Pain Without Gain      

By PAUL KRUGMAN

Last week the European Commission confirmed what everyone suspected: the economies it surveys are shrinking, not growing. It’s not an official recession yet, but the only real question is how deep the downturn will be.

And this downturn is hitting nations that have never recovered from the last recession. For all America’s troubles, its gross domestic product has finally surpassed its pre-crisis peak; Europe’s has not. And some nations are suffering Great Depression-level pain: Greece and Ireland have had double-digit declines in output, Spain has 23 percent unemployment, Britain’s slump has now gone on longer than its slump in the 1930s.

Worse yet, European leaders — and quite a few influential players here — are still wedded to the economic doctrine responsible for this disaster.

For things didn’t have to be this bad. Greece would have been in deep trouble no matter what policy decisions were taken, and the same is true, to a lesser extent, of other nations around Europe’s periphery. But matters were made far worse than necessary by the way Europe’s leaders, and more broadly its policy elite, substituted moralizing for analysis, fantasies for the lessons of history.

Specifically, in early 2010 austerity economics — the insistence that governments should slash spending even in the face of high unemployment — became all the rage in European capitals. The doctrine asserted that the direct negative effects of spending cuts on employment would be offset by changes in “confidence,” that savage spending cuts would lead to a surge in consumer and business spending, while nations failing to make such cuts would see capital flight and soaring interest rates. If this sounds to you like something Herbert Hoover might have said, you’re right: It does and he did.

Now the results are in — and they’re exactly what three generations’ worth of economic analysis and all the lessons of history should have told you would happen. The confidence fairy has failed to show up: none of the countries slashing spending have seen the predicted private-sector surge. Instead, the depressing effects of fiscal austerity have been reinforced by falling private spending.

Furthermore, bond markets keep refusing to cooperate. Even austerity’s star pupils, countries that, like Portugal and Ireland, have done everything that was demanded of them, still face sky-high borrowing costs. Why? Because spending cuts have deeply depressed their economies, undermining their tax bases to such an extent that the ratio of debt to G.D.P., the standard indicator of fiscal progress, is getting worse rather than better.

Meanwhile, countries that didn’t jump on the austerity train — most notably, Japan and the United States — continue to have very low borrowing costs, defying the dire predictions of fiscal hawks.

Now, not everything has gone wrong. Late last year Spanish and Italian borrowing costs shot up, threatening a general financial meltdown. Those costs have now subsided, amid general sighs of relief. But this good news was actually a triumph of anti-austerity: Mario Draghi, the new president of the European Central Bank, brushed aside the inflation-worriers and engineered a large expansion of credit, which was just what the doctor ordered.

So what will it take to convince the Pain Caucus, the people on both sides of the Atlantic who insist that we can cut our way to prosperity, that they are wrong?

After all, the usual suspects were quick to pronounce the idea of fiscal stimulus dead for all time after President Obama’s efforts failed to produce a quick fall in unemployment — even though many economists warned in advance that the stimulus was too small. Yet as far as I can tell, austerity is still considered responsible and necessary despite its catastrophic failure in practice.

The point is that we could actually do a lot to help our economies simply by reversing the destructive austerity of the last two years. That’s true even in America, which has avoided full-fledged austerity at the federal level but has seen big spending and employment cuts at the state and local level. Remember all the fuss about whether there were enough “shovel ready” projects to make large-scale stimulus feasible? Well, never mind: all the federal government needs to do to give the economy a big boost is provide aid to lower-level governments, allowing these governments to rehire the hundreds of thousands of schoolteachers they have laid off and restart the building and maintenance projects they have canceled.

Look, I understand why influential people are reluctant to admit that policy ideas they thought reflected deep wisdom actually amounted to utter, destructive folly. But it’s time to put delusional beliefs about the virtues of austerity in a depressed economy behind us.

緊縮手段 截斷經濟活水

歐盟執委會日前證實各方早已懷疑的一件事：它調查的各個經濟體正在萎縮而不是成長。這還不是官方認定的衰退，然而唯一的真正關鍵是，衰退的幅度究竟會多大。

這一波衰退已經開始影響從未自上一次衰退中復甦的國家。儘管美國有許多問題待處理，但其GDP終於超越危機前的高峰。歐洲仍未如此。部分國家正在承受與大蕭條時期同樣嚴重的煎熬。希臘與愛爾蘭的經濟總產出衰退幅度始終維持在兩位數；西班牙的失業率高達23%，英國衰退的時間更是已超越了1930年代。

更糟糕的是，歐洲領導人與為數不少的美國決策精英至今仍然死抱必須為這場大災難負責的經濟教條。

因為局面其實不必演變至如今的不堪狀態。無論決策者如何定奪，希臘還是會面臨棘手難題，若干歐洲周邊國家亦然。然而局面因為歐洲領導人及其政策精英以道德勸說取代冷靜分析，同時以幻想取代歷史教訓，而使問題更加嚴重。

特別是，2010年初堅持政府面臨失業率居高不下時應該縮減開支的緊縮經濟理論，成為歐洲各國的主流意見。這套理論認為，縮減開支對就業產生的直接衝擊必將因為「信心」改變而抵銷；大幅減支將導致消費與企業開支大增，因故未能減支的國家必將承受外資撤離與利率大增的後果。如果這聽起來有如胡佛的口氣，你一點也沒錯：的確如此。

後果已經次第出現，而它們正是累積三個世代的經濟分析與歷史教訓應該告訴你一定會出現的局面。有關信心的幻想並未實現：減支的各國均未出現預期的民間部門止跌回升。相反的，財政緊縮產生的負面效應已經因為民間減少開支而加倍嚴重。

尤有甚者，債券市場一再拒絕合作。即使緊縮政策的明星級信徒，例如葡萄牙與愛爾蘭，均曾充分配合外界的要求，舉債成本還是高得嚇人。為什麼？因為減支導致它們的經濟嚴重萎縮，同時衝擊它們的稅收基礎，以致債務對GDP之比更加惡化而不是改善。

另一方面，當初未搶搭緊縮列車的國家 ─ 特別是日本與美國 ─ 舉債成本仍然很低，有力駁斥財政鷹派的預言。

現在，並不是各個環節都出現問題。去年底，西班牙與義大利的舉債成本先後大增，以致財政隨時可能全面崩解。如今，這些成本已經下降。然而這個好消息其實是反緊縮主張的勝利。歐洲央行新任總裁德拉基力排有關通膨的疑慮，親自主導信用大幅擴張。這正是醫師開出的處方。

如此說來，該如何說服堅持減支可以創造繁榮的大西洋兩岸「煎熬黨團」承認，他們其實大錯特錯？

畢竟，在歐巴馬總統全力嘗試，最後仍然無法迅速降低失業率之後 ─ 即使許多經濟學者事先警告，振興方案規模太小 ─ 懷疑論者迅即聲稱，財政刺激的理論行不通。然而據我所知，雖然實際操作時嚴重失敗，緊縮仍然是負責且必要的手段。

要點是，我們其實可以為經濟注入活水，方法是，揚棄過去兩年來產生嚴重後果的緊縮政策。即使在美國，這也說得通。美國聯邦政府並未全面採取緊縮措施，州與地方政府則大砍開支與雇員。還記得有關「備胎方案」是否足以使大規模振興方案具體可行的爭論吧？不必在意。聯邦政府大幅提振經濟的要著是，為較低階政府提供援助，使其得以再次雇用此前解雇的大批教師，同時再次啟動它們取消的基建計畫。

我明白為什麼有力人士不肯承認，他們當初自認是智慧的政策理念最後卻變成毀滅性的愚蠢。然而我們必須及時把有關經濟衰退下，緊縮優點的幻想概念拋在腦後。

原文參照：
http://www.nytimes.com/2012/02/20/opinion/krugman-pain-without-gain.html

2012-02-21．經濟日報．A8．國際視野．陳世欽譯