Winston Churchill once used the phrase, the Locust Years, to describe his government’s reaction to the economic crisis of the early 1930’s.
I believe that Europe’s reaction to the Great Recession has borne an eerie resemblance to the painfully inept response of leaders around the globe to the Great Depression of the 1930’s. And yes, it is as if the locusts have returned to eat away at the very social fabric and social safety net that our parents generation worked so hard to create.
Governments throughout Europe and right-wing conservatives in America claim that the only way to return to economic prosperity is to have a program of economic austerity. Even moderates have bought into the idea that we can not afford to continue the way we are and that we have must cut and cut some more.
The more you cut, the worse things get. The more people that you lay off, the less revenue you bring in, the less revenue that you have the more you think that you need to cut to balance the budget. The result of such austerity is downward momentum instead of growth. Nothing that you can do will change the outcome, austerity does not work and it will never work in bad times. Of course, one can certainly understand cutting wasteful spending, spending money on programs that are outdated and no longer are needed but that course of action should take place when times are good. The current strategy has gone way past cutting frivolous spending.
What is Europe’s growth strategy? Where are the ideas to put people back to work? Spain has Depression level unemployment. Unemployment for those between the ages of 18 and 30 is near 50%.
With so many idle hands this is a recipe for revolution. When you have a young generation lacking in hope and opportunity, mischief can ensue.
Keynesian economics provides a proven strategy for improving conditions. It may be counter intuitive but one needs to prime the pump during hard economic times. Government can and has created jobs during our darkest days. In spite of being bogged down by the Great Depression and seemingly without the funds to spend, the United States, became the arsenal of democracy prior to our being attacked at Pearl Harbor. Even though, still beset by the Great Depression, Franklin Roosevelt made sure that people were hired to build airplanes, ships, ammunition and other goods that the allies needed.
Stimulus is needed in Europe not austerity. If one is not careful, there will be a lost generation in Europe. The seeds of fascism are being sown by the lack of urgency to put people to work.
In the United States we have our Tea Party, those who claim we can’t afford to continue with our social programs. They seem to wish to end help to the needy. They act as if those who are hungry and need food stamps are somehow the dirge of society. The Tea Party and many so-called conservative Republicans want to end our social democratic programs like Social Security and Medicare. Theirs is not a plan for growth but rather a plan for pain and a recipe for disaster.
I will not question their motives but the right-wing in this country has done nothing to make things better during the Great Recession. They have become the party of No and No way.
It has taken government stimulus passed by Congress and actions by the Federal Reserve Board to pull us back from the brink of another Great Depression.
We need work on our infrastructure here in the U.S.A. to keep us vibrant as an economy and as a nation. We need to rebuild America.
My daughter lives in England so I would encourage England to work on putting people back to work and to stimulate their economy. I have a vested interest in their success.
We have a much smaller world and we have a mutual self-interest in the success of us all. Austerity is the bane of growth.
A growth policy is what will lead us on the way to a better day. A growth policy is not one that would only increase the wealth of those who are already wealthy. We need to grow the middle class, by improving the quality of the jobs that are available.
Education is a key to growth. I am not talking about just improving our education for those who are college bound. We need training for jobs that do not require a college education. We need training and skills to be able to do the jobs that go wanting because we do not have enough trained workers. We need training for older workers who have lost their jobs due to outsourcing or to robotics and technology.
Our middle class will not regain strength if all of the new jobs are service jobs at $9 per hour. We have the best workers in the world and they need a livable wage.
Businesses spend money to make money. Our government needs to partner with business, and especially small businesses to encourage and incentivize growth. Government has done this in our past and we can do it now to foster growth and prosperity. As Benjamin Franklin might say, do not be a penny wise and a pound foolish. It is not the time to put our collective heads in the sand, but rather it is time to stand tall and have the courage to go forward to our next frontier. In our country’s history, the next mountain or the next frontier has always been our next challenge. We have faced these challenges in the past and we can be successful with the new problems that confront us. The President and Congress need to forget partisan politics and work together to provide the opportunities for future growth and prosperity.