How to Slay Invisible Bond Vigilantes
Paul Krugman has been going after those who wave the threat of Invisible Bond Vigilantes again — those people the Right are convinced are about to descend upon the US financial markets and wreck things because of Teh Enormous Debt and the lack of Austerity. As Krugman paints the picture, the financial industry MOTUs are saying one thing (“Be Afraid! Be Very Afraid!!”), but the actual bond market participants are saying another (“What? Me worry?”). As Nobel laureates are wont to do, Krugman points out that the economic models don’t support the story those who fear the Invisible Bond Vigilantes are telling. Then he searches for an empirical example that might possible prove that there is something to fear, and again comes up with crickets.
Sighing wistfully, Krugman closes with the following observation:
It’s quite remarkable: our policy discourse remains largely dominated by fears of an event that the fear-mongers can’t explain in theory, and for which they can offer no historical examples in practice.
It dominates, because the fear-mongers are largely con men, and con men don’t give a damn about economic theory nor history. As is the case with any con, the con men continue telling the story because the marks continue to fall for it. As is the case with any con, when the marks start to doubt the pitch, the pitch only gets stronger: “But this time, it’s really true!”
The folks at the top of the financial industry are quite clear: they want lower taxes on their income from capital gains, no changes to the favorable tax treatment of “carried interest”, and fewer regulations and restrictions on Wall Street in general. They want a pass on their past crimes, they want more money, and they want less accountability. So far, screaming about Invisible Bond Vigilantes has either gotten them what they want, or held off those who would make things (from their perspective) worse. As long as telling scary stories about Invisible Bond Vigilantes works, they’ll keep telling the stories.
Krugman’s policy and history lessons are, as they say in the wonk business, necessary but not sufficient to putting an end to these fictional fables. To put the Invisible Bond Vigilantes back under the bed with all the other monsters that haunt the dreams of impressionable children requires going after the fear.
The best weapon against irrational fears in the policy arena isn’t rationality — it’s mockery. A kindly parent may offer kindly mockery, by playing along with the delusion. When the child cries out at bedtime, “Mom! There are Invisible Bond Vigilantes under my bed!”, Mom swings into action. Wielding her invisible +5 Invisible Bond Vigilante Sword of Death, she stabs underneath the bed, pokes at the suspicious lumps under the blankets, and throws herself with shouts into the child’s closet. Suddenly, the screaming stops, a disheveled Mom emerges, and she solemnly declares to the frightened child that the battle is over and the victory has been won. Satisfied for the evening, the kid goes to sleep.
A less kindly approach is that of the schoolyard. Woe be unto that fourth grader who admits to the wrong classmate that they are tired because the monsters under the bed kept them up all night. “Hey Johnny! Lloyd still believes in monsters under the bed! What a baby!” The taunting on the playground, the laughing in the lunchroom, and the whispers in the classroom will be amazing.
Whether wieldly kindly or unkindly, mockery is what slays Invisible Bond Vigilantes.
Krugman’s general approach has been the former, but when it comes to reaching members of Congress, I think the latter will be the more effective approach. As the pressure for a Grand Bargain mounts and screaming about the Invisible Bond Vigilantes rises, someone needs to ask members of Congress a few questions. In addition to Invisible Bond Vigilantes, do they also believe in the Loch Ness monster? What about Bigfoot? How about the Abominable Snowman, Swamp Thing, and little green men on Mars who are coming to devour the Earth?
If the answer to any of these questions is yes, then the problem’s bigger than I thought and we’ll need bigger snark.
If you think that mockery won’t work, ask Todd Akin, John Boehner, Mitch McConnell, and Reince Prebius about legitimate rape. Just don’t expect them to laugh.
Image h/t to Sierra Tierra and used under Creative Commons. Note that the caption is mine, not STs.