By Dr. Selwyn R. Cudjoe
May 09, 2012
Now that Francois Hollande has shattered the consensus around the virtues of austerity, the real question is this: what will American voters do when their turn comes to make a judgment on Barack Obama's stewardship over the last four years. Too many Americans seem to have forgotten the mess that Obama inherited when he took over from George Bush and the unrelieved opposition he has encountered from a Congress and a Senate who are hell-bent on ensuring he fails. It is almost as though the Republicans want to punish Obama for not recovering the jobs that Bush lost in the first place.
Most would remember the obsession with which the Republicans wanted Obama's presidency to fail. As soon as he came into office Rush Linbaugh, their chief ideologue, put it this way: "On January 16th, before he was immaculated [sic), I was the one who said, 'I hope he fails.' You remember all the hell that that causes; and into the first six months of the regime, the stimulus. Everybody was cowed." And, on December 11, 2011, after the most enormous hemorrhaging of the economy, Rush could say: "And now it's time to elect somebody who knows what he's doing. Obama's experiment with socialism [has] failed."
The truth is that we have given the Conservatives the chance to right the economy but they have failed. The French have thrown out Nicolas Sarkozy; the Greeks have thrown out the conservatives even though they have not quite settled on an alternative government; and the English is in the process of throwing out Cameron and his Conservatives, who have driven England into its second recession.
In last week's (May 3) local election in Great Britain the Conservatives and the Liberals lost hundreds of seats while the Labor party made huge gains. The British people, like the French and the Greeks, spoke through their ballots. Ed Miliband, leader of the British Labour Party, observed: "People are hurting. People are suffering from the recession, people are suffering from a government that raises taxes for them and cuts taxes for millionaires. I think that's what we saw last night."
After stifling the UK economy with austerity two years ago and running the UK economy into the ground, David Cameron, the British Prime Minister, said the following: "These are difficult times, and there aren't easy answers. What we have to do is to take difficult decisions to deal with the debt, the deficit and the broken economy that we inherited. We will go on making those decisions because we've got to do the right thing for our country."
And isn't this the question: what is the right thing for the economy.
In 2010, once the Conservatives got into power, George Osborne, the British Chancellor of the Exchequer, announced that he was seeking cuts of up to 25 per cent in government spending to tackle the deficit without giving any thought to growing the economy to get out of the recession. Financial Times commentator Martin Wolf begged Cameron and George Osborne, to pour more money into the British economy. Fiscal tightening, he argued, was not the answer.
In the United States Paul Krugman, a commentator for the New York Times and Nobel Laureate in Economics has been making the same plea. When Obama poured a piteous $700 billion stimulus into the economy, Krugman told him that it was much too small a stimulus. A true disciple of Lord Keynes, he made it known that nothing but generous amounts of dollars would stimulate the economy and get things working again.
On January 1, 2012, Krugman declared that the obsession with reducing the budget deficit is the wrong way to go. Conceding that debt matters, he concluded: "We need more, not less, government spending to get us out of our unemployment trap. And the wrongheaded, ill-informed obsession with debt is standing in the way."
This is what the people of France, England and Greece were trying to say. Obama has been trying to say this across the United States but the Republicans like the conservatives in Europe, all of whom were swept out of office, cling to a belief that all we have to do is to balance the budget, just like a family balances its budget, and all would be well again. It is no wonder that President Obama called the House Republican budget plan "backward," and "thinly veiled social Darwinism…. It is a prescription for decline."
But, as Krugman has pointed out, a family's budget is not quite like a nation's budget. "First, families have to pay back their debt. Governments don't-all they need to do is ensure that debt grows more slowly than their tax base. The debt from World War II was never repaid; it just became increasingly irrelevant as the U.S. economy grew, and with it the income subject to taxation."
As for Britain, it has not balanced its budget for much of the past two centuries. In the United States, the most devastating effects of attempting to balance the US budget were felt during the Hoover administration in the early 1930s. All of which is to say, that the attempt to balance the US budget is a reactionary proposition that bodes no good.
The austerity measures taken by the European governments have left the ordinary people pauperized and enraged. One hopes that they have sent this message to the American electorate. Romney and the Republicans cannot speak their way out of a recession by offering a balanced budget, continue to cut taxes on the rich, and restore military spending by cutting programs for the poor. The only question is this: Are the poor people of the United States listening to what is taking place in Europe?
And, they do not have to be socialists, as Rush Linbaugh suggests, to understand that the proposals of Romney and the Republicans can have the same disastrous consequences as they have in Europe. Obama may lose (and that's a possibility) but if that happens the people of America will suffer the most.
Professor Cudjoe's email address is firstname.lastname@example.org
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