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Tuesday, May 13, 2014

Some opinions from the Krugginator


Been poking through the Krugman blog this afternoon. It seems that here at work we must have a sub to the NYT website because it's not blocking me; actually, there are hundreds of employees surfing thru our portal, so it must be the case.

Anyway, here's some Kruggie gold:


Paul Krugman - Unbalanced in Basel. Quote:
Ambrose Evans-Pritchard draws our attention to a speech by Jaime Caruana, General Manager of the Bank for International Settlements. It is indeed a quite remarkable speech — and I mean that in the worst way; it’s a perfect illustration of the way permahawks keep finding new arguments for their never-changing demand that we raise interest rates now now now.

Some background: the BIS has spent almost the whole period since the financial crisis struck calling for tighter money. Oddly, however, it keeps changing its justifications for that call. At first it was dire warnings of inflation just around the corner. Then it was financial instability. Now, with low inflation and possible deflation a growing concern, Mr. Caruana argues that (a) deflation is not so bad (b) we’re in a balance sheet slump, and that means loose money is bad.

[...]

Right now it looks as if the BIS is claiming that balance sheets make the case for tight money because in Basel everything makes the case for tight money.
Of course it does. Because that's what the ruling class demands - a higher rate of rent on their inherited, unearned wealth. What's funny is how many bloggers get sucked into the right-wing echo chamber narrative to the point where they demand a higher rate of interest for "poor little grannies" - and then they protest against me labelling them neo-con dog-whistling propagandists.


The Krugginator - Eurozone fiscal myths. Here again he addresses the American neo-con Republican narrative of European "fiscal irresponsibility", because whenever anyone's addressed it before the brainwashed masses just plug their ears and go "la la la! can't hear you!":
But even Yglesias is somewhat taken in by the intense propaganda that portrays the crisis as mainly fiscal. Namely, he says that the coming of the euro, and the resulting low borrowing costs, led to “irresponsible budgeting” in Italy.

Sorry, but no (and when it comes to almost any fiscal issue, you always, always want to check the numbers yourself, not rely on what all the reporting seems to say.) Italy’s high debt is a legacy of policies long ago:



The country’s debt position actually improved during the euro boom years, and only worsened again recently thanks to the economic crisis.

In reality, here is the full list of countries for whom a fiscal irresponsibility story of the euro crisis makes any sense at all:

Greece

The truth is that Spain and Ireland were models of fiscal responsibility from 2000 to 2007, or so it seemed, and Italy wasn’t too bad. If you imagine otherwise, if you think you’ve heard that fiscal irresponsibility was more widespread than that, blame bad reporting.
No, don't blame bad reporting; blame idiots who hear a story and swallow it entirely without bothering to check the data, or idiots who are happy to believe any old crap that perpetuates their racist opinion of "lazy Mediterranean socialists".


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