The horizon is not so far as we can see, but as far as we can imagine

European leaders draft a “competitiveness” treaty meant to lower wages and cut pensions

No, I’m not kidding. It includes:

  • a debt brake which will stop countries from deficit spending beyond a target;
  • automatic monitoring which can force pension cuts;
  • a requirement to monitor wages and productivity and to then lower wages if they rise “too quickly”

Every one of these are anti-worker.  The last is a modern version of the bankers obsessions in the 80s and 90s – wage push inflation, which was the idea that inflation is primarily caused by wages rising faster than inflation, so when they do, you must strangle them.  This was a stupid idea at the time, it is even stupider now, when the main inflation problems are commodity price (energy, food, others) driven, and exacerbated far more by huge pools of liquid money at the top than by ordinary citizens having pensions and good wages.

But ultimately the choice is simple: you either tax the top at very high progressive rates or you take it out of everyone else.  Since the rich have more control over the political apparatus than the middle and working classes, they chose to strangle everyone else, rather than themselves.

It’s them, or you.  They’ve chosen you.

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5 Comments

  1. guest

    Why Ireland isn’t bailing out of the European project as fast as it can, I’ll never understand. But looking at most of my faux news watching family, I’m starting to think the Irish are genetically stupider than the rest of humanity. I have no kids. You’re welcome.

  2. Adam Smith

    It is exactly 1848 revolutions. Just like France there is a pushback.

  3. anon2525

    But ultimately the choice is simple: you either tax the top at very high progressive rates or you take it out of everyone else.

    Here’s Felix Salmon quoting Steven Pearlstein:

    All of this is relevant for the US states, of course, which are also locked into a currency union and facing very tough fiscal cuts, as Steven Pearlstein says today:

    Will the pain come in the form of prolonged high unemployment? Or wage and salary cuts? Or reduction in the value of homes and financial assets? Or loss of ownership of American companies? Or price inflation? Or higher taxes? Or reductions in government services and benefits?

    The right answer, of course, is “all of the above.”

  4. anon2525

    The quote, above, is from this posting a few days ago: Austerity’s inauspicious historical precedents

  5. anon2525

    But ultimately the choice is simple: you either tax the top at very high progressive rates or you take it out of everyone else.

    Repeating myself:

    1) Provide a job guarantee (more expansively, Roosevelt’s Second Bill of Rights)
    2) Decide what programs to employee people in (i.e., what problems the gov’t. wants to address)
    3) Decide how to pay for it

    The debate continues to be in the reverse direction, starting with number 3, where it has been easily and effectively stalled (“We can’t pay for anything! We’re broke! Balance the budget! Cut spending! And taxes!”), preventing us from ever getting back to step 1.

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