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On the News With Thom Hartmann: Economists Study How Devastating Austerity Really Is, and More

The German Institute for Macroeconomic Research releases its report on the effects of austerity on Greece, and more.

In today’s On the News segment: Economists are figuring out how much austerity really devastates a nation; welfare recipients in Kansas are prohibited from withdrawing more than $25 in benefits per day; McDonald’s announces they’re giving workers a raise; and more.

See more news and opinion from Thom Hartmann at Truthout here.


Thom Hartmann here – on the best of the rest of Economic and Labor News…

You need to know this. As Republican lawmakers and presidential hopefuls continue to fantasize about more massive budget cuts, economists are figuring out how much austerity really devastates a nation. Last month, the German Institute for Macroeconomic Research released their report on the damage that harsh austerity measures have done to the nation of Greece. According to that report, poor people in Greece have lost 86 percent of their income because of austerity, but the wealthiest households in that nation lost less than 20 percent. To add insult to injury, the richest Greeks only saw their taxes increase about 9 percent, but those with the least saw their taxes rise by more than 300 percent. And, according to that report, public employees were hit the hardest by extreme austerity measures, with most losing about a quarter of their income. These numbers are not just statistics, they are human lives, and they represent everything that could happen in the United States if Republicans have their way. Harsh austerity measures wreak havoc on an economy, as we’ve seen in Greece, but these cuts have a far larger human cost. Where ever they are enacted, these cuts have a disproportionate effect on the poor, and they widen the gap between the haves and the have-nots. Greece may be the extreme, as the cuts that nation has endured are far larger than the austerity imposed on other nations. However, the end result is – and always will be – the same. You can’t cut your way to prosperity, regardless of which nation you happen to call home. These cuts have destroyed the lives of thousands of Greeks, and austerity will have the same effect here if Republicans get the additional cuts that they desire. And, this is one of the most important reasons that we need to fight in 2016. The next election could have dire consequences on our economy and our fellow Americans, and it may be our last chance to stop austerity from destroying our nation too.

Kansas Gov. Sam Brownback must hate the poor. Thanks to a new bill signed by Brownback earlier this month, welfare recipients are prohibited from withdrawing more than $25 in benefits per day. And, each one of those daily withdraws will cost recipients one dollar, which means that more benefits will go to the banksters instead of the poor. In addition, Brownback and his cronies in Kansas also want to be sure that poor people never have any chance to relax. This new legislation bans welfare benefits from being used at swimming pools, liquor stores, fortune tellers and cruise ships. As if people on welfare have so much extra money to spend on booze and vacations. This is just another attempt to demonize the poor, with the added benefit of handing the banksters a little extra cash. Treating welfare recipients like criminals is nothing new, but the people of Kansas need to make it clear that Brownback’s ridiculous new law goes way too far.

It isn’t easy to get in to Stanford University, but the cost of tuition is no longer an issue for some of the students who get accepted. Last week, the prestigious university announced that they will wave the tuition fees for students from households that make less than $125,000 a year. And, parents who earn less than $65,000 a year will spared room and board expenses as well. According to the University, students will only be required to contribute $5,000 a year, which they should be able to make through a summer job or by doing part-time work throughout the school year. Tuition, books, travel and other expenses can bring the cost of Stanford to over $60,000 a year, which can price kids out of the system even when they come from upper-middle-class families. But, thanks to this policy, students who make the grades to get in to Stanford won’t be held back by that hefty price tag. If Stanford University can understand that college education should be affordable, our lawmakers should understand the same.

Last week, McDonald’s announced that they’re giving workers a raise. But, don’t start heaping praise on that company just yet. According to a recent article by Zaid Jilani over at AlterNet, that pay hike is more about public relations than about paying workers a living wage. As Zaid explains, “As always, the devil is in the details.” That raise only applies to employees at “company-owned” locations, which means that 90 percent of McDonald’s workers won’t likely see a larger check. The fast-food giant also announced that they will provide paid leave for employees after one year on the job, but rapid employee turnover means most workers will never qualify. These changes are an improvement over low-wage, no vacation policies that were in place, but they need to be expanded to all stores, including franchises. It’s obvious that McDonald’s knows people want higher wages and better benefits, but it’s time for the company to do more than a public relations campaign.

And finally… Here’s a newsflash for Republicans: If you want more people to work, you need to increase welfare benefits instead of cutting them. According to a huge study spanning 18 countries and 19,000 recipients, providing generous welfare benefits make someone more likely to want a job. The authors of the study explained that, “employment commitment was much higher in all the studied groups in bigger welfare states.” In other words, they found the notion of people on welfare being lazy was the exact opposite of the truth, and the higher the welfare benefits, the more people wanted to work. Based on this logic, Republicans should want to strengthen our social safety net, instead of destroy it. The idea that poor people just want to sit around collecting checks is a myth, and we’ve finally got the science to prove it. Nations with strong social safety nets have stronger employment than we have, and it’s time rethink our history of demonizing the poor. We can afford to do better, and the science shows that it’s in our best interest as a nation to do so.

And that’s the way it is – for the week of April 13, 2015 – I’m Thom Hartmann – on the Economic and Labor News.

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