"The mind is a compact, multiply connected thought mass with internal connections of the most intimate kind. It grows continuously as new thought masses enter it, and this is the means by which it continues to develop."

Bernhard Riemann On Psychology and Metaphysics ca. 1860

"It is clear that the minds are the most important part of the universe, and that everything was established for their sake; that is, in choosing the order of things, the greatest account was taken of them; all things being arranged in such a way that they appear the more beautiful the more they are understood."

G. W. Leibniz

Today's Elites

Friday, June 18, 2010

Krugman's Keynesian Crocodile Tears

Under the ominous heading of "That 30s Feeling" Krugman opines that austerity in response to the woes of the Eurozone is wrong :
How bad will it be? Will it really be 1937 all over again? I don’t know. What I do know is that economic policy around the world has taken a major wrong turn, and that the odds of a prolonged slump are rising by the day.
But just last month he wrote:

Consider what Greece would get if it simply stopped paying any interest or principal on its debt. All it would have to do then is run a zero primary deficit — taking in as much in taxes as it spends on things other than interest on its debt. But here’s the thing: Greece is currently running a huge primary deficit — 8.5 percent of GDP in 2009. So even a complete debt default wouldn’t save Greece from the necessity of savage fiscal austerity.
 I reply: Note your use of the word necessity here, Paul. Why is this necessary? Why not put the failed global derivatives bucket shop monstrosity through bankruptcy reorganization and return to a Bretton Woods fixed currency model based upon long term investments in infrastucture and rapid development of advanced technology to sustain the world's population? Oh, I forgot. You are a monetarist at heart and believe in the magic of...money. That is sad.

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