€urosclerosis: The Portuguese are revolting!

They’ve lived beyond their means for years, and now they are upset that they can’t do that anymore. From

Portugal Hit by Strike

By Patricia Kowsmann

LISBON—A nationwide strike against austerity measures froze public-transport services, shrank hospital staffs and disrupted trash collection across Portugal on Thursday, but there were signs that fewer people joined in the protest than in the previous stoppage late last year.

CGTP, Portugal’s largest confederation union, was the sole organizer of the general strike, after the second-largest group, UGT, declined to join.

The two confederations differed over how to deal with the effects of the €78 billion ($103 billion) bailout program Portugal is under. UGT signed a labor pact with the government earlier this year.

The labor-reform agreement, a key demand under the bailout, makes it easier and less costly for employers to fire workers. The government said it should make Portugal’s products and services more competitive with those of other countries. CGTP, which refused to sign the pact, said there was a strong response by workers to the strike.

The Keynesians would say that Portugal’s response is all wrong: they should borrow even more, to stimulate their economy, and grow their way out of the problems. The trouble with that is that no one is willing to lend them any more money without European Union loan guarantees.

Austerity is tough, but it’s the only path left. Austerity means reducing the role of government spending in the economy, reducing the unpaid-for benefits that the people receive, and eliminating the goods and services the public receive for which their productivity cannot pay. Things are tough in the United Kingdom, and elsewhere: Belgium, Greece, Italy, Netherlands, Portugal, Slovenia and Ireland are all in recession right now, and Dublin has asked the European Central Bank to delay the payment on an installment, on a €67.5 billion bailout deal from 2010, which is due at the end of this month.

It’s difficult, and it’s a real blow to the European economies which lived beyond their means for so long, but the European economies have to adjust to the new reality, the reality that they can’t live beyond what their production justifies.

And we can’t either. The Portuguese are revolting because they have to take deep cuts to stave off bankruptcy, because that’s what the Eu creditors are demanding to try to soft-land their economy. They have the choice, now, of living with the harsh measures, or going bankrupt and seeing things get much worse. The Irish and the Greeks are facing the same tough choices.

The United States isn’t in their situation, yet, but we are headed in that direction. Secretary of the Treasury Timothy Geithner, in a rare moment of candor — the fact he was testifying under oath might have had something to do with his honesty — admitted to Representative Paul Ryan (R-WI), Chairman of the House Budget Committee, that the Obama Administration had no plan, no plan at all, for dealing with the long-term national debt problem, saying, “We’re not coming before you to say we have a definitive solution to that long-term problem. What we do know is we don’t like yours.”

In the competition of ideas, actually having an idea is superior to not having one at all. It can be argued that the Ryan plan is not perfect, but we are facing a debt crisis which would put Greece’s to shame, and there’s no one who can bail out the United States. If it’s a choice between the Ryan plan and no plan at all, the Ryan plan wins, period.

Barack Obama has been President of the United States for over three years now. He has the resources of the entire federal government available to him, he has the experts at the Treasury Department and the Office of Management and Budget at his beck and call, and they have managed to put together, each year of his Administration, a complicated and detailed proposed budget for the upcoming fiscal year. Yet, after all of that time, even with a presidential election looming, the President and his Secretary of the Treasury and his Administration have not been able to come up with a reasonable plan to deal with our long-term debt problems, have not come up with a plan to keep the United States from going the way of Portugal and Italy and Greece. It’s one thing to come up with a plan with which not everyone will agree; it’s something entirely different to not have any flaming idea what you will do, period. The President has been, quite simply, derelict in his duty.

How can the Democrats seriously ask us to vote for a President and a Party which will not do their jobs?


  1. “The labor-reform agreement, a key demand under the bailout, makes it easier and less costly for employers to fire workers. The government said it should make Portugal’s products and services more competitive with those of other countries. CGTP, which refused to sign the pact, said there was a strong response by workers to the strike.”

    1099 the sons of bitches, and make them their own bosses. Of course that would result in mass suicides among the collectivist kind.

    For them, being a “worker”, doesn’t mean being someone who productively applies force to mass in order to set it in motion and better arrange the material world. It means being a member of a “social class” of persons who have graciously made it known that should the conditions be right, they might be prepared to select from a smorgasbord of time-occupying and remunerative activities which it is someone else’s duty to offer. If they are too humanly defective, as so many lefties are, to successfully negotiate a field of social relations wherein others have the legal option of filtering out the insistently obnoxious, i.e., them, they obviously are entitled, on their view, to a government “job”.

    From their point of view, that works out best anyway.

    These leftist sacks of fleshy collectivist garbage, flee from the burdens of self-direction, like vampires in a cheap romance, from a dose of holy water.

    Grant them “40 acres and a mule and a gun”, and the first thing they would do is turn the gun on their neighbors … or themselves.

  2. DNW’s latest inconsequential rant is aimed, as usual, at the wrong culprit, the productive workers, when it should be aimed at the wealthy elite who are the principle manipulators who have caused us all this economic grief.

    And then our Editor comes along with his austerity approach again, aimed at punishing these same productive workers, while embellishing with tax favors the very class of greedy thugs who put us all into this mess to begin with.

    Here are some thoughts about the impacts of an austerity only plan that must be taken into consideration:

    Macroeconomic Policy Wagers

    One of the key arguments made by the proponents of fiscal austerity, even in a deeply depressed economy, has involved a sort of macroeconomic version of Pascal’s wager. Yes, the more open-minded admit, borrowing costs are very low in the US and the UK. Yes, the arithmetic suggests that cutting spending now will do very little to improve the long-run fiscal prospect. But you never know – maybe the last trillion dollars of spending will be what causes a sudden loss of market confidence, turning you into Greeeeeeece. (Cue scary noises).

    Leave on one side the enormous difference between countries that do and don’t have their own currencies (and debt in their own currencies). Let me instead point out that there are other risks in the world.

    Specifically, if allowing an economy to remain persistently depressed reduces long-run growth prospects — and there’s pretty good evidence to that effect — then austerity in a depressed economy has enormous costs, and may even lead to a vicious circle of shrinking potential leading to even more austerity and so on. Indeed, maybe that’s happening to the Cameron government right now.

    So will the austerians admit that they might be making a terrible mistake, that far from safeguarding the future they may be destroying it?”

    Consider the austerity which the UK is now invoking on her people as a mistake that we do not wish to make ourselves!

    The President’s deficit reduction plan wisely gradually phases out the stimulus for economic growth while gradually phasing in deficit reduction.

    Thus, again, the Editor’s statement that the President has “not been able to come up with a reasonable plan to deal with our long-term debt problems” is simply not true! Moreover, why, as our Editor suggests, repeat the same mistakes that the UK is making as we speak? I don’t get it!

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