Here's some really good news out of Europe. Hopefully we are seeing that continent finally shift gears and hear what the Obama Administration has been telling them:
ROME — Italy’s new prime minister, Enrico Letta, said Monday that he would move quickly to stimulate growth and jobs, while easing some of the unpopular austerity measures enacted to strengthen Italy’s public finances and ease its cumbersome debt.
“I will speak to you in the subversive language of truth,” Mr. Letta told lawmakers in his debut speech to the lower house of Parliament after the swearing-in of his cabinet on Sunday. Without measures that stimulate growth, he said, “Italy will be lost.”
Mr. Letta added that, although fiscal discipline has its place and time, austerity alone would "kill Italy."
This is another sign in the past few days alone that the worm has turned.
“There has been a clear shift in thinking,” said Guntram Wolff, a German economist who has worked at the European Commission, the union’s policy-making arm, and is now acting director of Bruegel, a Brussels research group.
The flurry of activity comes after an influential academic paper embraced by austerity advocates as evidence that even recessionary economies should cut spending to avoid high debt levels, written by the Harvard scholars Carmen M. Reinhart and Kenneth S. Rogoff, has come under attack for errors that opponents of austerity say helped lead European policy makers astray.
Paul Krugman has been truly excellent on this, and many of you likely already read his
column from yesterday on this topic, but for those who haven't, his takedown of austerity and his clarion call for a return to policies focused on achieving growth and increasing jobs is not to be missed:
What has happened now, however, is that the drive for austerity has lost its intellectual fig leaf, and stands exposed as the expression of prejudice, opportunism and class interest it always was. And maybe, just maybe, that sudden exposure will give us a chance to start doing something about the depression we’re in.
Maybe. Let's keep pushing.
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