Monday, February 15, 2010

Poor Krugman

Your heart has to bleed for this guy. Krugman is a marvelous writer whose ideas are bizarre, to say the least. In some ways, Krugman is the economist version of Obama. Everything sounds good, until you look at the substance.

The lastest Krugman piece in the NY Times is an effort to explain the plight of Greece (and much of the Euro zone). He dismisses cavalierly that the problem is mainly one of irresponsible fiscal spending. No, that can't be the real problem. It never is, in Krugman's view. Spending is always a magic elixir that will make everything right -- government spending that is. Private spending, on the other hand, is always the evil that mucks everything up. If we could just dispense with private spending altogether and have the government have the exclusive right to spend, all would be well -- so implies Krugman.

So, guess who is to blame for Greece's problems? The bad guys who put the Euro in place. Yes, they are the bad guys in this case. The Euro itself is to blame, robbing the Greeks of the opportunity to simply devalue their currency (that should be good for bondholders) and thereby escape from the mess that they are in. The obviously painful and tortured argument that Krugman presents shows how truly artful he really is. The economics is ridiculous, but the prose flows gently along the page as if there was something really going. Unfortunately, for poor Krugman, there is nothing going on but another failed experiment in too much government.