Austerity: No Pain, No Gain or No Brain?

After a little bit of discussion, in the clip above, about whether or not Greece will abandon the Euro, CNBC commentator Rick Santelli comes on with Harry Dent (The Great Crash Ahead) to talk about Austerity. The clip is a mixture of interesting observations and Santelli's Old Time Austerity Religion.

First, Harry Dent observes that the EU countries should anticipate a future of slow growth for demographic reasons (a reasonable observation). But then Santelli goes on to "make it easy for his listeners to understand" by claiming that Austerity cannot be pursued without some pain (Dent agrees). This would be a vacuous observation except that it is pretty clear Santelli means "pain for somebody else." Since increases in taxation would reduce the Government Debt -> Austerity link and since Santelli is rabidly opposed to any increases in taxation (especially if that pain falls on the upper classes), he hopes to administer pain on the lower classes who are more dependent on the social programs he would like to see cut. CNBC has provided a great platform for Santelli's no-pain-in-my-backyard platform. This is also the Tea Party platform, for whom Santelli presumes to speak.

To cap things off, Harry Dent argues that what we need is a return of the Iron Lady (Margagret Thatcher) to help us impose Austerity on the lower classes. The last I checked, British Austerity as a response to the Financial Crisis was not going very well. Mr. Dent might reconsider using British economic history as a positive example of what happens under a right-wing Austerity regime.