Krugman: Revenge Of The Unforgiven

[mindwalker_i]

Stop me if you’ve heard this before: The world economy appears to be stumbling. For a while, things seemed to be looking up, and there was talk about green shoots of recovery. But now growth is stalling, and the specter of deflation looms.

If this story sounds familiar, it should; it has played out repeatedly since 2008. As in previous episodes, the worst news is coming from Europe, but this time there is also a clear slowdown in emerging markets — and there are even warning signs in the United States, despite pretty good job growth at the moment.

--snip--

The answer, I’d suggest, is an excess of virtue. Righteousness is killing the world economy.

The good doctor is being way too kind. It's not righteousness, it's that the rich are given way too much consideration when it comes to policy, even though the policies enacted will hurt the rich. It's that fully one party and half of the other is dedicated to making sure their customers are fully served - your pain is our pain, literally, since most politicians are rich as well.

But the problem is that markets are a symbiotic relationship. There are buyers as well as sellers, and one is unable to exist without the other. All the attention is, however, paid only to one side of the equation. The other side is left to fend completely for itself, eith the predictable result that the equation doesn't balance, and that has a non-trivial effect of reality.

It's not a matter of virtue when it comes to those pushing austerity. It's a matter of those in charge - our elected officials - catering to the needs, both physical and psychological, of the 1%. They do this for two reasons: they are rich as well, but also they need money from other rich people to fund their campaigns - so they can keep their jobs. To some extent, that's understandable. It's what they have to do to stay in power. But it definitely isn't good for the country as a whole.