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Guest Post: The EU's Anti-Austerity Hypocrites

Tyler Durden's picture




 

Authored by Steve Hanke of The Johns Hopkins University in Baltimore,

The European Union (EU) is still in the midst of an economic slump. Many members of the political class in Brussels claim that fiscal austerity is to blame. But, this diagnosis is wrong.

The EU's problem is one of monetary, not fiscal, austerity. Money matters. Just look at the accompanying chart. Private credit in the Eurozone has been shrinking since March 2012.

Never mind. The EU fiscal austerity bandwagon keeps rolling on with Matteo Renzi, Italian Prime Minister and current President of the EU, holding the reigns. Indeed, Renzi recently went so far as to form an anti-austerity coalition with France and Spain. According to the coalition, its members simply cannot impose further spending cuts. They assert that their budgets have been cut to the bone. This claim is ludicrous.

There is nothing to cut in Italy? Get real. Senior civil servants are being paid over 12 times the national average salary. As for France and Spain, their civil servants are "well paid," too. It's time for the public to stop listening to the EU's anti-austerity hypocrites and start looking at the numbers.

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Fri, 08/01/2014 - 19:37 | 5035733 LetThemEatRand
LetThemEatRand's picture

"Senior civil servants are being paid over 12 times the national average salary."

I thought Draghi made a lot more than that.

Fri, 08/01/2014 - 21:37 | 5036176 JeffB
JeffB's picture

They weren't counting perks, that's for sure.

Sat, 08/02/2014 - 03:44 | 5036892 ConfederateH
ConfederateH's picture

EU bureaucrats get paid tax-free.

Sat, 08/02/2014 - 08:22 | 5037098 schatzi
schatzi's picture

What gets forgotten in this discussion, is that these civil servants need a comfortable lifestyle to hopefully make them less susceptible to bribes, job favours and lobbyists. This line of argument is based on the hope that for most being well off is good enough and greed doesn't dictate their decisions. So my argument may fall flat on its face.

Sat, 08/02/2014 - 10:00 | 5037256 nmewn
nmewn's picture

Well, the issue is, it used to be that "civil servants" took the less lucrative government job in exchange for their own job security, whether they were competent or not. Now its evolved into a more lucrative job WITH job security, WITH bonuses & bribery, whether incompetent or not, with the private sector paying the full freight as always.

As soon as they have mass firings at the VA or IRS I may change my opinion...lol.

Sat, 08/02/2014 - 10:03 | 5037263 Seek_Truth
Seek_Truth's picture

And don't forget the gilded examples of "hard work" these Gubmint "worker" parasites set:

http://m.washingtontimes.com/news/2014/jul/31/feds-accept-bordom-lack-of...

Sat, 08/02/2014 - 10:13 | 5037278 TrustbutVerify
TrustbutVerify's picture

Jail should be a deterrent to corruption even if your pay is decidedly average. 

Fri, 08/01/2014 - 19:42 | 5035753 nmewn
nmewn's picture

Alms, alms for the poor gub-mint worker.

Have pity.

Fri, 08/01/2014 - 19:43 | 5035761 The Alarmist
The Alarmist's picture

It will be interesting to see what happens when they actually try some austerity.  I feel for the poor Greeks, Spaniards, Portuguese, etc., but they are still well ahead of the lifestyle they had prior to accession. 

Fri, 08/01/2014 - 19:45 | 5035767 Smegley Wanxalot
Smegley Wanxalot's picture

I understand the author's point, but without all these overpaid senior civil servants, who would be left to tell us what to do?  Maybe there is an app for it because your average american surely has no idea unless it involves collecting a govt benefit.

 

BTW, USA is above Greece?  Fawwwwwk that.

Fri, 08/01/2014 - 20:33 | 5035958 nmewn
nmewn's picture

"but without all these overpaid senior civil servants, who would be left to tell us what to do?"

(Trembling with rage and trying not to expose my occupation) but I can confirm, government workers are some of THE DUMBEST, most arrogant motherfuckers on the planet.

I had an out of body experience with one just the other day, over a pdf file. I sent A (meaning one) pdf file of ten forms. She wanted something revised and "informed" me that I should send her TEN separate pdf files in the future because its easier on both of us in case of revision...I would only have to delete/replace ONE file.

I'm like...wut?

I swear to God.

Sat, 08/02/2014 - 01:50 | 5036756 Joe A
Joe A's picture

With PDFSAM you can cut up and merge pdf files into/from seperate pdf pages. You can then send the seperate pdfs in a zip file for easy emailing but then I guess you would need to explain them what a zip file is...

Sat, 08/02/2014 - 09:25 | 5037190 nmewn
nmewn's picture

Yeah, I can't even get her to understand one file is still one file, whether its a hundred pages or one. The only thing I can think of is her "work load" is determined by how many files she has to look at.

She'll probably hit her boss up for overtime pay based on how many files she has...she's swamped now you see, she now will have ten files to sort through instead of just the one, containing the very same information...its like a bureaucratic make-busy-work-project or sumpin...lol.

Its amazing, it really is.

Fri, 08/01/2014 - 21:23 | 5036125 Crtrvlt
Crtrvlt's picture

The Greek black market and political kickback scheme has always been and will be alive and thriving

Fri, 08/01/2014 - 19:50 | 5035787 Seasmoke
Seasmoke's picture

What's the highest SS payout ?  That's the highest any public takers pension should ever be. 

Fri, 08/01/2014 - 20:33 | 5035952 Accounting101
Accounting101's picture

So you have a hard on for public pensions? Please provide the name of your employer so those public pensioners know where not to spend their pension dollars. That way the takers will not be be supporting you.

Fri, 08/01/2014 - 21:57 | 5036246 25or6to4
25or6to4's picture

Hey accounting 101 it's both him and his employer who are providing the funds for the pay as you go / underfunded government pension ponzi scames. "Their dollars", you got to be kidding me because " their dollars" they put into the system where in fact spent long ago. It's up to us and our kids to pay for your precious pensions. But hey, that's accounting 101 right?

Fri, 08/01/2014 - 22:40 | 5036375 KnuckleDragger-X
KnuckleDragger-X's picture

SS is not a pension fund, it's a tax and there are two supreme court decisions that say they don't have to pay diddly squat.

Fri, 08/01/2014 - 19:57 | 5035823 The Alarmist
The Alarmist's picture

BTW, the more interesting chart is the ratio of mid- to senior-level Eurocrat salary to the national average.  Eurocrats are actually doing better than their US counterparts, thought that is only because they don't have the same revolving-door benefit that allows their US counterparts to amass staggering lifetime pots of wealth.

Fri, 08/01/2014 - 19:59 | 5035824 lemosbrasil
lemosbrasil's picture

Bull-Market of Dow Jones at the jeopardy.....Yesterday at monthly close, Dow Jones broke an uptrendline of 6 years....6 years !!....more...if we connect the 2 tops of 2000 and 2007, we will reach a new top at 17.000-17.200 now !! So....we had a 2 trendlines to Dow Jones in last 15 years......the 2 trendlines were broken yesterday at monthly close !....see here: http://pracompraroupravender.blogspot.com.br/2014/08/grafico-da-semana-d...

 

Fri, 08/01/2014 - 20:06 | 5035855 WTFUD
WTFUD's picture

There is no nation more vain than the Italian, alas, stupid also.

Sun, 08/03/2014 - 09:15 | 5039992 FlyingDutchman
FlyingDutchman's picture

Unfortunately, there are also simple, nice people living there who would give their shirt away to a stranger in need. (I'm speaking of first hand experience)

They don't know any better, but that doesn't make them bad people deserving a beating like this.

Fri, 08/01/2014 - 20:09 | 5035866 blindman
blindman's picture

quantitative and qualitative make up the domain.
what do the numbers represent? there, the political
nut my friend.

Fri, 08/01/2014 - 20:14 | 5035871 THE DORK OF CORK
THE DORK OF CORK's picture

This article is complete bollox.

The problem with the EU is that  the people inside it work for the machines.(and the people behind them)

Any austerity surplus created after inflicting poverty on  the masses is quickly eaten by new cars which are used by the population to seek scarce money.

They do not get a bottom up capital ration.

Credit is centralized.

The current credit is hyperinflationary in nature yet need not be.

Fri, 08/01/2014 - 20:15 | 5035886 Sudden Debt
Sudden Debt's picture

When I was young, my father told me I could do and be whatever I wanted... But no way I was going to work for the government because those wages sucked bigtime back than.
The moto was: make less now but you'll have a big pension...
15 years later...
And I have friends who work for the government and who make 11K a month, have 57 vacation days and they're home at 5...
And when he'll retire? About 3k net a month.

I work my ass off, I'm taking risk beyond normal to keep my bizz going and when I'll retire, I'll have about 800 euro's a month.

No who's the dumbass in this story?

And every year, those fuckers are getting pay raises you just can't believe!
On average, 150 per month per year extra and when they do the optional exams that doubles.
And exams... Exam google, exam excell, exam cpr... FUCK THIS SHIT!!

Fri, 08/01/2014 - 20:26 | 5035924 THE DORK OF CORK
THE DORK OF CORK's picture

Most jobs either goverment or private have no function other then the need to seek scarce money.

The public or private sector is no different in that respect.

There is need for work in some areas but there is no need for more jobs or stupid working hours.

You most likely burn more capital in your job then what you create....no offence

Fri, 08/01/2014 - 20:34 | 5035945 buzzsaw99
buzzsaw99's picture

all the smart talented people i know started their own business. all the dumb fucks i know went into the gubbermint, all the dumb fucks i know just blindly buy stocks. the dumb fucks ended up taking all the "smart" people's money. it makes me wonder who the dumb fuck really is. if i want to make a killing i need to get a fucking lobotomy.

Fri, 08/01/2014 - 20:45 | 5035995 THE DORK OF CORK
THE DORK OF CORK's picture

 The smart talented people in Europe are simply more dynamic.

This motion may not mean you acheive anything.

They are simply better at picking up euro breadcrumbs.

The dumbest of Micks breaking &  taking rocks out of a field will beat them for net productivity by a wide margin.

Fri, 08/01/2014 - 20:17 | 5035894 Fix-ItSilly
Fix-ItSilly's picture

There's only a problem with mantra spewing economists who can't think for themselves.  Eurozone Private Credit should be under pressure - its population is demographically retiring.

Fri, 08/01/2014 - 20:20 | 5035903 THE DORK OF CORK
THE DORK OF CORK's picture

There is empty villages all over Europe which if had enough local money supply would have a shop and other good stuff.

No need for a car.

No need to export in a manic fashion to pay for its inputs.....

 = Happiness.

Sat, 08/02/2014 - 08:06 | 5037074 what's that smell
what's that smell's picture

the race to the bottom is for cockroaches, austerity ghouls, shock therapists, friedmaniacs, and randroids.

bravo italy!!!

Fri, 08/01/2014 - 20:34 | 5035949 THE DORK OF CORK
THE DORK OF CORK's picture

Europe exports its wine to put into the mouths of people who drive to pointless jobs.

http://www.youtube.com/watch?v=qOs6RdO4H6A

Why scratch the back of man who drives a Tiger Tank ???

"There is no wine"

Fri, 08/01/2014 - 20:37 | 5035953 Kirk2NCC1701
Kirk2NCC1701's picture

When in Rome...

What cagacazzos.  Va fan Culo!

Fri, 08/01/2014 - 20:34 | 5035955 lasvegaspersona
lasvegaspersona's picture

The ECB seems to be taking it's single  mandate seriousy...inflation will not be allowed to exceed 2%. They will not go the way of the dollar. They will not allow politics to ruin the currency. They will not encourage savings of the currency (ZIRP/NIRP is proof). They will be there, when the dollar fails, to serve as a medium of exchange for the world to use until a new system can be formed. They will hold gold on the balance sheet, marked to market, as the new reserve asset....gold will have to have far greater 'purchasing power' to function in this manner. The paper gold market will be allowed to die.

Fri, 08/01/2014 - 20:40 | 5035978 THE DORK OF CORK
THE DORK OF CORK's picture

 @lasvegaspersona

BOLLOX

There is a hyperinflationary spiral happening in Europe right under your nose boy.

You make the mistake of following CB inflation or deflation metrics which absurdly use 1 euro of something against another something.

Most people have a income - they do not have a vast stock of Euros to run down.

The massive and continual losses of purchasing power within the EU project from the very beginning (by whatever means) is hyperinflation.

Fri, 08/01/2014 - 20:54 | 5036029 Accounting101
Accounting101's picture

Right, all those articles posted here on ZH over the last three years about Eurozone youth unemployment rates above 50%, self-immolations and people jumping to their deaths, getting HIV on purpose, etc. because of the economic nightmare that began in 2008 is all just ZH propaganda. There is no austerity in Europe, just a bunch of senior civil servants making 12 times the national average.

I wonder if this asshole Hanke has written a single article concerning the socialization of $23 trillion of private (Wall Street) debt that is now the burden of US taxpayers. This fucking coward is blaming librarians, garbage collectors, teachers and policemen. If you are of similar thought with this asshat, just remember that these civil servants take their wages/pensions and buy the private product you produce.

Fri, 08/01/2014 - 21:21 | 5036117 Seasmoke
Seasmoke's picture

Yeah with my OWN property tax money. Fuck them and fuck you.

Sat, 08/02/2014 - 09:07 | 5037156 Accounting101
Accounting101's picture

Name your employer dumbass! If your retired, then shut the fuck up as you collect Social Security which is decidedly not a pension system.

Sat, 08/02/2014 - 09:37 | 5037216 nmewn
nmewn's picture

Socialist Insecurity is a tax dumbass, there is no money in a shoebox somewhere or maybe you missed it when Obama & that fucktard Timmy Geithner said EXACTLY THAT during "budget negotiations".

There is no money, it was stolen years ago by government employees. Unless you're now going to claim that senators, reps & presidents are not government employees?

 

Sat, 08/02/2014 - 11:05 | 5037413 Accounting101
Accounting101's picture

Obama and Geithner said so! Two Wall Street whores. That's awesome!

Stay away from the topic of Social Security and the Social Security Treasury Fund Account. You obviously have no idea what you are talking about and your above comment is quite embarrassing. I'm sure you don't see it that way but I'm giving you the opportunity to step of the intellectual ledge.

Again, you are not very clever.

Sat, 08/02/2014 - 18:13 | 5038748 nmewn
nmewn's picture

I very much do know what I'm talking about and to save you from being crushed by the reality of assets vs debt (and me when I jump on your sorry ass from this ledge) I'll unpack this bit of Krugmanesque socio-economics nonsense for you.

The taxes paid into The Social Security "Trust Fund" go to people currently drawing out, any remainder is "loaned" to the Federal government and the Federal government issues a non-marketable intra-governmental bond as an obligation to repay plus interest. Do you know what that is? Of course not. Non-marketable means just what the name implies, they are not placed in the open market so participants can place a value as to the "assets" they are supposed to represent.

Do you know what the assets they represent are? Its now a debt, the money is gone, spent by the Federal government, with an IOU placed in the till.

Further along, what is the Federal governments "on the books" debt?  Its seventeen trillion isn't it Mr.Accounting101?

That is why Obama & Geithner said that without raising the debt ceiling they couldn't guarantee Granny would get her check as they were currently NOT FUNDING GOVERNMENT EMPLOYEE PENSION PLANS to keep the doors open (the money wasn't there, remember?) so Granny would have to suffer too.

Now, Mr.Accounting101, tell me about the "full faith & credit" of a Federal government already drowning in debt demanding moar debt issuance in order to save it.

Fri, 08/01/2014 - 21:48 | 5036216 Louie the Dog
Louie the Dog's picture

You fucking idiot. Who do you think pays for those pensions?  

Sat, 08/02/2014 - 09:05 | 5037154 Accounting101
Accounting101's picture

They do asshole! Teachers in Michigan put in $100,000 to $130,000 of their own money into their pension system, and that does not include another 3% of their wages for future retiree healthcare costs.

Who do you think helps pay your wages by buying the shit private product you produce? If it's public pensioners, and it is, then those public servants are supporting your worthless ass.

But go ahead and grab seasmoke's dick as he grabs yours, and you both can yank real hard. You want austerity? Immediately inform the audience of the name of your private employer so public pensioners know where not to spend their reduce pensions. We will then see how much of austerity lackey you really are.

Sat, 08/02/2014 - 09:15 | 5037171 Seek_Truth
Seek_Truth's picture

"Their own money"

Yeah, right- money stolen from productive citizens at the point of a Gubmint gun.

FIFY

Sat, 08/02/2014 - 11:01 | 5037404 Accounting101
Accounting101's picture

State in which you live and employer please. I'm sure you don't want public pensioners buying your product. That way you can stay intellectually consistent and can't be accused of being a government taker.

Sat, 08/02/2014 - 11:12 | 5037435 Seek_Truth
Seek_Truth's picture

PA, self employed, and refuse to do business with Gubmint types or ex Gubmint types, so perfectly intellectually consistent, thanks.

Unlike you vacuous, thieving, disingenuous, cowardly, completely unnecessary Gubmint "workers".

Your day will come, thief.

Sat, 08/02/2014 - 11:29 | 5037471 Accounting101
Accounting101's picture

Great, PA. Now the name of your business so those PA government workers know where not to spend their money. Please don't hand me some bullshit about turning away prospective business.

Do you see how this becomes a no win proposition for all involved? Aren't circular arguments a colossal waste of time?

Sat, 08/02/2014 - 11:53 | 5037524 Seek_Truth
Seek_Truth's picture

Your cowardly mind can't conceive of someone turning down, or not chasing, business that is immoral and unethical, eh?

No surprise there, none at all.

For your information, there are some of us who practice what we preach.

Sun, 08/03/2014 - 09:36 | 5040026 FlyingDutchman
FlyingDutchman's picture

Actually, all of the above makes it perfectly allright to rip of government and government workers/pensionners. Hey, you're just trying to get your money back.

So, here's how we do this : "Worked/Working for the government? Yes, that's 50% extra surcharge please."

All of us freelancers here just just apply for government contracts and then rip them off as much as we possible can.

Revenge feels so good, especially when the gigantic beast is ignorant about it.

Sat, 08/02/2014 - 09:24 | 5037189 FredFlintstone
FredFlintstone's picture

Teachers in Michigan contribute 2 years of their 30 to 40 year pension draw? That is less than I would have imagined. The system is worse that I thought.

 

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