Austerity = Inequality

One of the best books I have ever read is called The Shock Doctrine by Naomi Klein.  She attacks the economic theory that austerity is the way to prosperity for all.  On the contrary, austerity, under the banner of supply side economics as proposed by economist Milton Friedman of the University of Chicago, creates inequality and hardship for most people, with more wealth going to the upper class corporate types and less for everyone else.

Naomi calls this economic strategy "disaster capitalism".  The strategy is: 1) Wait for a major crisis; 2) Sell-off pieces of the state to private players (privatize as much as possible); 3) Make these reforms permanent.  In short, create or seize upon economic chaos, create a "shock" to the system because "only a crisis produces real change".

What kind of changes evolve from this "shock doctrine"?  Ease public education requirements to promote charter schools, schools for profit.  Then: tax cuts, free trade, privatization, cuts to social spending, deregulation, vouchers, downsize government, flat tax, and more.  Sound familiar?  Austerity = inequality!

Klein documents this economic mess by citing what is happening in South Africa, Russia, Chile, Iraq, Asia, Argentina, and parts of Brazil.  Then the United States.  Sound familiar?  Austerity = inequality!

The human cost of austerity is unfathomable, its scattered wreckage clear.

Fast forward to the Occupy Wall Street Movement.  The OWSs are on to something.  They are in agreement with Klein's thesis.  Supply side economics is not the full answer to economic growth.  There also needs to be a stronger dose of Keynesian economics, meaning the government needs to insure the equalization of wealth, human stewardship, equal justice, and equal opportunity.  After all, the people are the government, or, the government is the people.  Remember Lincoln's famous dictum: "...that government of the people, by the people, and for the people shall not perish from this earth."  Hmm, was Lincoln on to something?

Corporations, banks, Wall Street, are sitting on between $1.4 and $3 trillion of cash.  Meanwhile, to quote Robert Reich, "In the late 1970s, the richest 1% received 9% of total income and held 18% of the nation's wealth.  By 2007, they had more than 23% of the total income and 35% of the nation's wealth.  CEOs of the 1970s were paid 40 times the wage of the average worker.  Now they are paid 300 times the typical workers' wage."  Austerity = inequality!

This past Sunday, the Memorial to Dr. Martin Luther King, Jr. was dedicated.  He spent his last days in Memphis supporting the efforts of the sanitation workers.  President Obama is out on the stump promoting his Jobs Bill, or now pieces of it since the supply siders nixed it in the House and Senate.

Austerity, according to the supply siders is supposed to equal prosperity.  Austerity, by some magic formula, is supposed to cause a trickle-down effect, creating wealth or at least a sustaining wage for everyone.  On the contrary, austerity = inequality.  Austerity creates a trickle-up effect!  Austerity means prosperity for only the connected, the corporations, the Wall Street barons, the upper tiny minority.  Austerity is economic slavery where the shrinking middle class and growing lower class become serfs of the landed class and the owners.  The rest of us lose our schools, our teachers, our police, our fire fighters, our human services, our Social Security, our jobs, our....

We need an economics of love.  The Gospel lesson for this Sunday is from Matthew 22:34-40 where Jesus talks about the new law, the Greatest Commandment: love of God and love of neighbor.  We are created for each other, to make sure everyone has enough.  This Jesus love is not about austerity, but generosity!  Generosity = equality! Generosity = justice!

Peace!
Ron