All Pain, No Gain: A Brief History of “Austerity Program” Massacres & Disasters

[WildNovember]

The DC-Wall Street power circuit has already decided for the rest of us that “Austerity” is the Big Word that will define the 2011 political agency...

Let’s start with the most catastrophic of all austerity programs in history—the one austerity program none of the Austerity Snake Oil peddlers want you to know about. It was the disastrous austerity program tested out in Germany way back in 1930, under Chancellor Heinrich Bruning, himself an austere centrist. The Depression was just spreading around the globe, and Bruning, backed by Germany’s industry titans, believed that Germany would only recover with a strong currency, which he tethered to the gold standard, and a balanced budget through brutal cuts in wages, pensions and unemployment benefits, and hikes in taxes and fees.

Bruning learned austerity as a doctoral student at the London School of Economics—which nurtured and promoted free-market whores like Friedrich von Hayek and the “Austrian School” of austerity favored by today’s ruling class, and piped out to the rest of us through the editorial pages of the Wall Street Journal and the vast libertarian nomenklatura. Bruning applied the von Hayek medicine to Germany, and the resulting backlash was so intense that Bruning suspended parliamentary democracy and ruled by emergency decree, setting a fine example for the next guy who took power.

After just two years of “austerity” measures, Germany’s economy had completely collapsed: unemployment doubled from 15% in 1930 to 30% in 1932, protests spread, and Bruning was finally forced out. Just two years of austerity, and Germany was willing to be ruled by anyone or anything except for the kinds of democratic politicians that administered “austerity” pain. So in 1932’s elections, the Nazis and the Communists came out on top—and by early 1933, with Hitler in charge, Germany’s fledgling democracy was shut down for good....

http://exiledonline.com/all-pain-no-gain-a-brief-history-of-austerity-program-massacres-disasters/

[SammyWinstonJack]

1. ...

:scared:

[WildNovember]

2. More on the Bruning administration

In 1927, German manufacturing was at its postwar high: twenty-two percent above what it had been in 1913. In September 1928 Germany had 650,000 unemployed. In the wake of the great fall of prices on the U.S. stockmarket, lenders from the U.S. gave Germany ninety days to start repayment. By September 1930 Germany's unemployment had risen to 3,000,000. By 1930 Germany's manufacturing had fallen seventeen percent from that 1927 level. Bankruptcies were increasing. Farmers were hurting. Some in the middleclass feared sliding into the lower class. And some in the middleclass blamed the economic decline on unemployed people being unwilling to work -- while hunger was widespread.

In 1930 the parliamentary coalition that governed Germany fell apart, and new elections were held. The biggest winner in these elections was Adolf Hitler's National Socialist Party. From twelve seats in parliament they increased their seats to 107, becoming Germany's second largest political party. The largest party was still the Social Democrats, and this party won 143 seats and 24.5 percent of the vote. Communist Party candidates won 13.1 percent of the vote (roughly 50 times better than the U.S. Communist Party did in 1932 elections), and together the Social Democrats and the Communists were large enough to claim the right to make a government. But Communists and the Social Democrats remained hostile toward one another.

Instead of a left-of-center, socialist government, the president of the German republic, Hindenburg, selected Heinrich Brüning of the Catholic Center Party to form a government. This Party had received only 11.3 percent of the vote -- less than the Communists....

Brüning attempted to restore economic equilibrium by a balanced budget, high interest rates and remaining on the gold standard -- no emergency deficit spending. And the economy continued to slide....

http://www.fsmitha.com/h2/ch16.htm


Brüning's measures were implemented in the summer by presidential decree and made him extremely unpopular among the lower and middle classes. As unemployment continued to rise, his cuts in welfare and reductions of wages combined with rising prices and taxes, increased misery among workers and the unemployed. This gave rise to the quote: "Brüning verordnet Not!" (Brüning decrees need), alluding to his measures being implemented by "Notverordnung".

These effects undermined the support of the Social Democrats for the government and the liberal and conservative cabinet members favoured opening the government to the right...

http://en.wikipedia.org/wiki/Heinrich_Br%C3%BCning

[TheKentuckian]

3. Supporters utterly fail to explain why any of this makes any sense in our present context

They just keep cheering and pointing to what hasn't been cut yet.

[SammyWinstonJack]

5. Sounds like our present and our imminent future.

:scared:

[woo me with science]

6. +1

[Starry Messenger]

4. k&r

[woo me with science]

7. +100000 K&R

[Odin2005]

8. The Austrian School is pretty much pure nuts.

Most of their ideas are BS based on unjustified assumptions that support an assumed concusion, and some of their ideas ARE rational and reasonable, but at the same time they are immoral and disgusting.

Hayek and Mises equating economic planning with Socialism shows that they were ideological hacks.

[jwirr]

9. Thank you. So Milton Friedman did not come up with his idiots

ideas at all. Going on already in the 1920s in Germany. It is interesting that a philosophy we adopted in the 1950s to use on countries in South America is not biting us in the ass. And that EU is trying the game out a second time around. We need to get out of this game - there is no good ending.

Hopefully this is the goal of OWS.

[Warren DeMontague]

10. You'll note there's no 'austerity' for SWAT teams spending tens of millions to arrest pot smokers

For some reason, the giant fucking faucet spewing out huge bucketfuls of taxpayer cash every second hasn't been turned off, there.


http://www.huffingtonpost.com/2011/11/21/drug-war-incentives-police-violent-crime_n_1105701.htm

[sam11111]

11. london S of Econ- I thought it was Socialist. how did it morph to RW....or did it not??

Help

[Jim Lane]

12. LSE is generally identified with the left but didn't thought-police its faculty

LSE was indeed founded by members of the Fabian Society, a British socialist organization. (One of the founders was George Bernard Shaw.) Thereafter, however, it became part of the University of London. It was not an expressly partisan institution. At the time referred to in this thread, its faculty included Friedrich Hayek, one of the leading right-wing economists of the twentieth century, but also included Harold Laski, a notable British Marxist.

I confess I had forgotten that Hayek ever taught there. For this post I boned up with the Wikipedia article on ", where much more detail is available.

[sam11111]

13. hi, really good summary. Just what i wanted. Thank You!

Ps mick jagger went there.

[WildNovember]

14. It was founded by the Webbs, who were *Fabian* socialists with money from

another *Fabian* socialist who was a lawyer.

*Fabian* socialism = the socialism of upper-middle class twits & sometimes of spy-types. We could say it's an establishment response to Marxism or more specifically to the upsurge of working-class activism in the 19th century, beginning maybe with the 1848 revolts.


The Fabian Society is a British socialist movement, whose purpose is to advance the principles of democratic socialism via gradualist and reformist, rather than revolutionary, means. It is best known for its initial ground-breaking work beginning late in the 19th century and continuing up to World War I. The society laid many of the foundations of the Labour Party and subsequently affected the policies of states emerging from the decolonisation of the British Empire, especially India. Today, the society functions primarily as a think tank and is one of 15 socialist societies affiliated with the Labour Party.

http://en.wikipedia.org/wiki/Fabian_Society


Fabian socialism = settlement houses & top-down do-gooding. To put it more clearly, this is the kind of socialism that wants to give charity to the poor and educate them; it wants to ameliorate the worst of the pathology caused by the excesses of capitalism rather than eliminate the cause.

[woo me with science]

15. Kick nt