Thursday, May 23, 2013

The Austerians vs. Anti-Austerians: The Saga Continues

You may have read my earlier take on it.  If not, do read it, because it matters for understanding the newest stage of the saga:  Michael Kinsley's response to various critics.

Let's face it.  He doesn't talk to me there because I'm a very tiny (though divine) blogger.  So it may be understandable that his answer isn't about any of the invisible and inaudible points I made, such as the obvious one:  The correct policy depends on what works.  Or the other pretty obvious one:  Generalized demands of suffering do not change the moral incentives of those who, in fact, caused the suffering and have the power of causing more suffering in the future, and generalized suffering of that kind also punishes the innocent.

But whatever, as wiser people in the media say.  We talk about what we talk about.  And Kinsley talks about the bad press his earlier piece received:

The other article was the latest chapter in my ongoing discussion with Paul Krugman and his disciples about the economy and what we now call “austerity.” I hoped this article would be regarded as a useful contribution to the debate, but I had no great aspirations for it beyond that. It’s this one, though, that has produced one of those flattering but scary web hailstorms. People I don’t know are calling me things I don’t know either.
There are two possible explanations. First, it might be that I am not just wrong (in saying that the national debt remains a serious problem and we’d be well advised to worry about it) but just so spectacularly and obviously wrong that there is no point in further discussion. Or second, to bring up the national debt at all in such discussions has become politically incorrect. To disagree is not just wrong but offensive. Such views do exist. Racism for example. I just didn’t realize that the national debt was one of them.
I assume from the way he writes that Krugman is out there most Sunday mornings painting poor people’s houses
I’ve always been dubious of people claiming to be victims of political correctness. They generally exaggerate, and I don’t care for the self-congratulatory element. It requires no courage to say almost anything in this country. But the reaction to my piece—or really to my side of the whole debate—has that “how dare you” element that is associated with political correctness. Never mind the argument—this is something you just don’t say. Instead, let’s go straight to the impugning of motives

That ancient term "political correctness"  was always misused, by the way.  What was (and is)  politically correct are the opinions which the political powers-that-be support.  But the term wasn't used thataway.  It was used to imply stuff such as that the oppressors are oppressed by not being allowed to oppress without push-back and so on.

Well, that's an extreme example.  Others are similar, however, with the implication that vast masses of powerful people stop the real truth-tellers in the guise of political correctness.  And of course there were silly statements from the other side, too.  But mostly seeing a sentence begin with "this is not politically correct but" gave me warning to put my hazmat suit on in case I was next told that people like me are stupid, fickle,  lazy, greedy and intended only for sexual use.

This history may make me biased about the way Kinsley uses the term.  I thought his initial piece suffered from any lack of economic proof that austerity is at least as likely to lead to a quicker end of a recession than alternative policies.   Without such a proof discussing the importance of generalized suffering is  pointless.

Both Kinsley's earlier post and this new post do ask questions about the federal debt.  He wants to know how Krugman would pay for it if not through austerity politics during a recession.

I cannot speak for Krugman, but the usual economic thinking is to pay off debt during good times.  That's when the government can more easily afford it and that's also the time when tax revenues naturally rise, given rising unemployment and incomes.

And of course the government must use federal debt properly.  To use personal life analogies (with great care, as governments do not have the same tasks as families do), it's not a good idea to permanently live above your means by using credit cards without ever paying the debts off.  Anyone who does that should try to increase income and/or cut expenses.

But it's also not a good idea to decide to pay off all  credit card debts  during an exceptionally bad year when the breadwinners in the family lose their jobs or get very sick.  This is the case whether those debts are justifiable by the family's long-term budget or not.