NYT Editor:Majority of Workload Involved Krugman's Inaccuracies and Misstatements
- Thread starter Max E.
- Start date
________________________
"Apocalypse Fairly Soon ... Suddenly, it has become easy to see how the euro - that grand, flawed experiment in monetary union without political union - could come apart at the seams."
________________________
I think this, on one level, misses a key point and misrepresents a key failing of the E.U. The States of the E.U. in fact have only partial monetary union, they don't all have the same currency, and they don't have the same bond.
That's what prompted Soros to say in Frankfurt recently that Germany should drop its opposition to the Euro Bond or Exit from the European Union. Personally I think that is a better, and wiser solution to the problem of the PIGS, than a total breakup, with each PIGS State going its separate way.
If you draw a comparison between the States in the U.S. and the countries of the E.U. you will find that one real difference is that the U.S. has a True Monetary Union, though the laws of the individual States vary widely. You can go to prison for life in one State for a crime that you could be executed for in another. You can qualify for medicaid in one state, but not in another. You can smoke marijuana, and grow it legally, in one state, but not in another. You have the right to a Grand Jury for State prosecuted crimes in one State, but not in another. This list of dramatic differences between the States is nearly endless and testifies to the absence of perfect political union.
Possibly the similarities between Spain and Portugal are at least as great as the similarities between Massachusetts and Mississippi. But all 50 States have true monetary union.
"Apocalypse Fairly Soon ... Suddenly, it has become easy to see how the euro - that grand, flawed experiment in monetary union without political union - could come apart at the seams."
________________________
I think this, on one level, misses a key point and misrepresents a key failing of the E.U. The States of the E.U. in fact have only partial monetary union, they don't all have the same currency, and they don't have the same bond.
That's what prompted Soros to say in Frankfurt recently that Germany should drop its opposition to the Euro Bond or Exit from the European Union. Personally I think that is a better, and wiser solution to the problem of the PIGS, than a total breakup, with each PIGS State going its separate way.
If you draw a comparison between the States in the U.S. and the countries of the E.U. you will find that one real difference is that the U.S. has a True Monetary Union, though the laws of the individual States vary widely. You can go to prison for life in one State for a crime that you could be executed for in another. You can qualify for medicaid in one state, but not in another. You can smoke marijuana, and grow it legally, in one state, but not in another. You have the right to a Grand Jury for State prosecuted crimes in one State, but not in another. This list of dramatic differences between the States is nearly endless and testifies to the absence of perfect political union.
Possibly the similarities between Spain and Portugal are at least as great as the similarities between Massachusetts and Mississippi. But all 50 States have true monetary union.
One size fits all monetary policy for the EU is actually Germany size must fit all. The only reason greeks and Italians have lasted so long with their corruption and blatant overspending was because they could default and devalue every so often. Without the ability to do that, they have to actually solve really difficult sovereign problems - and the only way they can solve them is to take out more debt to cover old debt. They will fail, of that Krugman is correct.
But Krugman thinks that it's austerity driven, and that isn't the case.
But Krugman thinks that it's austerity driven, and that isn't the case.