Krugman points out in his column today that Mitt Romney declared himself to be the confidence fairy in his Boca remarks, saying that he really didn’t need to have an economic program, his election would be enough to lift all those boats without breaking a sweat. The declaration is as daft as it sounds, and Krugman dispatches it with his usual alacrity.
But within the column is this, which seems particularly relevant this morning:
It’s true that some studies suggest a secondary role for uncertainty in depressing the economy — and conservatives have seized on these studies, claiming vindication. But if you actually look at the measures of uncertainty involved, they’ve been driven not by fear of Mr. Obama but by events like the euro crisis and the standoff over the debt ceiling. (O.K., I guess you could argue that electing Mr. Romney might encourage businesses by promising an end to Republican economic sabotage.)
You should also know that efforts to base policy on speculations about business psychology have a track record — and it’s not a good one.
Back in 2010, as European nations began implementing savage austerity programs to placate bond markets, it was common for policy makers to deny that these programs would have a depressing effect. “The idea that austerity measures could trigger stagnation is incorrect,” insisted Jean-Claude Trichet, then the president of the European Central Bank. Why? Because these measures would “increase the confidence of households, firms and investors.”
At the time I ridiculed such claims as belief in the “confidence fairy.” And sure enough, austerity programs actually led to Depression-level economic downturns across much of Europe.
None of that has changed the ongoing belief in austerity among our ruling class, however. They are, apparently, completely faith based at this point, unshakable in their belief in their Fairy Goddess. Here’s Atrios:
If I actually believed that this was simply a story about evil plutocrats stealing from the rest of us I’d at least have a bit of respect. Oddly I don’t actually believe that. Sure there are evil plutocrats stealing from the rest of us, ones who know what they’re doing, but I also think that a lot of the people who rule us are just idiots.
Recession-hit Spaniards will this week be told to swallow yet more austerity as the government prepares a fresh round of reforms and another budget filled with spending cuts and tax increases that will allow it to seek a bailout from eurozone partners.
Pension freezes are also expected to form part of a raft measures to prepare the way for the European Central Bank (ECB) to give Spain support to control borrowing costs that will eat up a large chunk of next year’s budget.
Apparently the Confidence Fairy has a huge appetite for human sacrifice.
Mort Zuckerman read from the Austerian Book of Common Prayer on The McLaughlin Group this past week-end:
According to Austerian dogma, the US is exactly like Europe we just haven’t gotten there yet. So we must follow the European example and create as much suffering as possible as far as the eye can see to right the ship. (It’s the same illogic as the one that says in order to fix a projected shortfall in Social Security a couple of decades from now we need to lock in that shortfall today.)
Zuckerman isn’t even saying that the Confidence Fairy needs to be shown that we are serious about our debt so she will unleash her market power for the good of everyone. He’s pretty much admitting that she’s a vengeful Goddess who is punishing the lazy parasites for their piggish ways. She promises a dystopian hellscape in the future even for the deserving few unless we ensure that these parasites will continue to suffer now and in the future.