Ewald Nowotny, the head of the Austrian Central Bank, has now broken the taboo by stating publicly that the austerity policy applied in the Great Depression of the thirties and the mass unemployment that resulted from this policy gave birth to the rise of national socialism. Since Nowotny is also member of the ECB board, this is a statement that is both courageous as extremely interesting.
Equally interesting (and no doubt also politically ‘incorrect’) is to refer to what happened in economic terms after the Nazi’s seized power. The following graph, taken from a presentation by Richard Koo from Nomura Research Institute needs little further clarification: While the deficit doubled to 10% of GDP by building the tanks and the roads to take the tanks to the rest of Europe, unemployment fell from 30% to almost zero.
The situation today is different in the sense that it’s not German unemployment that is going up (at least not for the time being), it’s the unemployment situation in the ‘deficit’ countries that is dramatic. The key message however remains: The European financial elite, now working in overdrive to establish new treaties and legal procedures that push through brutal austerity policies against the people, should do well to seriously consider these lessons from history.
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It was the last financial crissis that allowed Hitler to emerge from obscurity.
The moderate leaders of the western world have to realize that their time to prove that they can cut it is limited. The extreme left and right are waiting in the wings, and failure will lead to more destruction.
I wish someone would tell these guys that it is time to be more bold in dealing with the current economic crissis. Austerity and stimulus are clasic remedies for business as usuall recesions. The fact that we are half a decade into financial crissis, and the sovereign finances are continuing to deteriorate, despite the fact that both austerity and spending have been tried, should be a wakeup call.
http://zoltansustainableecon.blogspot.com/2012/05/austerity-versus-stimulus-prominent-but.html
The question arises, which “financiers” were pulling Hitler’s strings ? to what end ? and which “financiers” are now pulling by the nose our current “democracies” ??? and to what end ? If I lend money in order to enrich myself and the borrower defaults, it’s tough shit to me. Why can’t the same principal apply to these gnomes instead of enslaving whole nations in order to pay back debts for which ordinary people are in no way responsible ?? am I missing something ?