The end of the 'confidence fairy'

[breadandbutterfly]

www.nytimes.com/2012/04/27/opinion/krugman-death-of-a-fairy-tale.html?_r=1

Good articel. Contains a brilliant phrase - "reign of error"
You have to laugh or else you'll cry.

I loved that phrase too - one of those you wish you'd come up with.

Yes, that is sheer brilliance.

I was driving past acres of fields the other day, and it made me wonder. Instead of loaning billions to banks, why couldn't they loan a fraction of that to building companies and get them to build houses and schools and hospitals to get the economy moving, to create employment and to provide better facilities. The building companies would be able to pay them back with interest over a decade or so, and there would be no fancy bonuses for builders as opposed to bankers, and no systemic risks and no more billion dollar bets gone bad that require bailouts.

you are a Keynesian, Claig. Sadly the leaders of Europe have stupidly ignored the lessons of the last great crash, unlike Obama who did use a stimulus package, with the result that the US is doing rather better than us.

(Although to be fair the US has seen massive cuts in public spending at the same time - but in the areas where stimulus has been used, it has worked.)

But that would not be austere, it would bring an end to fear and would raise a cheer, but the austerians say the cost is too dear, we must not encourage the bankers to leave the country or tax their transactions, it is better to keep them here.

They tell us that if we tax their transactions, that it is poor us who will have to pay anyway. But what's new? That's always the way. Rather tax them at source than let them come back to us, cap in hand, after they have backed the wrong horse.

'The conflict is between cutting the size of state spending down to a size where the state income can cover it'

But they didn't cut the spending to the banks, they bailed them out with billions, said it was quantitative easing, to stop the banks from seizing. But what about the people in the rest of the economy, those who don't earn banker bonuses, who are now having to pay?

They bailed out banks, they bailed out Ireland, they spend billions on aid, maybe they could spend some on the people too.

Krugman says it is the end of a fairy tale. He is right.

It is the end of a financial fairy tale of folly. The banking system was exposed, the emperor had no clothes, and as ever, the public was hosed.

And when the public, just like Oliver Twist once before, goes up and asks for more, the austerian turns and says what do you take me for? there is no more, don't you know the score? the bailout took everything you had and more.

Instead of investing in the economy and growing food and planting seeds, the austerian's only answer is to cut and leave the economy like a bed of weeds.

And where is today's Keynes when we need him?
Cometh the hour, cometh the man. I can't see him, maybe you can.

Ed Balls, you say? Go away!

I think we may be seeing the beginning of the end of austerity. The French people have had their say and Hollande is the start of a voice that says the emperor has no clothes. The austerian is on the back foot, saying that austerity is growth. The tide has turned, the mood has changed and the austerian will struggle to put Jack back in the box.

When the public mood changes, it changes fast. When the public looks across the Channel and watches Hollande, and when they hear that if the Euro collapses, that we will be the country worst affected in the whole world, then the public mood change will be like a tidal wave, and unless changes are made and growth becomes a priority, then the Tories risk being swept out of power.

What the hell claig? Exactly how many personalities do you have?

One second you're a rabid Tory, backing austerity measures to the hilt, agreeing with "niceguy's" bullshit about 'we lived beyond our means' blah blah and now you want the government to invest in public infrastructure and spur on growth?

What the hell?! Is it because you're just so damn populist that you go wherever the wind takes your sails?

You're utterly confusing. A bit funny, but utterly confusing.

So do you no longer support the sociopathic Tory scum, now, claig?

I'm also confused by claig's apparent loss of faith in the Tory love, but maybe I'm misunderstanding something.
Really interesting article. I've been fascinated by how much the "socialist" Hollande and Obama seem to agree with each other - do the Republicans realise?

I don't have as many personalities as you do; I only have the one.

I am still a Tory, but that doesn't mean that I think they are right on everything, just on more things than New Labour.

I have never backed austerity. I believe that it was done deliberately to impose cuts on pensions, increase working age and cut living standards in a bid to slow the growth of the people, in order to benefit the elite. I don't think the Tories were responsible for it, they just took over after New Labour left the note saying "sorry there's no money left".

By populist, if you mean that I read the Daily Mail and am with the people, then I make no apologies for that.

I still support the Tories and hope they change and listen to the calls for growth. I think that some of teh leadership is unfortunately out of touch and tehy need MPs like Nadine Dorries in the Cabinet. She understands the people and comes from a working class council house background.

The more I think about it, the worse it looks for the Tories. I think they will be forced to change their policies because Hollande and eventually Merkel will do so. But if they leave it too late, then they will look even more out of touch and as if they got it wrong. The public will not see them as leaders, but as followers of a wrong policy. Once the public lose faith, it will be curtains and we will see the return of New Labour.

claig is the Daily Mail in human form - if she has turned then hope is on our side.

Actually, as long as no-one mentions the environment, claig is quite a leftie, actually. :)

But I never knew claig had aspirations to be Dylan, before. Truly a woman of many talents. :)

I used to think that the Tories would win the next election, but now I have changed my mind. The gamechanger is Hollande. I think he will succeed in partially reversing austerity and creating growth. He will act as a beacon of hope for everyone who wants growth and the way things are going, Cameron will still be talking about the need for austerity. People will contrast the two, and if Hollande is successful, which I think he will be, and also in changing Merkel's mind, then Cameron will lose out.

Before Hollande, I thought that however unpopular Cameron is now, that he would still win. But now that Hollande is here, people have an alternative to look to and listen to, and Cameron may end up charging at the windmill of austerity with Sancho Osborne by his side.

breadandbutterfly asked the question "when are we going to get a British Hollande"?

That is a question that everyone will soon be asking and that Miliband will soon be answering.

Hollande's victory is a gamechanger. They talk about a game of two halves. The first half was about austerity, but the second half will be about growth. Can the present team adapt, stop scoring own goals and give the public something to cheer about?

I found the link to this OP from this article (would love to claim I read the NY Times as well as the UK press, but I'd be lying. )

www.guardian.co.uk/world/2012/may/20/europe-new-leaders-generation-normal

Hope you're right, claig.

Let's hope someone at Labour HQ reads my previous thread on this and we get our British Hollande. We cetainly need one.