Tuesday, July 14, 2015

Krugman Discusses The European Mindset

Thinking of some of my brighter commentators.

One of the ideas floating around in the aftermath of the sack of Athens has been that of, in effect, deposing Syriza from outside and installing a “technocratic” government. It wouldn’t be the first time in this dismal saga, and I won’t be surprised if it happens, for a few months anyway.

But let me note, as I have before, that what Europe calls technocrats aren’t people who know how the world works; they’re people who subscribe to the approved fantasies, and never change their minds no matter how badly wrong things go. Despite the overwhelming evidence that austerity has exactly the dire effects basic textbook macro says it will, they cling to belief in the confidence fairy. Despite a striking lack of evidence that “structural reform” delivers much of a growth boost, especially in an economy suffering from a huge output gap, they continue to present structural reform — mainly in the form of disempowering workers — as a sovereign remedy for all ills. Despite a clear record of past failure, they continue to push for asset sales as a supposed answer to debt overhang.

In short, what Europe usually means by a “technocrat” is a Very Serious Person, someone distinguished by his faith in received orthodoxy no matter the evidence.