Paul Krugman:Appeasing the Bond Gods

[cal04]

http://www.nytimes.com/2010/08/20/opinion/20krugman.html?ref=paulkrugman

As I look at what passes for responsible economic policy these days, there’s an analogy that keeps passing through my mind. I know it’s over the top, but here it is anyway: the policy elite — central bankers, finance ministers, politicians who pose as defenders of fiscal virtue — are acting like the priests of some ancient cult, demanding that we engage in human sacrifices to appease the anger of invisible gods.

Hey, I told you it was over the top. But bear with me for a minute.

(snip)
So how do austerians deal with the reality of interest rates that are plunging, not soaring? The latest fashion is to declare that there’s a bubble in the bond market: investors aren’t really concerned about economic weakness; they’re just getting carried away. It’s hard to convey the sheer audacity of this argument: first we were told that we must ignore economic fundamentals and instead obey the dictates of financial markets; now we’re being told to ignore what those markets are actually saying because they’re confused.

(snip)
It seems almost superfluous, given all that, to mention the final insult: many of the most vocal austerians are, of course, hypocrites. Notice, in particular, how suddenly Republicans lost interest in the budget deficit when they were challenged about the cost of retaining tax cuts for the wealthy. But that won’t stop them from continuing to pose as deficit hawks whenever anyone proposes doing something to help the unemployed.

So here’s the question I find myself asking: What will it take to break the hold of this cruel cult on the minds of the policy elite? When, if ever, will we get back to the job of rebuilding the economy?

[BootinUp]

1. I fear its going to be a long fuggin decade

I wish I was more optimistic about the economy right now.

[xchrom]

2. There is nothing I see in the near term that

Would break the hold of the 'financial elites'
On policy.

It's here where the two political parties
Hold the most resemblance.

If corporate power and influence is the problem -
More of it isn't the answer.

[Demeter]

3. We Need to Learn from Venezuela and Iceland How to Fight Back

or all is lost.