Pain and Punishment
Krugman wrote another post today featuring some people who are getting increasingly confused --- and frantic --- about the bizarre, contrarian policy failure of elites all over the world. He writes:
I don’t fully understand it. But a large part of it, it seems obvious, is the intense desire to see economics as a morality play of sin and punishment, where the sinners are, of course, workers and governments, not the bankers. Pain is not an unfortunate consequence of policies, it’s what is supposed to happen.
Read the whole post. He cites an Uncle Alan Greenspan post that's a real doozy.
It called to mind this post by Matt Yglesias on the rather puerile Micheal Kinsley piece today about Chris Chritie's allegedly disqualifying girth. Matt wrote:
A further nuance here, though, is that not only did Michael Kinsley’s piece on this draw a spurious connection between Christie’s appearance his personal virtue, it does so in order to make a second bad moral panic. After acknowledging that Christie “makes all the right noises about fiscal discipline,” he says that “perhaps Christie is the one to help us get our national appetites under control. But it would help if he got his own under control first.” This not only misunderstands obesity, it misunderstands fiscal policy. The sentiment here is that small budget deficits are a sign of self-control and personal virtue, and that large deficits are to be deplored as the reverse. There’s just no reason to think that any of that is true. The question to ask about fiscal policy is whether it’s appropriate to try to advance full employment in the short-term and capacity growth in the long-term. You have to ask what’s really going on, what the situation is, and what the impact of the policy choices will be. On Yom Kippur, you fast as an act of self-abnegation as part of a process for atoning for one’s sins. A person with out-of-control appetites will have a difficult time doing it. Fiscal policy is nothing like that.
I think all these elites believe they are wealthy and secure due to their superior morality and work ethic. Therefore, it's important to make sure the plebes feel some pain for their excesses so they'll adopt the higher standards of their betters. Just as Michael Kinsley believes that Chris Christie's obesity reveals a slothful character, the Central Bankers are apparently all convinced that sovereign debt is due to the character flaws of slothful citizens who have failed to become wealthy. Neither belief is relevant to fiscal policy. Or even true.
We've been mulling this over for some time and I still don't have adequate answer to the problem. But I think I might be edging toward some insight in reading Corey Robin's The Reactionary Mind. I'll keep you posted.