Thursday, 24 June 2010

Austerity measures.. Really? Or not really?

Whenever one puts on BBC these days, whether on TV or on the Radio, all one can hear is a repetitive, echoic rendition of various financial dilemmas. Whether they're in Greece, Spain or France. One expression in general that I think is being over used is "austerity measures". Now, this is being so overused that the viewer/listener is forced to think that no one really knows what it means. For starters, Christine Lagarde (French Financial Minister), said on BBC Hard Talk that in France they don't use the expression "austerity measures", or they are not familiar with it. Basically, her point is that in France they don't know any policies that would compel people to cut their spendings. In all honesty, I really think she doesn't know what the expression means. NO ONE DOES. So why is everyone using it? One news channel's definition is: "citizens cut spending", another definition is "the country cuts spending", some other definition online was "people spending the same, but wisely".

You want to know what I think, I think this is the exact same story with the term "derivative", which was created by Wall Street to confuse people when it was under the spotlight for being the main cause of the financial crisis. One can actually picture it now; people gathering in a tumultuous crowd, irate and virulent, outside one of the main banks on Wall Street demanding justice and reparations. So, a random employee from one of the banks chooses a spot, above the crowd, and shouts at the top of his voice "It's because the derivatives were bad". Clearly, no one knew what derivatives were but harmoniously they all hang their heads and walk away defeated. This means less questions for Wall Street, since no one knows what derivatives are, it's the easiest thing to blame the crisis on. The same thing can apply for these failed European economies. Since not even the most salient economists can solve this problem, the easiest way out is to propose a measure/solution that no one knows how to execute. Hence "austerity measures" was begotten.

So, there's a trend here, whenever there's an insolvable crisis, the solution is to come up with an expression/term, that no one understands or can execute, to describe the predicament. I bet you anything BP are working on theirs right now. Good morning!!

1 comment:

Jabi said...

whenever there's an insolvable crisis, there is the IMO and world bank to help you out.. :D