The Politics of Austerity

I hate to sound like a broken record here, but I believe the anti-austerians have it all wrong about the politics of austerity in Europe. Everywhere I look, there is some analysis that takes the statements of policy makers and big investors as evidence that we are seeing a paradigm shift away from austerity. Don't believe it. It isn't true. The only thing we are seeing is the move from front-loaded to back-loaded austerity. It is an attempt to meet the facts on the ground within the existing economic paradigm, nothing more.

For example, a lot of people are making a big deal out of bond guru Bill Gross' attack on austerity in Europe. Business Insider plays this up with its usual overstated headline. But Gross has not changed his tune at all. Look at Bill Gross circa 2011 talking up jobs ...


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