Austerity's Silver Lining?

Paul Krugman highlights the failure of austerity policy in Europe:

Clearly, It’s Time for More Austerity, by Paul Krugman:

• U.K. Jobless Claims Rise More Than Forecast as Cuts Bite.
• Euro-Area Economy Contracts for the First Time Since 2009
• Portugal’s Debt Efforts May Be Warning for Greece
• Greece and the return of the economic ‘death spiral’

Chris Dillow tries to find a "silver lining" in the UK's austerity policy, a policy that has increased the UK's unemployment rate:

...there might be a silver lining here. It could that one pleasant legacy of the 1930s depression was a favorable unemployment-inflation trade-off in the 1950s and early 60s. This was because workers who remembered the depression were scared of unemployment and so did not press for large wage gains even though they were in a strong labor market. The upshot was that inflation stayed low. However, as workers who remembered the 30s retired and were replaced by workers who had known only full employment, risk aversion and the fear of unemployment receded and so wage militancy rose.

It might be, therefore, that in 20 or so years time, we’ll enjoy low inflation if we get an economic boom because today’s joblessness might permanently reduce wage militancy (or an inclination to get into debt).

This, I suspect, is the best that can be said in favor of present economic policy.

Yes -- if we can just crush the working class and its demand for a fair share of the gains from growth, prosperity will be just around the corner.