What follows are verbatim quotes from Paul Krugman’s article today in the New York Times.
“Yes, there are big failings in Greece’s economy, its politics and no doubt its society.”
“Greece does indeed have a lot of corruption and a lot of tax evasion, and the Greek government has had a habit of living beyond its means.”
“Beyond that, Greek labor productivity is low by European standards — about 25 percent below the European Union average.”
From that Krugman concludes:
“But those failings aren’t what caused the crisis that is tearing Greece apart…”
“The Germans and the European Central Bank [must] realize that they’re the ones who need to change their behavior, spending more and, yes, accepting higher inflation…Greece will basically go down in history as the victim of other people’s hubris.”
In Krugman’s world, wherever that is, if a nation is ridden with corruption, allows extensive tax evasion and has a habit of living beyond its means for years, then when the money runs out it’s someone elses fault. With thinking like that the man could become president of the United States.
And then the economist turned journalist asks why the U.S. doesn’t have “the kind of severe regional crises now afflicting Europe?” His answer is “that we have a strong central government, and the activities of this government in effect provide automatic bailouts to states that get in trouble.”
So the reason America remains on a relatively sound footing is because we support failures automatically.
Nancy Pelosi fears investigations. I can understand that. The Hill reports that in a fund raising letter,
Speaker Nancy Pelosi (D-Calif.) is asking supporters for contributions to help prevent the “subpoenas and investigations” that would result from a GOP majority.
After her promise to “drain the swamp” she has reason to fear oversight will show the swamp has turned into a cesspool under her leadership. The Tea Party is Patriotic, not Nationalistic. According to George Orwell, Nationalism is the habit of identifying oneself with a single nation or other unit, placing it beyond good and evil and recognizing no other duty than to advance its interests. Patriotism is devotion to a particular way of life which one believes is the best in the world but with no wish to force it upon other people. Patriotism is by its nature defensive, both militarily and culturally. Nationalism, on the other hand, is inseparable from the desire for power. Soros and Obama have joined in urging Germany to increase their spending as a means to stimulate economic recovery and support EU nations with greater levels of debt. What they are calling for is what Random Thots calls International Socialism. It would tap the wealth of one nation that has acted responsibly in order to benefit other nations whose irresponsible spending led to the problem in the first place. Soros and Obama are urging a policy that would increase the debt of the EU’s strongest member and support the continuation of the policies that are leading other nations to bankruptcy.
Euro survives, this time. Dollar strengthens, for now.
The genesis of what is now the European Union was an economic agreement between six central European nations called the European Economic Community. The primary impetus was to discourage future wars between European nations. A common currency was not part of the original plan. From that simple plan it grew to what it was six months ago then declined to what it is today.
As it grew there was hope in much of the world that the € would replace the $ as the standard for international trade. Before Greece, call it 6 months BG, this looked like an imminent possibility. Bush ran our debt sky high and Obama has set us up for eventual bankruptcy. We have become dependant upon an adversary to support our debt and they were threatening to withdraw their support. Occasionally a tourist would report a refusal to accept the greenback in their travels. Then came Greece.
It had to happen. One can spend more than ones income and get away with it for a long time, a very long time if you are a nation and can raise taxes each time the next financial crunch occurs. But if spending is not controlled, the limit of what can be extracted from the people is eventually reached and that is when the fertilizer hits the circulator.
Germany has long been the economic strength of Europe and so it will remain for the foreseeable future. Greece has been what Greece is now for many generations and so it is likely to remain for the foreseeable future. As Walter Cronkite would put it, “It is the culture, stupid!” One cannot imagine a time when Greece would need to bail out Germany. Cultures do evolve, but evolution is a very long process. Random Thots recommends The Character of Nations by Angelo Codevilla for further insights on the subject.
We are always happy to rescue a neighbor in need due to no fault of his own, We will grumble, but still rescue a neighbor whose need was a predictable consequence of irresponsible self serving behavior, ,,,once. How many times will the nations of achievers be willing to bail out the nations of perpetual under achievement is yet to be determined.