"At a time when so many families are tightening their belts, he's going to make sure that the government continues to tighten its own," Obama said. "
We'll never know how differently the politics would have played if Obama, instead of systematically echoing and giving credibility to all the arguments of the people who want to destroy him, had actually stood up for a different economic philosophy. But we do know how his actual strategy has worked, and it hasn't been a success.
Krugman boils it down to its simple essence. But in order to fight it, we need all the insight we can get, which can get rather messy. I'm not going to try and do it all here. I'm only going to highlight one aspect. But in doing so, I hope to illustrate the importance of brining as much insight to bear as possible. Yes, there's a lack of principle, courage and will, as well as plain old common sense. There's not even a sense of poltical self-preservation, as Krugman himself points out.
But there's also an almost total lack of cognitive functioning. The content may be different, but as far as the formal processes are concerned, this is pure Tea Bag territory--reasoning by associative similiarity: You dress up like a Revolutionary soldier, and voila! the Founding Fathers are automatically your spokesmen! Obama's "reasoning" basically operates on the same level. This goes back to the appearance-based "sequential reasoning" that I first blogged about years ago in "Terri Schiavo: We're Too Smart!"
Sequential thinkers reason "by tracking the world," recognize regularities in sequences of events, but have no abstract understanding of cause and effect. The world they perceive is a world of appearances that has very little organization to it beyond the recurrence of sequences.
Linear thinkers understand cause and effect, limited to a one-direction, one-cause/one-effect model. The world they perceive has logical order and structure, but the structure is invariably hierarchical, causality flows top-down, and the world is divided neatly into cause and effect.
Systematic thinkers understand multi-faceted, multi-linear cause and effect, with mutual cause-and-effect relationships between different elements. The world they perceive is primarily a world of systems and relationships, rather than objects.
Equating the federal budget with family budgets is a classic example of sequential thinking. There is no logical reasoning involved here. There is simply an association between two things that superficially appear to be the same:
"The world they perceive is a world of appearances that has very little organization to it beyond the recurrence of sequences."
That perfectly describes the crazy world of John Boehner and the Tea Baggers last year. And the world of Barack Obama today.
Of course, there's another recurrence of sequences that Obama ought to be paying attention to: Those that followed Herbert Hoovers "cross your fingers and hope for the best" policy when it first seemed like the worst might have passed. Or those followed by FDR himself, with the same thing in mind, when cut back spending and caused the recession of 1937/38. But that's just the problem with sequential thinkers--there's no rhyme or reason to which sequences they pay attention to, and which they just choose to ignore.
In contrast, macro-economics is by it's very nature a matter of systematic thinking. Some people aren't very good at it, even with PhDs. But the essential structure of macro-economic thought is that mutliple causes produce multiple effects, some of the most important of which feed back to produce forms of circular causation.
In between the high level of macro-economics itself, and the dunderhead level of Boehner and Obama, there's a middle level in which arguments are advanced focused on a single cause-and-effect relationship. This is often the dominant structure of op-ed pieces, for example.
But there is not reason that things have to be this way. The President has a bully pulpit. The collapse of the economic system is a classic "teachable moment". One of the most important lessons of economics is the "paradox of thrift", about which Wikipedia says:
The paradox of thrift (or paradox of saving) is a paradox of economics, popularized by John Maynard Keynes, though it had been stated as early as 1714 in The Fable of the Bees,[1] and similar sentiments date to antiquity.[2] The paradox states that if everyone tries to save more money during times of recession, then aggregate demand will fall and will in turn lower total savings in the population because of the decrease in consumption and economic growth. The paradox is, narrowly speaking, that total savings may fall even when individual savings attempt to rise, and, broadly speaking, that increases in savings may be harmful to an economy.[3] Both the narrow and broad claims are paradoxical within the assumption underlying the fallacy of composition, namely that what is true of the parts must be true of the whole. The narrow claim transparently contradicts this assumption, and the broad one does so by implication, because while individual thrift is generally averred to be good for the economy, the paradox of thrift holds that collective thrift may be bad for the economy.
And as for the "Fable of the Bees", it's an early precursor of Adam Smith. A good enough intro from Wikipedia states:
The Fable of The Bees: or, Private Vices, Publick Benefits is a book by Bernard Mandeville, consisting of the poem The Grumbling Hive: or, Knaves turn'd Honest and prose discussion of it. The poem was published in 1705 and the book first appeared in 1714.[1] The poem elucidates many key principles of economic thought, including division of labor and the invisible hand, seventy years before Adam Smith (indeed, John Maynard Keynes argues Smith was probably referencing Mandeville[2]). It also describes the paradox of thrift centuries before Keynes, and may been seen as part of the school of underconsumption.
At the time, however, it was considered scandalous. Keynes reports in his General Theory of Employment, Interest, and Money, that it was "convicted as a nuisance by the grand jury of Middlesex in 1723, which stands out in the history of the moral sciences for its scandalous reputation. Only one man is recorded as having spoken a good word for it, namely Dr. Johnson, who declared that it did not puzzle him, but 'opened his eyes into real life very much'."
Mandeville's insight was crucial to the development of economics, even though its significance has not been highlighted. But the concept is hardly difficult to explain. And with the stakes so high for not understanding it...
We really do have to confront our own tendency towards sequential thinking. Yes, it's true, Barack Obama doesn't look anything like George W. Bush. He speaks in complete sentences, paragraphs, even.
But once you scratch away the surface, and look critically at the structure of reasoning behind the well-crafted surface of things, you will find a sickening similarity in the reliance on primative sequential thinking: "'A' looks like 'B', therefore 'A' is 'B'".
This is not change we can believe in. This is not change at all. This is more of the same old brain dead stupidity than you ever dreamed of.
And if you can't get your mind around that, then you need to take a good hard look in the mirror.
