Law and Disorder Radio

Rick Wolff Interview – Austerity

Austerity: Why and for Whom? – Rick Wolff

We are very pleased to have with us Professor Rick Wolff to update us on where we’re in this ongoing global capitalist crisis.  Austerity has appeared in the titles of many recent articles on the global capitalist crisis. What is it? Rick Wolff writes in his article titled Austerity: Why and for Whom? the efforts to broaden the recovery beyond one year have failed and that failure has cost Washington trillions in borrowed funds from lenders. Those lenders now demand guarantees that those loans will be repaid to them with interest. The guaranteed demanded by lenders is “austerity.“  To collect this austerity, the banks (lenders) want governments to raise taxes or cut government spending or both.  Economic Recovery for the Very Few by Rick Wolff. An extreme burden imposed on the global economy. Rick asks, Why not collect austerity from tax exempt multinational corporations, churches and private institutions?

Professor Rick Wolff:

  • Governments around the world borrowed enormous amounts of money, never seen before surge of borrowing.  The urgency of the second impending crisis of capitalism, the second major collapse of capitalism in 75 years was so intense, the terror in the ranks of business was so complete, that nobody stopped to worry, just lend us lots of money, take toxic assets off our books and so on.
  • Suddenly, the creditors who are lending to the governments are beginning to get nervous. They’ve been going to the governments and saying we don’t want to be stuck with a debt that your people might not pay back.
  • Lenders:  You either have to raise taxes on your people, save it and put it into a special account which will only be used to pay us interest on the principle or you cut your programs, your public services and put that into the same account.
  • The name of the government’s response to the demand of its creditors is “austerity.”  Imposing on society a severe regimen of rising taxes, or cut government spending to please and satisfy creditors.
  • Yale, a multi-billion dollar corporation with billions of annual income, pays no taxes. Rather than increase the taxes of individual persons, why don’t we do what should have done long ago.
  • Take a look at California, they’re laying thousands and thousands of state employees.
  • No Economic Crisis: Annual world wealth report, the income of the top wealthiest people 2009 rose 17 percent.
  • Banks are the buyers of government debt. The bankers produce a crisis, the government bails them out. The government borrows from the banks to bail them out.   The bankers know there is popular opposition.
  • French action against austerity: trade unions organizing general strike which will close everything in September in France.  Will the pressure rise within US politicians to re-negotiate this debt?
  • The state of Oregon, the democratic party controls both houses of legislature. To pay for the 700 million dollar gap over a 2 year period they raised taxes on business and wealthy people.

Guest – Richard D. Wolff is Professor of Economics Emeritus, University of Massachusetts, Amherst where he taught economics from 1973 to 2008. He is currently a Visiting Professor in the Graduate Program in International Affairs of the New School University, New York City. He also teaches classes regularly at the Brecht Forum in Manhattan.

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