The upside to wrongheaded purity

Krugman surveys a vast sweep of European austerity measures so anxiously coveted by our homegrown deficit scolds, and he concludes:

We learn that the doctrine that has dominated elite economic discourse for the past three years is wrong on all fronts. Not only have we been ruled by fear of nonexistent threats, we’ve been promised rewards that haven’t arrived and never will. It’s time to put the deficit obsession aside and get back to dealing with the real problem--namely, unacceptably high unemployment.

Yet Krugman knows you can't trump ideology with reason. Nothing fazes the politically pious mind, which knows--it just knows--that an utter fidelity to theoretical purity will lead to the mountaintop. Indeed, irrefutable evidence that the many steps leading to the mountaintop would only inflict greater suffering and accelerated ruin is merely a kind of ideological validation that the best medicine always tastes the worst.

Yet there's a practical side to American austerity advocates, and it is elegantly straightforward: They've simply no other argument to make. Were they to bow to reason and those Keynesian mountains of empirical evidence which reduce austerity policies in times of recession to the blithering incoherence they are, austerity advocates would lose their partisan raison d'etre. And they'd rather look like Hayekian fools than sound like Keynesian Democrats--and besides, as luck would have it, their base positively adores foolishness. 

Comments

[AnneJ]

Unfortunately, that foolishness that their base loves so much is hurting the rest of the country. Most of their base are either retired people who get SS and medicare and are not concerned about employment anymore. Their other base aka the laughably known "Job creators" benefit from mountains of corporate welfare from the government which never trickles down to job creation for anyone else. And yes I know that Obama has a lot on his plate right now with immigration and gun control, but he needs to be hitting the bully pulpit with this too, especially now. And I still maintain that on the issue of employment, BOTH sides are guilty of ignoring this persistent problem.

[Peter G]

Unfortunately Krugman's understanding of European politics is no deeper than his understanding of American politics. There is exactly one country in Europe that could be fairly said to be engaging in overly austere economic policies and that is Great Britain. The Scandinavian countries aren't, Germany isn't. In fact all the countries that have money or credit and reasonably large and functionning industrial economies aren't. The countries that are in trouble can't do anything about it because their ability to borrow is constrained by the fact that they are very poor risks to to repay what they need. And the electorates in the haves do not seem to inclined to part with the sums required to support the have nots. This despite the fact that trade flows would almost immediately bring all that money right back to them because they make all the stuff that those lesser Europeans buy. Poor Europe. Not quite a country yet. If they were they could adopt a Canadian idea, transfer payments, intended to equalize access to things like education and health care in provinces with less strong economies. It works pretty well on the whole.

[shsavage]

It almost, kinda sorta works here too, PeterG, what with all the blue state largess that flows downhill to the red states. Of course, none of those takers will admit the truth.

[Peter G]

And that, shsavage, is what being a country is all about. The Europeans are going to have to make up their minds about this and they are going to have to do it while the shit is being liberally distributed by the fan. Step forward or fall back and fall apart.

[Robert Lipscomb]

At some point, the left and probably everyone else needs to revisit their assessments of Obama's management of the economy through a lens of him being the primary (only?) government leader basing his policies on Keynesian economics while facing a world of leaders defaulting to austerianism.

He is dealing with more than GOP assholes.