..."

MAJIA HERE AGAIN: Meanwhile, the war machine grinds on and the costs associated with (failed) empire building rise, as reported here at BlackListed News, reprinted from Stripes.Com:

"Study: Wars could cost $4 trillion to $6 trillion

The authors of the book "The $3 Trillion War" noted in a conference call on Wednesday that when they first released their findings two years ago, the estimates were widely criticized as being too high. Now, the researchers believe they may have been too low.

Joseph Stiglitz, who received the 2000 Nobel Prize for Economics, and Linda Bilmes, a public policy professor at Harvard University, said the number of veterans seeking post-combat medical care and the cost of treating those individuals is about 30 percent higher than they initially estimated. That, combined with increases in the cost of military medical care and the lagging economy, will likely push the true long-term cost of the war over the $4 trillion mark...."

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