What now for the proponents of austerity? Up until last month it seemed they had won the policy and PR debate. With disciples across Europe and the US, and with Angela Merkel as its high priestess, fiscal restraint was positioned as a dose of much needed tough medicine. The mantra was clear; no pain, no gain. Politically unassailable, this was one helluva PR launch with some influential backers. Over the last month, however, things have become a little more complicated: austerity may have lost its PR claim as a cure all.
Last week, economists at the University of Massachusetts reviewed calculations cited in Growth In a Time of Austerity, the bible for those justifying tightened fiscal policy, as flawed. The claim? The research published in January 2010 by Harvard University included “selective exclusion of available data and unconventional weighting of summary statistics.” The case for austerity is now not so clear.
Since then, austerity seems to be losing more and more PR steam. EU nations are sliding deeper into recession, with unemployment in Spain and Greece topping 30 percent. In Britain, austerity is responsible for a limp 0.3 percent growth, while Germany, the champion of austerity, is teetering on the edge of recession. Has austerity fallen out of fashion? The headlines would seem to suggest that less has not added up to more.
THE PR VERDICT: “F” (Full Fiasco) for the proponents of austerity, who continue to lose a losing battle.
THE PR TAKEAWAY: Product launches can teach us something about ideological launches. If austerity was a consumer product, it would now be sitting on the supermarket shelves unloved and unwanted. Why? Because not one of its proponents have been able to demonstrate tangible benefits. Despite a big and loud launch, its advocates seem to be retreating into the shadows. Where are the business leaders confirming they are hiring in the face of cutbacks? Without some simple proof points and enthusiastic advocates, this is one launch that might have seen its brief vogue run right out of steam and into the dustbins of economic history.