Economic Bullshit

Here is a man for our time, Heinrich Bruning, German Chancellor from 1930 to 1932. In the middle of the Great Depression, he insisted on paying down Germany's debt and paying war reparations left over from the First World War. He imposed draconian cuts in welfare spending and on wages to pay for it. He ended up pushing the deeply suffering working and middle classes into the arms of extremists on the left and right, whose paramilitaries would soon be fighting it out in the streets of German cities. He found himself seriously entertaining the idea of reviving the German Imperial monarchy in order to head off a near certain election victory by Hitler. His effort failed because he backed the wrong Hohenzollern. Bruning wanted Crown Prince William to take the throne, but President Hindenburg demanded the restoration of the deposed Kaiser Wilhelm II, then in exile in the Netherlands. Hindenburg threw out Bruning, and we all know what happened next.

Paul Krugman lately has been reviving the memory of Chancellor Bruning as a cautionary tale to international politicians so fixated on national debts, inflation, and austerity measures in the middle of the worst economic crisis since the 1930s. While this may be the consensus of politicians and the conventional wisdom of the punditocracy, this is not the consensus of economists, some of whom are warning about the risk of deflation. Some economists, notably Duncan Black, point out that the austerity measures imposed on Greece, Spain, and Italy are not about helping those countries and their populations, they are about aiding banks and their shareholders who gambled badly.

Krugman gives the Germans under Chancellor Merkel credit for sincerity. They truly believe in what they are doing. He says American politicians are all hypocrites. The very same politicians now solemnly preaching the need for austerity voted for more than a trillion dollars of unfunded tax cuts primarily benefiting their wealthy clients. He doesn't mention the billions spent on imperial military adventures in Iraq and Afghanistan that are making defense contractors and their shareholders very very rich. American politicians of both parties are all lackies.

Since no one in the governing and chattering classes seems to be too bothered by 9 to 10% official unemployment (the unofficial rate is perhaps almost twice that), we can all look forward to a long cold economic winter followed by a hot political summer.

ADDENDUM:

Our politicians are all craven corporate shills (and so are Rupert Murdoch's and Clearchannel's appointed Tribunes of the People, and so is that corporate funded teaparty "movement"), but some are more shameless than others.