Small government wins another election in Europe
Keynesianism is still dead in Europe
Forgive me for being a broken record on this, but the right has won yet another election in Europe, this time in Estonia. Last June, I wrote that Keynesianism is dead in Europe as a political force. This weekend, the Estonian right has won another election fought over government spending. The coalition of the right went from 44% of the vote in the last parliamentary election in 2007 to over 50% in this one. The New York Times made it very clear that the left’s attack on the government was that it cut too deeply.
The vote reflects approval for a government that continued to embrace laissez-faire capitalism during the painful months after the global downturn. After Estonia’s economy shrank nearly 15 percent, the state reduced its budget by the equivalent of 9 percent of gross domestic product. Demand fell steeply, and unemployment crept up, early in 2010, to 19.8 percent. [...]
Meanwhile, the economy has been projected to grow by 4 percent this year, and unemployment has dropped to around 10 percent, according to the Estonian Unemployment Insurance Fund.
The opposition leader Edgar Savisaar, the mayor of the capital, Tallinn, and head of the Center Party, argued during the campaign that the government had overlooked the suffering of average people in its drive to join the euro zone.
Just to reiterate this now-tired fact: Keynesianism is dead as a political force in Europe. Small government and economic liberty has been winning elections throughout the continent.
We need to learn the lesson here.