Posted on 11/11/2011 6:01:41 AM PST by SeekAndFind
This is the way the euro ends — not with a bang but with bunga bunga. Not long ago, European leaders were insisting that Greece could and should stay on the euro while paying its debts in full. Now, with Italy falling off a cliff, it’s hard to see how the euro can survive at all.
But what’s the meaning of the eurodebacle? As always happens when disaster strikes, there’s a rush by ideologues to claim that the disaster vindicates their views. So it’s time to start debunking.
First things first: The attempt to create a common European currency was one of those ideas that cut across the usual ideological lines. It was cheered on by American right-wingers, who saw it as the next best thing to a revived gold standard, and by Britain’s left, which saw it as a big step toward a social-democratic Europe. But it was opposed by British conservatives, who also saw it as a step toward a social-democratic Europe. And it was questioned by American liberals, who worried — rightly, I’d say (but then I would, wouldn’t I?) — about what would happen if countries couldn’t use monetary and fiscal policy to fight recessions.
So now that the euro project is on the rocks, what lessons should we draw?
I’ve been hearing two claims, both false: that Europe’s woes reflect the failure of welfare states in general, and that Europe’s crisis makes the case for immediate fiscal austerity in the United States.
The assertion that Europe’s crisis proves that the welfare state doesn’t work comes from many Republicans. For example, Mitt Romney has accused President Obama of taking his inspiration from European “socialist democrats” and asserted that “Europe isn’t working in Europe.”
(Excerpt) Read more at nytimes.com ...
The idea, presumably, is that the crisis countries are in trouble because they’re groaning under the burden of high government spending. But the facts say otherwise.
READ HIS REASONS BY CLICKING ON THE ABOVE LINK
It was the Jews.
Krudman overlooks the obvious.
Krugman, you may be the dumbest sob I’ve ever heard in my life.
This is why I reject the notion that if you have a degree you are automatically smarter than those who don’t have one.
Leftists like Krugman typically blame Eurofailure on “unfair tax competition” coming from the US and Asia.
Krugman is as committed to his socialism, as lemmings are to taking their plunge to death. They might know that, in the end, they’re both going to be destroyed, but they can’t admit how wrong they are.
At the NYT link he continues the same line of argument: The problem with Greece, Italy Spain is that they cant print their way out of debt and recessions, because of the Euro.
It's not because they became a ' consumer ' based society not producing anything while consuming. 'Consumption' side economics says that the government employee creates the jobs, by spending money.
It’s the socialism, stupid. UNaccountable bureaucrats and their bureaucracies.
NO BAILOUTS for Eurocrats or the IMF.
DEFUND socialist collectives, foreign and domestic.
Well, by all means, lets compete harder! We need to figure out how to take down the PRC!
Would those of you who are simply demeaning Krugman please point out why he is wrong?
Nobel prize or not Krugman is an idiot at best. What I really think he is is an ideologue who is quite willing to pervert his discipline to promote his ideology. Of course he may still be an idiot.
The notion that Krugman is stupid assumes that he believes the drivel he spouts. You don't assume that defense attorneys believe what they say in the courtroom when they defend their clients, do you? Same deal with Krugman.
Krugman owes his position and income to being an effective spokesman for socialism, a system that benefits the "connected" elites that keep him in his position.
He says the key difference between the countries buried by their debt and those that are presently in better shape (Japan, Germany, US) is that the countries who are better off can borrow in their own currencies.
That is true, but foolish and circular reasoning. The only reason these countries are able to borrow in their own currencies is that they traditionally have been much stronger and more balanced economies.
When the debt becomes overwhelming, either the interest rates go up, or the country in question can no longer borrow in its own currency. Borrowing in your own currency means you won't have a national credit crunch because you can print money (or more politely, the country's central bank can buy up the bonds the Treasury needs to issue). That eventually causes a loss of faith in the currency, often with inflation, and an increase in interest rates. Once that happens, either the country in question has to borrow at increasingly high rates, or it has to issue debt in some other currency decided by the lender. Either way, it is screwed.
Krugman isn't stupid. He knows all of this, but my take is that he is more concerned about the politics of redistribution in the short and medium term than the right thing to do long term. Everyone agrees that spending austerity will cause immediate pain and worsen the economy. The difference of opinion is whether it is worth it at the other end, or the best thing to do is to minimize suffering for now, and hope things work out later.
“Not with a bang, but with bunga bunga.” Man....there’s some deep thinking and writing there. Krugman should be writing.....the ingredients list on a box of hamburger helper.
The other thing you need to know is that in the face of the current crisis, austerity has been a failure everywhere it has been tried: no country with significant debts has managed to slash its way back into the good graces of the financial markets.
This chap is mucking foron. He seems to think that debt problems have nothing to do with spending. And, he says that cutting back on spending will never help a deficit problem (ie a spending problem).
Another utopian fantasy lander. He is of the "print more money" crowd.
"Europe’s crisis proves that the welfare state doesn’t work"
That's exactly what it proves. Furthermore, this was not only predictable; it was predicted. It will happen every time it's tried.
You can say that again.
I believe he is stupid because I think he himself BELIEVES the tripe he opines on.
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