We of the reality-based community

George W Bush's sinister wing man Karl Rove once castigated opponents of the Iraq war as the "reality-based community". The phrase has now gone down in history as the essence of right-wing derangement--these guys are gleefully out of touch with reality! But the original meaning was a bit more complex, and relevant to our times.

The phrase came from a conversation Rove had with a journalist, where he was basically calling his opponents cissy. "History" might have been a better-chosen term, in that Rove was essentially saying: "You guys record history. We make history." The "reality" reference was more about the way that Rove and his allies were drunk on their own power, and in love with their superhuman Will: "You think reality is something you experience. We think it's something that we make."

Of course, that is in itself a type of derangement, but it gets at the core issue that these guys aren't just out of touch. They've become out of touch because they're convinced they have vast power to remake the world in radical ways, a mission more noble than that of the dull pragmatists.

As you can guess, I think the unreality-based community is firmly entrenched in key positions of power around the world right now. In the U.S., the right want to reverse the past 80 years of history to return America to a small-government stance not seen since the 1920s, and they're prepared to hold the world's largest economy hostage till they get their way. Obama has already offered them the most radical plan of spending cuts ever offered by a modern U.S. President--and this during a slump, when the economy needs stimulus!--but Congressional Republicans rejected it because they don't want him to pass significant legislation.

In Europe, the hard-money fanatics are refusing to step into a speculative crisis that threatens to blow apart the euro, saying that the onus is on troubled countries to make their economies more like Germany's. Leave aside the fact that the likes of Spain and Ireland were far more fiscally responsible than Germany, and the fact that it's pretty well impossible for the whole euro zone to run an economic surplus like Germany (if your current account is in surplus, someone else's must be in deficit to balance things out). If the solution to this crisis is really to remake almost every euro zone economy on German lines, that project would take decades, whereas the euro could fall apart within days.

The ideas that have least currency in political circles are actually the pragmatic, tried-and-tested ones that are mostly being ignored. Economies in the doldrums need stimulus, and it's most effective if it's directed to people at the bottom of the heap. When economies are growing below their trend, they need to grow above trend for a while to get back to that trend. Austerity programmes have never been a spark for economic growth, in the absence of surging export demand or monetary easing. And when a country's debt is under speculative attack, central banks need to stand behind it.

These measures would also fit a definition of populist politics. They would work to improve the lives of people who are suffering, while also helping economies in the longer term.

People need to understand that those in power aren't just grimly sticking to a painful but conventional programme that's our best way out of this mess. They are grimly committed to using this crisis to undertake a radical remaking of the status quo, and no one really knows where their policies will take us.