Issue #1570 24 October 2012
Austerity rewards the wealthy
As several countries try to pay off huge public debt due to the financial crisis and apply spending cuts – voices of caution say this is “a dangerous idea” because this response indicates there is one set of rules for rich countries and another for poor countries. The financial ship has been taken into dangerous waters by those at the top and they do not suffer from austerity budgets.
Demonstrators rally in Athens to protest austerity measures.
We need to listen to those who have suffered from these budgets: children who only get one chance at an education; the sick and disabled unable to support themselves; and seniors too old to work.
This war on the majority of people intensifies as the call by the global business class for austerity “hides processes of the uneven distribution of risk and vulnerability”. Belt-tightening cannot work. Austerity budgets result in falling incomes which result in less spending. Governments need to borrow to enable more public sector spending.
Western governments, always seeing the glass half empty, are implementing recession policies where they cannot trade out of their difficulties. Jobs and growth cannot be achieved through continued austerity. The idea of “austerity” has emerged from a so-called economic “orthodoxy” that by focusing on state spending sees the solution to the crisis in belt-tightening, cuts in social spending and higher taxes. The idea of “living within our means” persists as a solution. It is a dangerous idea because it does not work.
Governments are not like households or companies. They have a “free lunch” option: they can spend without giving anything up.
More teachers are always needed. Scientific experiments need funding. Bridges and highways need repairing. Infrastructure for new energy sources is required. Demands for austerity and balanced budgets are cruel, unjust, and self-defeating. We need to reverse policies that have allowed the top one percent to seize an overwhelming share of economic growth. Calls for cuts to government debts ignore the fact that many are due to bank bailouts.
Supporters of austerity fail to challenge corporate welfare and tax subsidies for the idle rich, or wars of choice.
Political leaders must overcome the obsession with eliminating deficits. They must use temporary deficits to restart growth. The European Union has misread history and ignored the teachings of John Maynard Keynes who argued for economy expansion through spending and tax cuts during recessions rather than the opposite.
Lessons from history have been brushed aside for ideological reasons. The warnings of many experts about too drastic an austerity program are well founded.
Budget cuts reduce demand for goods and services when they are most needed. By ignoring this, policy makers will deepen, not solve, the financial crisis and millions will suffer needlessly. The working and middle classes have been subjected to a new tyranny in which “there can be only one kind of value, market value; one kind of success, profit; one kind of existence, commodities; and one kind of social relationship, markets. The demand for austerity hides processes of the uneven distribution of risk and vulnerability.” (Henry Giroux)
Austerity rewards the wealthy and imposes poverty, suffering and severe hardship on people marginalised by race, disability and class. The calls for a harsh politics of austerity in the USA have been hypocritical and disingenuous: hypocritical for their support for massive tax breaks for the rich; and disingenuous because the implementation of a market-based agenda imposes the burden of decreased government services and benefits on the backs of the poor, young people, the unemployed, the working class and middle-class individuals and families.
Austerity measures apply to the poor, not the rich, who benefit under policies that produce government bailouts, support deficit-producing wars, tax breaks for the wealthy and deregulation policies that benefit powerful corporations. Calls for shared sacrifices in the name of balancing budgets do not promote justice, equality and the public good. They maximise self-interest, support a culture of organised irresponsibility, and expand the pathologies of inequality, military spending and poverty.
Such policies proliferate a culture of cruelty. They are harsh and brutalising for young people, the unemployed, the elderly, the poor and other individuals and groups that bear the burden of economic recession.
The institutions of capital, wealth and power merge not only to generate vast modes of inequality, but also to inflict immense amounts of pain and suffering upon the lives of the working people.
The politics of austerity is not about rethinking priorities to benefit the public good or work towards a better world but is a war on the poor rather than poverty; on young people rather than those economic and political forces that undermine their future; and, on those considered “other” rather than on the underlying structures and ideologies of various forms of state and individual racism.
The welfare state is ceding to the harsh realities of the punishing state. Social problems are increasingly criminalised; social protections are either eliminated or weakened; increased incarceration of young people where the prison-industrial complex is particularly lethal for poor youth of colour and adults; public schools being modelled on prisons; harsh anti-immigration laws; and policies that bail out financial institutions. The working class are left in a state of poverty, despair and insecurity.
Government support for the poor, unemployed, sick and elderly are derided because they either contribute to an increase in the growing deficit or they undermine the market-driven notion of individual responsibility.
Those same critics defend government support for the ultra-wealthy, the bankers, the permanent war economy, or subsidies for corporations as essential to the life of the nation. As public services are eliminated, health insurance cut and teachers and public workers laid off, corporate profits soar and executives give themselves bonuses.
As the language of privatisation, deregulation and commodification replaces the discourse of the public good, all things public (e.g. public schools, libraries and public services) are viewed as a drain on the market. In addition, inequality in wealth and income expands, spreading like a toxin through everyday life, poisoning democracy and relegating more and more individuals to a growing army of disposable human beings.
A market-driven society is not synonymous with democracy. The privileges of the rich and the corporate elite do more to crush democracy than uplift society. A society that allows the market to constitute the axis and framing mechanisms for all social interactions has not only lost its sense of morality and responsibility but ceded its claim on any vestige of a democratic future.
It is market fundamentalism and its structure of extreme inequality and machinery of cruelty that proves to be a death sentence on democracy.
Greece today is at the epicentre of a horrific assault on working people, the marginalised and on its democracy. They have stood up and protested.
But capital rules. The interests of corporations and financial institutions take precedence over the needs of people and governments are limited to rubber stamping the predatory actions of cut-throat speculators whose only interest is fattening the bottom line for their shareholders. The rising tide of suffering cannot be dealt with by shifting the burden downward.
Civil unrest is the last recourse and natural consequence of austerity – and the only way to deal with this is with brutal crowd control by mobilising security forces to protect gated communities and contain violence in poor areas.
Source: Adelaide Voices (abridged)
Next article – Culture & Life – Winners and losers
Back to index page