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Mark Blyth and Jeffrey Sommers: Austerity – A Dangerous Idea Returns

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Mark Blyth and Jeffrey Sommers: Austerity – A Dangerous Idea Returns


Yves here. Please welcome Mark Blyth and Jeffrey Sommers to Naked Capitalism. They bring some pithy if grim description of how, in classic “never let a crisis go to waste” fashion, Covid-19 is serving in Wisconsin as a pretext to double down on austerity policies.

By Mark Blyth, The William R. Rhodes ’57 Professor of International Economics, The Watson Institute for International and Public Affairs, Brown University and Jeffrey Sommers, Professor of Political Economy and Public Policy, University of Wisconsin-Milwaukee

The past decade delivered powerful lessons in what not to do in an economic crisis. Many countries pursued, or had imposed on them, austerity policies. That is, cutting government spending when the economy tanks in order to balance the books. The idea is that with less spending now, taxes will be lower later on, which will make people feel more confident now, thereby shortening the recession. It’s a nice idea. But it actually makes things worse.

The state of Wisconsin is set to embrace austerity in the wake of Covid-19. March 26th saw metro Milwaukee, the state’s biggest city, declared the 6th highest site for Covid-19 infections in the United States. In response, the state’s Democratic Governor engaged the Legislature to meet the challenge. But Robin Vos and Scott Fitzgerald, respectively heads of the Wisconsin Assembly and Senate, rejected cooperation. Up for grabs was an important State Supreme Court justice seat. The Governor in response gave an emergency order postponing elections until June. The GOP controlled Wisconsin Supreme Court, ironically under orders not to convene at the Court under the health emergency, overturned the Governor’s order. Wisconsinites who had not filed for absentee ballots would have to vote in person, or not at all.

On April 7th once-proud and progressive Wisconsin delivered scenes that seemed inspired by the Book of Revelations. Milwaukee manned only 5 of the normal 182 election sites. Voters, young and old, hale and frail, lined up for blocks and for hours in a day punctuated by hailstorms. Meanwhile, Vos served as election commissioner in a small town not yet hard hit by the virus, fully attired in safety glasses, protective gown, and surgical gloves. Looking more like Hannibal Lecter than an election commissioner, he declared to the press that it was “incredibly safe to go out” and vote. And then, emboldened by an election turned into a deadly farce, on April 8th Vos and Fitzgerald pressed for greater legislative powers to cut education spending during recessions. Yes, you read that correctly.

Massive cuts in education in Wisconsin have already occurred. Many K-12 teachers have left the profession, and the schools are now short of staff. Many university professors departed for better conditions elsewhere. And this was just one part of the austerity already seen; the next round will be worse, and Wisconsin, once the proud home of Robert LaFollette, of William Proxmire and Henry Reuss, of the Progressive Party, Wisconsin the incubator of Social Security and other New Deal programs, is by way of becoming a backwater, stagnant and impoverished. Unemployment remained low – until these past few weeks, only because working age people left the state for better jobs elsewhere.

Austerity now or later, in the pandemic or afterward, is the path to economic suicide. Of course it also belies the promises that President Trump made when he carried the state, and won the presidency, in 2016. There is an irony here, which is that the President’s Republican allies are working hard to make it more difficult, if not impossible, for him to win the state in 2020 – at least in a free and fair election. But as this week’s experience makes clear, free and fair elections are not on the agenda in Wisconsin either. Austerity isn’t just bad economics; it can be imposed, and maintained, only by force, fraud, a campaign based on fear, and the active subversion of democracy in Wisconsin and in America as a whole.

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