Occupied Media, by Noam Chomsky: on Budget & Economy

Austerity in a period of recession makes situation worse

Take the European Central Bank (ECB). There are many economists, Nobel Laureates and others, and I agree with them, who think that the policies that the ECB is following and pursuing-- basically austerity in a period of recession--are guaranteed to make the situation worse. So far, I think that's been the case.

Growth is what is needed in a period of recession, not austerity.

2008 real estate bubble came from increasing role of finance

A: At the root of its occurrence is the major shift in the economy that began to take place in the 1970s. It was escalated radically under Reagan, Thatcher in England and on from there. There was a big growth period in the US, the largest in history, during the 1950s and 1960s. At that time, there was also egalitarianism: the lowest quintile did as well as the highest quintile. That came to an end in the 1970s when there was a shift towards increasing the role of finance in the society. Combined with this were corporate decisions to ship production abroad. It's not a law of nature, again. You can have decent working conditions and production at home and abroad, but they make more profit that way. These decisions greatly changed the economy. One effect of this was that wealth became concentrated heavily in financial industries and that led to concentration of political power that leads to legislation.