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Seriousness, Sadism and Sound Money

As someone on record as being against seriousness, but who has also argued that the Great Recession made it all the more imperative that we realign our spending priorities, this Paul Krugman post hits me where it hurts: It was obvious during the runup to the Iraq war that what was going on in the […]

As someone on record as being against seriousness, but who has also argued that the Great Recession made it all the more imperative that we realign our spending priorities, this Paul Krugman post hits me where it hurts:

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.

Much of the problem in trying to stop the march to war was precisely the fear of many pundits that they would be seen as weak and, above all, not Serious if they objected. Austerity has been very much the same thing — and again, it’s not just the right-wingers who are afflicted.

I think there’s a great deal to this psychology. I certainly recognize it in myself. I’m not an Austrian because I think Austrian economics isn’t really economics at all – it’s not even trying to predict the outcome of particular economic decisions with any kind of accuracy. It’s a philosophical position, and I’m not sure it’s even subject to falsification.

But I’m not a true Keynesian in part because, well, there’s something fishy about it. The financial crisis that kicked off the Great Recession was a real event that changed people’s real risk tolerances. That sounds, to me, like  a profound psychological change that requires a similarly profound adjustment to correct, not a technical problem requiring a purely technical fix. I cannot believe that dropping money from helicopters or paying people to dig and fill holes would actually be efficacious at all.

Don’t get me wrong; I’m not an advocate of austerity. I agree much more with Krugman than I disagree on the questions of what our fiscal policy should look like (expansionist) and on what our fiscal priorities should be (less spending on defense, more on improvements to the nation’s capital stock, and I suspect we agree that we should be seeking more efficiencies in health care spending as well). I suspect I’m out on a lonely limb with those sentiments at this magazine, but fortunately my employers let me write what I think.

But perhaps I am being too serious. I applaud Krugman for saying, earlier this year, that he doubts inequality is an important contributing cause of our sluggish recovery. That’s an argument against interest on his part, and against instinct, as it would be for me as well. Which is a habit to encourage, not quash in the interests of appearing serious.

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