Krugman's Take on Greece?

[goodasgold]

Has Prof. Krugman given a pronouncement on the new Greek government?

It will be interesting to learn what he says. After all, the new Greek Prime Minister is an ideal Krugman candidate, as he keeps portraits of Fidel Castro and Che Guevara in his office to serve as an inspiration as he proceeds to follow their example by demolishing the Greek economy, or what's left of it.

I can see Krugman chuckling as he contemplates Greece's repudiation of its debt. Isn't it about time all those tiresome creditors, greedy billionaires all (typical PP investors, by the way), were told where they can go with their absurd hopes of getting their money back, along with (can you believe their arrogance?) the interest payments they were promised!

And from the way those German taxpayers carry on, you'd think they have no respect for their solemn duty to continue pouring billions of euros down the Greek rathole, even as the Greek Prime Minister tells them to go to hell.

[MachineGhost]

It's definitely comical.

But in the end, the reality of the situation on the ground in Greece over Euro technocrats full employment guarantee in Brussells is all that matters.  It's time for someone else but the Greek to take a haircut.  It's a law!

[Jan Van]

Syriza Is Offering a New Deal for the People of Greece

Syriza’s opposition to austerity is backed by historical experience, with the best example being the Great Depression. Indeed, the bulk of Syriza’s economic program for addressing the catastrophic crisis in Greece, which has evolved into a humanitarian crisis, is inspired by President Franklin D. Roosevelt’s New Deal programs, though on a smaller scale, for obvious reasons.

[stone]

Has Prof. Krugman given a pronouncement on the new Greek government?

It will be interesting to learn what he says. After all, the new Greek Prime Minister is an ideal Krugman candidate, as he keeps portraits of Fidel Castro and Che Guevara in his office to serve as an inspiration as he proceeds to follow their example by demolishing the Greek economy, or what's left of it.

I can see Krugman chuckling as he contemplates Greece's repudiation of its debt. Isn't it about time all those tiresome creditors, greedy billionaires all (typical PP investors, by the way), were told where they can go with their absurd hopes of getting their money back, along with (can you believe their arrogance?) the interest payments they were promised!
And from the way those German taxpayers carry on, you'd think they have no respect for their solemn duty to continue pouring billions of euros down the Greek rathole, even as the Greek Prime Minister tells them to go to hell.

I agree with you that Cuba was a mess and I'm totally against Castro style policies but I do think Tsipras is talking sense about this debt fiasco. Check out: http://syriza.net.gr/index.php/en/press ... out-greece

Remember, the main creditor is the EU, the IMF comes in second. The "bailouts" have meant that we are not talking about conventional bond holders. https://en.wikipedia.org/wiki/Greek_gov ... ebt_crisis

Any PP follower should know that the PP should only hold treasury bonds that are backed by a central bank standing by as a lender of last resort so as to render them free of default risk. Harry Browne was very clear about that.

When the EU declared that the Greek bonds must not default in 2010 and the ECB refused to act as a lender of last resort, then the EU stupidly and irresponsibly took on the debt.

My take on this is that governments should not be able to borrow in a currency for which they do not have sovereign control. The whole eurozone concept flies in the face of that of course though.International law should stipulate that anyone goofy enough to lend to a government in such a manner should have no legal recourse. Why should one regime be able to saddle succeeding governments with what they borrowed? Debt in the country's own currency though is quite different; I don't think it is helpful to see US, UK, Japanese etc government debt in the same way at all as foreign currency denominated debt.

Foreign currency denominated government debt is the root of massive global impoverishment and human waste IMO. The classic third world scenario is that a despot comes to power on the basis that he will load up the country with foreign currency debt to pay out to his cronies who send the money back to hoard in London, Switzerland and New York. Then he gets deposed, the country flounders under the debt and tax payers in developed countries then get tapped for "foreign aid" that actually is just aid to the creditors who knowingly lent destructively to the previous despot.

All that has happened with Greece is that that time-worn scam has been repeated but with a developed country. I guess Greece became a submerging market economy (if that's the reverse of an emerging market). I really hope Syriza succeeds in putting a stop to it.

[Libertarian666]

IMO, whatever Krugman says can safely be disregarded. He's a total hack and has nothing of value to say.

[moda0306]

IMO, whatever Krugman says can safely be disregarded. He's a total hack and has nothing of value to say.

I've heard that a lot, but when questioned on what I believe to be very pertinent points, most of his detractors don't put up very good arguments as to why he is wrong.

He's been correct about the path of interest rates an inflation in sovereign fiat currency countries like Japan & the U.S.  This is in the face of astoundingly incorrect predictions about our path by those of a more "Austrian" bend to their political/economic thought, as well as a lot of Americans who have understandably-yet-incorrectly come to view the financials of the U.S. as equivalent to a household.

This is a pretty big deal, considering the implications of being right/wrong on macro-economics, when you look at the difference between Greece and the U.S... two countries that saw (to varying degrees, of course) large over-investment and bubble in real estate and large-ish trade deficits, and are seeing such different consequences of those actions.

All-in-all, Greece might not be properly managing its promises to its lenders, but the managers of the currency are not managing their promises to the users of that currency to balance full employment with price stability (I'm assuming, perhaps-incorrectly, that this is a tenet of the management of their currency union).

[MachineGhost]

All-in-all, Greece might not be properly managing its promises to its lenders, but the managers of the currency are not managing their promises to the users of that currency to balance full employment with price stability (I'm assuming, perhaps-incorrectly, that this is a tenet of the management of their currency union).

Yep, only the Fed has a full employment mandate which is impossible from a monetary policy perspective, but I'm sure you know that already.

What Greece needs to do is leave the EMU and start printing up its own currency again and say F!@K YOU! to the Troika.  But the EU fears this because it will be the first domino to fall because all of the 28-member central banks are using garbage debt like Greece as bank reserves.  They are trying against hope and reality to preserve what is unsavable.  It's comical, really.  Typical government incompetence we're all too familiar with.

[stone]

This seemed to give more detail about the Syriza plan than I'd seen before.
http://www.telegraph.co.uk/finance/econ ... reats.html

Loans from the EU bailout machinery would be replaced by GDP-linked bonds, akin to Keynes’s "Bisque Bonds" in the 1930s. Money owed to the ECB would convert into “perpetual bonds”?.
“Everybody knows we are insolvent. What is the point of us borrowing another €7bn to pay back the ECB - which bought the bonds from north European banks to help them, not Greece – when the ECB is in the process of creating €1 trillion of new money? It is clearly absurd.”?
“So why don’t we just park the bonds on the books of the ECB. What I am not going to do is borrow yet more money from my colleagues in Italy, France or Slovakia, or wherever,”? he said.....
Mr Varoufakis was an economics lecturer before being catapulted into the limelight as crusader against the “monumental folly”? of Europe's deflation policies. An orthodox Keynesian – unlike neo-Marxists in the Left Platform of Syriza's broad church – he has taught at the universities of Essex, Glasgow, Cambridge, Sydney and Texas.
His latest works are “Europe after the Minotaur”? and a “Modest Proposal”?, a play on Swift. They are acclaimed blueprints for an EMU-wide reflation drive and a lasting peace to end Europe’s debt wars. They propose a mechanism to recycle the capital surpluses from the creditor states to the deficit states in a stable fashion to prevent the EMU economy as a whole becoming trapped in a self-feeding cycle of contraction. The arguments would be recognisable instantly to Keynes, who grappled with the same issues in the inter-war years when the Gold Standard went awry.
Mr Varoufakis is a fan of "game theory", a branch of economics epitomised by the Nash Equilibrium - the optimal outcome when each side knows what the other wants. But the current stand-off over Greece defies even the intricate formulae of Nobel theorist John Nash.
“Game theory only works if the players are rational. I am not sure that is the case in Europe. Even Nash would be at a loss here,”? he said.

[MachineGhost]

I didn't see that one coming.  That is savvy.

[MachineGhost]

I like Varoufakis and his style.  He seems to be what is termed a post-Keynesian economist.

Wow, its that guy?!!  That is very savvy, indeed.  Try to imagine that happening in, say, Venezuela or Cuba?   So hopefully we're entering a new era of post-capitalism here.