A few weeks ago, I wrote about a recent event where the usual clique of Beltway deficit hawks—Pete Peterson, Alan Simpson, Erksine Bowles—clucked about the danger of the debt. To them, and many others, our debt is the nation’s paramount economic problem—in their telling, it has the power to sink our growth, and impoverish our citizens.
Somehow, this urgency vanishes when it comes to mass unemployment. Relatively little energy is devoted to the 14 million Americans who are out of work, despite the fact that their suffering is far more real than the hypothetical debt crisis of Washington fever dreams. But establishment indifference to large scale immiseration is par for the course; with few exceptions—namely, early 2009—the D.C. establishment has been more concerned with reducing deficits than putting people back to work.
Riffing off of a recent op-ed in the Washington Post—where the editorial board applauds a decision to deny needed relief to homeowners—Jonathan Chait pinpoints the source of this blasé attitude toward widespread hardship:
I live in a Washington neighborhood almost entirely filled with college-educated professionals, and it occurred to me not long ago that, when my children grow up, they’ll have no personal memory of having lived through the greatest economic crisis in eighty years. It is more akin to a famine in Africa. For millions and millions of Americans, the economic crisis is the worst event of their lives. They have lost jobs, homes, health insurance, opportunities for their children, seen their skills deteriorate, and lost their sense of self-worth. But from the perspective of those in a position to alleviate their suffering, the crisis is merely a sad and distant tragedy.
It’s no accident that these are the same people who, for the last three-and-a-half years, have made excuses for—and even defended—intense Republican obstruction of efforts to repair the country. For a large portion of our establishment, the economic crisis is less important the prospect of higher taxes. Indeed, it’s less important than some abstract concern for “civility” or “bipartisanship”; hence the constant calls for a “grand bargain” that would reduce the deficit by depriving ordinary Americans of needed benefits.
It also fits in with the Federal Reserve’s refusal to act. The Fed is tasked with reducing unemployment and keeping inflation from running amok, and we’re in a situation with too much joblessness and too little inflation. In more concrete terms, this means that millions of people are in the worst situation of their lives—they’ve lost their jobs, their homes, and maybe even their families. Generating inflation, and encouraging people and businesses to spend money would seem like the rational response to this situation, especially since the Fed has a policy responsibility to its dual mandate, and a moral responsibility to help alleviate the tragedy of mass unemployment.
But they refuse to take steps to that end. And the simplest explanation—the one that makes the most sense—is that our central bankers, like most of our elites, are simply indifferent to the problem widespread immiseration. Or at least, not concerned enough to sacrifice a little price stability.