Protest Changes Austerity Debate

I visited Zuccotti Park on Oct. 20. Michael Moore gave a short speech, transmitted by the human microphone. (I gather that right-wingers are claiming that Occupy Wall Street is anti-Semitic; someone forgot to tell the excellent Klezmer band.) Overall, what struck me was how nonthreatening the thing is: a modest-sized, good-natured crowd, mostly young (it was a cold and windy evening) but with plenty of middle-aged people there, not all that scruffy.

Hardly the sort of thing that one would expect to shake up the whole national debate.

Yet it has — which can only mean one thing: The emperor was naked, and all it took was one honest voice to point it out.

As for how the emperor got that naked: read Ari Berman’s article on the austerity class and its dominance in Washington, published in The Nation on Oct. 19. It’s about “a central paradox in American politics over the past two years: how, in the midst of a massive unemployment crisis — when it’s painfully obvious that not enough jobs are being created and the public overwhelmingly wants policy makers to focus on creating them — did the deficit emerge as the most pressing issue in the country?” Mr. Berman writes. “And why, when the global evidence clearly indicates that austerity measures will raise unemployment and hinder, not accelerate, growth, do advocates of austerity retain such distinction today?”

An explanation can be found in the prominence of an influential and aggressive austerity class — an allegedly centrist coalition of politicians, wonks and pundits who are considered indisputably wise custodians of economic policy in the United States.

What’s truly remarkable is the way their reputation for wisdom persists despite one belly-flop moment after another.

There was the embrace of “expansionary austerity,” which has fared even worse than Mr. Berman says — it’s not just think tanks like the Center on Budget and Policy Priorities that have torn holes in the doctrine, it’s the Congressional Research Service and the International Monetary Fund. Yes, the I.M.F.

There was the fiscal responsibility award given to the clownish Paul D. Ryan, the chairman of the House Budget Committee — and in general, the embrace of Mr. Ryan when it was obvious way back in early 2010 that he was neither serious nor honest.

And there is, of course, the total failure of the economic data to perform as expected — austerity regimes have universally led to high unemployment; interest rates have stubbornly stayed low despite the supposedly imminent debt crisis.

I don’t think Mr. Berman fully explains the austerity class’s dominance, but he does a fine job of documenting it. And here’s the thing: that dominance has been so total that alternate views weren’t even being heard. So doing something, anything, that broke through the narrative could have a big effect.

Thank you, Occupy Wall Street.

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Paul Krugman joined The New York Times in 1999 as a columnist on the Op-Ed page and continues as a professor of economics and international affairs at Princeton University. He was awarded the Nobel in economic science in 2008.

Mr Krugman is the author or editor of 20 books and more than 200 papers in professional journals and edited volumes, including “The Return of Depression Economics” (2008) and “The Conscience of a Liberal” (2007). Copyright 2011 The New York Times.