We have traveled a long road from Thatcher/Reagan to the world wide economic collapse of 2008. That Free Market failed, it was the intellectual mirage of political romantics masquerading as economists, succeeded by an equally failed Austerity.
The Reinhart/Rogoff paper was just what was needed to sell this successor idea and practice to a receptive audience, whose critical faculties were dulled by the continuing crisis as it worked it’s way through the world economy. Except for a few dissenters:
Now we are presented with:’austerity with a human face’ and or ‘fiscal consolidation’ and other such locutions designed to give the appearance of action to stem failure. Mr. Rehn’s ‘It is important that we strengthen the social dimension’ so as to prevent wholesale social collapse? One marvels at this and can only wonder at the dream of Mr. Jean Monnet and his allies as they imagined a united Europe as a economic union, while placing the idea and practice of a democratic political union, the notion of a common destiny, in the background. Consider the first reaction of the Northern Tier to the crisis of the Southern Tier as ‘those lazy southerners’ as the lack of a necessary political solidarity. Is it really so hard to say that Keynes was right? Call me naïve but is your prestige more important than the welfare of your fellow citizens? We have the long, defensive response of Reinhart/Rogoff :