Tuesday, January 31, 2012

Austerian dreams

The Austerians have been driving economic policy in Europe lately, cutting government budgets dramatically in order to eliminate "crowding out" and thus spur economic growth. So has economic growth increased? Erm... No. In fact, much of Europe now is seeing economic collapse on a scale that exceeds the Great Depression, with enormous increase in unemployment and sizable declines in economic output.

So what's the retort of the Austerians? Well, their retort is to lie -- to say that despite huge budget cuts, their retort is to claim that there is no austerity in Europe because the unemployed are receiving unemployment insurance. At which point it's, WTF? Are the unemployed supposed to simply drop dead in the streets from starvation and exposure?

The Hayekian response seems to be, "yes". Or, rather, the actual argument of Cafe Hayek is that the unemployed workers are voluntarily unemployed, they’d have jobs if they only lowered their wages to the point where their value to employers exceeded their wages. I.e., the Great Vacation explanation for the New Great Depression, same one they use for the Old Great Depression. This of course ignores two points: a) that there is a bottom to wages imposed by survival (i.e., people will not voluntarily accept wages that are insufficient to provide basic food, shelter, and clothing), a point explicated further on Angry Bear where it's pointed out that when machines replaced horses for many tasks, the result was mass slaughter of horses whose feeding costs now exceeded their economic worth (i.e., Hayekians want humans whose feeding costs now exceed their economic worth to be slaughtered? Soylent Hayek?) and b) employers won’t hire additional employees at any cost above $0 if there is no demand for their product, because employers are in business to make money, which means having as few people on payroll as possible to meet current demand, which means the only way they’ll hire *at any wage above $0* is if demand increases.

But of course these unpleasant realities don’t happen in the bubble universe that Hayekians live in, where basic biological needs don’t exist and employers are charities. Of course, in *our* universe, neither of those statements are true…

- Badtux the Reality-based Penguin


  1. Um, I'm speechless. Or rather, I'm Internet speechless, since anything I write can come back to bite me. But this concept... that the poor would be less poor if they'd only accept a sub-minimum wage as a normal way of living... I'm speechless out of sheer horror.

  2. It's a nuisance that I'm an atheist. There are a lot of (mostly) Republican politicians I might pray to end in hell...

  3. Hell is an invention by those who belong there to keep us from exacting justice upon them in this world.

    - Badtux the Cynical Penguin

  4. Hell is an invention by those who belong there to keep us from exacting justice upon them in this world.

    I already have a QoD queued up for tomorrow.

    OK it I use this on Friday?

    With attribution, of course.


  5. Of course it's okay, JzB.

    Which reminds me that I didn't get over to your place to comment on your space travel post, just a case of too many things to do, too little time (thus the placeholder posting yesterday)...

    - Badtux the Busy Penguin

  6. I thought maybe you were moonlighting . . .


  7. The Republican end game kinda requires the bottom few percent of the population starving to death on a continuing basis, with a large percent of the surviving bottom population selling themselves into actual, genuine slavery in order to survive.

    But put it to them as a question, and you won't get many of them admitting the truth. Not without internet courage, that is.


Ground rules: Comments that consist solely of insults, fact-free talking points, are off-topic, or simply spam the same argument over and over will be deleted. The penguin is the only one allowed to be an ass here. All viewpoints, however, are welcomed, even if I disagree vehemently with you.

WARNING: You are entitled to create your own arguments, but you are NOT entitled to create your own facts. If you spew scientific denialism, or insist that the sky is purple, or otherwise insist that your made-up universe of pink unicorns and cotton candy trees is "real", well -- expect the banhammer.

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