dothemaths Posted January 13, 2011 Share Posted January 13, 2011 Interesting article by Paul Krugman It's long but worth a read and as concise a summary of the Eurozone's woes as I've seen (whatever your political views, he is a clever chap). www.nytimes.com/2011/01/16/magazine/16Europe-t.html?pagewanted=1&hp Europe is in deep crisis — because its proudest achievement, the single currency adopted by most European nations, is now in danger. More than that, it's looking increasingly like a trap. Ireland, hailed as the Celtic Tiger not so long ago, is now struggling to avoid bankruptcy. Spain, a booming economy until recent years, now has 20 percent unemployment and faces the prospect of years of painful, grinding deflation. The tragedy of the Euromess is that the creation of the euro was supposed to be the finest moment in a grand and noble undertaking: the generations-long effort to bring peace, democracy and shared prosperity to a once and frequently war-torn continent. But the architects of the euro, caught up in their project's sweep and romance, chose to ignore the mundane difficulties a shared currency would predictably encounter — to ignore warnings, which were issued right from the beginning, that Europe lacked the institutions needed to make a common currency workable. Instead, they engaged in magical thinking, acting as if the nobility of their mission transcended such concerns. The result is a tragedy not only for Europe but also for the world, for which Europe is a crucial role model. The Europeans have shown us that peace and unity can be brought to a region with a history of violence, and in the process they have created perhaps the most decent societies in human history, combining democracy and human rights with a level of individual economic security that America comes nowhere close to matching. These achievements are now in the process of being tarnished, as the European dream turns into a nightmare for all too many people. How did that happen? Quote Link to comment Share on other sites More sharing options...
Guest UK Debt Slave Posted January 13, 2011 Share Posted January 13, 2011 "Can Europe be Saved?" More like, can the totalitarian EUSSR be saved and can the Euro be saved Europe will do just fine without either. The big question is, what lengths (of destruction) will they go to to save their wet dream of a unified federal Europe? The answer is, they will absolutely wreck everything to keep their system going. It's a one way ticket to catastrophe as far as I'm concerned. People like Krugman don't help either. He is a absolute moron. My own conclusion is that the Fabian socialist (internationalist) movement will move mountains in pursuit of their globalist ambitions and when these aims cannot be achieved by social engineering and 'peaceful' coercion, they will resort to more tradiational methods of social control............ violence, intimidation, detention and imprisonment without trial, etc etc etc. It's just the nature of control freaks and fascists to resort to violence as a last resort. Quote Link to comment Share on other sites More sharing options...
aa3 Posted January 13, 2011 Share Posted January 13, 2011 I think the blogosphere is unfair to Krugman. The blogosphere did not like his remedy of Keynsian spending in the great recession.. and especially did not like the idea of massive printing. Its funny even guys like Mish who basically agreed with Krugman on the problems, deflation and a downward spiral in the economy, and inability to pay debts wit a deflation.. were not willing to agree to Krugman's solution. I notice Mish comes up with mental gymnastics on why Keynsian policies are not a good policy in response to a deflationary situation. In my opinio the highly educated blogosphere, the type of people debating about the stock market, and who have investment portfolios.. it seems hard right leaning, and just doesn't want to admit the solution in this case is huge government stimulus. Another part of the blogosphere seems a conspiracy minded group. And the ideas of gold money and such, so everytime they hear printing they think hyperinflation. Quote Link to comment Share on other sites More sharing options...
okaycuckoo Posted January 13, 2011 Share Posted January 13, 2011 I think the blogosphere is unfair to Krugman. The blogosphere did not like his remedy of Keynsian spending in the great recession.. and especially did not like the idea of massive printing. Its funny even guys like Mish who basically agreed with Krugman on the problems, deflation and a downward spiral in the economy, and inability to pay debts wit a deflation.. were not willing to agree to Krugman's solution. I notice Mish comes up with mental gymnastics on why Keynsian policies are not a good policy in response to a deflationary situation. In my opinio the highly educated blogosphere, the type of people debating about the stock market, and who have investment portfolios.. it seems hard right leaning, and just doesn't want to admit the solution in this case is huge government stimulus. Another part of the blogosphere seems a conspiracy minded group. And the ideas of gold money and such, so everytime they hear printing they think hyperinflation. Aw, diddums! Russia is a serious problem - lots of crime at the highest level, rich from commodities pumped up by their fellow criminals in London and New York. Do not want to see Germany taking their side and leaving the rest of us to our fate. Quote Link to comment Share on other sites More sharing options...
interestrateripoff Posted January 13, 2011 Share Posted January 13, 2011 The answer is, they will absolutely wreck everything to keep their system going. It's a one way ticket to catastrophe as far as I'm concerned. People like Krugman don't help either. He is a absolute moron. The elites will try to keep the gravy train running at all costs. The serfs are there to be screwed. Quote Link to comment Share on other sites More sharing options...
cica Posted January 13, 2011 Share Posted January 13, 2011 (edited) I don't trust Krugman at all yet he tries everything to hide what I see as obvious. In 2002... The basic point is that the recession of 2001 wasn't a typical postwar slump, brought on when an inflation-fighting Fed raises interest rates and easily ended by a snapback in housing and consumer spending when the Fed brings rates back down again. This was a prewar-style recession, a morning after brought on by irrational exuberance. To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble. He has recently claimed... One of the funny aspects of being a somewhat, um, forceful writer is that I’m regularly accused of all sorts of villainy.... The latest seems to be that I called for the creation of a housing bubble ... Guys, read it again. It wasn’t a piece of policy advocacy, it was just economic analysis. What I said was that the only way the Fed could get traction would be if it could inflate a housing bubble. And that’s just what happened. I dunno about you but I've read it several times it doesn't seem to be economic analysis and does seem to be him agreeing with McCulley that they need a housing bubble. I can't take him seriously after things like this. Edited January 13, 2011 by cica Quote Link to comment Share on other sites More sharing options...
Big Orange Posted January 13, 2011 Share Posted January 13, 2011 The European Union now just brings out the worst in European politics. Quote Link to comment Share on other sites More sharing options...
dothemaths Posted January 13, 2011 Author Share Posted January 13, 2011 I think the blogosphere is unfair to Krugman. The blogosphere did not like his remedy of Keynsian spending in the great recession.. and especially did not like the idea of massive printing. Its funny even guys like Mish who basically agreed with Krugman on the problems, deflation and a downward spiral in the economy, and inability to pay debts wit a deflation.. were not willing to agree to Krugman's solution. I notice Mish comes up with mental gymnastics on why Keynsian policies are not a good policy in response to a deflationary situation. In my opinio the highly educated blogosphere, the type of people debating about the stock market, and who have investment portfolios.. it seems hard right leaning, and just doesn't want to admit the solution in this case is huge government stimulus. Another part of the blogosphere seems a conspiracy minded group. And the ideas of gold money and such, so everytime they hear printing they think hyperinflation. IMO the collapse of 07-08 has discredited economics somewhat and as a result the voices of many outside the mainstream (who dominate the blogosphere) are being heard as well. As you say, some are a bit nutty but I still think its worth reading them and trying to understand them (but take it all with a pinch of salt) because somewhere out there might be the new paradigm. I believe this is a good thing because the old paradigms have to be modified. Many of these outsiders will turn out to have been talking rubbish but it's just too early to tell now. Quote Link to comment Share on other sites More sharing options...
Charlie The Tramp Returns Posted January 13, 2011 Share Posted January 13, 2011 Can Europe Be Saved? Just seen tomorrow`s papers review, think it was the Financial Times who say Tricky is about to raise IRs in the Eurozone. Quote Link to comment Share on other sites More sharing options...
Guest guest_db Posted January 18, 2011 Share Posted January 18, 2011 I think the blogosphere is unfair to Krugman. The blogosphere did not like his remedy of Keynsian spending in the great recession.. and especially did not like the idea of massive printing. Its funny even guys like Mish who basically agreed with Krugman on the problems, deflation and a downward spiral in the economy, and inability to pay debts wit a deflation.. were not willing to agree to Krugman's solution. I notice Mish comes up with mental gymnastics on why Keynsian policies are not a good policy in response to a deflationary situation. In my opinio the highly educated blogosphere, the type of people debating about the stock market, and who have investment portfolios.. it seems hard right leaning, and just doesn't want to admit the solution in this case is huge government stimulus. Another part of the blogosphere seems a conspiracy minded group. And the ideas of gold money and such, so everytime they hear printing they think hyperinflation. Krugman has become more reasonable since he started reading HPC. http://www.housepricecrash.co.uk/forum/index.php?showtopic=140712 Quote Link to comment Share on other sites More sharing options...
oracle Posted January 18, 2011 Share Posted January 18, 2011 The European Union now just brings out the worst in European politics. the nature of the EU HAS to change...period. but you could also say exactly the same about the political class in the US,the big difference being joe public across the pond is going to get SO angry with their politicians they are actually going to do something about it. the smokescreen of mad mullahs just ain't gonna wash(even though it's about 40% truth...that still leaves 60% embellishment for political capital). the yanks are fully aware the infection is within. Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.