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And Then What? – Paul Krugman

Via: NY Times

So it appears that the governing coalition in Greece has pulled out a narrow victory — winning only a minority of votes, but getting a narrow majority in the parliament thanks to the 50-seat bonus New Democracy gets for coming in first.

So they will now have the ability to continue pursuing an unworkable policy.


Joe Wiesenthal tells us that there’s a meme in Greece to the effect that Syriza didn’t really want to win, because it would rather see the current government flail some more.

Conversely, establishment types should actually be dismayed by this outcome: if current policies fail completely, which seems almost a GIVEN, and Greece exits the euro anyway, which seems highly likely, the entire Greek center will end up discredited; better, in a way, to be able to blame the radicals.

And I gather I’m not the only one thinking along these lines; Business Insider also reports hints that Pasok, which has suffered terribly from its identification with failing policies, might not continue in the coalition unless Syriza is also brought on board — which then raises the question, why would Syriza do that?

The debacle rolls on.



You can read all of the Nobel laureate’s blog, and column, here:




personal thought:

Q: Could it be worse?

A: possibly


Q: Will it get worse?

A: probably


June 18, 2012 Posted by | Uncategorized | , , , , , , | Leave a comment

Stiglitz says European austerity plans are a ‘suicide pact’

Via: The Telegraph

Imposing austerity measures as countries slow towards recession is a   fundamentally flawed response, said Mr Stiglitz, who won the Nobel prize in   2001 for his work on how markets work inefficiently.

“The answer, even though they see over and over again that austerity leads to   collapse of the economy, the answer over and over [from politicians] is more   austerity,” said Mr Stiglitz to the Asian Financial Forum, a gathering of   over 2,000 finance professionals, businessmen and government officials in   Hong Kong.

“It reminds me of medieval medicine,” he said. “It is like blood-letting,   where you took blood out of a patient because the theory was that there were   bad humours.

“And very often, when you took the blood out, the patient got sicker. The   response then was more blood-letting until the patient very nearly died.   What is happening in Europe is a mutual suicide pact,” he said.

Keynesian economics, which require governments to help sustain demand,  suggests that austerity measures should be imposed when an economy is booming, not waning.



January 18, 2012 Posted by | Uncategorized | , , , , , | Leave a comment