Real Issues and Real Solutions (Or perhaps for us, the realization that there are none)

Observations on “No alternative to austerity? That lie has now been nailed”
Article in The Guardian, Thursday 24 August 2017 06.00 BST, by Owen Jones

Portuguese economic revival under socialists

News in the United States is, for the most part, at best somnambulant.  Rumors of its death may be premature but, for now, all we get is neoliberal and neoconservative propaganda approved by the infinitesimal minority that controls both major political parties as well as the mainstream media and the Deep State (ironically, a rather shallow conglomeration).  Most of our purported news these days has to do with both blatant and subtle, both direct and indirect efforts to overthrow the government of President Trump who had the audacity to get elected when he was only supposed to run an ineffective, low budget campaign, clearing the red carpet for the election of the pre-selected and pre-approved dowager queen.  That and, of course, creative writing concerning Russian threats to the United States electoral system, the Ukraine and Syria, and quite a bit of material promoting the purportedly essential need for continuous foreign intervention and massive military spending.

Apparently, however, these is real news.  Abroad.  Real news involving real problems and even more amazingly, real solutions, solutions that work rather than endlessly perpetuate the problems they were supposed to resolve.  Owen Jones provides us an example in The Guardian involving the socialist government of Portugal and its rejection of the “Reverse Robin Hood” neoliberal fix for domestic economic problems.

Some context.  As with most of the world, Portugal was economically devastated by the 2007 et. seq. global financial crisis caused by out of control Financialization, a neoliberal inspired phenomena constructed via smoke and mirrors which very efficiently sucked wealth from producers and consumers into the pockets of financial speculators.  Except in Iceland, rather than imprisoning the malefactors, most of the world’s governments engaged in an orgy of attempting to squeeze blood out of stones (us) in order to provide the villains with the transfusions (our money) that would lead them back to vampire-like health.  Almost all such programs were characterized by drastic austerity imposed on the citizenry (except, of course, the very wealthy, hence the Reverse Robin Hood sobriquet).  In Portugal, during “a two-year period” of classical neoliberal forced austerity under a very neoliberal friendly Conservative governing coalition, “education spending [had] suffered a devastating 23% cut. Health services and social security [had] suffered too. The human consequences were dire. Unemployment peaked at 17.5% in 2013; in 2012, there was a 41% jump in company bankruptcies; and poverty increased. All this was necessary to cure the overspending disease, went the logic.” Of course, it wasn’t working (except, again, for the very wealthy, bankers and investors).

In reaction, during 2015, the Portuguese people, somehow awake, threw the rascals out and elected a Socialist Party led leftist coalition which, rejected the prior Conservative government’s acquiescence to International Monetary Fund and World Bank and investor demands that every possible penny be sucked out of programs designed to attain the common welfare, including wages, salaries, benefits, infrastructure, retirement pensions, etc., and its imposition of pennies on the dollar privatization of state industries which made a very few, very happy.  Instead, the Socialist and leftist alliance led by Prime Minister António Costa has to some extent followed the Icelandic recovery model.  Determining that

Cuts suppressed demand … [and that] … for a genuine recovery, demand had to be boosted[;] … [t]he government pledged to increase the minimum wage, reverse regressive tax increases, return public sector wages and pensions to their pre-crisis levels – the salaries of many had plummeted by 30% – and reintroduce four cancelled public holidays. Social security for poorer families was increased, while a luxury charge was imposed on homes worth over €600,000 (£550,000).

The neoliberal solution had of course been drastically different, apparently based on the medieval medical theory that “bleeding” the patients restores good health.  Of course, when the economic condition of potential consumers is deliberately worsened, the result is less capital available to spend on goods and services which results in increased unemployment which results in even less capital available to spend on goods and services which results in even more increased unemployment, a repeating downward economic spiral, at least for most.

For those with capital the conservative’s neoliberal results had been “a vulture’s feast”, lower wages and the ability to pick up state owned industries at a fraction of their real value, with the proceeds going, not programs designed to alleviate the resulting poverty but to enrich bankers and investors.  The same had been true of the purported international bailouts.  The proceeds of loans from the pre-reform Scrooge inspired international funding sources (e.g., the IMF, the World Bank and diverse financial consortiums) had gone, … well, … back to other bankers and investors.  Like a thoroughly bled patient, the resulting cadaver of state was to have become a compliant beggar grateful for any crumb that happens to seep through the neoliberal collectors nets.  Just as things ought to have been.  But drat those damned socialists!!!

The results of the revised Portuguese strategy?  As Mr. Jones points out in his article:

By the autumn of 2016 – a year after taking power – the government could boast of sustained economic growth, and a 13% jump in corporate investment. And this year, figures showed the deficit had more than halved, to 2.1% – lower than at any time since the return of democracy four decades ago. Indeed, this is the first time Portugal has ever met eurozone [sic] fiscal rules. Meanwhile, the economy has now grown for 13 successive quarters.

It’s a shame the Greek Syriza party led by once promising leader and then subservient Prime Minister Alexi Tsipras lacked Portugal’s spine.  But then, the Germans have all too frequently been fearsome opponents.  Their tactics may have changed from military to economic, but the goals and consequences tend to be eerily and disturbingly familiar.  Still, tiny Iceland and now, to a lesser but still admirable extent, small Portugal, are demonstrating that economic theories in place since the Great Depression are workable only for the very wealthy, up to now just fine as far as they’re concerned and since they own the mainstream media, the financial institutions and most of the “Western World’s” governments, just fine for us, no matter what we think, feel or suffer.

And the European Union experiment, something that sounded so noble until it was undermined by Germany’s economic conquest of the continent, now lies in disarray.  Not defeated, but perhaps in a Battle of the Bulge state.  Of course, the Germans have probably learned from the devastating losses that followed that brief resurgence during World War II, and are now an integral part of the world neoliberal alliance rather than its principle opponent.  But the world appears to be changing and Iceland and Portugal are only a small part.  Perhaps inconsequential internal rebellions, but on the horizon looms the China led campaign for a new world economic order, one based on a unified Euro-Asian market integrating Europe, Russia, China, Iran, the Middle East and perhaps, even oft ignored Africa and Latin America.  How will Germany react to that?  In its own self-interest by joining it and then, patiently seeking dominance there as well?  Or by following the internally fragmented and apparently suicidal United States; grateful for past support and assistance and the Marshall Plan, although perhaps a bit miffed at the intervention at the end of World War I which led to World War II and disaster.

Of course, in the United States, the mainstream media and both major parties are much too distracted with internal politics to pay much attention to the foregoing.  The dowager queen wants the throne that was oh so close to her grasp, and her minions traverse the horizons shouting “off with his head; off with his head, dammit!!!”  Wall Street and Madison Avenue and Hollywood are still dreaming of profits and war games and wars and of how the dowager queen had promised to continue the run.  And the world marches on, … bemused and a bit confused, but in the back of many, many minds, a question grows: who gets the spoils if the United States falls?

“For want of a message the battle was lost. For want of a battle the kingdom was lost. And all for the want of a horseshoe nail” (proverb of unknown origin).  Might it be that Iceland and Portugal are such nails?  Of course, in the case of our current United States, the messenger (the mainstream media) seems to be either drunk or AWOL, probably both; and the battle is internal rather than external, with victory in any realistic sense improbable regardless of who wins.  Polarization is spreading like a cancer and the likelihood seems that we will consume ourselves, having learned way too little from our first Civil War, other than the importance of bickering over its memorabilia.

So, ….

Is it too late to wake up from our current “Alice in Wonderland” nightmare?  Can we still find that damned nail in time?

I guess, as with everything else, “time will tell” (another proverb of unknown origin).

But it doesn’t look good.

© Guillermo Calvo Mahé; Manizales, 2017; all rights reserved.  Please feel free to share with appropriate attribution.

Guillermo Calvo Mahé (a sometime poet) is a writer, political commentator and academic currently residing in the Republic of Colombia although he has primarily lived in the United States of America (of which he is a citizen).  Until recently he chaired the political science, government and international relations programs at the Universidad Autónoma de Manizales.  He has academic degrees in political science (the Citadel), law (St. John’s University), international legal studies (New York University) and translation studies (the University of Florida’s Center for Latin American Studies).  He can be contacted at or and much of his writing is available through his blog at

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