Governments mislabel banking rescues as sovereign overspending because honesty would be politically fatal
Evidence
So, why, then, do European governments play the great bait and switch and then blame it all on sovereigns that have spent too much? Basically, it’s because in a democracy you can hardly come clean about what you are doing and expect to survive. Imagine a major European politician trying to explain why a quarter of Spain needs to be unemployed, and why the whole of periphery Europe needs to sit in a permanent recession just to save a currency that has only existed for a decade. — Mark Blyth, Austerity, 242
Categorization
- XREF: Echoes the political-legitimacy framing Mattei uses for austerity’s ideological entrenchment; the ‘bait and switch’ is a version of the blame-shifting that runs through the whole book. — connects to: The sovereign debt crisis was actually a banking crisis in disguise. — Mark Blyth, Austerity: The History of a Dangerous…, 33; European austerity is a bait-and-switch to save banks from themselves without admitting it — Mark Blyth, Austerity: The History of a Dangerous…, 208; European banks were too large for any national sovereign to rescue — Mark Blyth, Austerity: The History of a Dangerous…, 231 (+7 more)
Broader Connections
- The sovereign debt crisis is a transmuted and camouflaged banking crisis
#corroborates(0.85) — Mark Blyth, Austerity, 35 - European austerity serves to reserve sovereign balance-sheet space for too-big-to-bail bank rescues
#expands(0.82) — Mark Blyth, Austerity, 617 - The European debt crisis resulted from banking losses, not sovereign overspending
#corroborates(0.80) — Mark Blyth, Austerity, 40 - The Eurozone crisis was wrongly blamed on sovereign fiscal profligacy
#corroborates(0.80) — Mark Blyth, Austerity, 152 - Debt politics functions as a morality play shifting blame from banks to the state
#expands(0.78) — Mark Blyth, Austerity, 56 - Bailing out bankers while imposing austerity damaged faith in politicians
#expands(0.75) — Yanis Varoufakis, Technofeudalism, 392