Monday, December 3, 2018

Bill Mitchell — IMF Euro hitman in denial of the reality that the monetary union has become

The IMF hitman in Europe, one Poul Thomsem recently published a European Money and Finance Forum (SUERF) Policy Note (October 2018) – A Financial Union for the Euro Area – where he basically told us that any changes that the IMF will allow to occur in the Eurozone architecture will be minimal and will not stop Member States “from being forced to undertake large pro-cyclical fiscal adjustments when the next shock or major downturn hits”. The term “large pro-cyclical fiscal adjustments” means harsh fiscal austerity at the same time as the non-government sector spending in those Member States is collapsing. Fiscal policy thus reinforces the non-government spending withdrawal and worsens the outcome for employment, growth, income generation etc. Why? Because “all member countries” must “respect the Stability and Growth Pact”. End of story. Welcome to the Eurozone dystopia – the world where governments must follow rules set by technocrats which are incapable of delivering sustained prosperity for all but clearly suit the top-end-of-town. He then waxed lyrical about a whole set of neoliberal financial market reforms that the IMF is proposing which will further diminish the capacity of the Member States. But, at that point, he just starts to dream. The Member States are already deeply suspicious of the financial reforms that have been introduced to date, ineffective as they are. They are not about to cede more power to Brussels and Frankfurt any time soon....
Stabilize the EZ financially by destabilizing it socially, politically, and economically. How is that working out for you one wonders, with people taking to the barricades and the old order collapsing as nationalism and populism rise? See below.

Bill Mitchell – billy blog
IMF Euro hitman in denial of the reality that the monetary union has become
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

See also
French authorities have predictably blamed the right-wing for the protests - with interior minister Christophe Castaner denouncing National Rally (*formerly National Front) leader Marine Le Pen of encouraging the violence.

"Marine Le Pen urged people to come to the Champs Elysees, and there are members of the ultra-right putting up barriers," said Castaner, adding "They have responded to Marine Le Pen's call and want to take the institutions of state. We want people to be responsible."
The real cause, however, may be quite a bit more nuanced and a long time coming. As political commentator Kark Sharro suggests in a seven-part tweetstorm, the Yellow Vest movement is "about marginalsation and the impotence felt by ordinary people."
Zero Hedge
Explaining France's Grassroots "Yellow Vest" Movement - And Why It's Spreading Across Europe
Tyler Durden

See also
 As I see it, what was happening ... in the streets, explains the different responses to the two crashes. It was the Left—in the form of political parties (Socialist, Communist, and the left-wing of the Democratic Party), but also labor unions, councils of the unemployed, academics, and so on—that pushed the administration of Franklin Delano Roosevelt and Congress to adopt policies that moved beyond restoring economic growth to fundamentally restructure the U.S. economy (which, of course, continued during and after the war years).*** Nothing similar happened in the United States after 2008. As a result, the policies that were discussed and eventually adopted only meant a recovery for large corporations and wealthy households. Everyone else has been left to battle over the scraps—attempting to get by on low-paying jobs retirement incomes based on volatile stock markets, with underwater mortgages and rising student debt, and facing out-of-control healthcare costs....
Occasional Links & Commentary
Tale of two depressions
David F. Ruccio | Professor of Economics, University of Notre Dame

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