Paul Krugman: This Snookered Isle

Mediamacro:

This Snookered Isle, by Paul Krugman, Commentary, NY Times: The 2016 election is still 19 mind-numbing, soul-killing months away. There is, however, another important election in just six weeks, as Britain goes to the polls. And many of the same issues are on the table.

Unfortunately, economic discourse in Britain is dominated by a misleading fixation on budget deficits. Worse, this bogus narrative has infected supposedly objective reporting; media organizations routinely present as fact propositions that are contentious if not just plain wrong.

Needless to say, Britain isn’t the only place where things like this happen. A few years ago, at the height of our own deficit fetishism, the American news media showed some of the same vices. ... Reporters would drop all pretense of neutrality and cheer on proposals for entitlement cuts.

In the United States, however, we seem to have gotten past that. Britain hasn’t.

The narrative I’m talking about goes like this: In the years before the financial crisis, the British government borrowed irresponsibly... As a result, by 2010 Britain was at imminent risk of a Greek-style crisis; austerity policies, slashing spending in particular, were essential. And this turn to austerity is vindicated by Britain’s low borrowing costs, coupled with the fact that the economy, after several rough years, is now growing quite quickly.

Simon Wren-Lewis of Oxford University has dubbed this narrative “mediamacro.” As his coinage suggests, this is what you hear all the time on TV and read in British newspapers, presented not as the view of one side of the political debate but as simple fact.

Yet none of it is true. ...

Given all this, you might wonder how mediamacro gained such a hold on British discourse. Don’t blame economists. ... This media orthodoxy has become entrenched despite, not because of, what serious economists had to say.

Still, you can say the same of Bowles-Simpsonism in the United States... It was all about posturing, about influential people believing that pontificating about the need to make sacrifices — or, actually, for other people to make sacrifices — is how you sound wise and serious. ...

As I said, in the United States we have mainly gotten past that, for a variety of reasons — among them, I suspect, the rise of analytical journalism, in places like The Times’s The Upshot. But Britain hasn’t; an election that should be about real problems will, all too likely, be dominated by mediamacro fantasies.