"There is precisely zero chance of austerity working. It is the same as thinking you can escape from gravity by waving your arms up and down."
“Last week was an awesome warning of where go-it-alone austerity can lead. It produced some brutal evidence of where we end up when we place finance above economy and society. The markets are now betting not just on the break-up of the euro but on the arrival of a new economic dark age. The world economy is edging nearer to the abyss, and policymakers, none more than in Britain, are paralysed by the stupidities of their home-spun economics…
It could hardly be more sobering. Money has flooded out of Spain, Greece and the peripheral European economies. Signs of the crisis range from Athen's soup kitchens to Spain's crowds of indignados protesting in the streets against austerity and a broken capitalism. Youth unemployment is sky-high. Less visible is the avalanche of money flowing into hoped-for safe havens in the US, Germany and even Britain.
We live in the aftermath of one of the biggest financial and intellectual mistakes ever made. For a generation the world, with the London/New York financial axis at its heart, surrendered to the specious theory that lending and financial contracts could grow many times faster than the underlying economy. There was a blind belief that in a free market banks could not make mistakes. Free markets didn't make mistakes – only clumsy bureaucratic states made economic mistakes. Or so they said. Financial alchemists, guided by the maxims of free market fundamentalism, could make no such errors.”…
Read more:
The facts are clear. This cruel austerity experiment has failed
While the human cost of economic stupidity is all too visible, the world's leaders are paralysed by their dogma
http://www.guardian.co.uk/commentisfree/2012/jun/02/austerity-failed-will-hutton/print
See also:
Bank bailout makes Spaniards question their future as euro agonies mount
Spaniards having to tighten their belts find it hard to stomach bailing out banks whose recklessness has brought them to ruin
http://www.guardian.co.uk/world/2012/jun/03/spain-euro-austerity-bailout/print