On this week’s episode of On Contact, Chris Hedges sits down with economist Mark Blyth to discuss the detrimental ramifications of austerity programs following the 2008 financial crisis. Professor Blyth, author of “Austerity: The History of a Dangerous Idea” addresses the political effects of the spending cuts and considers why the elites will not take responsibility for the fallout. RT Correspondent Anya Parampil examines the impact austerity measures have had on the American working class and the poor since 2008.
Bailout: Reimbursement to speculators and savers of losses incurred by bad loans, investments or deposits in banks that fail. The effect of this moral hazard is to preserve financial control in the hands of the economy’s wealthiest 10 percent, “making them whole” by shifting the loss onto the bottom 90 percent of the population in order to benefit those at the top of the pyramid (see Rentier and Oligarchy).
For those who are interested in the real world, a look at the actual history suggests some adjustment — a modification of free market theory, to what we might call “really existing free market theory.” That is, the one that’s actually applied, not talked about.
And the principle of really existing free market theory is: free markets are fine for you, but not for me. That’s, again, near a universal. So you — whoever you may be — you have to learn responsibility, and be subjected to market discipline, it’s good for your character, it’s tough love, and so on, and so forth. But me, I need the nanny State, to protect me from market discipline, so that I’ll be able to rant and rave about the marvels of the free market, while I’m getting properly subsidized and defended by everyone else, through the nanny State. And also, this has to be risk-free. So I’m perfectly willing to make profits, but I don’t want to take risks. If anything goes wrong, you bail me out.