Does this sound familiar?
Central bankers who are so concerned about the threat to their currency that they demand that austerity be imposed upon angry citizens. Political leaders who, facing a deep recession that has led to large-scale unemployment, insist that the only route to recovery is to cut public spending, pay off national debt and impose higher taxes.
How about this?
Economists, doubting the wisdom of bankers and lawmakers, argue that the best way to avoid a decade of lost jobs and economic stagnation is to borrow and spend to promote economic growth. They are ignored in favor of a creed that deems government intervention damaging to business confidence and the self-restoring effects of the market.
Eighty years ago, the coalition government of the British prime minister, Ramsay MacDonald, faced an almost identical set of choices to those now confronting the policy makers who run the euro zone, not to mention the slightly different circumstances challenging U.S. and British economies today.
MacDonald, caught in a world recession and saddled with defending an ailing world trading currency — the pound sterling — clung to what came to be known as The Treasury View, a program of deep public spending cuts and a belief that the market would eventually restore economic growth. The policy didn’t work and its legacy was a lost generation unable to find jobs.
Chief among the critics of the British government was John Maynard Keynes, the economist from King’s College, Cambridge, of whom the philosopher Bertrand Russell said, ‘‘When I argued with him I felt I took my life in my hands, and I seldom emerged without feeling something of a fool.’’
http://rendezvous.blogs.nytimes.com/2012/01/24/austerity-could-again-sow-seeds-of-extremism-in-europe/
Central bankers who are so concerned about the threat to their currency that they demand that austerity be imposed upon angry citizens. Political leaders who, facing a deep recession that has led to large-scale unemployment, insist that the only route to recovery is to cut public spending, pay off national debt and impose higher taxes.
How about this?
Economists, doubting the wisdom of bankers and lawmakers, argue that the best way to avoid a decade of lost jobs and economic stagnation is to borrow and spend to promote economic growth. They are ignored in favor of a creed that deems government intervention damaging to business confidence and the self-restoring effects of the market.
Eighty years ago, the coalition government of the British prime minister, Ramsay MacDonald, faced an almost identical set of choices to those now confronting the policy makers who run the euro zone, not to mention the slightly different circumstances challenging U.S. and British economies today.
MacDonald, caught in a world recession and saddled with defending an ailing world trading currency — the pound sterling — clung to what came to be known as The Treasury View, a program of deep public spending cuts and a belief that the market would eventually restore economic growth. The policy didn’t work and its legacy was a lost generation unable to find jobs.
Chief among the critics of the British government was John Maynard Keynes, the economist from King’s College, Cambridge, of whom the philosopher Bertrand Russell said, ‘‘When I argued with him I felt I took my life in my hands, and I seldom emerged without feeling something of a fool.’’
http://rendezvous.blogs.nytimes.com/2012/01/24/austerity-could-again-sow-seeds-of-extremism-in-europe/
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