If you want to see how far notions of neo-Keynesianism and government omnipotence have seeped into Washington's conventional wisdom, have a look at today’s Politico lineup. One of the articles, headlined "Improving economy defies Washington, for now," has one of the funnier ledes I've seen in a while:
Washington has tried very hard this year to crush the economy with debt ceiling fights, clumsy budget cuts, a government shutdown and complete legislative gridlock. It does not appear to be working.
Funny, that. It’s almost as though—and talk me down if I sound crazy here—the private sector hums along just fine if we cut federal spending. In fact it seems like—and hold onto your hats for this one—the economy functions better if the government has its hands tied and can’t pass new legislation.
Indulgent sarcasm aside, how many more iterations of this will we have to endure? The press predicted everything short of nuclear annihilation if the sequester took effect (Chris Matthews called it a “doomsday machine”), and the effects were almost nonexistent. The government shutdown was supposed to be a branch thrown in the gears of the recovery, and the economy grew at its regular pace. Even the debt ceiling standoffs, despite sending the stock market into a tizzy, haven’t diminished the economy in the long run.
Yet progressives, and many centrists, wring their hands and wonder how much longer we can survive this dark age of austerity. Maybe the better question is: Why is there never any consequence for being repeatedly wrong?