IMF Calls Bullshit on Brit Tory Austerity Farce

David Cameron's boneheaded austerity fetish isn't working.   Even the International Monetary Fund, the IMF, says that much is plain.  The Guardian's Jonathan Portes has this take on the IMF report.

A non-technical summary of Thursday's International Monetary Fund report on the UK economy would be that we are up the creek – "recovery has stalled" – and that we should use any available paddle to head as fast as possible in the opposite direction. "Demand support is needed. Additional monetary stimulus … credit easing measures … increased government spending on public investment." Stop pretending we're on track, and throw the kitchen sink at the economy.

 There are, however, two much more interesting parts to the IMF report. The first is its demolition of the government's argument that this pain was necessary and the alternative would have been worse – that, as George Osborne says, without accelerated fiscal consolidation we would have had higher interest rates and maybe even a debt crisis. This is nonsense: low interest rates reflect not economic confidence but its opposite, and the IMF says so: "Bond yields have been driven more by growth expectations than fears of a sovereign crisis."

 But even more important is the IMF's analysis of the consequences of this policy failure: not just low growth now (they estimate fiscal consolidation has so far knocked about 2.5% off output) but permanent economic and social damage. This is primarily because unemployment – especially long-term and youth unemployment – has "scarring" effects; someone who is unemployed now because of recession is more likely to be out of work later in life, even after economic recovery.

...the basic point is spot on. In other words, what the government is offering is not pain today for a better economic future tomorrow. It's pain today for more pain tomorrow. As many of us have long argued, the reason for changing course is not because of the short-term boost to growth, but because of the longer-term impacts.

Why the Right Embraces Emotion Over Reason

The New York Times' veteran rightwing commentator David Brooks is something of a rarity these days, a conservative intellectual. One annoying aspect of this is that it's sometimes tough to disagree with him. His column today where he explains how the right found its home in anti-intellectualism is one example:

over the past few decades, the Republican Party has driven away people who live in cities, in highly educated regions and on the coasts. This expulsion has had many causes. But the big one is this: Republican political tacticians decided to mobilize their coalition with a form of social class warfare. Democrats kept nominating coastal pointy-heads like Michael Dukakis so Republicans attacked coastal pointy-heads.

Over the past 15 years, the same argument has been heard from a thousand politicians and a hundred television and talk-radio jocks. The nation is divided between the wholesome Joe Sixpacks in the heartland and the oversophisticated, overeducated, oversecularized denizens of the coasts.

What had been a disdain for liberal intellectuals slipped into a disdain for the educated class as a whole. The liberals had coastal condescension, so the conservatives developed their own anti-elitism, with mirror-image categories and mirror-image resentments, but with the same corrosive effect.

Republicans developed their own leadership style. If Democratic leaders prized deliberation and self-examination, then Republicans would govern from the gut.

The political effects of this trend have been obvious. Republicans have alienated the highly educated regions — Silicon Valley, northern Virginia, the suburbs outside of New York, Philadelphia, Chicago and Raleigh-Durham. The West Coast and the Northeast are mostly gone.
The Republicans have alienated whole professions. Lawyers now donate to the Democratic Party over the Republican Party at 4-to-1 rates. With doctors, it’s 2-to-1. With tech executives, it’s 5-to-1. With investment bankers, it’s 2-to-1. It took talent for Republicans to lose the banking community.

Conservatives are as rare in elite universities and the mainstream media as they were 30 years ago. The smartest young Americans are now educated in an overwhelmingly liberal environment.

Brooks contends that this descent to the bottom of the barrel has now brought the right to ruin. Having already driven away the educated classes, it has now failed the working classes by its gross neglect of the economy. Squeezed at both ends, there's nowhere left to go.