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The Unbearable Lightness of Being Right


Ezra Klein and Evan Soltas had a rather uncharacteristically dyspeptic post this morning lamenting the failure of essentially anyone in DC to change policy proposals despite all the information that has come in undermining whatever intellectual basis those proposals might once have had. There’s a fair bit of obligatory both-sides-do-it false equivalence in their post; but that aside, they’re basically right.

Except actually it’s worse than that. The austerity consensus that took over Washington (and Brussels, and London, and Frankfurt, and …) never actually had many facts behind it to begin with. It flourished through sheer incestuous amplification: the in-crowd reassuring each other that they were right, with journalists — as Ezra himself pointed out — simply adding to the problem:

verdict on austerity or on Paul Ryan three years later, they still look pretty good — not perfect (the Baltics have done better than I expected, though not actually well), but compared with the orthodoxy of the time, well, there’s no comparison. Overall, it’s hard to think of any previous episode in in the history of economic thought in which we had as thorough a showdown between opposing views, and as thorough a collapse, practical and intellectual, of one side of the argument.

And yet nothing changes. Not only don’t the policies change; by and large even the people don’t change. Reinhart and Rogoff may get a bit fewer high-profile invites, as will Alesina and Ardagna; but Bowles and Simpson are still touring, the same people at the BIS and the OECD are still issuing dire warnings about the dangers of easy money, George Osborne is still making pronouncements, Paul Ryan is still the intellectual leader of his party.

OK, I know I’m hyperventilating a bit. But the lack of accountability, for ideas and people, is truly remarkable in a time of massive policy failure. 

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