The germ of this diary is Paul Krugman's excellent piece on Europe's Austerity Madness. Krugman is making the case against the austerity programs being foisted on ailing European economies. Krugman's central thesis is that the austerity programs do nothing to address the source of the problem and will only worsen economic conditions in the countries being forced into these austerity policies. He's right, of course, but there's a larger point to be made about the group he names as being behind this policy fiasco: The "Very Serious People."
These Very Serious People have a long track record of screwing things up for the rest of us, and we have to ask why we allow these VSP's to keep selling us their lipstick-covered porcines.
Krugman rightly points out that Spain actually had a budget surplus before the country's absurd housing bubble burst. Spain was afflicted with a madness in the run-up to the crash, but it had nothing to do with government excesses in social spending. It was all about condos and new real estate developments that have become ghost towns. Who was making the real money off these developments? Very serious people who invested in real estate trusts, in Spain and around the world.
Of course, governments bailed out the banks to preserve the global wealth the VSPs rely on. We can argue about the propriety or the wisdom of those decisions, but we cannot deny that the vast majority of those most affected by the housing market collapse have gotten little relief. As they are being forced to rely on government supports, the "makers" are insisting that governments actually cut back on those supports -- cut back on the government programs that played such a large part in creating the American and European middle classes that were the backbone of the strong economies of the 20th Century.
Yeah, economics is a tough slog, but Krugman's piece is worth a read.
It's also worth considering the wisdom of Krugman's Very Serious People. They're not a new phenomenon. They've been with us for a long time.
30 years ago, the Very Serious People sold us the magic of supply-side economics. They told us that the savior of Western economies in recession would be tax cuts, especially for the wealthiest. We slashed income tax rates, collapsing much of the progressivity that had been in our tax code. The market grew (until it crashed), and even capital gains revenues grew, but the governments ran up record deficits and we began the long slow slide of the disappearing middle classes. Our trade deficits grew and the disappearance of manufacturing jobs in the US just accelerated.
Next, the Very Serious People told us that the post-war international financial and trade regimes had brought peace and prosperity, but that we needed to open things up even further. So, we were sold on the magic of free-trade agreements. They proved to be a huge boon to companies willing to invest in third world production, and to market funds that made fortunes off of those investments. Manufacturing in the US continued to fall off, but the giant sucking sound was drowned out by the ringing bells and bulls on Wall Street.
The VSPs came in and told us that we needed to create even more demand for stock, which we could do if got people to agree to invest a portion of their Social Security accounts. Fortunately, the VSPs didn't get their way there, but they did succeed in getting the post Depression rules against mixing banking and investment funds.
They also told us that the Clinton Presidency was a foreign policy disaster and that we needed to bring back the serous people who had thoughtlessly signaled Saddam Hussein that we would allow him to conquer Kuwait. These Very Serious People insisted that we needed to overthrow the Iraqi regime.
President Obama has spent his first four years trying to pull us out of the wreckage created by the VSPs -- the Great Recession, the Iraq War, and maybe even the consequences of a far too limited effort in Afghanistan for too many years.
Now, the Very Serious People are telling us we need to cut back on beneficial public spending because we can't ask the wealthy to pay more or ask the richest, most profitable corporations to actually start paying taxes.
They're also telling us we can't start investing in renewable energy -- that we have to give up and suffer the coming global warming catastrophe. Is it just a coincidence that there's no way to for corporations to monopolize the sun, the wind, or geothermal power, no way to control drilling rights for solar rays? We've got big problems, but we're being told to give up on solving them -- because they're either too expensive or just unrealistic...or, maybe that they are just a cover for a "redistribution of wealth."
As I wrote before, the VSPs aren't a new phenomenon. They led us feet first into the Great Depression. Then, they refused to see the threat posed by the Fascists. There is a commonality -- where policy is heavily influenced by an insular group that doesn't see their interests as being aligned with those outside their group and class.
We live in a society that is more divided than at any time in the last century -- literally. We used to have communities where people of different economic strata lived together. Those places are disappearing. Is it any wonder that people now just see clashes of interests, insisting one or the other group is parasitic? The rich live in communities that are beyond the dreams of the 99%. They send their kids to private schools, so it's hardly a surprise that they no longer see the value in our public education system. They no longer interact with schoolteachers, with police, with firefighters, or even soldiers. So, it's not surprise that they see these public employees and their pensions as parasitic invasions upon their personal treasuries.
The VSPs have created their own world, where they cannot see the broader damage their isolation is creating. The VSPs have monopolized the debate in the Very Serious Media for too long. We need to dispel the notion that the VSPs have a monopoly on seriousness.
We need a new ethic that recognizes our long-term shared interest in improving conditions for everyone, even if it means asking more of those who have the most. More than anything, we need to reinvigorate governments to take on our most serious problems, even if it might mean making far-sighted investment, instead of listening of the short-sighted, self-interested advice of the Very Serious People.
We have serious problems we need to address, way beyond the prescriptions of the Very Serious People. If we're going to address our economic problems, if we are to reverse the social inequalities that are corrupting our politics, and if we are to really face head-on the unprecedented challenge posed by climate-change, we need to go beyond the unserious ideas offered by the Very Serious People.