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Home Publications Blogs Beat the Press European Ministers Advocate Austerity as an End In Itself, not to End the Debt Crisis

European Ministers Advocate Austerity as an End In Itself, not to End the Debt Crisis

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Tuesday, 05 March 2013 06:20

The Washington Post began an article on a meeting of the euro zone finance ministers by telling readers:

"European leaders demanded that euro members press on with budget cuts to end the debt crisis."

At this point there is overwhelming evidence that the primary effect of the austerity being demanded by the finance ministers is to slow growth and increase unemployment. As a result of the negative impact on output, the budget cuts lead to little improvement in the financial situation of the affected countries.

Since the evidence shows that the ministers' austerity agenda is not an effective way to deal with the debt crisis it is wrong of the Post to tell readers that this is the motive of the finance ministers. This assertion assumes that the finance ministers have no clue about the actual effect of the policies they advocate. While this may in fact be true, the Post certainly cannot claim to know that the euro zone's finance ministers are completely clueless about economics.

It would have been more accurate to simply report what the ministers claim, for example writing:

"European leaders demanded that euro members press on with budget cuts 'to end the debt crisis.'"

This would made have made it clear to readers that the rationale claimed by the finance ministers bears no obvious relation to reality.

Comments (2)Add Comment
...
written by Roger Bloyce, March 05, 2013 8:57
The quote marks would help, since the motives of the European finance ministers can't be known, but it hard not to conclude that they are utterly clueless about their responsibilities and are directly responsible for an economic catastrophe.
Austerity is the tool of the big corporation
written by FoonTheElder, March 11, 2013 12:51
Austerity is the tool of the big oligopolistic corporation. It helps them create a total lock on low wages. In Europe it is there to start to destroy the unions, just like has been accomplished in the US.

Over the past 30 years, competition has been eliminated to the point that the huge corporations make money in any economy. There is no longer any real competition, just friendly competitors who have no incentive to compete.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

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