Clearly, the politics and policies of austerity have been summarily rejected in both France and Greece. Now, of course, comes the hard part: figuring out what a non-austerity approach will look like not only in those two countries but also across the rest of Europe.
Meanwhile, Paul Krugman, who does understand that “the austerity program that has defined being Serious in Europe is an abject (and predictable) failure,” falls into the trap of asserting that the rejection of austerity favors “extremists right and left.” However, if you exactly examine the results of the election in Greece, nothing could be further from the truth: while the fascist right (Golden Dawn) did in fact increase its percentage of the vote and has won seats in parliament for the first time, the majority of the anti-austerity vote went to the non-establishment left: SYRIZA (the Coalition of the Radical Left), KKE (the Communist Party of Greece), DIMAR (the Democratic Left), and OP (the Ecologist Greens). That does represent a shift to the Left.
A similar shift is evident in France, having elected the first Socialist president since François Mitterand.
And one last thought: how ironic that Robert Reich chooses today to announce that “We don’t need socialism. We need a capitalism that works for the vast majority.”
Francois Hollande’s victory doesn’t and shouldn’t mean a movement toward socialism in Europe or elsewhere. Socialism isn’t the answer to the basic problem haunting all rich nations.
Clearly, both Krugman and Reich reject austerity, in Europe and the United States. But it’s also clear the centrist alternative they offer—more economic stimulus and a more equitable sharing of productivity gains—may be left behind by the move to the Left of austerity’s discontents.
It’s interesting, isn’t it, that all the sacred cows of economics are coming forward to warn against “extremism”.
First it was Shiller (he had a video conference in Aussie TV last night, too), now it’s Krugman and Reich.
For Shiller, the problem is financial capitalism, where the emphasis is in the adjective, not in the noun. Fix something here, do some make up there, and presto! the “financial” bit is good as new. It’s not cancer (noun) that kills you: it’s the size (adjective) of the tumour.
I’ll read Reich later.
But Krugman was quite illuminating: extremist is defined in relation to a center of the universe. In that center of the universe a god-like conscience exists… And it’s called Paul Krugman. The failing of the very serious people is that they stubbornly refuse god’s message.