Intellectually we see that Reinhart-Rogoff have egg on their faces-Sumner and his Market Monetarist friends of course are one of their few defenders. Sumner and friends are becoming the main intellectual vanguard for austerity at this point: austerity is nice because no matter how much we do the Fed can always counterbalance it.
http://diaryofarepublicanhater.blogspot.com/2013/06/marcus-nunes-has-suggestion-for-new.html
Make no mistake about it austerity is certainly under attack. The IMF-who as Krugman says were not nearly as bad as either the OECD or the EU-has written a major mea culpa admitting that they were wrong about austerity.
http://www.imf.org/external/pubs/ft/scr/2013/cr13156.pdf
Yet Krugman sounds pessimistic about this truth seeping through to the political class.
"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."
http://krugman.blogs.nytimes.com/2013/06/06/the-unbearable-lightness-of-being-right/
I don't know that nothing changes. We now have Democrats questioning austerity.
http://diaryofarepublicanhater.blogspot.com/2013/06/should-i-call-this-blog-diary-of.html
In 2011 Nancy Pelosi said we needed austerity.
"Congress, the White House, and maybe even the country at large have come a long way since House Minority Leader Nancy Pelosi (D-CA) — of all people — told reporters, “It’s clear we must enter an era of austerity. To reduce the deficit through shared sacrifice.”
http://diaryofarepublicanhater.blogspot.com/2013/06/marcus-nunes-has-suggestion-for-new.html
Make no mistake about it austerity is certainly under attack. The IMF-who as Krugman says were not nearly as bad as either the OECD or the EU-has written a major mea culpa admitting that they were wrong about austerity.
http://www.imf.org/external/pubs/ft/scr/2013/cr13156.pdf
Yet Krugman sounds pessimistic about this truth seeping through to the political class.
"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."
http://krugman.blogs.nytimes.com/2013/06/06/the-unbearable-lightness-of-being-right/
I don't know that nothing changes. We now have Democrats questioning austerity.
http://diaryofarepublicanhater.blogspot.com/2013/06/should-i-call-this-blog-diary-of.html
In 2011 Nancy Pelosi said we needed austerity.
"Congress, the White House, and maybe even the country at large have come a long way since House Minority Leader Nancy Pelosi (D-CA) — of all people — told reporters, “It’s clear we must enter an era of austerity. To reduce the deficit through shared sacrifice.”
"That was July 2011, days before she, other congressional leaders, and President Obama struck a debt limit deal to cut $2 trillion in federal spending over 10 years. It was perhaps Democrats’ darkest moment since Obama was first elected in 2008. But it was ironically consistent with Obama’s broader goals: $4 trillion in total deficit reduction, split roughly two parts to one between spending cuts and higher taxes."
"A lot’s changed since then. The economy has slowly but steadily improved over the past two years — enough that the country re-elected Obama. With that victory under his belt he was able to pocket a decent chunk of the revenue he’d hoped to raise by allowing the Bush tax cuts for top earners to expire. These developments combined to send the deficit into a rapid tumble."
Now Dems are no longer afraid to attack austerity-this change in political fashions tell us volumes. Austerity's intellectual defeat will have real world-political-consequences.
So while it's too soon to tell definitively, we may be learning something.
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