Must-Read: Paul Krugman: Faithocrats

Must-ReadPaul Krugman: Faithocrats: “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…. 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…. What Europe usually means by a ‘technocrat’ is a Very Serious Person, someone distinguished by his faith in received orthodoxy no matter the evidence. It’s as Keynes said:

Worldly wisdom teaches that it is better for reputation to fail conventionally than to succeed unconventionally.

And it looks as if there’s a lot more failing conventionally in Europe’s future.

July 15, 2015

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