Austerity as cover for class war

Yanis Varoufakis is a Greek economist and academic who was appointed minister of finance in the government of the Syriza party led by Alexis Tsipra that came to power in January on an anti-austerity platform. Varoufakis was an outspoken critic of the harsh measures that were imposed by the IMF and the European Union and resigned in July when he felt that he had burned his bridges with his negotiating partners in those organizations and could not support the bailout package.

But he remains outspoken against austerity policies and accuses those pushing for austerity measures of waging a class war against the poor.

Austerity and deficit reduction are being used as a cover-story for conducting class war against the poor, an economics professor who served as Greece’s finance minister has said.

Yanis Varoufakis noted simultaneous reductions in taxes on the wealthy and cuts to spending on social security amounted to a redistribution of wealth away from the poor to the rich.

“The problem is that austerity is being used as a narrative to conduct class war,” Mr Varoufakis told the BBC’s Question Time programme.

“To be talking about reducing the state further when effectively what you are doing is reducing taxes like inheritance tax and at the same time you are cutting benefits – that is class war.”

Even after the Syriza government acceded to many of the demands made by its creditors and failed to shake free of the austerity measures, they were easily returned to power last week when Tsipras called a snap election. As bad as the austerity measures were, the voters seemed to feel that at least Tsipras was being honest with them and was better than his rivals.

Differing explanations were proffered for the unexpectedly handsome victory, which – despite nervous faces and much anxious cigarette puffing before the exit polls arrived – few claimed they had ever doubted.

Some reckoned voters who had felt betrayed by the party – that promised to “eradicate” austerity but, with capital controls in place and an exit from the eurozone looming this summer, ended up swallowing an even harsher dose – had realised Syriza was not truly to blame.

“They understood that in fact they should be angry more with the European Union and with the bailout agreement,” said Kostas Fothiadakis, who is unemployed. “That in the end they had to support Syriza, really, because they know it is the only party that speaks the truth about Europe, and that really wants change.”

This suggests that Greeks still hope for a reversal of those policies and that Syriza is the only hope for doing so.

Varoufakis is exactly right in his analysis and could just as well be talking about the US where the class war nature of austerity measures is even more blatant. The budget deficit is hauled out as a reason why earned benefits must be cut as part of austerity measures when it is tax cuts for the rich that caused the deficits in the first place. We should not forget that this is bipartisan, because it was president Obama who made the temporary Bush tax cuts permanent. And of course, even more tax cuts for the rich are now being proposed by Republican candidates such as Jeb Bush, Donald Trump, Ben Carson, Rand Paul and others. They may differ in their details but the net result is always the same: the rich get a windfall.


  1. raven says

    The GOP strategy is pretty simple.

    1. Cut taxes citing the magic of Supply Side economics. Magic doesn’t work. They know it won’t work as Krugman has pointed out.

    2. Well duh, budget deficits!!! So cut services. No problem!!! No services either. Education is half of state budgets so it falls on the kids mostly.
    Repeat as needed.

    3. Reagan first did it. He at least realized that magic doesn’t work and ended up raising taxes 11 times. Bush did it and ended up with huge deficits and a ballooning national debt.

    Lately it has been used by GOP governors with the usual disasters. Brownback in Kansas, Walker in Wisconsin, Jindal in Louisiana, Florida, Arizona. It doesn’t work, they know it doesn’t work, and they don’t care. It’s, let’s blow up the state governing.

  2. Holms says

    As far as I can see, different economies joining together in the manner of the EU made economics disasters like this inevitable. There is a good chance that the best thing for Greece is to exitthe Euro and go back to a separate currency.

  3. Robert,+not+Bob says

    I’ve always suspected that many Republicans (not just uneducated Foxbots) really do believe in trickle down. Why not? People still believe in Young Earth Creationism! The situation in Kansas reminds me of those faith-healing parents who let one child die after another: they believe god will cure the children if they pray for it. They can’t admit to themselves that this doesn’t work. So they double down, defending the belief. Yes, that means their faith is more important than the lives of their children (very biblical attitude that). In the same way, Republicans dare not admit that trickle down doesn’t work, because they’re committed to believing in it. And so the actual economy of Kansas matters less than maintaining conservative cred.

  4. atheistblog says

    And you purposefully omitted hilly billy hillary. Let me correct for you “Jeb Bush, Donald Trump, Ben Carson, Rand Paul, hillary clinton and others. They may differ in their details but the net result is always the same: the rich get a windfall.”

  5. StevoR says

    @ ^ atheistblog : Hillary Clinton doesn’t even deserve upper case capitals from you eh? But the Repub klowns do?

    Oh & as well you seem to have omitted any supporting evidence and reason(s) to back up our anti-Hillary assertion there.

    Why your hate for Hillary?

  6. lorn says

    Ahhh … the old budget, screw the poor, two-step:

    1) Cut taxes on wealth and corporations claiming it will stimulate growth and use as yet unseen growth to finance a defense buildup and creation of vast new bureaucracy like DHS. Watch as deficit balloons because growth fails to happen while outlays are increased.

    2) Crank up fear over deficit with ‘sky is falling rhetoric’. Demand ‘common sense’ action be taken to balance budget. Cut funding for New Deal programs, education, health care and welfare citing the necessity to ‘make hard choices’.

    Wash, rinse, repeat.

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