Austerity Works

Wednesday 16 May 2012 13:16

It’s time to stop saying austerity doesn’t work. It works very well. It is designed to support incomes. Greece, for example, has just paid 400 million euro  to Kenneth Dart, a man whose fortune was made in disposable cups and who lives in the Cayman Islands. It worked to instal a new form of fascism in Italy in order to avoid the chaos of asking the electorate what they think. It has made the Irish government the most profligate and wasteful government the republic has ever had, giving away 1.2 billion euro to rich people in January of 2012 alone. It is reducing public services, firing public sector workers, strangling public medical care, public pensions, disability care, education, public transport and public investment. It is doing all of this against the will of the electorate in most countries. France has voted against it, Greece has voted against it. Arguably the elections in the other European states represent a rejection of the policies of whatever government was in power when austerity was introduced – nevertheless, austerity plunges on like a machine out of control.

An undernourished child collapses in school? It happens in Ireland. It happens on an even bigger scale in Greece, Spain and Portugal. This is ‘the developed world’. Alongside the report of the Irish incident (see image above) we are offered the chance to win a break in the luxury Aghadoe Heights hotel and spa, an easier way to find love, and the chance to recommend the article to our facebook friends. Is the undernourished child an example of collateral damage? Yes.

So, is she important? No.

Nobody wants to see undernourished children. But then the proponents of austerity don’t see them.

We should ask ourselves who benefits from austerity, and how do they plan to continue to benefit. Clearly, the short-term answer to this question is simple: the rich. Because where the rich are concerned austerity = profligacy. They hope we’ll continue to pay them their percentage but they know that, in the long-term, as economies shrink and the austerity states gradually shrivel, this income stream will dry up. Why could they possibly want that?

Perhaps Italy is the answer. Democracy in Europe and the Anglo-Saxon nations has become a Tweedledum/Tweedledee contest, where right-wing Centre Right governments alternate with right-wing Centre Left governments election after election. But even this is inconvenient. It has required expenses of treasure and spirit on the part of the elites to maintain their power and wealth. It has involved embarrassing hole-in-the-corner transactions with venial politicians and parties and the risk of having to spend time in court or visiting parliamentary enquiries and having, of all things, to justify oneself in public.

It must be remembered that these people are almost never seen in public, and in turn they rarely see ordinary people. Their lives are conducted in secure compounds, their travel in private jets and helicopters, their holidays on private yachts, their social lives in each others estates. What we know of them comes from tittle tattle. When Roman Abramovich briefly breaks cover in Antibes, for example, just off camera is his team of protective Gurkhas commanded by ex-SAS, the closest he comes to meeting ordinary people. His private yacht is the biggest in the world. Building it bankrupted the ancient and famous Blohm and Voss shipyard in Germany. It has a submarine and a disco hall and possibly a missile defence system. In maritime law it is classed as a ship.

So Roman Abramovich does not want to talk to a parliamentary enquiry. He doesn’t even want to have his lawyers talking to a parliamentary enquiry. It’s not that he’s against parliaments, it’s just that they’re so tedious. I imagine Rupert Murdoch is a shining example of what happens to people who meddle in politics.

If only governments were run by bankers. Rich people get on very well with bankers because bankers are, in essence, clients of the rich. Rich people give them money from time to time and bankers are grateful for it. Traditional fascism with all it’s attendant unpleasantness was really a failed experiment. Real fascists can get very nasty and the results are bound to be embarrassing and tedious. Hugo Boss was very lucky to get away with making uniforms for Hitler’s thugs, not to mention IBM making those punch-cards for the gas-chambers. All of that could have gone so badly wrong.

So, all in all, bankers are a better bet than Nazis. Bankers are so much more humble in their ambitions. In many cases all they want to do is play with money – look at good old Al Greenspan (although there was all that weird Ayn Rand stuff). The one thing a banker cannot imagine doing is interfering with the income stream. And traditionally banks have screwed the small man in order to maintain the rich in the manner to which they are accustomed – your local bank in petty matters like transaction charges, and central banks on the grand scale. So Sig. Mario Monti is the world’s first experiment in banker fascism – since the experiments in corporals, colonels and generals has been deemed unsuccessful. He is what is meant by ‘structural reforms’. In terms of international capital, he is the local manager, the Kapo, as it were. And what put him in power? What made his uniform? What punched his card? The need for austerity.  Because if you’re rich austerity is the new profligacy.

Austerity means more poor. But the corollary is richer rich.

When we say that austerity doesn’t work, all we’re really saying is it doesn’t do what we want it to do. We need to get over that.

Austerity works – for them.