The Fallacies and Devastating Impacts of Austerity

Not my core professional competence, but I’m increasingly exasperated by our politicians’ handling of the economic crisis. So I guess I’ll keep updating and expanding this post here as my personal go-to place.

There’ve recently been two studies published on the devastating impact austerity is having on public health, a book and an article in the prestigious medical journal Lancet (links to news articles here and here). While access to care and medication are going down, mental illness, suicide rates and epidemics are on the rise. So cutting back public health spending is leading to a deterioration of public health. Who could have guessed?!?

Unemployment rates in the crisis countries are also just horrifying, especially youth unemployment. Essentially, a whole generation is being destroyed in terms of its job prospects. Youth unemployment in Greece is now above 60% and also at similarly devastating levels in the other crisis countries.

And all this pain isn’t even doing what it’s supposed to do, helping to balance public budgets. No wonder, since a lot of people are starting from a wrong diagnosis. Especially Germans like to think that the crisis was caused by profligate public spending in the Southern European countries. Actually, except Greece, all the crisis countries ran pretty solid public budgets before the crisis hit, the BBC has a nice chart here. Spain for instance decreased its debt-to-GDP ratio from about 60% to below 40% in the decade before the crisis.

What actually caused the crisis was an unsustainable economic boom in the private sector, especially the housing sector, in the USA and Southern Europe. Now that the bubble has burst, everybody is sitting on a pile of debt and is forced to pay down that debt, leaving no money for spending or investments. The interest rate would have to be negative to bring desired spending and desired savings into balance. But it is already close to zero and obviously can’t get below. In such a situation, public spending doesn’t crowd out private spending, instead it utilises resources that otherwise would lie idle. Even the IMF’s chief economist now says that under current conditions it’s counterproductive to cut back government spending. Under current conditions, each euro of public spending cut leads to a decrease of GDP of more than one euro. Austerity therefore just further depresses GDP and thus the tax base and thus worsens the debt position instead of improving it. As has been amply borne out by the experience over the recent years, the sharper the austerity has been in a country, the sharper the drop in its GDP.



The Rave Reviews Joe Romm’s New Book “Language Intelligence” Is Getting Are Fully Justified

Joseph Romm is the mind behind the indispensable “Climate Progress” blog. And he’s an avid student of rhetoric and has just published a book on how to improve your “language intelligence” in six steps:

  1. Use short, simple words. Short words win. Never use a long word if a shorter one will do.
  2. If you don’t repeat, you can’t compete. This includes repetitive figures of speech such as alliterations, anaphoras, chiasmus (“Ask not what your country can do for you, but what you can do for your country”) etc. Repetition is not only the mother of memory but also of persuasion.
  3. Master irony and foreshadowing – the twist we can’t resist.
  4. Master metaphors. Metaphors are missiles aimed at the hearts of your audience.
  5. Use extended metaphors for big tasks.
  6. If you want to avoid being seduced, learn the figures of seduction. If you want to debunk a myth, do not repeat that myth.

There’s already quite a number of excellent reviews out there, such as this one on the equally indispensable “Skeptical Science” website, so I won’t add another one to the pile. I’ll just say that I read the book through in one go (in addition to being very well written it comes in at an easily digestible 231 pages) and that I’ll add the paper version to the Kindle version I now have. And luckily I have Shakespeare’s complete works on my shelf to turn my attention to next.

You can also get an impression of what’s in there at Romm’s other blog,

Republicans Vote To Repeal Obama-Backed Bill That Would Destroy Asteroid Headed For Earth

WASHINGTON—In a strong rebuke of President Obama and his domestic agenda, all 242 House Republicans voted Wednesday to repeal the Asteroid Destruction and American Preservation Act, which was signed into law last year to destroy the immense asteroid currently hurtling toward Earth.

You just gotta love The Onion.

Video: Ökosex’ Weihnachten ohne Atom

Jedes Jahr wieder gut.

Impressions from the 20th Anniversary Conference of the Wuppertal Institute

Update 19.10.2011

Some of the conference presentations (all in German) can now be viewed at the conference website or at the Wuppertal Institutes YouTube channel. Photos from the conference are now available on the Wuppertal Institute’s Flickr stream.

Video: Wuppertal Institute in 60 Seconds

Original Post

The Wuppertal Institute was founded 20 years ago and yesterday hosted a major conference to celebrate. The conference took place in Wuppertal’s Historische Stadthalle, an opulent building from 1900. One of the jewels Wuppertal has left from it’s glory days of being one of the first centres of industrialisation in Germany and home to companies such as Bayer.

Töpfer: The process is key

The keynote was delivered by former German environment minister and former UNEP executive director Klaus Töpfer. Among other things he highlighted that democracy means to think in alternatives – the opposite of the claim that “there is no alternative (TINA)” which policy makers frequently like to employ to ram through their favoured approaches. But he also expressed a dislike for holistic approaches because these might also quickly turn into TINA. Instead, approaches should be scaled down and small iterative steps be taken in order to be able to quickly change course if necessary.