My best friend, to digress from elbows for a moment, told me that she thinks the country is headed over a cliff if it is true that in the recent government program to stimulate home buying, prisoners (in prisons for whatever crime) were able access the program and rip off the American taxpayers for upwards of $8,000 a piece. Why, she ranted, can't government see that the person applying for the credit is in prison and, ipso facto, ineligible for the largesse? Why doesn't government work anymore, she concluded in righteous disgust! They're all crooks and liars!
My friend's chagrin has turned to biliousness, and the reason is that her sense of fair play has been offended what appears to be "once too often." She believes that if she hears one story like the prisoners getting government hand-outs, however undocumented, that her separate experience in the hospital observing the indigent "gaming" the health-care system, gives her not only the ability, but the right and responsibility to withdraw support from governments so easily conned.
Two factors missing from her analysis and eventual political catatonia are: quantitative evidence and sound logical principles. She does not know for a fact that there was more than one case of $8000 fraud (fraud only if those in prison were actually prohibited by statute from participating ... which, btw, may have eluded the rule-makers in their rush to get systems primed and working again). Assuming there was more than one case, what was the total damage to the public? Was it 0.000001% of the total spent or 0.0001%? Like the funnybone, the trauma of unfairness and fraud is perceived out of all proportion to the actual damage or injury.
Another misunderstood factor is the logic of government spending that eludes even the most diligent observers, namely, the concept of Statistical Effectiveness in the broadcast method of distribution. Governments spend like homeowners use grass seed. We broadcast seed across the territory to be greened up, rather than taking each seed or dollar individually and planting it in its own little hole. Yes, of course, the homeowner knows that birds will eat some fraction of the seed, that they will poop some of it out in fertile little packages, but on the neighbors' yards. Yes, of course, the government knows that in broadcast method emergency programs there will be waste. They don't advertise their advance expectation for the simple reason that to do so would attract even more birds!
Life is not fair! We come to know this incrementally during our youth as one darned thing after another befalls us. We don't get the attention of the cute, blonde, cheerleader, the pitching position on the school baseball team, any credit for saving money that we could have spent on boutique coffee concoctions, the unfailing love of both parents and spouses, and so on, and endlessly. We learn that the universe really does not care about our little peeves, but we also learn to insulate ourselves from the opportunities for disappointment. We learn to keep our elbows in, but then something major happens and our funny bone achingly stings for what seems like hours.
When there is a major event like the Great Recession of 2008 and its aftermath, we hunker down and prepare for whatever kind of austerity and pain and disillusionment that may come our way. We can hold this pose for a limited time however. Hunkering is hard on the psyche, and so we break posture from time to time to stretch a muscle or listen for good news. When the news is that the birds have eaten "all the grass seed" we are alarmed and outraged, stopping only momentarily to actually notice that the vast majority of the seed remains on the fertile ground.
So, today Paul Krugman in the New York Times has good reason to be critical of the outraged and "tired of hunkering" among us. He knows that outrage and bad news spread faster than confidence and good news, so he is warning us like a bumped elbow that the pain we have now is but a trifle compared to what we will have if we don't stay hunkered down long enough to solve this recession.