If you read enough Paul Krugman columns, you know that there are politicians–in this country and elsewhere–who continue to assert that the best way to turn around slumping economies is to slash government spending. The problem, as Krugman has written countless times, is that there’s no evidence that this works in the real world–and plenty of evidence that it does not.
But the austerity backers persist nonetheless. And sometimes the message comes not from political leaders or opinion journalists but from news reporters. Washington Post correspondent Howard Schneider took another turn with his March 14 piece, “Is Ireland an Economic Example or an Exception for the Euro Zone?”
His lead told you where this was headed:
In Europe’s grand battle over growth vs. austerity, has Ireland proved that austerity works?
The only evidence Schneider had was that Ireland “successfully sold longer-term government bonds Wednesday.” While that’s better news, it’s hard to say this is going to settle this argument any time soon.
Ireland’s major economic problem, as economist Dean Baker pointed out in a response to this piece, is massive unemployment, currently at around 14.7 percent–“still 10 full percentage points above the pre-recession level.” Schneider doesn’t ignore this, exactly; he writes that the “economy is growing–slowly–despite a regional recession. Employment and foreign investment are rising.”
There’s perhaps slight movement in reducing Ireland’s unemployment rate–but nothing you’d confuse with good news. And Ireland’s growth is hardly good news, either. (See this Irish Times headline today: “Irish Economy to Be Flat in 2013: Irish GDP Growth Downgraded From 1 to 0.1 Percent in Ernst & Young Euro Zone Forecast.”)
So why is Schneider telling this story? That’s hard to say, but he has some history. In January he wrote a piece warning that France should consider slashing workers’ pay in order to be competitive, just like Spain had done. This is remarkably weird advice, considering the state of their respective economies: France’s unemployment rate is 10.5 percent, while Spain’s is 26.6.
Spain slashed spending in response to the economic collapse, and its population has suffered the consequences. For people like Schneider, though, austerity still seems to always be the answer.