"The rats are jumping ship"

[ozymandius]

by gjohnsit

If you watched 60 Minutes the other night, you would have heard New Jersey's Republican governor Chris Christie tell us how we have no choice but to slash wages and benefits and lay off thousands of school teachers, police, and firefighters in every state.

You will also hear lots of economists use the phrase "competitive", as in "the American economy needs to be more competitive in the world". What they really mean is that we need to accept lower wages and a lower standard of living. If we do this then it will be "good for us", that there is economic value in this.

First of all, where do economists get the idea that a lower standard of living is a good thing? That concept was developed at the Chicago School of Economics by Don Patinkin. His theories about unemployment and lower wages leading to a healthy economy was embraced by conservative economist Milton Friedman, and caused a great deal of controversy.

There is also the obvious problem of trying to get the economy "competitive" with the rest of the world by vicious job and wage cuts while the entire rest of the world is also engaging in similar austerity measures.

So why are political and financial leaders around the world preparing to engage in an economic agenda that is certain to lead to disaster?

The thing you need to understand is that it won't lead to disaster for everyone.

When it comes to the fiscal problems with the states and cities, all you hear about are greedy, middle-class school teachers and firefighters. The 60 Minutes interview even called their benefits "golden parachutes", as if they can be compared to the multi-billion dollar Wall Street benefits. What 60 Minutes failed to mention was how Wall Street was extracting $4 Billion from the states through financial wizardry. How many teachers and policemen could be paid with that much money?

http://www.dailykos.com/storyonly/2010/12/21/930719/-The-rats-are-jumping-ship

The author, gjohnsit, is a long-time regular diarist at DailyKos.