Conventional Madness – Paul Krugman

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Conventional Madness - Paul Krugman Blog -

It's comforting to find one's self in the company of Martin Wolf and Paul Krugman in a day, both with regard to the madness of the OECD Economic Outlook report.

As Krugman notes in the NYT:

It’s a terrifying document.

Why? Not because it offers a grim prospect, although it does ‚Äî although the OECD has marked up its growth projections, it’s still forecasting extremely high unemployment for years to come.

No, what’s scary is the utter folly that now passes for respectable opinion.

And his explanation:

What’s so scary about this is that the OECD virtually defines conventional wisdom; it’s a numbered-paragraph sort of place, where a committee has to sign off on everything, policing the nuances as they say. So what we get from this [report] is that among sensible people the idea that you should undermine recovery to appease those who think there might be inflation even though actually there isn’t has become conventional wisdom ‚Äî so conventional that it’s treated as self-evident.

This is really, really bad.

I agree.

Insanity is taking over the markets.

banks and business are demanding cuts that can only harm them - to the point of destroying much of the private sector.

And the majority of economists - yet again- applaud this insanity.

Will we ever learn?

Or is the collective memory of less than two years now?

Hat tip to Howard Reed