Greece – Economy – Austerity, Not The Euro, Ought To Be Krugman’s Focus – 18 June 2012

I am posting this article by Paul Krugman, originally published in the New York Times, in the form in which it appears in the Los Angeles Daily News because I want to point out the headline they put on the article in Los Angeles. “Blame Greece’s Problems on the Euro, Paul Krugman says” is the headline this paper assigns to the same content which was headlined “Greece as Victim” in the New York Times.

Krugman’s column, if you read it, fits the New York Times headline much better. Krugman is pointing out that, though there are bits of truth here and there to the notion that Greece is not always a colossus of fiscal rectitude, in the main it is Greece that is getting ripped by EU policies, and it is those EU policies which have to change.

I was very impressed by the Krugman column as it appeared in the New York Times, because I took the emphasis to be on criticising the German-led austerity program already in place and defending the Greeks against both the starving of their economy and the ridiculous and unfair stereotyping they are now being made to suffer.

Indeed, Krugman made an argument in the article I’ve been making here for some time now – that people don’t say “why don’t we make those people in Mississippi, Florida or Texas pay for their fiscal irresponsibility?” but are ready to moralistically pile it all on Greece. It’s nice to have a Nobel Prize-winning economist agree with me that the situations are _indeed_ analogous. (Furthermore, the argument about how the US bailed out the state of Texas in the wake of the 1980s S & L crisis is long overdue. Why are we never treated to credit downgrading debates about the Texas economy? Because the entire US stands behind Texas, and all of the other states as well. Okay, well then, what have we learned? That the relevant difference is the EU is not similarly standing behind Greece, right?)

But…the Los Angeles headline still says it all. Krugman’s ideas are still being principally used not to help the Greeks (presumably what he wants) but to attack the Euro concept (and if he didn’t want to be taken to approve of attacks on the Euro, maybe he should have thought twice about actually saying to “Blame the Euro” in the text of the article). Never mind that Krugman’s analogy to how the US relates to its states suggests that the solution in Europe is to _deepen_ economic union, not abolish it…those who are principally in this to destroy the Euro concept will pick and choose what they like from Krugman, and ignore the stuff that’s more important (namely, that one quarter of Greece is out of work because of heartless and ineffective austerity policies).

I admire Krugman’s principled stands on austerity, but he is undercutting them by Euro-bashing. I’m sure he’s aware of François Hollande’s initiative to establish “eurobonds” for the EU as a whole (rather than in the individual member states of the EU directly). That’s the sort of thing which might make European policy makers take its periphery-states a bit more seriously – and treat them like the US treats Mississippi, Florida or Texas. You would think, based on what he’s said in this article, that he would support that kind of initiative. Why has he been silent on the matter?

In any case, I recommend the New York Times version of this article, which puts the emphasis on Greece being the victim of irresponsible austerity policies. Give the LA Daily News one a skip, though. The Euro is not to blame.

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