“The time for austerity is not today,” said the most under-worked guy in DC, Jacob Lew, Obama budget-guy-turned-chief-of-staff on NBC’s Meet the Press on Sunday. “If we were to put in austerity measures right now, it would take the economy in the wrong way.”
Is that Greek for strikes, riots, burning buildings?
The sudden, deliberate introduction of the word “austerity” into the progressive lexicon ought to give the country cold chills as Greece burns. Class warfare might no longer simply be a political metaphor for taxing the rich.
Instead it might be a budget tactic where real violence is employed to give politicians cover to do what they normally would not do, like passing the suicidal 2012 Obama budget.
Any regime that’s willing to threaten seniors with the withholding of social security checks in the debt ceiling debate, could be willing to ratchet up the stakes quite a bit more. Remember these are the folks from Fast and Furious running our country. Violence is not out of the question.
This fragile recovery will either continue kind of sluggishly or it will slow down considerably. And in either case, it’s not a net positive for Obama.
If the economy continues to improve- it won’t, but I’ll get to that in a second- it only makes Obama’s claim for higher spending and higher taxes seem out of place, dated, an emperor leading from behind a fig-leaf.
If the economy slows down, as I think it most likely will, look for the Occupy army to start protesting “austerity” measures in support of Obama’s rhetoric. And this time they won’t be banging drums in a circle.
The only thing that can help Obama is a real crisis of political collapse, like Greece- not unemployment climbing 150 basis points more or less like the U.S. circa 2011.
The images from Greece where politicians are desperately trying to placate the mob looks like a much better negotiating ploy than anything else the Democrats have tried since they regretted passing Obamacare.
That’s why liberal and main stream media outlets are suddenly crying “austerity!”
Hussman's Open Letter to the Fed; The Problem with Bubbles; Textbook Pre-Crash Bubble; Reflections on Not Chasing Bubbles; Integrity vs. Respect | Mike Shedlock