Ruy Teixeira's post in the Think Progress Ideas symposium on Mark Blyth’s Austerity: The History of a Dangerous Idea:
Arguably, there is no greater obstacle to progressive change than the idea of austerity. Austerity dominates economic policy discussions in Europe, resulting in policies in country after country that ensure continued slow growth (or outright contraction) and high unemployment. These conditions have produced demoralized electorates that lack faith in all politicians, including those on the left, a cynicism that has only been deepened when left parties have attained power and failed to revive growth. In such an environment, progressive change is not possible and the left is reduced to purely defensive actions.
In the US, things are slightly better. Nevertheless, our economic policy discussions are still dominated by variants of austerity. The fiscal cliff deal at the beginning of this year slowed the economy and the sequestered spending cuts are slowing it more. Yet with unemployment still at 7.6 percent, growth projections for the year halved to 1.4 percent and the latest jobs report coming in at an anemic 88,000 jobs created, policy discussion continues to focus on the need to cut the deficit more (despite the fact it has already gone down dramatically) and solve a national debt “crisis” whose effects, if any, are many years away (and may never appear). Of course, such a focus precludes any progressive economic policies, including critically, spending programs that would help revive the economy and invest in our economic future.
How did we get into such a pickle? Does the current mania for austerity make any sense whatsoever? And could the recent discrediting of Carmen Reinhart’s and Kenneth Rogoff’sinfluential pro-austerity paper provide any hope for defusing this mania? Mark Blyth’s timely new book, Austerity: The History of a Dangerous Idea, provides answers to these questions. They are not necessarily comforting ones.