When The Narrative Proves Wrong, The Story Will Just Fade Away

As the clothes-less would-be emperors of the world meet in Paris to try to impose mandatory energy restrictions on everyone else's life, the big news is the latest effort to silence the handful of little kids who would point out the pooh-bahs' obvious nakedness.  The Washington Times reports on a demand from an environmentalist group SumOfUs to deny press credentials to any who don't toe the official climate line:

The climate-change group SumOfUs submitted a formal complaint Monday to U.N. conference organizers “asking for notorious climate denying groups to be denied accreditation to the Paris climate talks,” according to a press release.    

So at least as of today, they still think they can keep everybody from laughing at President Obama, Pope Francis, Bernie Sanders, Al Gore, et al., by shutting the little kids up.  But, as I have predicted, when this whole thing dies, as it inevitably will, none of those who promoted it for decades will ever admit they were wrong or be called to account.  The whole subject will just quietly fade away as if it had never existed and it will never be spoken of again in polite company.  That's how it works with these heavily-promoted narratives when they just prove to be so embarrassingly wrong that they can't be mentioned any more.

For another example of the same phenomenon, consider the campaign against the belt-tightening fiscal regime by governments that goes by the name of "austerity."  "Austerity" is that muddled pseudo-Keynesian term favored by the likes of Paul Krugman and the IMF in their campaign to stop any cuts to government spending.   By one count Krugman has written over eighty articles since the financial crisis attacking anyone who dares to advocate cutting government spending as an economic policy for any country.  Back in 2012, the IMF weighed in on the effort to maintain all government spending everywhere without any cuts with a report claiming that "austerity" was causing massive "economic damage."

But when was the last time you saw one of these anti-"austerity" articles?  The most recent one I can find by Krugman is from September.  They just get fewer and fewer and gradually disappear.  So what happened to that narrative?

Let's compare a couple of examples of spending cutters versus blowout spenders.  First, the UK.  Chancellor of the Exchequer George Osborne has an op-ed in today's Wall Street Journal titled "How Britain Got Its Mojo Back."    It seems like the newly-re-elected Tory government plans to continue the program of spending cuts that got it re-elected.  According to Trading Economics here, UK public spending as a percent of GDP has come down from 49.7% of GDP in 2009 all the way to 44.4% in 2014, a cut of more than 5%.  Osborne says that there is lots more to come:

Over four years, [our economic plan] will eliminate our budget deficit and deliver a surplus, putting Britain in its strongest fiscal position for almost half a century.  Total public spending will fall to 36.4% of national income . . . .  With the exception of demobilization after world wars, this will be the biggest reduction in government consumption in Britain for a century—and the biggest in any G-7 economy for at least 50 years.     

And how has that been playing out in GDP?  Again from Trading Economics, we find an annual GDP growth rate of 2.3% in the year to September 30, 2015, 2.9% for the prior year, and 2.1% for the year to 9/30/13.  Not gangbusters, but very respectable by European standards.  Compare it to most recent reported annual growth (same source) of 0.3% for France and 0.1% for Germany.

And now for the world champion of blow-out government spending -- Venezuela!  Its economy is a total shambles.  They have literally destroyed everything.  Bill Neuman at the New York Times has been doing a very respectable job on reporting on the impossible economic conditions and empty stores.  From an article on October 18:

The eagerness to dump bolívars or avoid them completely shows the extent to which Venezuelans have lost faith in their economy and in the ability of their government to fix the mess.  A year ago, $1 bought about 100 bolívars on the black market. These days, it often fetches more than 700 bolívars, a sign of how thoroughly domestic confidence in the economy has crashed. 

Meanwhile, the government has stopped publishing any economic statistics at all.  But the IMF projects that the Venezuela economy will shrink by a full 10% in 2015.  Oh, and that's with the usual fraudulent IMF GDP accounting that counts government spending in GDP at 100 cents on the dollar.  A more realistic view of the one-year shrinkage of the Venezuelan economy would be 15 - 20%.  I guess all that government "stimulus" spending didn't work out too well.

Meanwhile, in the all-time champion of low government spending, Singapore (government spending less than 20% of GDP) the per capita GDP has now comfortably passed that of the U.S., and the gap continues to widen.  Same in Switzerland (government spending about 33% of GDP).  I'm not saying we won't ever see another one of these anti-austerity rants, but it's fewer and fewer.  They're just fading away.  Global warming will too.