Paul Krugman Demolishes Conservatives At Night, Too

Paul Krugman was on the British show Newsnight, demolishing two conservative British nitwits like the Hulk smashed through Loki’s Army. Sure, Krugman uses laser-like intellect and super-sharp reason, but the results are similar. Each and every argument for austerity is countered and destroyed.

Krugman bases his beliefs on, you know, actual evidence.

KRUGMAN: We now have about two years of experience with austerity, here and elsewhere. And what we’ve seen most of all is that austerity really does contract the economy and the notion that it would inspire confidence and lead to expansion and not contraction is decisively proved wrong by experience all across Europe….and secondly there’s now growing evidence that austerity under these conditions doesn’t even work in fiscal terms because it shrinks the economy now and also shrinks the economy in the future.

One of Krugman’s opponents is a member of Parliament. Frighteningly, Andrea Leadsom  says that the failure of austerity shows that we haven’t been austere enough, and that we should shrink the economy more by cutting the budget “far faster.”

So now Krugman has to treat her like a schoolkid, and point out that governments are not households. I wish the media could learn this simple difference.

KRUGMAN: We run up against the fundamental fact that we are not a household, we are an economy. And that your spending is my income, and my spending is your income. And if we are both trying to do this slashing at the same time, what we end up doing is producing  a Depression that leaves us worse off.

Leadsom is saved from making all government officials look bad, because the guy from the private sector, Jon Moulton, is just as big an idiot, although he manages to be a little more pompous in his affect. Leadsom’s complaint?

MOULTON: We have too large a state.

Please note that, when conservatives complain about the state being too large, they are never complaining about having too many subsidies for large companies. They are never complaining about spending too much money on war. Moulton is a good old-fashioned reactionary who thinks it’s a sin to run up debt. This actually opens up an opportunity for Krugman to address the progressive morality of the Depression, which should be addressed far more often.

KRUGMAN: The damage we are inflicting on the next generation by not having jobs for them, which is the result of misguided austerity right now, that is the great sin.

Never fear, Leadsom manages to return the conservative argument from moral bankruptcy to economic idiocy.

LEADSOM: Those jobs will be generated when people move from the public sector to the private sector.

Now, I’m not sure what the magical difference is between a private job and a public job, but it’s dangerously misguided to think of jobs as a zero sum game. There’s no reason not to have both private and public jobs, unless you’re ideologically opposed to one or the other. And Leadsom is…

LEADSOM: We shouldn’t be about creating new jobs.

…as Krugman picks up on quite quickly…

KRUGMAN: You’ve just given me confirmation of something that people like me tend to say, which is that actually none of this is at all about fiscal responsibility. It’s all about exploiting the current situation to pursue an ideological goal of a smaller state.

I love the look on her face when Krugman calls her out. She just can’t believe it.

What I can’t understand is how Krugman manages to do this without losing his cool. Does he really have to do it all by himself? Leadsom doesn’t believe we’re in a Depression but she doesn’t even understand what a Depression is, so the kindly professor has to explain it.

KRUGMAN: We are in a Depression where there are vast numbers of workers idle, who ought to work. There’s vast amounts of potential capital, which is going nowhere because there’s no demand, so at this point in time, the private and the public sector are not competing for resources. There are these unemployed resources and the point is to put them to work.

The conservative economists and their enablers — which unfortunately includes a large number of people in the White House — are not Serious People. They are not Practical People. They are Silly Idealists and they ignore evidence in favor of ideology.

SEE ALSO
occasional links & commentary: Cartoon of the day
ThinkLeft: As Michael Hudson predicted – The Euro-Reality of Austerity
Paul Krugman: Ballistic in the Baltics