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Angela Merkel: High unemployment is the “price Europe had to pay to become more competitive.” Merkel’s statement that austerity is intended to “ensure the prosperity of our people” is an oxymoron only to those liberal economists who do not see capitalism as a class-based system! “Greek European Commissioner Maria Damanaki recently noted, “‘The strategy of the European Commission over the past year and a half or two has been to reduce the labour costs in all European countries in order to improve the competitiveness of European companies over the rivals from Eastern Europe and Asia.’

June 1, 2013
Once Again Paul Krugman, Once Again!

“Greek European Commissioner Maria Damanaki recently noted, “‘The strategy of the European Commission over the past year and a half or two has been to reduce the labour costs in all European countries in order to improve the competitiveness of European companies over the rivals from Eastern Europe and Asia.’”

Similarly, in her recent keynote speech at the World Economic Forum, Angela Merkel was admirably frank in asserting that high unemployment is, according to the Guardian, the “price Europe had to pay to become more competitive.” Merkel’s statement that austerity is intended to “ensure the prosperity of our people” is an oxymoron only to those liberal economists who do not see capitalism as a class-based system. For, Krugman’s contention that recessions are merely “technical malfunctions” ignores what both politicians and capitalists have long asserted: recessions are “correctives” that reduce the cost of the one commodity that is more adjustable and often more expensive than any other: labor.

Austerity, via slashing social spending and expanding a surplus labor pool that is ever more desperate, achieves its aim via making labor cheap enough so that it can again be profitably exploited by capitalists.

Austerity is neither psychological nor mysterious, unless you are a liberal economist who thinks that – notwithstanding some two centuries of wage labor exploitation – capitalism could “work” for everyone. While Krugman accuses austerity’s proponents of wearing ideological blinders, it is he and other liberals who are guilty of the charge, as they fervently mystify what is, to any dispassionate observer, plain as day. How else to explain the Nobel Prize winning economist’s failure to recognize austerity as embodying that most basic capitalist concept: an investment.”

http://www.counterpunch.org/2013/05/31/austerity-is-confusing-only-to-liberals/

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