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Why Do the Media Provide Cover for Austerity Cranks, Like the Folks Running the EU?


Why Do the Media Provide Cover for Austerity Cranks, Like the Folks Running the EU?

Dean Baker

It’s not uncommon to read new stories that quite explicitly identify economic mismanagement. For example, news reports on the hyperinflation in Zimbabwe routinely (and correctly) attribute the cause to the poor economic management by its leaders. We will see similar attributions of mismanagement to a wide range of developing countries.

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Maybe the media don’t provide cover, maybe they just don’t know anything about economics ( because that is difficult for me and millions of others too. )
But, social programs do help people to spend on buying food and surviving ----but I do not understand companies wanting to screw over their own employees----without realizing that employees with little money don’t and can’t buy very much. from anyone. Without having livable wage—no one can buy a house or a car, or pay for training----it just seems that a serf culture hurts an entire nation and its people. Although, in the short term, it makes the very rich very happy-----but corporate crime breeds crime in all other classes too. Without realizing it greed does eventually take an entire nation down. : (



Because they are in the same club, and a paid part of the problem.
Next question.



“At this point, the advocates of fiscal austerity in the context of economies that are operating well below potential GDP are ignoring a large body of evidence in favor of personal prejudices.”

Ya think?

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Media’s product is STORIES that will produce revenue from sponsors and/or consumers.

They only allow facts and evidence that do not get in the way of a good STORY !



Media companies promote austerity for two reasons;

  1. Growth is difficult when nature is friction rather than free lunch,

  2. A bit more can be squeezed from the masses.



Dean Baker wrote in the article, second paragraph, “One place we will never see the term mismanagement, or any equivalent term, applied is in reference to the austerity imposed on the euro zone countries by the European Commission, acting largely at the direction of the German government.”

In contrast, the financial press that I read has repeated denounced ‘European-style austerity’ and what the European Commission and IMF imposes as outright mismanagement and malicious malfeasance. They will also point out that ‘European-style austerity’ is not the austerity they would recommend.

As an example, austerity was imposed on Greece, despite the resistance of its SYRIZA government. What does Greek style austerity look like? 90% of it was increased taxes, and only 10% was economic reforms. And SYRIZA intends to increase salaries for public employees. (This last should not surprise us, since most of SYRIZA’s political support comes from public employees.)
- Meanwhile, as an example out of Greece’s private sector, a woman running a small bathing suit company had no choice but to lay off all of her staff. She now sews the bathing suits herself during the winter, and sells them herself during the summer.

What would these financial writers recommend instead? Some of them point to Lithuania and Latvia, which took it hard, but are now climbing out of the hole, much better than south Europe is.



And as Dean documented in Rigged, unemployment caused by austerity, visited on those who are ready and able to work, is an intentional decision made by policy makers. This intentional choice is not a necessity. Other choices could be made which would massively reduce unemployment and benefit the economy tremendously. Germany is the example Dean used to demonstrate how partial employment helps society and the economy, and how state intervention through policy that encourages layoffs is a destructive, anti social policy operated by captured governance.
The zealous faith in orthodox, inaccurate, economic beliefs causes more misery than the violent superstitions of the worlds religions. Yet, this normalized tradition dominates without the widespread recognition that unseats its folly and brutality. The myths of economics are manipulative poison.