Manhattan Institute for Policy Research.
search  
 
Subscribe   Subscribe   MI on Facebook Find us on Twitter Find us on Instagram      
 
 
   
 
     
 

National Review Online

 

Re: The Debate Over Austerity Continues

May 08, 2012

By Nicole Gelinas

Also, "austerity" continues to mean bailing out banks, with governments making no differentiation between protecting small depositors (okay) and protecting sophisticated institutional investors (maybe a paradox, but either way, not okay).

Less than 24 hours after the French election, Spain was putting together a taxpayer-funded rescue package for something called Bankia, according to the FT:

Spain is planning a state bail-out of Bankia, the country’s third biggest bank by assets, in a move likely to involve the injection of billions of euros of public money into the troubled lender.

Is this what politicians think that European voters want to spend their "saved" austerity money on — more bank bailouts?

Why not let the bank’s shareholders and creditors shoulder the losses?

This same topic is going to come up in Ireland, too, and soon, as Irish voters ratify (or reject) the new European treaty at the end of the month. They’ll find find themselves wondering why they are being "austere" partly for the sake of protecting bank investors from market forces.

It’s far from conclusive that European voters are rising up against austerity. They could just as easily be rising up against incompetent austerity — and more bank bailouts.

Ironically, if François Hollande and other newcomers start to question the Western orthodoxy that bank debt equals sovereign debt, they’d be introducing free-market forces — as opposed to socializing forces — into Europe.

And, in the long run, they’d be protecting sovereign debt, too, as it’s getting to the point where using a dollar to prop up a bad bank means not using a dollar to prop up a bad government.

Original Source: http://www.nationalreview.com/corner/299403/re-debate-over-austerity-continues-nicole-gelinas

 

 
PRINTER FRIENDLY
 
LATEST FROM OUR SCHOLARS

Unemployment Is Dropping, Thanks To A Republican Policy That Obama Opposed
Avik Roy, 03-02-15

Why Eric Holder Won't Let Go Of Ferguson
Jason L. Riley, 02-24-15

Affordable For Whom: How Robust Is De Blasio's Housing Plan?
Nicole Gelinas, 02-24-15

DC Streetcars Don't Just Combust --- They Also Congest
Alex Armlovich, 02-23-15

Jamming Up LaGuardia: Andrew Cuomo's Airport Meddling
Nicole Gelinas, 02-22-15

Playing The Specialty Drug Lottery
Ben Boychuk, 02-22-15

Millions Of Americans In Danger Of Losing Key Obamacare Tax Subsidy
Diana Furchtgott-Roth, 02-20-15

Paying For A Movie, Even If You Don't See It
Peter Meyer, 02-20-15

 
 
 

The Manhattan Institute, a 501(c)(3), is a think tank whose mission is to develop and disseminate new ideas
that foster greater economic choice and individual responsibility.

Copyright © 2015 Manhattan Institute for Policy Research, Inc. All rights reserved.

52 Vanderbilt Avenue, New York, N.Y. 10017
phone (212) 599-7000 / fax (212) 599-3494