Via Ezra Klein, this graph:
So 80% of the economists think the stimulus created jobs, yet for some reason these folks are still running the show globally:
Specifically, in early 2010 austerity economics — the insistence that governments should slash spending even in the face of high unemployment — became all the rage in European capitals. The doctrine asserted that the direct negative effects of spending cuts on employment would be offset by changes in “confidence,” that savage spending cuts would lead to a surge in consumer and business spending, while nations failing to make such cuts would see capital flight and soaring interest rates. If this sounds to you like something Herbert Hoover might have said, you’re right: It does and he did.
Now the results are in — and they’re exactly what three generations’ worth of economic analysis and all the lessons of history should have told you would happen. The confidence fairy has failed to show up: none of the countries slashing spending have seen the predicted private-sector surge. Instead, the depressing effects of fiscal austerity have been reinforced by falling private spending.
Furthermore, bond markets keep refusing to cooperate. Even austerity’s star pupils, countries that, like Portugal and Ireland, have done everything that was demanded of them, still face sky-high borrowing costs. Why? Because spending cuts have deeply depressed their economies, undermining their tax bases to such an extent that the ratio of debt to G.D.P., the standard indicator of fiscal progress, is getting worse rather than better.
Meanwhile, countries that didn’t jump on the austerity train — most notably, Japan and the United States — continue to have very low borrowing costs, defying the dire predictions of fiscal hawks.
Kthug goes on to ask “So what will it take to convince the Pain Caucus, the people on both sides of the Atlantic who insist that we can cut our way to prosperity, that they are wrong?”
The answer of course is nothing. Nothing will convince them they are wrong. This is not about facts or data our actual outcomes, this is about their religion. This is about faith. Nothing will prove to them that they are wrong, because they believe. You will have more luck convincing the Pope there is no God than you will convince a wingnut economist that no matter how low you cut taxes, government revenues will still increase. They just believe.
Yutsano
IT HAPPENED UNDER SAINT RONALDUS MAGNUS! THEREFORE IT IS DIVINE TROOF! SUCK IT LIBRUL HIPPIE!!
(honest, that’s what they think, I’m related to someone who buys that bullshit.)
Hunter Gathers
Clap louder, you fuckers.
General Stuck (Bravo Nope Zero)
Well, the folks out there in the countryside had better wise up pretty quick, and send a message to these people. The answer to our dilemma rests at the ballot box, and not the female uteri. Or something like that. Can’t believe I just wrote that, but it was ripped from today’s headlines.
Jamie
well,, one of our biggest problem is that many of those plotting the course of our ships of state approach economics as though it were a religion. On top of that if the economy ever recovers we will be paying eight dollars a gallon for gasoline.
Dave L
Losing power will make them change their minds.
No, wait — it won’t. Just look at the Neo-Cons.
But losing power; an electoral wipe-out for the people asserting this nonsense most aggressively; that would at least take their hands off the controls. And mockery should complete the job.
Seriously, though — I think we’re going to have a textbook case-study in the disparate fortunes of the US and the EU. Republicans will undoubtedly try to depict Europe’s problems as the consequences of Socialism, but that just ties them even more into knots because Obama is the worst Socialist of all. The 27% will go on believing, but most of the rest of us will see what’s happening and understand what it means.
BGinCHI
They believe that the institutions of civil society are harmful and that corporations are the key to prosperity.
Without the institutions of civil society (including our laws, schools, regulatory functions, social safety net) NO corporate/market activity could function.
This lack of understanding of how the world works is what is harming us all.
Face
This is like 3rd grade economics, yet these ass-clowns cant (wont?) figure this out. Somebody demand to see their elementary school graduation records.
Downpuppy
Some of them may be thinking that a bit of growth would just touch off $200 oil, so why fight the fools?
Yutsano
@BGinCHI: You lie! They can go Galt and form their own productive selfish society any time they want! They just don’t because we couldn’t possibly survive without our brilliance! So sayeth the Gospel of St Ayn.
WereBear
The propagandists know corporations are the key to their prosperity and the rest of us can go find a sparrow and a curtain rod to roast it on.
YoohooCthulhu
They won’t, ever. It’s because this belief in “austerity” is founded in the irrational glorification of savings and sacrifice in all circumstances. It’s the same mindset that causes some people to work a minimum wage job ridiculous hours so they can make enough money to finish their bachelor’s degree over 7 years without taking out debt instead of taking a balance of loans and working to pay back when they can get a higher paying job with a degree. Penny-wise and pound foolish. Savings and austerity is always good, “borrowing” and other types of loans are ALWAYS bad.
David Hunt
Actually, I think that quite of few of the people up top know full well that cutting taxes lowers government revenues. They won’t admit it, but they do know it to be a fact. The problem for the rest of us is that lowering government revenues is an intermediate goal. The ultimate aim is to hugely slash/entirely eliminate the entire social safety net. The thinking is that if the government is poor enough, they’ll eventually have to go after those programs. They will then blame Democrats for the cuts.
smintheus
The conservatives’ preference for their own fantasies and their willful disregard of empirical evidence showing them to be untenable, played out with disastrous consequences already once before, after 1929. Herbert Hoover and virtually the entire Republican establishment insisted to the bitter end that austerity was the path to recovery, which they thought could be easily and quickly accomplished once the confidence fairy re-appeared to sprinkle pixie dust over Wall Street. As for the suffering of ordinary Americans, they didn’t really notice or care then any more than Republicans care now.
Can't Be Bothered
What’s doubly infuriating, is that they would probably be better off themselves without their stupid policies. It is just an article of faith that is too psychologically damaging to give up. They need to believe in a world of meritocracy, moral hazards, rational actors, job creators and so forth. These fairy tales elevate them to more virtuous and superior to others. It is much more comforting for them to trade in theories than in reality, so they persist, b/c the consequences for their being wrong is really no consequence at all for them and their ilk.
jl
I disagree, it is about their profits, or the profits of their supporters and financiers.
Krugman and others discussed months ago the convenient coincidence that austerity measures just happen to benefit powerful financial interests.
You are a Too Big to Fail, or Systematically Dangerous Financial Institution. You own lots of paper claims on real property and productive resources the nominal value of which is not supported by the real property’s value (or capitalized value of real income streams).
You want to eventually capture as much of the nominal value of your paper assets as possible, and you are in a contest with other powerful financial interests to do that in a game of financial musical chairs.
You also have debts that you have to service.
You kind of want the real world to stand still while you and the other big players fight to capture as much real worth as your over valued paper claims permit.
You want low inflation and low, even falling, real interest rates. Nothing else matters, for you are a mostly unproductive overgrown incompetent and inefficient money and paper shuffling machine. Your organization cannot dig (or teach, or police, or build or even figure out how much a house is worth) but you are not too proud to beg (and weedle, and bribe and intimidate and extort) to get your way.
Edit: remember that real estate and related financial mess is still several years away from being cleaned up, and in Europe, it is also mixed up with very non robust and delicate ill designed monetary union, and financial shenanigans that led to housing boom and bust got mixed up with government finances more than in US or Canada or Japan.
Gex
It’s always been about a small group of “the right kind of people.” It’s off putting how so many people who would be laughed at if trying to enter our new aristocracy insist on voting for people who would bring us back to a Downton Abbey-like society where we all fight to see who can serve our betters.
But they are white Christian men, and they’re all certain they’ll be, at worst, Carson.
MBunge
“Kthug goes on to ask “So what will it take to convince the Pain Caucus, the people on both sides of the Atlantic who insist that we can cut our way to prosperity, that they are wrong?””
You don’t have to convince the Pain Caucus. You have to convince the general public. If people knew the stimulus had created jobs, they’d want more of it. But you can’t effectively champion the stimulus as a job creator AND bitch up a storm about how puny and worthless it is. We know which one Krugman would rather do.
Mike
Gex
@Dave L:
Ha ha ha ha ha ha ha ha ha ha
I haven’t had such a good laugh in a long time. They don’t want to think. They don’t want to follow complex issues. They won’t compare and contrast US vs European policies. They will vote for whomever presents a platform that makes them feel better about themselves. And that will be browns, women, and gays until it stops working for them. The next time the GOP presidential candidate loses the white male vote, we’ll know the electorate is waking up.
cathyx
They will only admit it after they finish stealing all the money. Then who cares.
PeakVT
@MBunge: We know which one Krugman would rather do.
Say, can you tell what I think of your mind-reading skills right now?
patrick II
@jl:
This.
“Religion” and self-interest have a way of merging in some people’s mind.
BGinCHI
@WereBear: I need that recipe.
Baud
@MBunge:
I don’t know about Krugman’s state of mind, but I agree with the first sentence.
General Stuck (Bravo Nope Zero)
@Baud:
seconded. It is what it is. And Krugman should come clean that he has been wrong and overboard in the personal attacks on Obama. Or not. I don’t really care for any pundit that much, especially the polemic types, Krugman included.
NR
This is absolutely true, yet the Democrats still insist on compromising with them at every turn. Yet nobody bothers to ask the obvious question of why.
Baud
@NR:
Because we all know that the GOP controls one House of Congress and can force a filibuster in the other thanks in part to people who insist on continually attacking Democrats instead of working with us to defeat Republicans.
Chris
@Dave L:
No it doesn’t. The average American can’t find Europe on a map: he certainly doesn’t have a clue how its countries’ economic recoveries are progressing. He’s aware of a few vague concepts about Europe, like “it exists,” “it’s socialist” and “it’s doing badly,” and for the Foxbots and a lot of the “apolitical” people who listen to them, that’s all it’ll take to connect those two dots.
Chris
@Dave L:
No it doesn’t. The average American can’t find Europe on a map: he certainly doesn’t have a clue how its countries’ economic recoveries are progressing. He’s aware of a few vague concepts about Europe, like “it exists,” “it’s soshulist” and “it’s doing badly,” and for the Foxbots and a lot of the “apolitical” people who listen to them, that’s all it’ll take to connect those two dots.
NR
@Baud: You don’t defeat Republicans by compromising with them. You’d think people would understand this by now. It’s almost as if they have an incentive not to….
Chris
@Dave L:
No it doesn’t. The average American can’t find Europe on a map: he certainly doesn’t have a clue how its countries’ economic recoveries are progressing. He’s aware of a few vague concepts about Europe, like “it exists,” “it’s soshulist” and “it’s doing badly,” and for the Foxbots and a lot of the “apolitical” people who listen to them, that’s all it’ll take to connect those two dots.
Baud
@NR:
You defeat Republicans by voting against them. That’s what I plan to do. You are, of course, free to go your own way.
Chris
@BGinCHI:
In other words, we’re slitting our own throats in the same way the Soviets did, and we think because we’re doing it in the name of a different ideology, it’s going to save us.
Though at least the Soviets could plead dictatorial government over which they had no control. We actually vote for this delusional clusterfuck of a governing class.
Bob Hall
Austerity is not about economics. It’s about political economics, i.e. who will bear the costs of the adjustment to the financial imbalances. Austerity places the costs predominantly on the middle and working classes and the poor.
Gex
@Can’t Be Bothered: I don’t begrudge them the need to feel good about themselves. What I loathe them for is their need to feel better than most others. That’s the real issue. That’s always been the real issue.
Poor white working men can’t count on being better than minorities or women anymore just by definition. They’ll have to demonstrate their worth instead of just earn it because of their skin tone and genitals. They hate that. In their hearts they know it’s all this equality stuff that’s making it harder for them. They won’t admit that they just don’t want to compete. They’d rather ban everyone else from the games.
NR
@Baud:
Wrong. You defeat Republicans by convincing a majority of voters to vote against them.
And you don’t do that by compromising with them.
Scott P.
Ironically, “not compromising with the opposition” is also the Republican’s Master Plan.
Or Your Money Back
The answer of course is nothing. Nothing will convince them they are wrong.
bzzzzzzzzzzzzzzzzzzzzt !!!!!!!!!!!!!!!
wrong answer !!!!!
Class ?? Bueller ??
.40 or .45 in the back of the skull will most definitely convince them of the errors of their ways.
guaranteed
Auldblackjack
Those folks are running the show cause the plot line has noting to do with actual ‘jab creatin’ and everything to do with using this (and every other) crisis to lower labor costs globally for The Usual Suspects.
This has been another addition of simple answers to …
Debbie(aussie)
Am glad to say that we (Aus) are doing ok too! Unemployment at about 5-6%; inflation 3%. We were lucky enough to have a not-extremist-right-wing(ostensibley left)govt at the time that utilised stimulus rather than austerity. But not sure how long it will last.
Jimbo316
@Yutsano: And how many times did St. Ronald raise taxes? The Goopers are extremely selective in their knowledge of facts and history.
Jimbo316
@BGinCHI: This is also Romney’s failure of understanding. Actually, it is the failure of his message: that the USA should be run as a corporation instead as a complex body politic. Most people instinctively understand that this is false, which is one of many reasons even Goopers are turning off to him.
A.J.
” Twenty-seven percent were uncertain.”
Gee. 27%. Now where have I heard that before?
Grumpy Code Monkey
Faith-based economics.
Should work at least as well as faith-based medicine, yes?
OzoneR
@NR:
No, but you GOVERN by compromising with them.
Governing and campaigning are two different things
and in a word where they’re not, we don’t have a functioning country- we have a civil war.
OzoneR
@NR:
Because they win enough seats in Congress, governors mansions, and generally enough votes to remain relevant.
People ask why all the time, and you get an answer, but you don’t like the answer.
Not my problem.