Stimulus, Austerity, and Double StandardsFunny how the rich and powerful are willing to quickly pooh-pooh stimulus, but they cling to their advocacy of austerity well past the point where it is shown to be wrong-headed. It just shows that politicians and "the serious people" simply don't understand economics. Instead they see the world as a morality play written from the viewpoint of the ultra-rich, i.e. how to punish the peasants until they are willing to fall on their bellies and squirm begging "enough! enough!".
Just a quick thought: in much discussion of economic policy these days, the presumption is that stimulus had its chance, it failed, and that’s that. Never mind those of us who say that we actually didn’t do nearly enough — and were saying that from the beginning, not as an after-the-fact rationalization. It’s one strike and you’re out.
Meanwhile, the pain caucus keeps telling us that austerity is the way to restore confidence; and confidence keeps not being restored. Ireland, for example, has imposed savage austerity, yet the interest rate on its 10-year bonds is still 6.7 percentage points higher than Germany’s, down from recent peaks but still far above its level when the austerity program began.
Yet somehow nobody in the pain caucus says hey, this was supposed to work but it didn’t, so our theory is all wrong. Instead, they just insist that we double down, continuing the beatings until morale improves.
Sunday, September 18, 2011
Krugman Spots Hypocrisy
Here is a post by Paul Krugman in his NY Times blog that tries to wake people up to the ridiculous hypocrisy in the supposed "serious" discussion of the economy and how to fix it: