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The Austerity Agenda

By Jeff Berg

28 June, 2010
Countercurrents.org

The essay appended below reveals with a great deal of clarity the not so hidden agenda of the political class here in Canada and throughout much of the world. This agenda properly described as a classic snake oil sales job. The snake oil in question being the bottling and distribution of their newest panacea "prosperity through austerity". Pensions? Too costly. Living wages? Some day of course, just not today. Transition from fossil fuels as the Gulf of Mexico dies? Manana. Sustainable agriculture? Sustainability generally? When we can afford it. Climate change? The silence resounds.

As the author of the essay - Dr. Michael Hudson - properly points out events in the really occurring world long ago revealed the intellectual bankruptcy of the IMF's Structural Adjustment Programs. Something their former Chief Economist, Dr. Stiglitz, got fired for noticing and suggesting may be worthy of study. Not to mention that over 300 years ago John Locke demonstrated categorically that the path to genuine prosperity must avoid the predations of the rentier class.

Harper, Canada's PM, and his ilk instead choose to cheerlead this sector and their behaviour. This despite the fact that it was only a few short months ago that they brought us to the edge of the abyss. Harper chooses instead to turn reality on its head and make the central goal of the economy the health of the banks. In lieu of the rather more sensible - and three century long effort - to make the health of the economy the central goal of the banks. A move, if successful, that will turn the clock back a long way indeed. Mike Harris's regression of Ontario labour laws back to a pre-WWII setting is small beer by comparison.

No country that has followed the IMF austerity program - the economic equivalent of a hair shirt - has ever gotten wealthy from doing so. Alternately pretty much every country that defied this regressive economic program has markedly improved their economic fortunes as a result.

Today at the G20 Canada led the forces agreeing to refashion our economies in the vision that the bankers of the ECB have brought to Latvia: Spending cuts on pensions, education, infrastructure, public transit, health. Unsurprisingly the net result of all this contraction is soaring unemployment and the depression of wages - the latter a publicly avowed goal of all this wreckage.

In addition property values are down 70% and the populace is disallowed walking away from the resulting negative equity. As a result they are drowning in red ink and bound to a life of what can only be described as debt peonage. Like the Mad Queen in what seems increasingly like an Alice in Wonderland world, the bankers who made the mess now thunder with righteous indignation that "Someone must pay!".

The people of Greece are taking to the streets trying to ensure that they are at the very least not the only ones forced to do so. Meanwhile the people of Toronto this weekend are getting their first taste of what is very likely headed their way. I say this as the choice betweeen Harper's Conservatives or Ignatieff's Liberals leaves no electoral way out. Yes people could vote for the New Democratic Party or the Green Party of Canada. Genuinely alternative parties. Canada truly is one of the most blessed countries in the whole wide world. But we all know they won't. Money has done its job all too well, and the people their job all too ill.

Equally unsurprisingly government receipts in Latvia have also contracted massively and so all of this austerity has also failed to "balance the budget". Instead the deficit gets worse. Is there an acknowledgement of the massiveness of the failure of this economic plan as a result? An acknowledgement that not even the single putative goal for all this pain has been achieved? Of course not. Like WMD in Iraq, fixed goal posts are for lesser beings.

But then getting the government out of debt was never the actual purpose to this economic agenda. Far from it. Giving the government over to ruinous debt, and making the public scream in economic pain, are means to an end. Where then other than the private sector are any of us to turn?

The commodification of natural capital and the fire sale of public assets follows next as surely as riots follow riot police. Witness here in my home province of Ontario our in name only Liberal government openly discussing the sale of 20% of our most profitable crown corporations. Or the Mayoral candidates in the city of Toronto, Canada's largest city, that would privatize Toronto Hydro. And this in the wealthiest city, of the welathiest province, of the country that is universally acknowledged to have weathered this financial sector generated economic collapse better than any other OECD nation.

Speaking as someone who works at a restaurant on the corner of Queen and Peter in downtown Toronto. A business that was at the very epicentre of the standoff between police and citizens, and whose Saturday night sales were off by 95%. All set to the accompaniment of two burning police cars. (For this we paid one billion in security costs?) I predict that Harper's plan for the G20 will prove every bit the boost to our societies that this G20 was to Toronto tourism.

Link to Hudson essay: http://www.counterpunch.org/hudson06252010.html
ton confrere,



Jeff Berg is a founding member of Post Carbon Toronto. He is a politically engaged citizen and a freelance writer. Focusing on energy & emissions and their micro and macro implications ecologically, economically and socially. He can be reached at jeffberg@rogers.com www.postcarbontoronto.org