Reality bites Pinko Economist on the arse

Paul Krugman is the economic equivalent of a global warming advocate. He doesn’t let reality get in the way of a good theory.

The simple explanation is that the Baltic countries have pursued the opposite policy of the southern Europeans. In 2009, the Baltic governments each carried out strict austerity, with a fiscal adjustment of about 9.5 percent of GDP, mainly though expenditure cuts and substantial structural reforms. The southern Europeans, by contrast, delivered substantial fiscal stimulus in 2009. Previously fiscally conservative Cyprus and Slovenia ran up budget deficits of 6 percent of GDP in 2009, but neither benefited from greater growth. Instead, they have been trapped with large budget deficits and are now being overwhelmed by their public debt, admittedly also because of banking crises.

One would think, given the divergent outcomes, that a serious economist would advocate for countries to follow the successful example of northern Europe rather than the failed strategies of the south. Nobel laureate and New York Times columnist Paul Krugman doesn’t seem to see it that way. Throughout the crisis, Krugman has attempted to explain away or even mock the Baltic countries’ success even as they have continued to inconveniently disprove his arguments.

Good on the Baltic countries for sorting out their own shit and taking a bit of pain instead of going on the bludge.


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  • johnbronkhorst

    and the FED has just printed more money…quantitative easing…Obama really is a dum ass!!!

    • Mabel_Gruntfuttock

      Cunliffe was just on NewstalkZB with Larry Williams – suggesting that NZ do some QE as well! FFS. God help us all if idiots that like ever get near the purse strings.

      • Karlos

        Can someone please let me know how QE in NZ would be a bad thing? Surely it would weaken the NZD which would help exporters while making borrowing easier for businesses looking to grow, or am I looking at this far too simplistically?

        • johnbronkhorst

          then you are as dum as Obama. Tell me …….how much would fuel be (Diesel/petrol) if the Dollar fell by say 10%, exporters rely on transport, which relies on fuel…idiot on the first point. 2nd if the economy doesn’t grow (amount of products produced) but the number of dollars in the economy does (due to QE or exchange rate tampering),, every dollar in the economy becomes worth nominally less, so we are in fact poorer not wealthier than before. We have more dollars, but they are not worth as much….2nd idiot point!!!!

          • Patrick

            Agree – taken to its extreme you end up with hyper inflation as per Zimbabwe. Take that to its extreme & you end up with the NZ Dollar being thrown out & NZ adopting the AUS as per Zimbabwe & SA Rand in an effort to bring stability. Puring more petrol on the fire does not put it out.

  • fella

    Haha the owner of this blog is so unashamedly retarded it’s on the cusp of being not funny…

    • botti

      People in glass houses…

    • Napalm in the morning

      The only thing retarded was your statement. If you write a comment like that at least give a reason for it.

    • Richard McGrath

      What the fuck are you on about? WO has merely pointed out Krugman’s refusal to face economic reality.

    • onelaw4all

      Nice projection there, fella.
      Did the dog eat your rebuttal?

  • botti

    Krugman has become a tribal cheerleader rather than a serious commentator.

  • cows4me

    The FED plains to print a hundred billion a month till all comes right. Economists are in raptures and the ponzi scheme rolls on. These people are mad, quite fucking mad. I liken it to giving an alcoholic a dozen of whiskey and telling him to drink himself right.Perhaps it’s time to peg our currency to a new standard. I see the Chinese will now be paying for oil in yuan, this will piss the yanks off no end.

  • Ross

    WO — Krugman is a global warming alarmist as well.

  • CJH

    I’m a frequent traveller to the Baltic area and have always been impressed with their fiscal maturity and realist approach to the economic crisis. Not that long ago I remember reading Kiwis sneering at how flat tax Lithuania was in deep dark poverty and now Lithuania has made offers to buy Greek Islands for tourist purposes. Talk about recovery!

  • Jman

    I don’t get why Krugman is still taken seriously by anyone. He is consistently wrong on everything.