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Why Swedish Sadomonetarists Don’t Stroke Cats

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One more note on Swedish Sadomonetarists. Why, asks Krugman, did the Sadomonetarists insist on high interest rates that would tank the economy?

Where does this gut dislike for low [interest] rates come from? At some level it has to reflect an instinctive identification with the interests of wealthy creditors as opposed to usually poorer debtors. But it’s also driven, I believe, by the desire of many monetary officials to pose as serious, tough-minded people — and to demonstrate how tough they are by inflicting pain.

What Krugman doesn’t get is that when monetary officials tried to show how tough they are by inflicting pain on the middle class and the poor, that’s just another form of their instinctive identification with the 1%. What exactly is “tough-minded” about letting Finance make outrageous profits by running wild until they push the economy over the cliff, then sticking the rest of us with the bill? This is the very opposite of being a serious hard ass. How do you define what it means to be tough is all about who you identify with.

When most folks do evil things, they don’t think of themselves as being evil. Only in Bond movies do the bad guys sit in a chair stroking a cat while making plans to inflict pain. In the real world, human beings are exceptionally skilled at coming up with reasons why what they’re doing to burn other people while they rack up the cash is actually good for all of us, including the people who will get hurt the worst. More often than not, they end up believing their own PR; it’s so much easier that way. But that doesn’t make it any less of a con game.



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