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The Triumph of Bad Ideas

by: egberto

Mon Jan 07, 2013 at 01:22 PM CST

On January 6th Paul Krugman wrote a piece (The Big Fail) every Right Wing politician and every myth based economist should read. It was expected that at this year's American Economic Association meeting, that they would be discussing about the success of the slump ending. Instead, they are still talking about the ongoing slump.

This should have been expected given the nature of the corrupt fiscal policy of the United States and every "capitalist free market" country in the world. Could it be that this chart would be forgotten? What cannot be absolved is that these policies have decimated the middle class.

Paul Krugman ponders why:

It's tempting to argue that the economic failures of recent years prove that economists don't have the answers. But the truth is actually worse: in reality, standard economics offered good answers, but political leaders - and all too many economists - chose to forget or ignore what they should have known.

The reality is that the purity of science has been corrupted by scientists as hired guns, (e.g., climate change deniers). When companies can purchase scientist that can overtly deny the obvious verifiable failure of drugs, technologies, and the bad outcomes of their products, how can one expect economists to not suffer an even more perverse faith, given the inexactness of that "science".

The failure of the world's economy was man made. It was a fraud by the financial titans on the middle class and the poor. It was the middle class and the poor (we the people) that ultimately rescued them with the creation of money to make them whole. When these titans needed rescue they were happy to accept a Keynesian approach to inflate the financial sector via the resources of the government. Of course they do not want the middle class "sector" inflated with public dollars to repair and create infrastructure, education capital, and future energy paradigms. That would mean the people dictating the economy as oppose to them holding the economy hostage to extort cheap labor.

It is not enough for them that the austerity they are seeking has failed in every major country in the world that has implemented it. Paul Krugman illustrates this brilliantly:

But it all went wrong in 2010. The crisis in Greece was taken, wrongly, as a sign that all governments had better slash spending and deficits right away. Austerity became the order of the day, and supposed experts who should have known better cheered the process on, while the warnings of some (but not enough) economists that austerity would derail recovery were ignored. For example, the president of the European Central Bank confidently asserted that "the idea that austerity measures could trigger stagnation is incorrect."

Well, someone was incorrect, all right.

Exactly. The fact that the evidence is staring everyone in the face does not seem to be enough to derail those that continue to have bad ideas. Why is that? There is a media out there that gives both sides and sometimes more so the side of the Right equal plausibility. Paul Krugman should be a constant on every network. After all, his prognostications have been mostly correct. He ends his article with a prescient statement.

The truth is that we've just experienced a colossal failure of economic policy - and far too many of those responsible for that failure both retain power and refuse to learn from experience.

What should be added is that when McCain, McConnell, & Gingrich can be the voices that the media continuously reach out to in order to discuss what ails our country, we have a problem. When economists like Paul Krugman, Joseph Stiglitz, and Richard Wolff, the folks that have been continuously correct, are the voices of authority we hear from, we will have the possibility of stemming the economic decline of America's middle class.

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