The economic crisis in Europe is giving the U.S. stock market an excuse to decline. We can ignore all the misinformation and wrong statements about housing prices coming back up, unemployment going down, inflation under control. Actually our economy is still in a deflationary phase, but the detailed picture is so mixed one could make arguments for either situation.
However, there’s no argument about Europe being in trouble, though pundits and analysts tell us it is just Greece, Spain, Portugal, Ireland, maybe Italy… That’s pretty much the whole Southern tier of Euroland, except for Ireland.
The Northern tier keeps calling for austerity to great public opposition. We thought austerity meant cutbacks in government spending. Silly Girl!!! What bureaucrat would call for ANY government entity to cut spending!There has been so much obfuscation over the past several years on this crisis we never could find a really clear explanation of what austerity actually meant.
Thanks to Mish, we have it now. From a CNBC story he linked to, we have the following quote from Matthew Lynn of Strategy Economics, who said,
“… the prescription from Brussels and Berlin is precisely the same as it has been for every other country struggling with the euro. Endure a deep recession. Let unemployment rise. Allow wages to fall until you claw back competitiveness,” he said.”
So, even though it is the governments’ fault that the governments have all that debt they can’t pay because the private sector is suffering from the burdens put on them by the government… the private sector has to pay.
Great. Way to go, burons. We hope you burn in … where ever you go when you lose your cushy jobs. And you will lose your cushy jobs.