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Thread: Krugman on Greece? It's a Win / Win!

  1. #1

    Krugman on Greece? It's a Win / Win!

    Part 1:

    This just has all the makings of the perfect example of a good old fashioned Krugman mock.

    And if Greece ends up exiting the euro? There’s actually a pretty good case for Grexit now — and in any case, democracy matters more than any currency arrangement.
    I know - bankers are evil, but just for a minute - think about what that actually says. And means.

    Part 2 :

    The most immediate question involves Greek banks. In advance of the referendum, the European Central Bank cut off their access to additional funds, helping to precipitate panic and force the government to impose a bank holiday and capital controls. The central bank now faces an awkward choice: if it resumes normal financing it will as much as admit that the previous freeze was political, but if it doesn’t it will effectively force Greece into introducing a new currency.

    Specifically, if the money doesn’t start flowing from Frankfurt (the headquarters of the central bank), Greece will have no choice but to start paying wages and pensions with i.o.u.s, which will de facto be a parallel currency — and which might soon turn into the new drachma.
    And couple that with his conclusion:

    And let’s be clear: if Greece ends up leaving the euro, it won’t mean that the Greeks are bad Europeans. Greece’s debt problem reflected irresponsible lending as well as irresponsible borrowing, and in any case the Greeks have paid for their government’s sins many times over. If they can’t make a go of Europe’s common currency, it’s because that common currency offers no respite for countries in trouble. The important thing now is to do whatever it takes to end the bleeding.
    So, lending again with no fundamental changes to the Greek social system (which pays people to retire at age 55 at 96% of their final year's salary but doesn't require people to pay income taxes) will help Greece, even though their problem is directly related to irresponsible lending combined with irresponsible borrowing.

    And fiscal democracy ftw.

    I swear, he's an economic Kafka.

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  3. #2
    Quote Originally Posted by acptulsa View Post
    And now Krugman is on. Greece is too small to matter much, yet if they drop out of the European Union it will be catastrophic. It could end the EU, but Krugman has no intention of saying why that would be bad.

    'Wow... If Greece has its own currency we say obviously devalue it. In this case Greece does not have its own currency, but maybe they should consider devaluing it (anyway)...--Paul Krugman on This Week, deflecting from a statement that the real problem is rampant debt
    "Stupidity got us into this mess. Why can't it get us out?"--Will Rogers

    "All I know is what I read in the newspapers, and that's an alibi for my ignorance."--Will Rogers

  4. #3
    Quote Originally Posted by acptulsa View Post

    Of course, Greece no longer has its own currency, and many analysts used to claim that adopting the euro was an irreversible move — after all, any hint of euro exit would set off devastating bank runs and a financial crisis. But at this point that financial crisis has already happened, so that the biggest costs of euro exit have been paid.

  5. #4

    "And now that the legislators and do-gooders have so futilely inflicted so many systems upon society, may they finally end where they should have begun: May they reject all systems, and try liberty; for liberty is an acknowledgment of faith in God and His works." - Bastiat

    "It is difficult to free fools from the chains they revere." - Voltaire

  6. #5
    Does he actually believe this crap?
    Too bad our elected officials are not as aggressively trying to reduce the federal deficit as they are trying to strip us of our constitutional rights.

  7. #6
    common currency offers no respite for countries in trouble
    Translation = euro holders in Germany, France, et al don't want to pay for Greece's profligate spending through price inflation.

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