SARKO’S DEFEAT: GOOD AND BAD NEWS FOR OBAMA Posted by John Cassidy - New Yorker

[tabatha]

For President Obama, the sight of Nicolas Sarkozy, a fellow member of the Presidential class of 2007-2008, being sent packing by French voters will bring mixed feelings. Coming three days after British voters repudiated David Cameron’s Conservative-Liberal coalition in local elections, and on the same day that the Greeks delivered big losses to both major parties in parliamentary elections, the French result was another setback for conservatives and proponents of fiscal austerity. But it also confirms that these are perilous days for incumbents seeking reëlection. Sarkozy is the first French President to be turfed out of the Élysée Palace after one term since Valéry Giscard d’Estaing, in 1981.

As I pointed out on Friday, European defenders of austerity economics are on the defensive. Here in the United Kingdom, where I’ve been staying for the past few days, Thursday’s elections, which saw the Labour Party make sweeping gains in local councils, were widely interpreted as a referendum on the budget-deficit fixation of Cameron and his finance minister, George Osborne. Now, the French have given their verdict on the hair-shirt polices that have tipped both continental Europe and the U.K. into double-dip recessions.

“Austerity no longer needs to be our fate,” François Hollande, the victorious Socialist Party candidate, told a cheering crowd in his hometown of Tulle on Sunday night, and he pledged to bring this message to France’s partners, “first and foremost to Germany.” We’ll have to wait to see whether the new French President will be able to deliver on his promise to provide a “new start for Europe,” but the days when Berlin could automatically count on Paris to back its hard line appear to be over.

When the campaign turns to questions of economics, what is happening in Europe should provide Obama with plenty of arguments with which to flay his opponents. Republicans say they want to slash government spending and focus on the deficit regardless of the immediate economic situation. The Europeans have carried out that experiment, and, to say the least, it hasn’t turned out very well. From this side of the Atlantic, the American economic recovery seems pretty impressive. After more than three years of economic stagnation, most Europeans would gladly take G.D.P. growth of two-to-three per cent and an unemployment rate of eight per cent.


Read more http://www.newyorker.com/online/blogs/johncassidy/2012/05/sarkos-defeat-is-good-and-bad-news-for-obama.html#ixzz1u9oKglXG

[chollybocker]

1. It's like some idiot took the time to log-in to some on-line poll,

and voted "No opinion." In 1,500 words or less. And then got paid for it.

Why TF should I care what some person named John Cassidy thinks?

[joshcryer]

2. Why don't you read their blog and consider whether or not what they think is interesting?

I frankly think that their opinion is perfectly in line with progressives, and he provides interesting insights: http://www.newyorker.com/online/blogs/johncassidy

Apparently they've been writing for The New Yorker since 1995.

[trumad]

15. Because what he said was 100 percent true..

Care to dispute it?

[joshcryer]

3. This is what so many privileged American's don't understand.

We didn't get the same level of bullshit austerity that Europe got. Yes, the Republicans (and Obama's compromising) got us to take a hit, but it didn't come anywhere near what Europe has had to endure.

[dkf]

4. They had a lot more to begin with. They probably haven't got cut to our levels yet.

[joshcryer]

5. EU cut "debt" far too much, the US has been debt spending for a decade due to war economy.

First, the real issue isn't debt per se but the ratio of the debt to the size of the economy.

In their haste to cut the public debt, Europeans forgot the denominator of the equation. By reducing public spending, they removed a critical source of demand at a time when consumers and the private sector are still in the gravitational pull of the Great Recession. The resulting slowdown is worsening the ratio of Europe's debt to its total gross domestic product.

A large debt with faster growth is preferable to a smaller debt sitting atop no growth at all. And it's infinitely better than a smaller debt on top of a contracting economy.

The second big truth they've overlooked is the social cost of austerity. Cutting spending during a time of high unemployment and flat or declining wages doesn't just worsen unemployment. It also removes public services and safety nets that people depend on when times are tough.

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2012/05/06/IN471OBND3.DTL

The stimulus should've been twice what it was. We'd be booming along.

[dkf]

6. I meant they haven't cut benefits to our levels.

Their benefits still outclass ours by a large margin I bet.

[joshcryer]

9. That's quite possible, the key is that for every little cut they did...

...it had twice or more of an impact, imo. Thus the backlash. There are so many articles on Google News about European austerity backlash that it's pretty great.

[Lydia Leftcoast]

7. Should have hastened the withdrawal from Iraq and Afghanistan

and moved that money over to the domestic economy.

All the countries with economic problems have them for different reasons. With the U.S., it's an out-of-control military-industrial complex that wants to pour all resources into war, even if it has to invent wars.

In Greece, the right-wing's favorite negative example, it's lack of tax enforcement plus cooking their books to qualify for the EU.

In the UK, there was a housing bubble collapse (with no Fannie Mae, Barney Frank, or any of the other right-wing targets), extreme crookedness in their financial markets, and maintaining a military complex as if they still controlled 1/3 of the world.

Spain's troubles are partly an echo of the British housing bubble, since vast numbers of Brits bought vacation homes or retirement homes in Spain.

[JDPriestly]

8. All that growth they talk about hasn't trickled down to ordinary Americans much.

Public sector employment and government services are still far too low to serve the needs of the 99%.

And those who have the new jobs in the private sector as well as those who are re-employed in the private sector have often taken pay cuts.

Then there are those who have lost their homes, their small businesses and their faith in their dreams.

To say nothing of retirees who still fear for their pensions, Social Security and
Medicare and what the Republicans have in store for them.

So, the fact that the economic statistics have improved doesn't mean much because, as chart after chart demonstrates, the "improvements" have mostly made the fat cats fatter and left the skinny ones close to starving.

[Skittles]

10. WORTHY OF ITS OWN THREAD

well said, JDP

[tabatha]

11. Good summary.

Hopefully the EU example will make it less likely that what "Republicans have in store for us" happens.

The 99% all over the world should join forces.

I would love to see the day when "libertarianism" goes down in flames. And all selfish, autocratic money hoarders be replaced with more socialistic govts.

[PSPS]

13. 2009 - 2010: 93% of all new income generated in the US economy went to the top 1%.

[idwiyo]

14. +1

Rant ON:

I am sick and tired of "austerity" bullshit. You (as in ref to the government) want austerity? Sure, how about for a change first we get rid of subsidies to oil corps, gas corps, etc, etc, etc? What about taxes (for 1% that is and the corps). Banks bailouts also comes to mind. And military spending of course.
Oh, did I forget to mention that just to show how bloody committed all of you are to the austerity plan, I'd like you cut your own taxpayer funded wages, personal expenses and pension plans to something that closely resembles what rest of the country gets payed and has to live on.
And please, don't bother bleating about "but if taxes are too high all the banks and business will move to <insert exotic destination here>". Let them. After they pay a hefty exit tax and after they are told how much import tax would be applied to their products if they move.

Rant OFF.

[Selatius]

12. As an aside, the headline US unemployment rate of 8% is totally unrealistic. It hides too much.

There are six measures of unemployment published by the Bureau of Labor Statistics. The number often cited in the news media is known as the U3 measure of unemployment. The broadest measure of unemployment the BLS publishes is called U6.

Referencing the current U6 numbers, you get an unemployment rate of about 14%, not 8%. However, even that number hides more unemployment.

Up until the Clinton Administration, everyone who was ready, willing, and able to work but was discouraged because there weren't enough jobs for them were counted in the unemployment numbers. The Clinton Administration re-classified those who had been discouraged for more than a year as having left the labor force entirely, so they are not "unemployed" at all.

If you add discouraged workers who have been discouraged for more than a year, you're looking at anywhere between 15% to 20% unemployment.