Monday, January 30, 2012
Obituary for a Zombie Policy
Paul Krugman writes the obituary for expansionary austerity, an economic policy that was dead on arrival but brought back to life by the voodoo doctors of the Very Serious People in Europe. Even though the evidence is enough to take a chainsaw to austerity, you know the voodoo doctors will bring it back until they are eliminated.
The infuriating thing about this tragedy is that it was completely unnecessary. Half a century ago, any economist — or for that matter any undergraduate who had read Paul Samuelson’s textbook “Economics” — could have told you that austerity in the face of depression was a very bad idea. But policy makers, pundits and, I’m sorry to say, many economists decided, largely for political reasons, to forget what they used to know. And millions of workers are paying the price for their willful amnesia.Despite what you see in the movies, brains have never been part of this zombies diet.
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