Paul Krugman reflects on the meltdown of the putative policy arguments in favor of austerity, and asks whether it will matter to those in power.
Does a continuing depression actually serve the interests of the wealthy? That’s doubtful, since a booming economy is generally good for almost everyone. What is true, however, is that the years since we turned to austerity have been dismal for workers but not at all bad for the wealthy, who have benefited from surging profits and stock prices even as long-term unemployment festers. The 1 percent may not actually want a weak economy, but they’re doing well enough to indulge their prejudices.
And this makes one wonder how much difference the intellectual collapse of the austerian position will actually make. To the extent that we have policy of the 1 percent, by the 1 percent, for the 1 percent, won’t we just see new justifications for the same old policies?
I hope not; I’d like to believe that ideas and evidence matter, at least a bit. Otherwise, what am I doing with my life? But I guess we’ll see just how much cynicism is justified.
Meanwhile, last night the U.S. Senate unanimously passed a bill aimed at exempting rich people who fly a lot from the consequences of the sequester. The House is expected to follow suit today.
[I]t sets a precedent that sequestration’s problems — particularly those that impact the wealthy — can be fixed piecemeal by shimmying money around, instead of by raising revenue to restore finances to important government programs.