The Remarkable Consistency of Michael Kinsley on Sacrifice and Deficits
Joe Weisenthal is quite harsh on Michael Kinsley's latest attempt to defend "fiscal discipline" (the policy formerly known as austerity), writing that the famed editor and columnist has "humiliated himself."
What happened is that Kinsley responded to an essay by Paul Krugman titled "Austerity Kills" with a piece in The New Republic titled "Paul Krugman's Misguided Moral Crusade Against Austerity."
Near the end of the piece Kinsley writes: "I don't think suffering is good, but I do believe that we have to pay a price for past sins, and the longer we put it off, the higher the price will be."
This idea that economic pain is a sort of penance for economic sins has been a bête noir of Krugman's for quite some time. As he recently wrote in his lengthy New York Review of Books essay on Austerity:
When applied to macroeconomics, this urge to find moral meaning creates in all of us a predisposition toward believing stories that attribute the pain of a slump to the excesses of the boom that precedes it—and, perhaps, also makes it natural to see the pain as necessary, part of an inevitable cleansing process. When Andrew Mellon told Herbert Hoover to let the Depression run its course, so as to "purge the rottenness" from the system, he was offering advice that, however bad it was as economics, resonated psychologically with many people (and still does).
By contrast, Keynesian economics rests fundamentally on the proposition that macroeconomics isn't a morality play—that depressions are essentially a technical malfunction.
Kinsley appears to have accidentally proving Krugman's point by adopting the very language that treats economic suffering as "a price for past sins."
Weisenthal seems kind of shocked by this but he shouldn't be. This is quintessential Kinsley. He's been sounding the same note for at least 20 years—with remarkable consistency. The basics of a Kinsley column on fiscal policy is that we need to "sacrifice" now to put our fiscal house in order but that this sacrifice really won't be so painful. It's just politicians pandering to the middle class that keep us from absolution.
Here he is in 2010:
My second purpose concerned the deficit. It was to argue that despite all the talk from me, among others about the "sacrifice" needed to solve the deficit problem, these GDP figures suggest that the sacrifice would not be all that great, if we were all willing to go back to where we were financially in 2006 or so, when times did not seem so bad. The difference between then and now would be enough to solve the problem.
In his confirmation hearing the new budget director, Leon Panetta, talked about the need for ''sacrifice ... a word we haven't heard very much over the last 12 years.'' He's right about that, and bully for him for using the s-word in public.
But let's put this ''sacrifice'' in perspective. Compared with what? Compared with the size of the economy? We're talking something like 2 percent of GNP. That's a few months' growth, even at the current modest rate. Was this country unthinkably worse off in, say, May 1992 than it is now? That's the degree of ''sacrifice'' we're talking about.
Weisenthal is too harsh on Kinsley. He hasn't humiliated himself. This is just Kinsley doing what Kinsley does.
_By CNBC's John Carney; Follow him on Twitter