European Crisis Realities - Krugman

Classic Krugman simpifying the European economic problems {paraphrased by me with a little spin to fit our problem here at home, too).


"You can slash the welfare state all you want (and the right wants to slash it down to bathtub-drowning size), but this has very little to do with export competitiveness. You can pursue crippling fiscal austerity (belt tightening), but this improves the external balance -- only by driving down the economy and hence import demand -- with maybe, maybe, a gradual “internal devaluation” caused by high unemployment (where we are now).

We’re basically looking at a balance of payments problem, in which capital flooded in (spelled "foreign investments") leading to overvaluation. It’s the main way one should think about where we are."

Me again. Our so called "leaders" should realize that what we really need is a general REFLATION. Krugman again, "So let’s hope that they get this, and also give each of us a pony."

A Pain in the Neck!

Am I conceited? Someone read my profile and said I was conceited. I looked it up and conceit vs arrogance have different definitions. Conceit is often mistaken for arrogance, but is actually a good thing while arrogance is a bad thing. Conceit is a posture one takes when he/she believes they are right, and stand their ground. Arrogance stands its ground whether it is right or not. The difference lies in whether or not one backs down when they discover that they are mistaken.


These are my words for what I gleaned from what I read. If I am wrong -- would you please let me know -- so I can get my nose out of the air? My neck is starting to hurt.

Krugman on "The Power of Ideas"

"The true scarcity in Keynes world -- and ours -- was therefore not of resources, or even of virtue, but of understanding.  We will not achieve the understanding we need, however, unless we are willing to think clearly about our problems and to follow those thoughts wherever they lead.  Some people say that our economic problems are structural, with no quick cure available; but I believe that the only important structural obstacles to world prosperity are the obsolete doctrines that clutter the minds of men." The Return of Depression Economics, p.191.