Capitalist Pundits becoming Socialist Advocates

Posted on November 1, 2011 by

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Paul Klugman

While attending a conference in Reykjavik, Iceland, Op-Ed Columnist Paul Krugman wrote a stunning admission: “Bailing out the banks while punishing workers [was] not, in fact, a recipe for prosperity.” Capitalist pundits are beginning to line up with criticism against socioeconomic policies that are causing such distortions in the economy that the effects of capitalism can no longer be denied or ignored. Conversely as well, socialistic policies are beneficial not only to society, but to the economy.

Krugman reports: “There’s a lesson here for the rest of us: The suffering that so many of our citizens are facing is unnecessary. If this is a time of incredible pain and a much harsher society, that was a choice. It didn’t and doesn’t have to be this way.”

Krugman’s critique compares two opposing choices made by Iceland on the one hand, and Latvia and Greece on the other. These countries, like many others were facing banking disasters and fiscal insolvency. Being pressured by the European Union to introduce extreme austerity measures, Latvia and Greece capitulated to those expectations; Iceland did not.

Socialistic values emerged among the Icelanders. The fact that the banks allowed themselves to get tangled up in risky investments was an issue between the banks and their investors. The Icelanders decided it was not the government’s role to bailout the wealthy elite from their bad decisions, but to protect the working populous from the effects of the Elites’ bad decisions.

As Krugman explains it: “A funny thing happened on the way to economic Armageddon: Iceland’s very desperation made conventional behavior impossible, freeing the nation to break the rules. Where everyone else bailed out the bankers and made the public pay the price, Iceland let the banks go bust and actually expanded its social safety net. Where everyone else was fixated on trying to placate international investors, Iceland imposed temporary controls on the movement of capital to give itself room to maneuver.”

Austerity measures in Latvia have produced a neutral effect on the economy. The neutral effect has been gained at tremendous hardships imposed upon the poor. And, while Greece struggles to maintain a minimal safety net, austerity – thus far – has failed. Yet, American politicians – both Democratic and Republican alike – champion austerity in order to protect the society’s “Most Deserving.”

What is seen being played out is the old myth – Hard Work Will Set You Free. And, the American poor that dreams of someday becoming Rich & Famous defend the old myth as Gospel Truth. History shows hard work does not actually set a populous free. Working harder to placate the insatiable demands of an elite few only depletes the working class of its resources (remember – the Company Store).

Iceland shows a reality that is more compassionate, a success-proven reality expressing the virtues of socialism. As we already quoted Krugman writing: “If this is a time of incredible pain and a much harsher society, that was a choice.” “The suffering that so many of our citizens are facing is unnecessary.” The harshness created by capitalism is a vice so heavy, it is crushing the foundations of society.

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Posted in: General Interest