Translation by Siv O'Neall from article in Le Monde, May 1, 2012
"Nous ne voulons pas mourir dans les decombres du neoliberalisme !"
by Pierre Larrouturou, Member of the organization Roosevelt 2012
Systems often hold longer than we think, but they end up by collapsing much faster than we imagine. "In those few words, the former chief economist of the IMF International, Kenneth Rogoff , sums up the situation of the global economy. As the Governor of the Bank of England, he asserts that "the next crisis may be worse than 1930" ...
The euro area is not well, but the United States and China, often presented as the twin engines of the global economy, are actually two ticking bombs: the total debt of the United States reached 100%* of gross [domestic] product (GDP), the Chinese housing bubble, almost three times larger than it was in the U.S. before the subprime crisis, is beginning to explode.
Given the international context, how can the PS (Socialist Party) and the UMP (Union pour un Mouvement Populaire, the totally misleading acronym for Sarkozy's party, which will now most likely disintegrate after the election debacle) continue any bet on the return to growth? There is one chance in a thousand that this dream can possibly become a reality. "It will be terrible, a socialist leader recently told me. There will be no leeway. Starting in June, the government will freeze expenditures. In a few months the country will be paralyzed by mass demonstrations and, in 2014, we will take a historic beating in the election. "
Is austerity the only solution? Is the Left in power doomed to disappoint? No. History shows it is possible to get out of the "death spiral" in which our countries are now locked .
IN 1933
In 1933, w hen Roosevelt came to power , the United States had 14 million unemployed, industrial production decreased by 45% in three years.
He acted with a determination and speed that revived people's confidence: some laws are presented, discussed, passed and promulgated on the same day. The objective is not at all to "reassure financial markets ", but to tame them.
Its purpose is not to "make sense of austerity", but to rebuild social justice. Shareholders are angry and oppose with all their might the law between deposit banks and investment banks, taxes on the highest incomes or the creation of a federal tax on profits (capital gains).
But Roosevelt stands firm and has fifteen fundamental reforms voted in three months. The catastrophes predicted by the financiers do not occur. Better yet! The U.S. economy has lived very well with these rules for half a century.
What Roosevelt achieved on economic matters was probably not enough (if it had not been for the war economy, the U.S. would have fallen into recession), but the reforms he imposed on banking and taxes have fully achieved their goals.
Until the arrival of Ronald Reagan in 1981, the U.S. economy was operating without having any need of either private debt or public debt.
While, for thirty years, Fordism [1] rules had assured an equitable share of added value between employees and shareholders, deregulation policies have, in thirty years, made the wage share pass from 67% to 57% of the GDP in the OECD countries (Organization for Economic Cooperation and Development), which led to an increase in the public debt -- because consumption and income taxes are the primary financial resources in all countries -- as well as in the private debt, since employees had to borrow to maintain their standard of living.
It is because of unemployment and job insecurity that the wage share has fallen so much in all our countries: unemployment is not only a consequence of the crisis we have been experiencing for five years, it is one of the fundamental causes . We can not get out of the crisis without dramatically attacking unemployment and job insecurity. (emphasis added)
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Siv O'Neall was born and raised in Sweden where she graduated from Lund University. She has lived in Paris, France and New Rochelle, N.Y. and traveled extensively throughout the U.S, Europe, and other continents, including several trips to (more...)
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