Krugman’s blog, 12/8/15

There were two posts yesterday.  The first was “VSPs and the FN:”

Kevin O’Rourke weighs in on the big showing of Marine Le Pen and friends in the French elections; like me, he argues that it has a lot to do with Europe’s economic failures.

Let me add, however, that it’s not just a matter of times being bad. It’s also important to realize the way in which traditional sources of authority have devalued themselves through repeated policy failure. Europe, much more than the U.S., is run by Very Serious People, who tell the public that it must accept Schengen, austerity, and regulatory harmonization (the eurosausage!), and that these are the right things to do because those who understand how the world works say so. But if things keep going badly, this authority based on the presumption of expertise erodes, and politicians who offer more visceral answers gain support.

Funke, Schularick, and Trebesch recently did some work asking whether the rise of right-wing extremism in the 1930s was paralleled in other times, and found that the answer is yes: “politics takes a hard right turn following financial crises.” Interestingly, this isn’t true for all kinds of crises. Financial crises, they suggest, are different, in part because

financial crises may be perceived as endogenous, ‘inexcusable’ problems resulting from policy failures, moral hazard and favouritism.

I would put it a bit differently: financial crises call into question whether respectable people know what they’re doing, in a way that other kinds of economic shocks often don’t.

The point for Europe is that the doctrinaire policies followed since 2010, and the unwillingness to rethink dogma in the light of experience, aren’t just economically destructive. They undermine the legitimacy of the whole European system, and may in the end lead to political catastrophe.

Yesterday’s second post was “Obamacare and the Cockroaches:”


National Center for Health Statistics

In policy discourse, zombies and cockroaches are somewhat different.

Zombie ideas are claims that should have been killed by evidence, but just keep shambling along, like the notion that vast numbers of Canadians, frustrated by socialized medicine, come to America in search of treatment. (It was in a paper about that and other myths that I first encountered the zombie terminology.) Cockroaches are claims that disappear for a while when proved ludicrously wrong, but just keep on coming back.

I think of the notion that Obamacare hasn’t really reduced the number of uninsured as a cockroach; it seemed to me that it subsided for a while after the big enrollment numbers of 2014 and the sharp drop in uninsurance rates. And really, how could you continue to make that claim given the results shown above, which are corroborated by independent sources like Gallup?

But the claim is back, as Charles Gaba notes. He says that Avik Roy’s latest is embarrassing, which I guess it is — but how much more embarrassed can the guy who did the totally spurious work on “rate shock” get? I’d say, rather, that the latest is impressive in the way it uses multiple layers of misrepresentation to obscure what you might have thought was too obvious to deny.

Anyway, it’s another example of the proposition that in modern political discourse, in particular on the right, no bad argument is ever abandoned. It’s like inequality, where the current position of the usual suspects is that it hasn’t gone up, it has gone up but it’s a good thing, we can’t do anything about it, and anyway it’s all the fault of liberals. You might think one would have to choose one of these lines, but they don’t.

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