Mort d’un conte de fées

Infographie : François Descheemaekere

Death of a Fairy Tale

[The New York Times]

Paul Krugman, professor of Economics and International Affairs at Princeton University, Nobel Prize in Economics 2008. 

For the past two years most policy makers in Europe and many politicians and pundits in America have been in thrall to a destructive economic doctrine. According to this doctrine, governments should respond to a severely depressed economy not the way the textbooks say they should — by spending more to offset falling private demand — but with fiscal austerity, slashing spending in an effort to balance their budgets. Critics warned from the beginning that austerity in the face of depression would only make that depression worse. But the “austerians” insisted that the reverse would happen. Why? Confidence! “Confidence-inspiring policies will foster and not hamper economic recovery,” declared Jean-Claude Trichet, the former president of the European Central Bank — a claim echoed by Republicans in Congress here.
Or as I put it way back when, the idea was that the confidence fairy would come in and reward policy makers for their fiscal virtue. The good news is that many influential people are finally admitting that the confidence fairy was a myth.
Lire  : nytimes.com