Monday, 7 May 2012

Austerity Loses Out to Populism

The French have voted against austerity, as have the Greeks. The Brits too had a poke at austerity with the local elections.

What do you do when you have no money in your current account? You rein back on your spending, naturally. But the electorate seems to think this is a bad idea and that government should spend more, purloining cash from whatever sources it can (and that usually means the well off).

Politics does seems to pander to the worst in us, and we therefore get what we deserve - or what we vote for. 

Democracy is fine when there's plenty of money in the kitty, but I can't help feeling that some other form of government is needed it times of crisis. Perhaps the position of dictator, as constituted under the Roman Republic

Unfortunately, the word dictator has come to assume a pejorative connotation, despite it working admirably for 500 odd years under the Roman Republic.

I wonder if Angela Merkel would be willing to accept the position on behalf of Europe?


  1. I seem to remember there was a chap called Keynes who had a different answer to the question "What do you do when you have no money in your current account?"

    1. Alan: Keynsian economics depends on a reasonably sized private sector that's willing to invest. When you have more than 50% of the economy in the public sector - as in Greece and France, and banks which have been told not to lend more than they can afford to lose, then it falls apart a bit. If the government has a bit in the bank, then it's not so bad, but the government gave a huge wedge to the banks to bale them out.

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