On The Pathetic Left

Simon Wren-Lewis asks,

Why does the economic policy pursued or proposed by the left in Europe often seem so pathetic?

citing the Hollande government as the prime example, but also the limpness of Labour in Britain. And he suggests that it’s a question of resources and organization:

Seeking out good advice (and distinguishing it from bad advice) takes either money or time. An established government finds this much easier than an opposition or a new government.

Well, I can’t speak to the European situation, but we had our own version of the sorta-kinda left utterly failing to take on austerian macro — Obama’s “pivot” from jobs to deficits, which actually began in 2009, back when Democrats still controlled both houses of Congress. And you can’t make the resources argument there; not only was Obama a sitting president with a Congressional majority, but modern U.S. progressivism has a large policy-analysis apparatus outside the government, much of which was arguing strenuously against the pivot. Yet there was Obama in November 2009 (!) warning, on Fox News no less, that excessive deficits might cause a double-dip recession.

So how did that happen? Based on my observations, I’d put it down to the influence of the Very Serious People, whose views on economics tend in turn to be driven largely by the financial industry. It’s hard to believe, but back when Obama was telling Fox that the deficit was a huge threat, there were also widespread rumors that he would soon replace Tim Geithner with … Jamie Dimon.

And what those finance-industry people were telling Obama was to beware of the invisible bond vigilantes.

I would guess that it’s much the same in Europe. Labour should be listening to Jonathan Portes and, well, Simon Wren-Lewis, but I’m sure that it’s listening much more to well-tailored men from the City. Hollande may be a man of the left in a way that nobody in US politics is, but he’s still getting advice from bankers telling him that fiscal rectitude is all (and although France may be well to the left of the United States in most respects, it has nothing like the intellectual infrastructure of the US progressive movement to counter the alleged wisdom of big money.)

I guess you could say that it was ever thus. But the nature of our current economic situation is that smart policy requires that you ignore what supposedly responsible people, who sound as if they know what they’re talking about — and hey, they’re rich, so they must know something — have to say. And no government of the moderate left has had the intellectual and moral courage to do that.