World Turned Upside Down: Paul Krugman Makes Perfect Sense
I read this long article by Paul Krugman about the European economic crisis with growing puzzlement. I kept waiting for the moment at which he revealed himself to be insane, but to the very last word, he said nothing with which I don't more or less agree:
Europe’s woes have all the aspects of a classical Greek tragedy, in which a man of noble character is undone by the fatal flaw of hubris ... 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.
I'm perplexed. Yesterday I found a piece in the Guardian perfectly apt, today I find Krugman not only inoffensive but saying more or less what I've been saying for years. Any more of this will force me to conclude that I've fallen through a wormhole in the quantum foam. I shall take appropriate precautions.
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Oct '10
Re: World Turned Upside Down: Paul Krugman Makes Perfect Sense
Whew! I thought this was Sarah Palin-related again.
Re: World Turned Upside Down: Paul Krugman Makes Perfect Sense
Perhaps he fears that the Times is going to dump him.
Dec '10
Re: World Turned Upside Down: Paul Krugman Makes Perfect Sense
The question is: Why cannot he see the hubris in his own vision of making a perfect state through the government?
Re: World Turned Upside Down: Paul Krugman Makes Perfect Sense
I have no idea, and that's such a good question.
Re: World Turned Upside Down: Paul Krugman Makes Perfect Sense
Krugman's intimate familiarity with "magical thinking" must be the source of this burst of perspicacity.
May '10
Re: World Turned Upside Down: Paul Krugman Makes Perfect Sense
His wife must've fled to England again, protesting the failure to raise taxes. He was once a quite reasonable economist, before she began leaning over his shoulder and urging him to punch up the script.
And maybe, just maybe, he's thinking it's time to take a brief respite from controversy. He didn't have a good week.
Jun '10
Re: World Turned Upside Down: Paul Krugman Makes Perfect Sense
Does anyone believe now that the left might be a bit less ambitious with its "noble" agenda? Perhaps they could start by working on a cure for cognitive dissonance. Is the condition treatable with drugs or therapy?
Oct '10
Re: World Turned Upside Down: Paul Krugman Makes Perfect Sense
Krugman used to be a well-respected international economist, believe it or not, until he became a political pundit and a hack.
His analysis is correct. You cannot have a common currency without a shared tax pool--it's like building a house without walls. Each nation will go its own way, and prices/wages gradually diverge until the whole thing explodes. This is why floating exchange rates were invented--a lessen Europe seemed to forget rather quickly.
It's annoying; I was really hoping our own federal government could one day be as small and unintrusive as the EU Commission. Sadly, short of states issuing their own currencies, this simply isn't possible.
Reducing the federal government's size is doable, but there are limits. It helps that most states cannot borrow; this goes a lot towards limiting trade imbalances.
(For those who would argue we did perfectly fine without an income tax, that was when banks issued their own currency; our single-currency experience without an income tax--or the Fed--was marred by a string of depressions).
Edited on Jan 14, 2011 at 6:29amMay '10
Re: World Turned Upside Down: Paul Krugman Makes Perfect Sense
The error of the article is that he believes the Euro to be the only problem faced by the Europeans. And as for the wisdom of the Guardian piece -- did you really want to bring that up again?
My suspicion is that in editing Ricochet, you may be on conservative argument overload and are desperate for a contrarian view you can embrace. I have the same feeling. I troll Facebook in vain searching for a political p.o.v. that I can embrace. Sadly, I fear we are already into the next election cycle which is going to be absolutely brutal. I have friends attacking Tim Pawlenty as a right-wing kook. Tim Pawlenty!!! *sigh*
Facebook is convinced that I need to be friends with Jonathan Capeheart, Austan Goolsbee, Steve Rattner and Don Graham... every day it tells me how much simpler (and more glamorous) my life would be if I would just give in and embrace liberalism!
May '10
Re: World Turned Upside Down: Paul Krugman Makes Perfect Sense
Is quantum foam another confusingly-labeled Turkish cleaning product?
Oct '10
Re: World Turned Upside Down: Paul Krugman Makes Perfect Sense
I would agree, Claire, except for this phrase that I found particularly troubling:
Reminiscent of his arguments that Obama’s stimulus package should have been doubled, Krugman believes that there were too few bureaucracies in Brussels with inadequate power to exercise command & control over the member EU countries.
Krugman himself is engaging in magical thinking.
Oct '10
Re: World Turned Upside Down: Paul Krugman Makes Perfect Sense
Europe does have greater problems. Still.
It shouldn't be possible for Germany to suck the wealth out of southern Europe. In a properly functioning currency union, trade surpluses are recycled, governments don't borrow themselves to death, and fiscal transfers evens out pension obligations (social security and medicare for us). Unemployment insurance helps, so long as it's temporary.
The Germans themselves do not know what they are doing. They honestly seem to believe they live in a functional currency union, where they can wreak economic havok and everything magically takes care of itself.
Aug '10
Re: World Turned Upside Down: Paul Krugman Makes Perfect Sense
Dunno. But it is the brand of hair-styling mousse preferred by a certain sort of physicist.
Nov '10
Re: World Turned Upside Down: Paul Krugman Makes Perfect Sense
After 8 long-winded pages, Krugman advocates for the same old Sesame Street solution: So will Europe’s strong nations let that [failure of the euro project] happen? Or will they accept the responsibility, and possibly the cost, of being their neighbors’ keepers?
How could that possibly go wrong? Does Krugman even bother to analyze the history he presents?.
May '10
Re: World Turned Upside Down: Paul Krugman Makes Perfect Sense
It wasnt so long ago that Krugman was calling Europe "the comeback continent"http://www.nytimes.com/2008/01/11/opinion/11krugman.html now he asks "can Europe be saved" oh how times have changed.
Edited on Jan 14, 2011 at 7:45amOct '10
Re: World Turned Upside Down: Paul Krugman Makes Perfect Sense
Trace Urdan: The error of the article is that he believes the Euro to be the only problem faced by the Europeans. And as for the wisdom of the Guardian piece -- did you really want to bring that up again?
My suspicion is that in editing Ricochet, you may be on conservative argument overload and are desperate for a contrarian view you can embrace. I have the same feeling. I troll Facebook in vain searching for a political p.o.v. that I can embrace. Sadly, I fear we are already into the next election cycle which is going to be absolutely brutal. I have friends attacking Tim Pawlenty as a right-wing kook. Tim Pawlenty!!! *sigh*
Facebook is convinced that I need to be friends with Jonathan Capeheart, Austan Goolsbee, Steve Rattner and Don Graham... every day it tells me how much simpler (and more glamorous) my life would be if I would just give in and embrace liberalism! · Jan 14 at 6:43am
Whiter teeth wouldn't hurt either.
Re: World Turned Upside Down: Paul Krugman Makes Perfect Sense
Ken Sweeney: I would agree, Claire, except for this phrase that I found particularly troubling:
Reminiscent of his arguments that Obama’s stimulus package should have been doubled, Krugman believes that there were too few bureaucracies in Brussels with inadequate power to exercise command & control over the member EU countries.
Krugman himself is engaging in magical thinking. · Jan 14 at 6:48am
Well he is Krugman. I'm not saying that he's not hinting at something stupid. I'm just surprised that he got as much of this story right as he did and acknowledged so many things so frankly. Tell me you're not.
Re: World Turned Upside Down: Paul Krugman Makes Perfect Sense
Trace Urdan:
My suspicion is that in editing Ricochet, you may be on conservative argument overload and are desperate for a contrarian view you can embrace.
Could be some truth to that. I guess it's a less dramatic explanation that a perturbation in the very fabric of spacetime. That said--if you hadn't known Krugman was the author of that article, you would never have guessed, would you?
Sep '10
Re: World Turned Upside Down: Paul Krugman Makes Perfect Sense
Claire Berlinski, Ed.
Trace Urdan:
My suspicion is that in editing Ricochet, you may be on conservative argument overload and are desperate for a contrarian view you can embrace.
Could be some truth to that. I guess it's a less dramatic explanation that a perturbation in the very fabric of spacetime. That said--if you hadn't known Krugman was the author of that article, you would never have guessed, would you? · Jan 14 at 9:27am
I guess Krauthammer's column had a medicinal effect for which he should certainly send Krugman a 37 part invoice under Obamacare.
Oct '10
Re: World Turned Upside Down: Paul Krugman Makes Perfect Sense
Claire Berlinski, Ed.
Ken Sweeney: I would agree, Claire, except for this phrase that I found particularly troubling:
Reminiscent of his arguments that Obama’s stimulus package should have been doubled, Krugman believes that there were too few bureaucracies in Brussels with inadequate power to exercise command & control over the member EU countries.
Krugman himself is engaging in magical thinking. · Jan 14 at 6:48am
Well he is Krugman. I'm not saying that he's not hinting at something stupid. I'm just surprised that he got as much of this story right as he did and acknowledged so many things so frankly. Tell me you're not. · Jan 14 at 9:21am
Claire--I completely agree with your assessment that this is an extremely rare, cogent, and insightful column covering the dire straits of the Euro by Mr. Krugman.
My only point is that he cannot avoid the temptation of trying to repair the underlying problem with more statism. Remove a few aside phrases such as the one I emphasized, this article could actually be published in the Wall Street Journal by a conservative economist. Which is your main point.
Edited on Jan 14, 2011 at 10:10am