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Response to JawJaw (Original post)

Tue Mar 15, 2016, 09:43 AM

2. Well, ¡duh! as the cousins would say...

... The social effects of the spending cuts—all ostensibly aimed at reducing the supposedly catastrophic government debt overhang—have been devastating. British universities, which not so many years ago were (as in most of Europe) entirely free, have become among the most expensive in the world. Social housing has been ransacked, subsidies have been cut, and squatting in residential properties was made illegal at exactly the moment tens of thousands were being “decanted” from their homes. To be poor now means to be endlessly assessed, monitored, and surveyed, and almost invariably found wanting. No one really knows how many thousands of people have died as a result of the freefall in government support, but to get just an inkling: between December 2011 and February 2014, the Department of Work and Pensions reported that 2,380 Britons previously on disability support were found dead no more than six weeks after receiving notice that they were having their benefits cut because they had been determined to be “fit for work.”...

... Almost all British economists understood that the gaping deficits of 2008 and 2009 had been caused by the banking crisis, not the other way around. Likewise, anyone paying attention knew that cutbacks of public services to “save money” reduced economic activity, and hence government tax revenues, and so really had the effect of raising, not lowering deficits. Most also understood that deficits weren’t really much of a problem to begin with. But even the opinion of mainstream economists was, suddenly, excluded from public debate. By 2012, even the IMF was issuing statements urging the Tories to lay off. But you’d never learn any of this from the Times, the Observer, or the BBC.
How could such total, lock-step defiance of reality be maintained in a country with a formally free press and highly educated population? To some degree, you find the familiar bubble effect. Politicians, journalists, lobbyists, CEOs, and corporate bureaucrats rarely talk to anyone except each other. They constitute a distinct intellectual universe. Within this universe, economic policies are designed primarily for political marketability; economic science exists largely to provide impressive diagrams and equations to sell them with. Phrases designed in think tanks and focus groups (“free markets,” “wealth creators,” “personal responsibility,” “shared sacrifice”) are repeated like incantations until it all seems like such unthinking common sense that no one even asks what the resulting picture has to do with social reality. True, the bubble logic can be maintained only by a certain studied ignorance of how the economy really works. One 2014 poll discovered, for instance, that 90 percent of sitting MPs, for all their endless debates on the need to save money, didn’t know where money comes from. (They thought it was created by the Royal Mint.)...

... The divorce between consensus and reality has grown so extreme and unworkable that even the technocrats charged with running the system have started to cry foul. In 2014 the Bank of England—its economists apparently exhausted by having to carry out economic policy in a made-up, topsy-turvy world designed only to benefit the rich—issued a statement on “Money Creation in the Modern Economy” that effectively destroyed the entire theoretical basis for austerity. Money, they noted, is not created by governments, or even central bankers, who must be careful not to make too much of it lest they spark inflation; it’s actually created by private banks making loans. Without debt there would be no money. The post-Keynesian heterodox economists, regularly denounced as a lunatic fringe by those commentators willing to acknowledge their existence, were right.

No major news outlet considered this a story; politicians continued preaching their morality tales of the evils of debt exactly as they had before...

/... http://thebaffler.com/salvos/despair-fatigue-david-graeber


Thanks for the OP JawJaw.

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JawJaw Mar 2016 OP
JFKDem62 Mar 2016 #1
LineNew Reply Well, ¡duh! as the cousins would say...
Ghost Dog Mar 2016 #2
Denzil_DC Mar 2016 #3
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