Our medieval economic policy

Tightening the budget when we should be expanding will only make the economy weaker

By , Guest blogger

  • close
    Representative Jeff Landry holds a sign in his lap during President Obama's address to a joint session of Congress on Capitol Hill in Washington. The author argues that insisting on cuts to the economy will only weaken it further.
    View Caption

A few weeks ago I referred to austerity economics—fiscal or monetary tightening when we need both to be expanding—as akin to the medicine of medieval times. Bleeding patients was thought to cure them, but it generally made them weaker and less resistant to disease.

Paul Krugman uses the same analogy today and I was reminded of an aspect I hadn’t thought of before, having just finished a (great) historical novel covering the period in history when medicine was just beginning to wake up (World Without End by Ken Follett).

The way Follett tells it, by the end of the 14th century, private hospitals began offering alternative treatments to those in the monasteries. Monks were still practicing bleeding and other “austerity” measures, but early physicians were beginning to understand that such practices were…um…contractionary to your health.

Recommended: Could you pass a US citizenship test?

So people began to migrate away from the monks and their ancient ways.

In other words, there was a market—you could choose, and once people were able to assess the different results, the choice was obvious.

And here is where the analogy breaks down. Unemployed workers, families unable to make their budgets on shrinking paychecks and falling incomes, small businesses suffering from a lack of foot traffic—they can’t go across the street and try a different macroeconomic policy.

They have to accept the austerity whether it’s coming from the Fed (“we’ve got some other tools here but we’re just not ready to use ‘em”), the Congress (“the President’s jobs plan won’t work”), the European Central Bank (“price stability uber alles!”), or the medievalists of Europe (“only by contracting will you grow!”).

I guess one could argue there’s an election market for such choices, and in some sense, the “throw the bums out” dynamic fulfills that role. But it’s a slow, cumbersome, and noisy process—there’s so much misinformation that it’s hard for people to sort out the facts, so you end up with politicians who claim to be different but have their leeches and bleeding bowls at the ready (see Republican field).

The only way out of this mess is to reach more people—voters—with the evidence-based facts of the case. It won’t always work—the noise machine is powerful and well-funded. But the truth will out.

I mean…I hope it will…it will…um…right?? Hello…anyone there??!!

The Christian Science Monitor has assembled a diverse group of the best economy-related bloggers out there. Our guest bloggers are not employed or directed by the Monitor and the views expressed are the bloggers' own, as is responsibility for the content of their blogs. To contact us about a blogger, click here. To add or view a comment on a guest blog, please go to the blogger's own site by clicking on jaredbernsteinblog.com.

Share this story:

We want to hear, did we miss an angle we should have covered? Should we come back to this topic? Or just give us a rating for this story. We want to hear from you.

Loading...

Loading...

Loading...