Eat-Your-Spinach Austerity and Machismo Economics

Here’s the back story: Paul Krugman has an article called “How the Case for Austerity Has Crumbled” in the current New York Review of Books. It’s a long article, but in it the Professor makes the point that austerity economics is more about morality than economics. It grows out of an emotional need to make somebody pay for our sins.

Michael Kinsley wrote what was supposed to be a rebuttal to Krugman that made Krugman’s case. Kinsley accuses Krugman of making a moral case against austerity, and then said austerity is good because it is payment for past sins and just like eating one’s spinach. See also Michael Kinsley Humiliates Himself In Terrible Defense Of Austerity and Kinsley loves austerity because it is “spinach.”
Since then there has been a high-level piling on, joined by people like Brad DeLong and Matt Yglesias, as well as some blog posts by Krugman himself. This includes a post today called Macroeconomic Machismo.

It was obvious during the runup to the Iraq war that what was going on in the minds of many hawks — and not just the neocons — was not so much a deep desire to drop lots of bombs and kill lots of people (although they were OK with that) as a deep desire to be seen as people who were willing to Do What Has to be Done. Men who have never risked, well, anything relished the chance to look in the mirror and see Winston Churchill looking back.

Actually, I suspect that even the torture thing had less to do with sadism than with the desire to look tough.

And the austerian impulse is pretty much the same thing, except that in this case the mild-mannered pundits want to look in the mirror and see Paul Volcker.

It occurs to me this theory could be extended to just about every stupid thing in U.S. history, from the firing on Fort Sumter to the McCarthy witch hunts to LBJ’s ordering troops into Vietnam. Feel free to discuss.

See also Neocons:Munich :: Austerians:Stagflation

20 thoughts on “Eat-Your-Spinach Austerity and Machismo Economics

  1. No… well, being macho with terrorists and guilty over debt are both reactions to a situation. And it might have even been this blog/blogger pointed out long ago that there’s a difference between reacting and responding. So here it is: it has been documented that in crisis situations people prefer decisiveness over competence, at least initially. More so for the rw authoritarians.

    So yeah, torture won’t get us any info, but at least it’s something to do that’s blunt and straightfoward. Same thing with the debt. Deep down austerity is the natural straightforward reaction to the spending and debt “crisis”. It’s a lot better than any sort of self-reflection. It just must be right. It’s decisive, but they’re still grasping at straws at this point. When you take economics out of discussions about the economy you’ve already lost. Everything else is just saving face.

  2. I don’t believe we can just ignore our debt; it is approaching 110% of GDP that is not sustainable. The good news is we can pay down our debt without Austerity, it’s called taxes and if everyone paid their fair share (Mittens, Crossroads GPS, Tea-Party, Exxon, Apple, etc.) we’d have budget surpluses. Pretty simple really!

  3. I like how Krugman finishes his piece:
    “So if you like, the problem is Seriousness rather than sadism. On foreign policy, it’s always 1938; on economic policy, it’s always 1979. And the colossal muddle goes on.”

    And so, after 9/11, our Conservatives tried to paint W as America’s ‘Young Churchill” – when in fact, he wasn’t even Churchill’s butler.
    W, and his boss, Cheney, couldn’t afford to keep looking like the hubristic nincompoops who were warned about massive terrorist threats, and responded by going, and staying, on vacation. And what followed, “Bush’s Folly,” was all about showing how big their cojones remained, by playing high-tech games of “Whack-a-mole” – which resulted in thousands of our soldiers died, tens of thousands mentally and psychologically wounded, and millions of Afghan’s and Iraqi’s, dead, wounded, or displaced.
    All to prop-up the weakest US President in history, and the most sociopathic VP in our history.

    And then, President Obama, after a too-small stimulus, abandoned Keynesian economics, and went with “Shock Doctrine” economics.
    And so, the group headed by Simpleton & Bowel-movement prescribed pain for all – but the top 2%, of course.
    So, everyone else had to take our daily dose of cod-liver oil, and wash it down with cheap beer – just so the wealthy could keep feasting on lobster and caviar, while deciding whether they wanted to ask their sommelier’s to get them Doux, Brut, or Brut Sauvage, champagne, out of the wine cellars in their mansions.

    We have just spent the last (nearly) 5 years, in which Austerian ecomonics have been applied on a massive scale.
    And, predictably, using leeches hasn’t helped the anemic patient.
    But the doctors can’t admit that leeching was the wrong thing to do, because then they’d have to admit they were wrong in their analysis, prognosis, and treatment, since there’s still no miraculous cure.
    And giving the anemic patient a transfusion, while probably curing him, will make them all look weak – and show everyone that they’d been wrong all along.

    And so, they figure, better dead patient’s, than damaged reputations.
    You can at least hide the dead by burying them – but what do you do with a dead reputation?

  4. What the hell? I like spinach. Plus it really is good for your body in a way that austerity is not good for your economy.

  5. And Kinsley’s shtick has been the “intellectual contrarian.” He really blew that up.

    They hate Krugman d*mn near as much as they hate Obama, for speaking uncomfortable truths.

    Even though its evident, as Krugman so pointedly makes clear, its still fantastic that the people in power are that small minded and petty; the very opposite traits of great leadership they imagine in themselves, such as exhibited by people like Churchill, that they’d see thousands of lives lost, the economy remain in devastation mode, rather than just changing course. Let alone admitting they were wrong about the cure.

    BY their actions they prove the mirror does not reflect greatness; just their own pathetic selves.

  6. Is this really hard for people like Kinsley?

    If you’re going to get ego strokes from all the people you give a damn about, *you are not being brave*. Period. The end. It doesn’t matter if you’re saying something unpleasant, or even something *truly* evil, it takes no courage to say something that will get you ego strokes and that doesn’t put you in any actual danger.

    When all the Very Serious People agree that austerity is what’s needed, then, yes, it *is* brave to say “bullshit; what we need is stimulus.” It’s not extremely brave – in the end, no one is going to be put at risk by it – but it’s braver than nodding and agreeing with the VSPs.

    Similarly, although we were talking about the brutal deaths of thousands of people, there was no courage in declaring that We Must Go To War With Iraq. It took courage to take a stand and say “we have no reason to cause the deaths of thousands of people,” because it’s going against public opinion and you’re going to be called a traitor. You could (and many people did) lose their jobs over such things.

    Is this really *difficult*? I mean, does this really require *thinking*?

    (Or, to be clear: Is Kinsley really *that* fucking[1] stupid?”)

    [1] I try to avoid profanity – sometimes it is appropriate, and then I try to emphasize that I feel it’s necessary.

  7. uncledad, actually we can ignore the debt. At least for a while yet, we very much should ignore the debt. 100% GDP is no magic number … there is no reason to believe we are anywhere near the point where the debt level becomes unsustainable. It is clear, though, that we need to apply a little Keynes to our current situation … which requires government to run a deficit, the bigger the better. At present, it would be just as bad of an idea to try to tax our way to a balanced budget as it would be to cut our way there. The whole point is for the government to inject money into the economy via borrowing.


  8. “The whole point is for the government to inject money into the economy via borrowing”

    That may be and was valid during the downturn, but we are not in recession anymore now is the time to pay down the debt while our corporations are profitable. Your argument is no different that the baggers just on the other side. They always cry “now is not the time to raise taxes”. when is the time to raise taxes? When is the time to pay off the debt?

    • When is the time to pay off the debt?

      When we’re closer to full employment. If we put debt reduction before employment, we’re doomed.

  9. “When we’re closer to full employment”

    I think you’ll be waiing forever then. I’m no economist but it seems to me we are at full employment. Unless we reform the way we do busness here (giving incentives for corporations to offshore) I don’t see the employment picture improving anytime soon.

    • I think you’ll be waiing forever then.

      Look, it’s simple. Many big companies are flush with cash, but aren’t hiring because they don’t see increasing demands for their products. And the reason they don’t see increasing demands for their products is that so many people are not buying as much stuff. The number of poor, underemployed and and unemployed people keeps consumer confidence low, and when consumer confidence is low companies see flat sales and don’t want to hire people. This also causes tax revenues to go down, which increases the deficit. Round and round and round.

      Too much austerity just strangles the economy even more, making any kind of recovery more unlikely. This has been happening in large parts of Europe. The stingier they get with government spending, the worse the overall economy. Unemployment goes up, consumer spending goes down, revenues fall, and there’s still a deficit. In the long run it isn’t cost effective.

      When the government spreads money around to hire people and start projects, it puts more money into circulation, and people start buying stuff, and then companies see demand for their products and services and begin to expand. Tax revenues increase; the deficit falls.

      When the unemployment rate is finally low again, then government can start to economize. The issue of moving jobs offshore is also a factor, but at this point it’s not a primary factor for why the economy still sucks. There are all kinds of jobs that can’t be “offshored” — teachers, nurses, cooks, mechanics, plumbers, etc. Can’t send your dripping faucet to India, can you?

  10. uncledad,
    Never mind the official unemployment statistics.
    There are probably at least twice as many people now unemployed than those stats show.
    People like me, who have been unemployed for more than 3 years, whose unemployment insurance has run out.
    On top of that, we’ve got a HUGE jobs problem at both extreme’s of age. Teenagers are blocked from fast food jobs, by seniors taking them, trying to make ends meet. And if you’re over 50, and find yourself losing your job, your chance of finding another job is – 9%.
    Not a “comparable” job – A JOB.

    We are still at what used to be crisis-level, all speed ahead let’s fix this, unemployment.
    But now, it’s “Ho-hum… It is what it is…”

  11. uncledad,
    I forgot to mention that people who have been unemployed as long as I have, have dropped off the statistical radar.
    We no longer exist – except in “long-term chronically unemployed” stats, which are separated from the official stats, because to include us, would embarrass the President, and Congress. – if Congress can still be embarrassed, at this point.

  12. Cund,

    Your missing my point, I am not saying all is well. I am saying until we change the way we do business here we are at full employment (i.e their aint many more jobs out there). Why would US corporations decide to start building things here when our laws are written to encourage the opposite?

    • Your missing my point, I am not saying all is well. I am saying until we change the way we do business here we are at full employment (i.e their aint many more jobs out there).

      Be advised that private sector job growth has been much better than public sector. A big reason the unemployment picture has remained bleak is large layoffs of government employees, especially at state and local level.

      In other words, even factoring in the off-shoring of jobs, the employment picture could be a lot better than it is.

  13. “Too much austerity just strangles the economy even more, making any kind of recovery more unlikely”

    I agree that is why I didn’t call on massive cuts to pay the debt. I want people that can afford to and corporations to start paying taxes again. Much of our debt can be traced to the fact that we have allowed our tax laws to be undermined by endless loopholes. Are you Ok with profitable US corporations paying zero taxes? I’m not and it adds to our debt. Estimated cost last year was 385 billion?

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