French Economics Minister Arnaud Montebourg resigns in opposition to misguided counterproductive austerity policies

M.Arnaud Montebourg has openly protested against the austerity policies of the Hollande Government headed by Prime Minister Manuel Valls. He correctly denounced the policies as absurd and counterproductive in the fight against unemployment and the deficit. As a consequence of his very public denunciation of the policies, President Hollande has dissolved his government and asked his prime minister to form a new cabinet purged presumably of any Keynesians. But the brave statement of Montebourg which he correctly stated required both intellectual and political courage ought to serve as a rallying cry for those enlightened French politicians, civil servants and public intellectuals who share the perspective and who would like to see a long overdue shift in policy in France and Europe generally.I strongly encourage them and assure them they are correct in their diagnosis which is backed up by more than eighty years of scientific debate and the results of the last great depression and the delayed economic recovery which only occurred after the obsession with austerity was overcome by the requirements of the war time for greatly increased public spending. But it was not the war, per se, which solved the problem . Rather the war removed the political barrier to the increased investment and boosting of aggregate demand which was the necessary fiscal part of the solution.It became unpatriotic to oppose public spending and unemployment reduction. As a consequence the fiscal conservatives and anti deficit balance the budget fanatics melted away. As the economy recovered the positive business cycle and low unemployment allowed the debts that were incurred to shrink over time as a proportion of the GDP so they were no longer an issue for many decades. This positive growth cycle can be restored in Europe but it will take courageous politicians, public intellectuals,academics, journalists and business people like M.Montebourg to speak out to promote the necessary sea change in policy. Merci beaucoup M. Montebourg. Votre courage est une inspiration.


About haroldchorneyeconomist

I am Professor of political economy at Concordia university in Montréal, Québec, Canada. I received my B.A.Hons (econ.&poli sci) from the University of Manitoba. I also completed my M.A. degree in economics there. Went on to spend two years at the London School of Economics as a Ph.D. student in economics and then completed my Ph.D. in political economy at the University of Toronto. Was named a John W.Dafoe fellow, a CMHC fellow and a Canada Council fellow. I also was named a Woodrow Wilson fellow in 1968 after completing my first class honours undergraduate degree. Worked as an economist in the area of education, labour economics and as the senior economist with the Manitoba Housing and Renewal Corporation for the Government of Manitoba from 1972 to 1978. I also have worked as an economic consultant for MDT socio-economic consultants and have been consulted on urban planning, health policy, linguistic duality and public sector finance questions by the governments of Manitoba, Saskatchewan,the cities of Regina and Saskatoon, Ontario and the Federal government of Canada. I have also been consulted by senior leaders of the British Labour party, MPs from the Progressive Conservative party, the Liberal party and the New Democrats on economic policy questions. Members of the Government of France under the Presidency of Francois Mitterand discussed my work on public sector deficits. I have also run for elected office at the municipal level. I first began to write about quantitative easing as a useful policy option during the early 1980s.
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