Austerity is Not About Policy, But Ideology

  I get tired of saying this sometimes, but Paul Krugman is a must read again today. The first half of his column dissects for what seems like the millionth time the economic reasons why austerity is a bad idea, including the unapplicability of economy-as-household metaphor. The difference between macro- and micro-economics is so obvious to anyone with even elementary knowledge of the subject that it's impossible for key policymakers to be quite as stupid as their many conservative voters. So Krugman delves into their ulterior motives based on his conversations with prominent austerians:

Well, that’s where it gets interesting. For when you push “austerians” on the badness of their metaphor, they almost always retreat to assertions along the lines of: “But it’s essential that we shrink the size of the state.”

Now, these assertions often go along with claims that the economic crisis itself demonstrates the need to shrink government. But that’s manifestly not true. Look at the countries in Europe that have weathered the storm best, and near the top of the list you’ll find big-government nations like Sweden and Austria.

And if you look, on the other hand, at the nations conservatives admired before the crisis, you’ll find George Osborne, Britain’s chancellor of the Exchequer and the architect of the country’s current economic policy, describing Ireland as “a shining example of the art of the possible.” Meanwhile, the Cato Institute was praising Iceland’s low taxes and hoping that other industrial nations “will learn from Iceland’s success.”

So the austerity drive in Britain isn’t really about debt and deficits at all; it’s about using deficit panic as an excuse to dismantle social programs. And this is, of course, exactly the same thing that has been happening in America.

In fairness to Britain’s conservatives, they aren’t quite as crude as their American counterparts. They don’t rail against the evils of deficits in one breath, then demand huge tax cuts for the wealthy in the next (although the Cameron government has, in fact, significantly cut the top tax rate). And, in general, they seem less determined than America’s right to aid the rich and punish the poor. Still, the direction of policy is the same — and so is the fundamental insincerity of the calls for austerity.

The big question here is whether the evident failure of austerity to produce an economic recovery will lead to a “Plan B.” Maybe. But my guess is that even if such a plan is announced, it won’t amount to much. For economic recovery was never the point; the drive for austerity was about using the crisis, not solving it. And it still is.

It's not about the policy they feel is right at any given time. It's about an ideologically-driven, compulsive need to dismantle the supports of basic moral civilization.

And Krugman is right. There will be no "Plan B." If the deregulation-fueled banking crisis itself didn't cause a soul-searching reevaluation of the world's economic structures, the failure of austerity policy in its wake won't do the trick, either. The political history of the last thirty years is of the revenge of the right wing after finding itself discredited for a generation after the Great Depression and the fall of fascism. We're living in a grand period of conservative revanchism, one that I fear will not end without entire economies and and civilizations being destroyed in the process.

That is, after all, what happens when rabid ideologues of any stripe come to power. The problem now is recognizing that, for all the surface niceties of our democratic institutions, we're in the grip of anti-government cultists just as detached from reality and morality as any other ideological authoritarian regime.


Hullabaloo / By David Atkins | Sourced from

Posted at June 2, 2012, 5:52am

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