Readers of The Golden Calf know that I cite Paul Krugman more than any other contemporary economist, perhaps because his New York Times column is so readily accessible, as well as because I think he usually makes the most sense. In that book I also had a bit of fun with Krugman because in earlier columns, he came right up to the main thesis of the book—that economism is really disguised religion, and not economics at all—but refused to go all the way to his own argument’s logical conclusion.
He’s at it again, as shown by his April 25 column, “The 1 Percent’s Solution” (subscription may be required):
He states in this column that the answers are now in—the so-called austerians are simply wrong in arguing that more austerity, rather than short-term economic stimulus, was needed to get the economy back on track after the big recession. Specifically, several authoritative reports favoring austerity have been recalculated and shown to be riddled with errors. So why, Krugman asks, is the austerity position still so widely proclaimed, and why is no one calling for more stimulus?
He has two answers. His main answer, as his title suggests, is that the wealthy find the austerian position to be in their selfish short-term interests, and what the 1 percent want is what the economists, by and large, proclaim to be true. (I guess those are the folks that donate the big bucks to the university economics departments and the economics think tanks.)
But along the way Krugman offers a second answer:
Part of the answer surely lies in the widespread desire to see economics as a morality play, to make it a tale of excess and its consequences. We lived beyond our means, the story goes, and now we’re paying the inevitable price. Economists can explain ad nauseam that this is wrong, that the reason we have mass unemployment isn’t that we spent too much in the past but that we’re spending too little now, and that this problem can and should be solved. No matter; many people have a visceral sense that we sinned and must seek redemption through suffering — and neither economic argument nor the observation that the people now suffering aren’t at all the same people who sinned during the bubble years makes much of a dent.”
In short, people want to make their economic theories match certain religious preconceptions about God’s plan for the world—exactly the thesis The Golden Calf offers for how economism is rooted in some major religious traditions, and functions logically like religion rather than economic science.