Paul Krugman: The Nation's most dangerous Economist.

[Ricter]

Quote from CaptainObvious:

This is the model Krugman would have us follow? It's worse than the crony capitalism we practice here.

PARIS — Ireland on Friday appeared headed toward adoption of the European Union’s fiscal compact, but stocks fell and the dollar rose by midday in Europe after data showed unemployment in the euro zone rising to a record.

The jobless rate in the 17-nation euro zone reached 11 percent in March and April, the highest since the start of the data in 1995, Eurostat, the European statistical agency said in Luxembourg. The previous record had been 10.9 percent in February, Eurostat said, after it revised March’s figure upward from the 10.9 percent initially estimated.

“We have an economy that’s freezing up, it’s clearly not creating jobs,” Peter Dixon, global equities economist at Commerzbank in London, said. “But right now policy makers’ main concern is to ensure that the peripheral countries’ governments and banks can stay afloat. Given that, the real economic data is taking a back seat.”

But before long, he said, unemployment “is going to be a major problem for those countries,” as it rises to the top of the political agenda and further complicates the financial problems.

For the overall European Union, made up of 27 nations, the jobless rate was 10.3 percent in April, up from 10.2 percent in March. Spain’s jobless rate, of 24.3 percent, was again the highest in the European Union

Huh? Quite the opposite.

 

[Brass]

Quote from Ricter:

Huh? Quite the opposite.

You'll have to forgive the good captain. He's just lashing out every which way. Best to just wait out the storm.

As an aside, don't you find it entertaining how guys like Grandluxe refer to "fanatics" while actually looking outside their tent?

Quote from Grandluxe:

...which is of course what the fanatics crave for.

And then, of course, there is Tsing Tao, who knows everything there is to know about macroeconomics without actually knowing anything about it. I think it's fascinating how you always manage to "lose" every debate with him on the subject matter. Don't you?

 

[Lucrum]

Quote from Brass:

... knows everything there is to know about macroeconomics without actually knowing anything about it.

Introspection is good for the soul, so they say.

 

[377OHMS]

Quote from Tsing Tao:

Because it wasn't them, of course. No one wants to have to be austere when it's themselves. They know that the way to be elected is NOT by cutting entitlements. But at the same time, they'll be damned if they're going to lend money when they know there's no way in hell it will be repaid, unless the country getting the funds makes an effort to cut their spending.

One day soon it will be France. And watch what happens when no one will lend to France.

Not sure I agree here. France has so many exports. A surprising number of food products in the grocery stores in the UK and USA come from France. They've got a thriving space launch industry that brings in serious foreign money. There is Airbus. Tourism to France is an enormous industry in itself. Its difficult to see how France comes unraveled like Greece, Spain or Italy.

Of course if their new President goes completely socialist and actually raises taxes to 75% on the top earners while maintaining high entitlement levels I suppose you could be right about what happens. If France actually became a defaulting debtor I would start worrying about a global economic depression.

 

[Tsing Tao]

Quote from 377OHMS:

Not sure I agree here. France has so many exports. A surprising number of food products in the grocery stores in the UK and USA come from France. They've got a thriving space launch industry that brings in serious foreign money. There is Airbus. Tourism to France is an enormous industry in itself. Its difficult to see how France comes unraveled like Greece, Spain or Italy.

Of course if their new President goes completely socialist and actually raises taxes to 75% on the top earners while maintaining high entitlement levels I suppose you could be right about what happens. If France actually became a defaulting debtor I would start worrying about a global economic depression.

I don't remember saying anything about France's exports. All I'm saying is watch what happens to France when the rates the bond market will charge them are greater than they can pay. When no one will lend to them any longer (once debt to GDP is high enough) at the rates they want, they will be forced to cut programs. Given that France is one of the biggest entitlement providers of the world, watch what happens.

 

[377OHMS]

Quote from Tsing Tao:

I don't remember saying anything about France's exports. All I'm saying is watch what happens to France when the rates the bond market will charge them are greater than they can pay. When no one will lend to them any longer (once debt to GDP is high enough) at the rates they want, they will be forced to cut programs. Given that France is one of the biggest entitlement providers of the world, watch what happens.

You didn't mention exports. I was just noting that France has a much more robust economy than Greece, Spain and Italy though, as you note, they have a huge entitlement burden. It looks like they are about to really increase their tax rates as well. That will probably chase away quite a few French entrepreneurs who create jobs.

If they run their debt up much higher than GDP I agree that things will get dicey. It has always amazed me that the French often take the entire month of August off for vacation and they also can retire at a rather young age. Hard to sustain that.