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20 August 2010

Aum Bond Shivaya, Aum Bond Shivaya

In his column today, Paul Krugman presents an analogy that I find interesting. He writes, "[T]he policy elite — central bankers, finance ministers, politicians who pose as defenders of fiscal virtue — are acting like the priests of some ancient cult, demanding that we engage in human sacrifices to appease the anger of invisible gods." I think there is more to this than Paul acknowledges in the rest of the piece. The calls for austerity in the face of increasing unemployment and lagging recovery are both non-rational and super-empirical, two things that mark all religious endeavour. (Note that non-rationality is not the same as irrationality.) Because of this, I think the religion metaphor works very well. There is a certain dogmatism that persists in spite of contradicting evidence. Don't worry about what you see in the heavens, Galileo; the earth is clearly at the center.

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