Hudson on European Protests

[oddlots]

First!

http://www.counterpunch.org/hudson10012010.html

...the story goes much deeper than merely a reaction against unemployment and economic recession. At issue are proposals to drastically change the laws and structure of how European society will function for the next generation. If the anti-labor forces succeed, they will break up Europe, destroy the internal market, and render that continent a backwater. This is how serious the financial coup d’etat has become. And it is going to get much worse – quickly. As John Monks, head of the European Trade Union Confederation, put it: “This is the start of the fight, not the end.”

[oddlots]

Re: Hudson on European Protests

The money quote from the article my mind is this:

"The reality is that every neoliberal “cure” only makes matters worse. But rather than seeing rising wage levels and living standards as being a precondition for higher labor productivity, the EU commission will “monitor” labor costs on the assumption that rising wages impair competitiveness rather than raise it. If euro members cannot depreciate their currencies, then they must fight labor – but not tax real estate, finance or other rentier sectors, not regulate monopolies, and not provide public services that can be privatized at much higher costs. Privatization is not deemed to impair competitiveness – only rising wages, regardless of productivity considerations."

I think he's right about the very suspect "sacrosanct" nature of FIRE sector profits in the face of their obviously debilitating effect on productivity (i.e., real wealth generation.) Figuring out how this fine substitution came about is the political mystery of our age I swear. (See housing for a start.)

This is really valuable analysis but I really wish he'd right an article about what fiscal policy should look like. How do you avoid the "trap" mentioned above. I just get the sense that he's a half-hearted "fellow traveller" on the Keynsian bandwagon. In other words what is the meaning of sound fiscal policy in Hudson's world?