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Austerity - The Battle Cry of the 1% - In Search of a More Just World - counterpunch.org
The policies of austerity are not unique to the U.S. They are being enacted internationally. In Europe they have been aggressively put into play for four years. While austerity has been pursued on all continents, this article will focus on Europe and the U.S.
What are the policies of austerity? They involve the
cutting of public investment and services such as education, health care, and retirement insurance. In addition they also include the
privatizing of existing government assets. Public employees suffer
wage freezes or cuts and mass layoffs as part of austerity measures.
Labor laws are revised to empower employers at the expense of employees’ job security, wages, benefits, and voice on the job. And austerity also involves
increased taxes and fees on working class people.
[...] the devastating impact the Great Recession has had on workers internationally with high unemployment rates and a declining standard of living. Today life in Greece has been likened to living under occupation during World War II. Spain and Italy are not far behind. Given this, clearly what benefits the financial powers behind austerity comes at a great cost to the vast majority of people and the health of the economy as a whole.
The truth is that the world economy is not in crisis because of debt. It is because too many have too little to buy what has been created. Without a stronger consumer base the capitalists have no reason to invest in making more commodities and creating more jobs. How are they going to realize a profit if few can afford to buy what is produced? [...]
Aren’t we all in the same boat? Shouldn’t our fortunes rise together?
This myth is what is brought to center stage to justify the fanciful notion of “shared sacrifice” when confronting economic ills. However, it is working people who are doing all the sacrificing while the 1% fattens their shares. The relationship between the ruling economic circles and everyone else is that of predator to prey [...]
If governments were to take a growth approach and provide federal funds to create jobs according to social need, this would result in inflation. While it would be easier for people and governments to pay off debts,
the money paid back to the investors who hold the bonds would be worth less. This is unacceptable to those who hold the purse strings, though such an approach would greatly benefit the vast majority. Austerity is a way of putting a stop to such hopes.
Big business is hoarding trillions of dollars rather than investing these funds in job creating production and services. In the U.S. alone it is estimated that these funds are up to $2 trillion. (1) Without a thriving consumer base, the big business owners have no motivation to invest in goods and services. Without this investment, there will be no thriving consumer base. The economic elite sees no way out of this Catch 22, so they are looking for other ways to enrich themselves.
One way they are doing this is by treating the world economy as an enormous casino. For instance, it has been estimated that the total amount of derivatives being played in the market comes to $1.2 quadrillion — 20 times the amount of money currently in the global economy [...]
The 1% does need to obtain real money from somewhere, however. Productive investment is out of the question for the reasons discussed above.
Austerity is a weapon they can use to muscle their way towards grabbing the vast pools of social capital in government programs meant to benefit working people. Rather than acting as organizers of production, the corporation and bank owners are using austerity to act as parasites, draining the economy as a whole.
Austerity also serves the business elite’s interests at the expense of everyone else in another way.
Without a strong safety net, workers are left in an even more desperate competition with one another to find work. This enables those on top of the economy to depress wages, benefits, and rights since they have a larger reserve of workers to pick from who are willing to take anything.
Finally, austerity is a weapon to weaken the Labor Movement, the first line of defense for working people against corporate greed [...]
Push Back:
Such an aggressive tearing up of social contracts that generations have taken for granted, as is required by austerity, has been provoking a fight back. In Europe this response has taken place at different rates across the continent. Greece is where the struggle is most acute with at least 18 general strikes in the last two years, and many more mass mobilizations against austerity. This example is beginning to spread.
On November 14, a series of Labor protests and political strikes swept across Europe in a coordinated protest called by the European Trade Union Confederation (ETUC). Many millions of people are estimated to have participated in these events. In Spain and Portugal there were national general strikes. Nine million Spaniards stayed at home, or 77 percent of the workforce of the country [...]
A Counter Proposal?:
Frightened by these responses, some leading policy makers, especially in Europe, have been arguing for the need to curb austerity, combining it with growth investment to relieve the downward pressure on their nations’ rebellious countrymen for now. The business magazine “The Economist” put forward this line in the following way when countering the Financial Times pro-austerity writer Gideon Rachman:
“One puzzling mistake Mr. Rachman makes is in implying that the only fiscal alternative to austerity is stimulus; in fact, less austerity is also a decent option.” [...]
“Less austerity” is not a decent option for workers still suffering from the effects of the international economic crisis.
Considering the depth of this crisis and that there is no end in sight that relies on capitalist investment, either fiscal policy will benefit the 1% or workers, not both. Ultimately the outcome will be determined by a showdown between these social forces that will require a fundamental transformation of the political/economic system if workers are to prevail [...]
LINK:
www.counterpunch.org/2012/11/30/austerity-the-battle-cry-of-1/ 
