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Monday, May 09, 2011

Paul Krugman: The Unwisdom of Elites

The "self-appointed wise men, officials, and pundits in good standing" are trying to shift the blame for the troubles we are having;

The Unwisdom of Elites, by Paul Krugman, Commentary, NYTimes: The past three years have been a disaster for most Western economies. ... How did it all go so wrong?
Well, what I’ve been hearing with growing frequency from members of the policy elite — self-appointed wise men, officials, and pundits in good standing — is the claim that it’s mostly the public’s fault. The idea is that we got into this mess because voters wanted something for nothing, and weak-minded politicians catered to the electorate’s foolishness.
So this seems like a good time to point out that this blame-the-public view isn’t just self-serving, it’s dead wrong.
The fact is that what we’re experiencing right now is a top-down disaster. The policies that got us into this mess weren’t responses to public demand. They were, with few exceptions, policies championed by small groups of influential people — in many cases, the same people now lecturing the rest of us on the need to get serious. ...
Let me focus mainly on what happened in the United States... These days Americans get constant lectures about the need to reduce the budget deficit. ... What happened to the budget surplus the federal government had in 2000?
The answer is, three main things. First,...President George W. Bush cut taxes in the service of his party’s ideology... — and the bulk of the cuts went to a small, affluent minority.
Similarly, Mr. Bush chose to invade Iraq because that was something he and his advisers wanted to do,... it took a highly deceptive sales campaign to get Americans to support the invasion...
Finally, the Great Recession was brought on by a runaway financial sector, empowered by reckless deregulation. And who was responsible for that deregulation? Powerful people in Washington with close ties to the financial industry...
So it was the bad judgment of the elite, not the greediness of the common man, that caused America’s deficit. And much the same is true of the European crisis. ...
Why should we be concerned about the effort to shift the blame for bad policies onto the general public?
One answer is simple accountability. People who advocated budget-busting policies during the Bush years shouldn’t be allowed to pass themselves off as deficit hawks; people who praised Ireland as a role model shouldn’t be giving lectures on responsible government.
But the larger answer, I’d argue, is that by making up stories about our current predicament that absolve the people who put us here there, we cut off any chance to learn from the crisis. We need to place the blame where it belongs, to chasten our policy elites. Otherwise, they’ll do even more damage in the years ahead.

    Posted by on Monday, May 9, 2011 at 12:42 AM in Economics, Politics | Permalink  Comments (127)


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