Euro zone unemployment just hit a 15-year high. German unemployment just hit a 15-year low. What can those of us across the Atlantic glean from this seemingly bipolar state of affairs? That austerity, every economic conservative’s favorite prescription for an ailing economy — the medicine Republicans here in the United States are pushing hard — is an utter disaster.
A few euro zone members, including Germany and the Netherlands, are enjoying a relative jobs boom. And yet, europe’s overall unemployment rate is 10.8 percent. How is this possible? Because of depression-level unemployment in Europe’s austerity-plagued periphery. […]
This should put to rest the notion of “expansionary austerity” — that is, that budget cuts can spur growth by giving businesses increased confidence. It has been an epic, epic failure with interest rates at zero. The more a country has cut, the more unemployment it has. Greece, Spain, Portugal and Ireland have all had markets (and Germany) force them to radically reduce deficits amidst already deep slumps. The result has been even deeper slumps. Joblessness has jumped to levels not seen in advanced countries since the 1930s.
Read more. [Image: Eurostat]