A Money Too Far
By PAUL KRUGMAN
NYT
So, is Greece the next Lehman? No. It isn’t either big enough or interconnected enough to cause global financial markets to freeze up the way they did in 2008. Whatever caused that brief 1,000-point swoon in the Dow, it wasn’t justified by actual events in Europe.
Nor should you take seriously analysts claiming that we’re seeing the start of a run on all government debt. U.S. borrowing costs actually plunged on Thursday to their lowest level in months. And while worriers warned that Britain could be the next Greece, British rates also fell slightly.
That’s the good news. The bad news is that Greece’s problems are deeper than Europe’s leaders are willing to acknowledge, even now — and they’re shared, to a lesser degree, by other European countries. Many observers now expect the Greek tragedy to end in default; I’m increasingly convinced that they’re too optimistic, that default will be accompanied or followed by departure from the euro.
In some ways, this is a chronicle of a crisis foretold. I remember quipping, back when the Maastricht Treaty setting Europe on the path to the euro was signed, that they chose the wrong Dutch city for the ceremony. It should have taken place in Arnhem, the site of World War II’s infamous “bridge too far,” where an overly ambitious Allied battle plan ended in disaster.
(More here.)
NYT
So, is Greece the next Lehman? No. It isn’t either big enough or interconnected enough to cause global financial markets to freeze up the way they did in 2008. Whatever caused that brief 1,000-point swoon in the Dow, it wasn’t justified by actual events in Europe.
Nor should you take seriously analysts claiming that we’re seeing the start of a run on all government debt. U.S. borrowing costs actually plunged on Thursday to their lowest level in months. And while worriers warned that Britain could be the next Greece, British rates also fell slightly.
That’s the good news. The bad news is that Greece’s problems are deeper than Europe’s leaders are willing to acknowledge, even now — and they’re shared, to a lesser degree, by other European countries. Many observers now expect the Greek tragedy to end in default; I’m increasingly convinced that they’re too optimistic, that default will be accompanied or followed by departure from the euro.
In some ways, this is a chronicle of a crisis foretold. I remember quipping, back when the Maastricht Treaty setting Europe on the path to the euro was signed, that they chose the wrong Dutch city for the ceremony. It should have taken place in Arnhem, the site of World War II’s infamous “bridge too far,” where an overly ambitious Allied battle plan ended in disaster.
(More here.)
Powered by Blogger
1 Comments:
I just don't get this. For years, Paul Krugman has been praising the European economic model as the future of western economies. He also says 'don't take seriously analysts claimin the we're seeing the start of a run on all government debt'. Really? Krugman has zero credibility when people like me for years - for years - have been criticizing the European Model which has addicted European citizens to unsustainable, cradle-to-grave entitlements and bankrupting continental economies.
A few years back, Krugman was praising the European Model thusly - "while American conservatives drone on about family values, Europe actually lives it by enacting more 'family friendly' policies such that 'government regulations actually allow people to make a desirable trade-off-to modestly lower income so that more time can be spent with family and friends". What Krugman failed to notice is that fora continent of 'family friend' policies, Europe is remarkably short on families. How can an economist analyze 'family friendly' policies without noticing the upshot of those policies is that no one has any families! And as for all that 'extra time' to 'spend with family and friends' - what happened? In Greece, where they have upsidedown family trees where four grandparents have two children and one grandchild, the extra time is spent fire bombing banks over the austerity measures the government is going to have to implement because the entitlement crowd that Krugman has been touting for years are throwing a temper tantrum because their overly generous public benefits are going to have to be cut.
I am so sick and tired of Krugman's double standard and cheerleading of his policies which has led to social chaos in Greece where hard-core leftists are firebombing and killing innocent citizens because the public union crowd and the welfare crowd might have to have a cut in their public benefits.
And while Greek debt is 108% of GDP and Greek state spending is 50% of GDP, America's debt will be 90% of GDP by 2020 according to the CBO and we are approaching government expenditure of 50% of GDP when you include federal, state and local spending. Greece is the welfare state run amok and it's going to spread to other countries and is likely to spread to the US.
And what does Vox Verax spend their time publishing? The peaceful and honest Tea Party protests in the United States. And not a word on these pages about the three bank workers who were killed in these violent temper tantrum protests in Greece??You've got to be kidding me.
Post a Comment
<< Home