Austerity or Keynesianism: Can’t we do better than this?

Austerity. Keynesianism. Voting for the Center-Right. Voting for the Center-Left. Let’s call the whole thing off.

Five years of the economic crisis has yet to shake the stubborn idea that, if only the right policy were implemented, prosperity would be here again. And so this week’s two turns of the electoral wheel — agreement on a “grand coalition” government in Italy and the return to power in Iceland of the two parties that presided over that country’s collapse — demonstrate that traveling in a circle leads you to where you just were.

The outgoing Icelandic government earned a reputation for “standing up” to banks and the International Monetary Fund, and refusing to saddle its citizenry with the massive debts of Iceland’s swollen banks. At first glance, it seems curious that Icelanders would vote out such a government and return to office the same government coalition that presided over the country’s meltdown. But a closer look reveals a much different story. So different, in fact, that the IMF praised the outgoing Social Democrat/Left Green coalition government of Johanna Sigurdardottir.

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