Want to Restore the Economy? Arrest the Bankers.

Worked like a charm in Iceland

While bankers were being bailed out elsewhere, Iceland arrested theirs. Now Iceland’s economy is recovering faster than the EU and the United States.

Watch the video.  It's not too late to start cuffing the motherfuckers. And confiscating all their money.

But when you do the opposite - when you let bankers skate and hand them the keys to the treasury, then punish the workers who are the bankers' victims by slashing spending - aka austerity - you get Greece and Spain.

 

Down with Tyranny, citing Paul Krugman:

For the past two years, the Greek story has, as one recent paper on economic policy put it, been "interpreted as a parable of the risks of fiscal profligacy." Not a day goes by without some politician or pundit intoning, with the air of a man conveying great wisdom, that we must slash government spending right away or find ourselves turning into Greece, Greece I tell you.Just to take one recent example, when Mitch Daniels, the governor of Indiana, delivered the Republican reply to the State of the Union address, he insisted that "we're only a short distance behind Greece, Spain and other European countries now facing economic catastrophe."

By the way, apparently nobody told him that Spain had low government debt and a budget surplus on the eve of the crisis; it's in trouble thanks to private-sector, not public-sector, excess. But what Greek experience actually shows is that while running deficits in good times can get you in trouble -- which is indeed the story for Greece, although not for Spain -- trying to eliminate deficits once you're already in trouble is a recipe for depression.These days, austerity-induced depressions are visible all around Europe's periphery. Greece is the worst case, with unemployment soaring to 20 percent even as public services, including health care, collapse. But Ireland, which has done everything the austerity crowd wanted, is in terrible shape too, with unemployment near 15 percent and real GDP down by double digits. Portugal and Spain are in similarly dire straits.

So if their is a case to be made to America, it's this. Austerity sucks in times of recession. Don't believe me? Just look at the facts. And ask yourself this. Where is the proof that austerity has worked since the financial crisis hit? You can't find any except through empty words coming out of Germany or conservative hacks like Prime Minister Cameron.

Cameron indicated that Britain's programme of spending cuts, initially planned to take five years, could last until 2020."This is a period for all countries, not just in Europe, but I think you will see it in America too, where we have to deal with our deficits and we have to have sustainable debts. I can't see any time soon when ... the pressure will be off,"

When the Conservative/Liberal Democratic coalition took power in 2010, it introduced an austerity programme of increased spending cuts and tax increases that was intended to finish by 2015.The programme was extended to 2017 late last year, however, and is expected to save the government about 110 billion pounds in total.

His solution is an endless austerity which attacks the people he's supposed to be trying to help. And by the way, it's really not austerity itself that is extending Europe's problems, it's those that prescribe it as a remedy that are killing the economy.

Krugman finishes with this:

So it is time to stop invoking Greece as a cautionary tale about the dangers of deficits; from an American point of view, Greece should instead be seen as a cautionary tale about the dangers of trying to reduce deficits too quickly, while the economy is still deeply depressed. (And yes, despite some better news lately, our economy is still deeply depressed.)

The truth is that if you want to know who is really trying to turn the United States into Greece, it's not those urging more stimulus for our still-depressed economy; it's the people demanding that we emulate Greek-style austerity even though we don't face Greek-style borrowing constraints, and thereby plunge ourselves into a Greek-style depression.

Krugman's too professional to say it, so I will: every analpundit, politician and conservative economist who's flogging austerity, deficit reduction and "entitlement reform" has been proven dead wrong about the economy over and over again. Whereas Krugman has been dead-on right every time since sounding the alarm about the repeal of Glass-Steagall 13 years ago.

They didn't give him the Nobel Prize for nothing.