The Dangerous Prevalence of Moral Contagion

Krugman on Europe (the article is a good summary and analysis, leading to a typical socialist course of treatment for the patient):

http://www.nytimes.com/2011/01/16/magazine/16Europe-t.html?hpw

 

My comment:

Those nations that do not sustain the fiscal standards of the EU's economic leaders ought to be encouraged to leave. It's a well-established psychological reality (for which I wish I had a ready link and clearly recall reading a striking study on) that low standards are more contagious than high standards. Greece et al. set low standards for integrity, for discipline, for self-reliance, for productivity. They will not Germanize if bailed out endlessly by the Germans--but, the Germans may be sufficiently demoralized by such a parasitic dynamic to turn Greek. The cultural/psychological contagion is what must be contained. Krugmanite socialism would only spread the disease (and encouraging this contemptible proto-"Idiocracy", in the long run, does less to alleviate the human suffering he harps upon). At the very least, high standards are difficult and time-consuming to develop, low standards can spread readily and rapidly. It's a perilous asymmetry, especially in an obsessively egalitarian intellectual milieu, like the Western world. As Nietzsche insisted, in practice equality is possible only by pulling down the higher men and the higher societies.

 

The Non-Debate

http://krugman.blogs.nytimes.com/2010/10/02/how-the-other-half-thinks/

Krugman is perhaps too kind in this post: the other half by and large does not think. Republicans have been consistently stupid or dishonest on the economic issues we face. Their policy solutions are an invitation to a prolonged slump a la Japan over the last 20 years. On macroeconomics, the democrats have a better approach right now--except insofar as they intend to expand entitlements. But, apparently, the story Krugman has clearly explained on multiple occasions is too counterintuitive for most to grasp.

There may also be some deeper motives at play--deliberately extending the recession to discredit Obama, for example. Or, squeezing government revenues so hard as to force a reconsideration of the whether we can afford an ever-expanding welfare state. Or, waiting for increasing unemployment to lead to an anti-immigration political consensus that will evolve at least far enough to end illegal immigration, preferably all non-strategic immigration. All worthy motives to my mind. But, are they worth the price? Also, can they be this way achieved? The second and third seem unlikely to happen, and they are more important in the long run than Obama's political fortunes. The welfare state strategy may even backfire. FDR invented the welfare state during the Depression.

Dr. Jekyll and Dr. Krugman

That is, Dr. Krugman on economics instead of  his Hydeian political madness. Here are two concise perspectives on how to escape the current economic recession (we are only technically out of recession, not in any meaningful sense). The first explains, with reference to one of the most appropriate historical analogies, why temporarily increased government spending should not result in a long-term rise in the government's debt burden. Essentially, this is because expansionary fiscal policy increases economic growth and increases inflation--both of which erode the real burden of any incurred debt. The key is to ensure that new entitlement programs are not a part of expanded government spending. The second explains the other likely way out--continued high levels of bankruptcy and default. This path will take longer and result in less economic growth in the long run. It is the path we opted for in the 30's and the one Japan has opted for since its financial collapse 20 years ago. In both cases economic growth was minimal at best. So far, it is the path we are on--supported mindlessly by the repubs and cravenly by the dems. http://krugman.blogs.nytimes.com/2010/09/03/paradoxes-of-deleveraging-and-releveraging/ http://krugman.blogs.nytimes.com/2010/09/25/default-is-in-our-stars/