Economic austerity and the household belt-tightening analogy

Fallacy of composition as explanation fails to do the trick – too technical sounding. Perhaps something more than analysis, rigorous or simplified, with supporting data, simply explained, is needed. Not Simon Wren-Lewis with his macro mania, nor Paul Krugman, nor a host of others have succeeded in getting their message across. And nowhere was that failure more evident than in the recent UK elections.

Wren-Lewis continues to tilt away.with a post, this dauntingly entitled, Austerity as a Knowledge Transmission Mechanism failure. While those of still academic bent would spend more than a moment compared with an earlier one, over at a more accessible online ‘town hall’, AK Sen adds his two cents. He reaches back to the end of World War I and implications of the very austere terms of surrender imposed on Germany. His take-off starts with JM Keynes, a disillusioned advisor to the British government at Versailles, whose disillusionment would soon appear in his, ‘Economic Consequences of the Peace’. Sen’s article in New Statesman is aptly titled, Amartya Sen: The economic consequences of austerity.

Sen takes his readers on an illuminating historic journey from WWI to today, where the prevalent economic prescriptions seem akin to a medical prescription of a mixture of antibiotic and rat poison (now, that gets one’s attention), where all the patient needs is the antibiotic for the ailment. Of course, Sen may very well persuade those who do read this and similar articles, whereas, in contrast, the many, the millions, conditioned to turn trustingly to media, opt for ostensibly sensible-sounding myths the media spin – what Wren-Lewis calls mediamacro.

Notwithstanding the clarity of exposition on austerity, especially here, and using varying levels of rigour, the media myths continue to control opinion, which suggests that the populace at large has settled into complacency, acquiescence as regards their political fate. Some mechanism to get their attention, to skim at least an article as Sen’s, is then the challenge.

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