So yesterday, we had this little blast from Paul Krugman who notes that the economics profession is FAR more to blame than the general public when it comes to the economic catastrophes the world finds itself in. It would be very difficult to better explain this huge gap except with with one of Veblen's better (and funnier) expressions.
The Peasants Are Revolting
September 6, 2011
OK, I bagged out on the gala dinner because I’m exhausted from travel (it’s not the flight, it’s the drive to the conference venue), so time for a blog post while I wait for room service.
I see that Atrios has spotted another piece claiming that we’re having all this trouble because those pesky voters won’t support what the wise men know is good for them. I’ve written about this before, with comparable disgust.
Look, I don’t want to wax all sentimental about the genius of the common man. But the fact is that both the origins of this crisis and its perpetuation overwhelmingly reflect the errors of the very people now lamenting the annoyances of democracy that keep them from imposing their preferred policies.
As Atrios says, the euro was very much a top-down, elite-imposed project; and it’s the ECB and the German finance ministry, not the unwashed masses, that have pushed for the austerity-for-all agenda that is pushing the euro system to the edge as we speak.
Meanwhile, in the United States it was the Very Serious People — the WaPo editorial page, the Bowleses and Simpsons and those who extolled them, who declared that our top priority must be deficit reduction now now now, and have left us slashing spending to fend off imaginary bond vigilantes at a time of mass unemployment and record low interest rates.
Meanwhile, voters may be confused and not all that well informed, but if anything they are making more sense on job creation than anyone in a real position of influence.
Suppose Trichet and Schaeuble had been free to dictate fiscal policy for all of Europe, never mind the elected governments; suppose Alan Simpson were in a position to dictate US fiscal policy without that legislative nonsense. Do you really think we’d be in better shape?
And more to the point: by blaming democracy, the people who have gotten everything wrong are letting themselves off the hook. The elites on both sides of the Atlantic have messed up catastrophically, and need to face that fact. more