Hullabaloo

Wednesday, June 09, 2010

 
Virtuous Sadism

by digby

Krugman says that the new fiscal austerity fad among economists is driven less by class warfare than a psychological desire to be seen as tough and serious and a willingness to succumb to the "seductiveness of demands for pain":

Calling for austerity and tight money feels courageous, tough-minded, and virtuous; it allows the economist making such calls to take the pose of a Serious Person standing firm against the easy-money guys.

Yes, I know that’s insulting. But what’s so striking is that in all three cases I’ve cited you had highly trained economists — that is, people who have spent their whole lives arguing in terms of carefully laid out models — making arguments that aren’t backed by any model I can see.

And may I say, I think that by giving in to the seductiveness of calls for pain, some of my colleagues are doing a lot of damage; at a time when we really need clarity of thought, they’re adding to the intellectual murk instead.

He understands the thought processes of economists as well as anyone, so I imagine he knows what he's talking about.

Two thoughts leap to mind. The first is that this is very reminiscent of the intelligentsia in 2002/2003 during the Iraq war debate. Indeed, that's where the "Very Serious People" critique originated. This psychology is very much a product of group think and the feedback loop of insiderism, which always seems to come out on the side of the ruling class. I suppose I expected it of pundits and policy analysts, but until recently I didn't realize just how compromised the economics profession is.

But I'm not sure that on some level even this isn't class warfare, at least in the sense that very comfortable elites seem to find it satisfying to prescribe massive pain and sacrifice for people other than themselves. I'll remind everyone again of Mrs Alan Greenspan's comments from over a year ago:

MSNBC commentator: ... The subtext of all of this [call to service] is "hey Americans, you're gonna have to do your part too. There may be some sacrifices involved for you too." Do you think he's going to use his political capital to make those arguments and will it go beyond rhetoric?

Andrea Mitchell: It does go beyond rhetoric. He needs to engage the American people in this joint venture. That's part of the call. That's part of what he needs to accomplish in his spech and in the days following the speech. He needs to make people feel that this is their venture as well and that people are going to need to be more patient and have to contribute and that there will have to be some sacrifice.

And certainly, if he is serious about what he told the Washington Post last week, that he wants to take on entitlement reform, there will be greater sacrifice required from a nation already suffering from economic crisis --- to ask people to take a look at their health care and their other entitlements and realize that for the long term health and vitality of the country we're going to have to give up something that we already enjoy.

Needless to say, millionaire celebrity journalists married to the Oracle of Objectivism won't be among those required to suffer for the greater good.

Or as a puzzled Martin Wolf put it in this piece for the Financial Times today:

Premature fiscal tightening is, warns experience, as big a danger as delayed tightening would be. There are no certainties here. The world economy – or at least that of the advanced countries – remains disturbingly fragile. Only those who believe the economy is a morality play, in which those they deem wicked should suffer punishment, would enjoy that painful result.

Evidently there are a whole lot of elites in various professions who think that they need to be "tough" by prescribing a world of hurt for ordinary people. Maybe it isn't class war. Maybe it's just sadism. But whatever the motivation, the result of this austerity fad is that this thing could easily take on a life of its own and these shallow egotists could wake up one morning in a global economic nightmare. Of course they can always just blame the sinners again, but at some point the sinners are going to start blaming somebody too. And there are a whole lot more of them.



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digby 6/09/2010 08:00:00 AM |