Tuesday, September 24, 2013

Simon Wren-Lewis — The scandal of the austerity deception

The problem for ‘small state people’ like Warner is that “there is never any appetite for it in the good times”. I can only interpret this as meaning that in good times people appear to be quite content with the size of the state they have, and will not elect a government which aims to reduce the size of the state. So why are things different in a crisis? Do people’s preferences over the size of the state relative to GDP really change when we are in recession? Or could it be that in the current crisis people are told that government debt is ‘out of control’, and that a reduction in government spending is necessary to bring the nation’s finances to order. Cuts in government spending are being justified by the need to reduce debt and not because of the virtues of a small state.

Reducing the size of the state temporarily to reduce debt, and reducing it permanently are rather different things. There is apparently no appetite for the latter, so why not push for the former as a way of achieving the latter? As a political ruse it sounds very clever, and it is currently working in the Eurozone, US and UK. But it remains a ruse: a giant deception played on electorates across the globe.
Simon Wren-Lewis piles on. Good on him, even if a bit late in the game. But better late than never. Wren-Lewis is specific. The objective is subversive and the means perverse. Economic ignorance is no excuse. This is a political ploy.

Mainly Macro
The scandal of the austerity deception
Simon Wren-Lewis | Professor of Economics, Oxford University

1 comment:

mikehall said...

Well, yes, it is about time for Wren-Lewis.

Please note anyone who cares to offer a 'challenging' (not rude, note) comment on his blog, it will not be published. After two goes I decided he doesn't like debate or challenge.

So what's new with the 'establishment' priesthood?

Getting very sick of what imo amounts to a decades old campaign of denial of the existence of 'macro' economics itself, as distinct from 'micro'.

The fact that likely 99% of the public are in complete ignorance of such distinction, some 80 odd years after Keynes is a disgraceful deceit. Inevitably they will tend to vote for policy quite opposite to their interests.

Nothing is taught in schools & mass media is no better.

Mainstream academic macro economists should be utterly ashamed.

I do not believe such lack of basic education - a mockery of democracy itself - is an accident. In order to deny much +any+ role for government, on ideological/political grounds, its important role as the only possible counter cyclical actor is airbrushed out of public discourse.

We see the results, especially in the Eurozone.

Progressive educators should be raising this issue at every opportunity imo.