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ARG, I refer you to my diary:

http://www.eurotrib.com/story/2012/4/12/91330/2464

For some in charge, Depression is a choice, but for most, this depression is an outcome of learned helplessness.

The final triumph of Hayek and others has been to bring the vast majority to believe that they can do nothing, that they must suffer depression as the vengeance of an angry market god...

by Metatone (metatone [a|t] gmail (dot) com) on Thu Apr 26th, 2012 at 11:58:18 AM EST
The final triumph of Hayek and others has been to bring the vast majority to believe that they can do nothing, that they must suffer depression as the vengeance of an angry market god...

Ironically, the older Hayek disagreed on that with the younger Hayek:

I am the last to deny - or rather, I am today the last to deny - that,in these circumstances, monetary counteractions, deliberate attempts to maintain the money stream, are appropriate.I probably ought to add a word of explanation: I have to admit that I took a different attitude forty years ago, at the beginning of the Great Depression. At that time I believed that a process of deflation of some short duration might break the rigidity of wages which I thought was incompatible with a functioning economy. Perhaps I should have even then understood that this possibility no longer existed. ... I would no longer maintain, as I did in the early `30s, that for this reason, and for this reason only, a short period of deflation might be desirable. Today I believe that deflation has no recognizable function whatever, and that there is no justification for supporting or permitting a process of deflation.

...

The moment there is any sign that the total income stream may actually shrink, I should certainly not only try everything in my power to prevent it from dwindling, but I should announce beforehand that I would do so in the event the problem arose.... You ask whether I have changed my opinion about combating secondary deflation. I do not have to change my theoretical views.

As I explained before, I have always thought that deflation had no economic function; but I did once believe, and no longer do, that it was desirable because it could break the growing rigidity of wage rates. Even at that time I regarded this view as a political consideration; I did not think that deflation improved the adjustment mechanism of the market.



guaranteed to evoke a violent reaction from police is to challenge their right to "define the situation." --- David Graeber citing Marc Cooper
by Migeru (migeru at eurotrib dot com) on Thu Apr 26th, 2012 at 12:45:31 PM EST
[ Parent ]
Hansen recants on IS/LM, Hayek recants on the utility of deflation, on and on and it makes no difference. I think Varafoukas' recent description of the shuffle that new classicals perform in the face of clear evidence of the bankruptcy of their ideas is the best explanation.

At Metatone's response to the Hayek link above he  certainly is right about the next step being the redefinition of deflation - all the better to keep the depression of choice on track. Their real response is:
"We piss on your alternatives!"

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Thu Apr 26th, 2012 at 02:08:37 PM EST
[ Parent ]
Depression is a choice, but that does not mean that most of those making that choice will not insist that There Is No Alternative, even while pissing on every alternative brought forward. Their positions are held not for their explanatory or predictive power but because holding them is a requirement for continuing to hold their positions and incomes. No one wants to admit they are supporting nonsense for money, so they instinctively discredit alternatives.

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Thu Apr 26th, 2012 at 02:15:51 PM EST
[ Parent ]
How much weak political representation of home market actors support austerity?

Large export firms dominate employers unions and their workers employees unions. Home marked is served by large number of small enterprices whose employees have weak unions.

Firms and employees who have least to lose because of austerity are overrepresented at both sides of political spectrum.

by Jute on Fri Apr 27th, 2012 at 07:42:56 AM EST
[ Parent ]

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