As I watch the politics swirl around the Occupy Wall Street movement, I find myself thinking about Bernie Madoff. Bear with me here; this might even make sense.
The Madoff affair, as you may know, was a classic case of “affinity fraud”; Mr. Madoff was able to gain the trust of many wealthy Jews by persuading them that he was their kind of guy. Affinity fraud lies behind a lot of financial scams — and political scams, too.
Right now, the campaign against Occupy Wall Street basically tries to get working Americans to turn on the movement, even though most people support the movement’s goals, by trying to make it seem as if the protesters are people not like them — whereas the plutocrats are. Hey, this has worked many times in the past. And it can operate in many directions: Occupy Wall Street should be shunned because they’re dirty hippies; Elizabeth Warren, who is running for Senate in Massachusetts, is not like you because, horrors, she’s a Harvard professor.
And now that I think of it, the generalized theory of affinity fraud extends beyond politics to things like financial analysis. I’ve marveled now and then about the continued popularity on Wall Street of inflationistas, who have been wrong about everything. I suspect that a lot of it is that economists who issue dire warnings about deficits and money growth come across as the kind of people they’d like to hang out with at the golf course, whereas bearded professors don’t.
So what to do? Within limits, one should try to allay unnecessary social dissonance. If you’re going to have a demonstration on behalf of working Americans, can the drumming circles. The class warriors on the right want to convince people it’s really a culture war, and you don’t want to make their job easier. But there are limits.
No, I won’t take up golf.
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Paul Krugman joined The New York Times in 1999 as a columnist on the Op-Ed page and continues as a professor of economics and international affairs at Princeton University. He was awarded the Nobel in economic science in 2008.
Mr Krugman is the author or editor of 20 books and more than 200 papers in professional journals and edited volumes, including “The Return of Depression Economics” (2008) and “The Conscience of a Liberal” (2007). Copyright 2011 The New York Times.