Tag Archives: Krugman

Krug

“What could Europe be doing differently? From early on in the crisis, critics like me urged a three-part response. First, ECB intervention to stabilize borrowing costs. Second, aggressive monetary and fiscal expansion in the core, to ease the process of internal adjustment. Third, a softening of austerity demands on the periphery — not zero austerity, but less, so that the human costs would be less. We eventually got part 1, more or less — but nothing on parts 2 and 3.”

“And European officials remain in deep denial about the fundamentals of the situation. They continue to define the problem as one of fiscal profligacy, which is only part of the story even for Greece, and none of the story elsewhere.

They keep declaring success for austerity and internal devaluation, using any excuse at hand: a spurious surge in measured Irish productivity becomes evidence that internal devaluation is working, the decline in bond yields following ECB intervention is proclaimed as a vindication of austerity.”

“So that’s where we are. And it’s hard to envisage a happy ending.”

Yeah, yeah, tell us something we don’t know…

Europe in Brief: The Conscience of A Liberal blog (New York Times)

Previously: Why Ajai Chopra’s Sad-Eyed Was So Sad

Bearded, Guinness-sipping, American tourist writes about Ireland. Should I care?

He teaches at Princeton. People listen to him. He has a Nobel Prize for Economics.

Kissinger has a Nobel prize for Peace.

He predicted the world-wide recession back in December 2006.

David McDreamy saw it coming back in the 80s.

In June, Krugman asked – vis a vis Ireland’s savage cuts and Spain’s lack of same –  does austerity really impress the markets. His answer then was no.

So he’s changed his mind? Not very noble. Hur.

If by change you mean he’s more convinced than ever that our self flagellation was pointless then yes.

Oh.

He’s compared the 10-year bond yield (don’t ask) of both countries. Guess what? Spain – the biggest messer in the class – is tearing us – the hard-working, arse-puckering toady – a new one.

Meaning?

Austerity be damned

Does he have graphs to prove this? Not pretendy ones from that website?

Yes.

Is there a devastating quote from the article that will silence me and end  this conversation?

“…since austerians were claiming bond market approval as a sign of its policy success, it is worth pointing out that dutiful Ireland looks as if it’s entering a runaway debt spiral, while malingering Spain is looking considerably better.”

Ireland And Spain Revisited (Blog, New York Times)