Two strange, revisionist pieces in this AM’s WaPo.
First, on the oped page, a confusing, ahistorical editorial riffing off of the Rogoff-Reinhart (R&R) debacle. The piece starts off spot-on, making a point I’ve been stressing in recent days: the austerity movement is not built off of this one R&R paper, and absent their paper, the austerions would find other misguided sources to motivate their actions.
The fact that one of those sources would indeed be the editorial page of the WaPo is where the editorial gets weird. All the sudden, the ed board is all “austerity?…us?…really?…why, we’ve been veritable Keynesians over here, praising the stimulus and simply calling for long-term balance.” [I’m paraphrasing.]
In fact, they’ve constantly criticized policy makers for not cutting deep enough and fast enough, and have consistently failed to blow the whistle on cuts that have us stuck in our current slog and Europe back in recession.
It’s interesting to see reactions like this to R&R’s mistakes. An optimist might think that some of those who’ve been relentlessly confident in their bad, contractionary advice might start thinking twice. I am not such an optimist.
Next, just across the broadsheet, we come across an even weirder commentary by Robert Samuelson, on how economics has just become really confusing, and no one knows what to do because nothing seems to work.
This is like someone who’s supposed to be getting in shape for a race saying “I’ve tried eating extra snack foods, sitting around watching TV, and napping…but nothing seems to be improving my speed. It’s a mystery!”
Interestingly, on a different oped page today, Krugman writes:
The main reason our economic recovery has been so weak is that, spooked by fear-mongering over debt, we’ve been doing exactly what basic macroeconomics says you shouldn’t do — cutting government spending in the face of a depressed economy.
I don’t mean to imply that it’s that simple. In models, you add more stimulus at a time like this and economies grow faster. In the real world, there’s implementation, timing, etc. But the evidence, both from our own Recovery Act, and from research on the European situation (see box 1.1 here), is very strong, showing multipliers from Keynesian measures that are well above 1 right now.
To say “we just don’t get it” is to stubbornly and willfully ignore that evidence.