Austerity Has Lost All Credibility & Threatens Social Upheaval

Published on ZNet, by Carl Bloice, May 13, 2013.

When Michael Higgins, the president of Ireland, finished speaking he received a standing ovation from members of the European Parliament. In a stirring April 17 address to the delegates meeting in Strasbourg, he said the continent’s policy makers must not “ignore the fact that European citizens are suffering the consequences of actions and opinions of bodies such as rating agencies, which, unlike parliaments, are unaccountable.”  

“Many of our citizens in Europe regard the response to the crisis in their lives as disparate, sometimes delayed, not equal to the urgency of the task and showing insufficient solidarity with them in their threatened or actual economic circumstances,” Higgins, a left-leaning poet, sociologist, author and broadcaster who holds the largely ceremonial post as his country head of state, continued. “They feel that in general terms the economic narrative of recent years has been driven by dry technical concerns; for example, by calculations that are abstract and not drawn from real problems, geared primarily by a consideration of the impact of such measures on speculative markets, rather than driven by sufficient compassion and empathy with the predicament of European citizens who are members of a union, and for whom all of the resources of Europe’s capacity, political, social, economic and intellectual might have been drawn on, driven by the binding moral spirit of a union” … //

… The April jobless rate for African Americans was 13.2 percent, practically unchanged from 13.3 percent in March. According to Steven Pitts of the University of California Labor Center, “For the nation as a whole, unemployment was 7.5 percent in the month of April; this was virtually unchanged from March when the national unemployment rate stood at 7.6 percent. Among whites, unemployment was 6.7 percent; among Latinos, unemployment was 9.0 percent. Comparable March 2013 figures were 6.7 percent and 9.2 percent respectively.”

In keeping with the usual pattern, the group taking the biggest hit on the jobs front is African Americans between 16 and 19 years old. For them the unemployment rate in April was 40.5 percent, up from 33.8 percent in March for Black female teens, unemployment stood at 37.6 percent, up from 30.9 percent in March). For young black males the unemployment rate was 44.7 percent up from 37.1 % in March.

As Pitts notes, “teen unemployment rates are extremely volatile from month to month.” Yet, it is clear that the catastrophic employment situation for young African Americans shows no sign of improvement.

Over 20 percent of 18-29-year-old African Americans are without a job.

Just in case there was an impression that the May Day appeal by Pope Francis to “give new impetus to employment,” was applicable only to Europe consider this from David Leonhardt of the New York Times May 3: The U.S. “has quietly surpassed much of Europe in the percentage of young adults without jobs. It’s not just Europe, either. Over the last 12 years, the United States has gone from having the highest share of employed 25- to 34-year-olds among large, wealthy economies to having among the lowest.”

Would it really be easy to end “the scourge of unemployment?” in the U.S. economist Paul Krugman asked March 30. “Yes — but powerful people don’t want to believe it. Some of them have a visceral sense that suffering is good, that we must pay a price for past sins (even if the sinners then and the sufferers now are very different groups of people). Some of them see the crisis as an opportunity to dismantle the social safety net. And just about everyone in the policy elite takes cues from a wealthy minority that isn’t actually feeling much pain.”

“The Class of 2013 will graduate into a labor market that is still very weak,” observed Shierholz. “As discussions take place this spring about what to do for these young workers entering a dire labor market, it is important to note that although young workers are a unique group, their currently high unemployment levels do not require a unique solution. The thing that will bring down the unemployment rate of young workers most quickly and effectively is strong job growth overall. Focusing on policies that will generate demand for U.S. goods and services (and therefore demand for workers who provide them) – policies such as fiscal relief to states and substantial additional investment in infrastructure – is the key to giving young people a fighting chance as they enter the labor market during the aftermath of the Great Recession. This would require policymakers to prioritize job creation over deficit reduction.”

“Over 20 million people are in need of full-time work,” wrote Robert Borosage of the Campaign for America’s Future May 3. “Thirty seven percent of the officially unemployed have been out of work for more than 27 weeks. Wages of those who are working are not keeping up with prices. Families are losing their homes. Marriages break under the strain. The young are idled; their hopes crushed. Americans are paying a terrible price for Washington’s folly.”

“A first and urgent task must be to get Europe back to sustainable and fulfilling employment and a return to real growth,” the Irish poet said to the EU Parliament. “There is nothing more corrosive to society and more crushing to an individual than endemic unemployment, particularly among the young. Today there are 26 million people across the Union without work, 5.7 million young people, and 115 million in or at risk of poverty and social exclusion. We cannot allow this to continue.”
(full text).


China and the Euro, on Current Concerns, May 6, 2013;

Destroying the lair of the budget-balancing cretins, on Real-World Economics Review Blog, by Dean Baker, May 13, 2013;

US: Monsanto wins landmark patent case in Supreme Court, on Russia Today RT, May 13, 2013 (with links to related articles and a video, 2.08 min);

Egypt: Shadow government in the making, on Al-Ahram, by Reem Leila, May 8, 2013;

15 percent of the U.S. population is receiving food-stamp benefits, on Real-World Economics Review Blog, by David Ruccio, May 13, 2013.

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