Krugman: The Austerity Agenda...gut the social programs, and defeat Obama

By Paul Krugman, New York Times, May 31, 2012
The great American economist Irving Fisher explained it all the way back in 1933, summarizing what he called “debt deflation” with the pithy slogan “the more the debtors pay, the more they owe.” Recent events, above all the austerity death spiral in Europe, have dramatically illustrated the truth of Fisher’s insight.

And there’s a clear moral to this story: When the private sector is frantically trying to pay down debt, the public sector should do the opposite, spending when the private sector can’t or won’t. By all means, let’s balance our budget once the economy has recovered — but not now. The boom, not the slump, is the right time for austerity.
As I said, this isn’t a new insight. So why have so many politicians insisted on pursuing austerity in slump? And why won’t they change course even as experience confirms the lessons of theory and history?
Well, that’s where it gets interesting. For when you push “austerians” on the badness of their metaphor, they almost always retreat to assertions along the lines of: “But it’s essential that we shrink the size of the state.”
Now, these assertions often go along with claims that the economic crisis itself demonstrates the need to shrink government. But that’s manifestly not true. Look at the countries in Europe that have weathered the storm best, and near the top of the list you’ll find big-government nations like Sweden and Austria.
And if you look, on the other hand, at the nations conservatives admired before the crisis, you’ll find George Osborne, Britain’s chancellor of the Exchequer and the architect of the country’s current economic policy, describing Ireland as “a shining example of the art of the possible.” Meanwhile, the Cato Institute was praising Iceland’s low taxes and hoping that other industrial nations “will learn from Iceland’s success.”
So the austerity drive in Britain isn’t really about debt and deficits at all; it’s about using deficit panic as an excuse to dismantle social programs. And this is, of course, exactly the same thing that has been happening in America.
In fairness to Britain’s conservatives, they aren’t quite as crude as their American counterparts. They don’t rail against the evils of deficits in one breath, then demand huge tax cuts for the wealthy in the next (although the Cameron government has, in fact, significantly cut the top tax rate). And, in general, they seem less determined than America’s right to aid the rich and punish the poor. Still, the direction of policy is the same — and so is the fundamental insincerity of the calls for austerity.
The big question here is whether the evident failure of austerity to produce an economic recovery will lead to a “Plan B.” Maybe. But my guess is that even if such a plan is announced, it won’t amount to much. For economic recovery was never the point; the drive for austerity was about using the crisis, not solving it. And it still is.
Dismantling social programs, first, demonstrates an attitude, even a fixation, not about economics but about selfishness, and about a lack of compassion, sensitivity and empathy as values/virtues unworthy of the name.
In a world drowning in globalization/competition/profiteering where making the most money, in the most efficient way possible, regardless of the "human" cost, and where all measures of everything are about how the person, or the thing rates in comparison with the competition, those comparisons and those competitions, and all of their strengths and weaknesses, have become THE barometer by which to measure all things.
So reducing all variables to numbers, and preferably to dollars, in a cost/benefit analysis, stampedes the international public discourse leaving any discussion of how we might be killing ourselves, our environment, our children and our way of life to the "effetes" who really have no place at the "boardroom table"...those tables that have become the altar in this new religion.
Those "effetes" include the dangerous environmentalists, the pacifists, the labour unions, the public service workers like teachers, firefighters, police and utilities workers who keep the water flowing in and the sewers flowing out of our homes and into the recycling labs for re-use...all of those who, by the cost-benefit analysis of the glib public accounting, do not pay their way, but drain the public purse through their work.
Along with the marginalization of the "effetes" goes the elimination of the programs that were designed to level the playing field by providing access to quality, affordable universal health care, to pre-school programs, to food stamp programs, to pensions and employment insurance programs, all of these considered redundant by those who have no need for any of them, having inherited or invested their way to huge off-shore bank accounts.
The most devout christians, ironically, are the most "darwinian" in their silent but universal endorsement of the survival of the fittest, in social and political terms, as demonstrated by their commitment to the "Norquist" pledge of no new taxes, and the accompanying destruction of government as a legitimate player in the nations crisis.
In Wisconsin, on Tuesday, there is a recall vote, in a public attempt to remove the current governor who has become the poster-boy for the Tea Party, and the right wing in his dismantling of public service unions, their right to collective bargaining and the public pensions contracted by previous state legislatures in different economic and cultural times. Truckloads of cash have been flowing into the state in support of his attempt to retain his governor's mansion, by those seeking to make Wisconsin a "test case" for the rest of the United States, a battlefield for the dismantling of the social programs that, if they win, will be fought across the nation, right up to and including the November presidential election.
In Canada, we have already seen several examples of a federal government dismantling labour unions which strike, only to find themselves ordered back to work, in the "interest of the economy" because after all, the government believes that we are all here for a single purpose: to feed the monster of the national economy, as measured by their terms, terms which, not incidentally, do not include protection of the environment, protection of the national retirement age of 65 (they have already moved it to 67, although the program is demonstrably viable and sustainable for decades).
It was Rahm Emmanuel, then the President's Chief of Staff, who declared back in 2009, shortly after the inauguration of President Obama, "A crisis is a terrible thing to waste!"...
And his words have become a mantra for all the political operatives seeking to dismantle government by gutting the social programs that bring government services to the most vulnerable and the most needy, in a fallacious argument that only by eliminating government programs will we be able to afford to pay the bills, cut the debt and the deficit.
Already, the crisis in the U.S. has provided cover to the Republicans to obstruct all attempts at governing in the national interests, addicted as they are to the "one-term Obama presidency" bumper sticker.
Now, they are demonstrating their subservience to the dogma, "gut the social programs" as the route to demonstrating that government is the problem.
Both bumper stickers are lies, and they know that they are.
However, their need for personal power, through the achievement of their agenda, financed by their deep-pocketed, self-interested donors, is clearly trumping the national interest.