Economics as Religion

Alan Grayson reminds us that the Bush tax cuts are now eleven years old. Bush signed the first tax cut package into law on June 7, 2011 2001.

Bush claimed (as right-wingers always do) that tax breaks for the rich would create jobs in the private sector. Well, they haven’t. There were 110 million private sector jobs in America in 2001. There are 110 million private sector jobs in America today. Despite a population increase of more than 25 million, there are no more private sector jobs today than when the Bush tax breaks for the rich became law.

Further, most of the continent of Europe has been going whole-hog on “austerity” in recent years to bring down government debt, and the result is disaster. Will Hutton:

It could hardly be more sobering. Money has flooded out of Spain, Greece and the peripheral European economies. Signs of the crisis range from Athen’s soup kitchens to Spain‘s crowds of indignados protesting in the streets against austerity and a broken capitalism. Youth unemployment is sky-high. Less visible is the avalanche of money flowing into hoped-for safe havens in the US, Germany and even Britain. The last time the British government could sell government bonds at interest rates as low as today’s was in the early 1700s.

One would think that anyone bright enough to tie his own shoes would look at these results and conclude that more tax and spending cuts probably are not going to help. But the capacity of true believers to deny reality is boundless. The crew at Reason argue that Europe just hasn’t been austere enough. More spending cuts … that’s the ticket!

Of course, in 2010 the famously stupid Veronique de Rugy thought that Europe was getting everything right.

I’ve been haunted by this video of Paul Krugman trying to explain reality to a couple of pro-austerity Brits. The two Brits are obviously well educated and successful, and they seem incapable of understanding anything but budget cuts good, spending bad. The two of them sputter and babble and repeat ideological talking points and look at Krugman as if he has worms coming out of his nose. And you know that no amount of real-world experience would ever make a dent in their fantasies.

At one point, Krugman gets to the bottom line:

“By the way, I think you’ve just given me confirmation of something that people like me tend to say, which is, actually none of this is at all about fiscal responsibility. It’s all about exploiting the current situation to pursue an ideological goal of a smaller state.”

Which is why they can’t be reasoned with.

BTW, at the end of the interview one of the two twits asked “What about Estonia?” Estonia’s economy has improved somewhat, which proves to the twits that austerity works, even if it is failing everywhere else. Krugman addresses that on his blog.

Speaking of religion, see also “The GOP’s Bizarre, Disturbing Passion for Raising Taxes on the Poor.” Also, too,”Not With a Bang, But a Whimper: The Long, Slow Death Spiral of America’s Labor Movement.”