President of Estonia Calls Krugman Smug, overbearing, Patronizing.

Discussion in 'Politics' started by Max E., Jun 7, 2012.

  1. Max E.

    Max E.

    You can telll that it is getting to Krugman that nothing he has said so far has been working, and one of the few countries to go through hard core austerity is now thriving, but not only are they thriving, the most important part is that they have drank their medicine, and they are now operating on a balanced budget. Something that can not be said about any of the other countries in Europe, or else us in the States. I can just picture that doofus sitting in his home going crazy because no one takes him seriously.

    New York Times columnist Paul Krugman appears to be angering people all over the world these days.

    After getting trashed by the British Telegraph and schooled by a member of Parliament last month, the Nobel laureate took to attacking the Republic of Estonia Wednesday only to be slammed in return by its President Toomas Hendrik Ilves via Twitter hours later:


    What drew the President's ire was something Krugman posted at his blog Wednesday: "Since Estonia has suddenly become the poster child for austerity defenders — they’re on the euro and they’re booming! — I thought it might be useful to have a picture of what we’re talking about."

    After presenting a chart of Estonia's Gross Domestic Product since 2007, Krugman wrote, "So, a terrible — Depression-level — slump, followed by a significant but still incomplete recovery. Better than no recovery at all, obviously — but this is what passes for economic triumph?"

    As Hot Air noted, "That post was in turn a Keynesian belch at this widely linked Global Post story describing how Estonia managed to kickstart rapid economic growth while the rest of Europe got sucked into a black hole. Three words: 'Austerity, austerity, austerity.'”

    Those that have been paying attention know that currently nothing bothers Krugman more than austerity despite him clearly not understanding that few countries in Europe are actually practicing it.

    It must really be getting under his knickers that a real case of austerity across the Atlantic is showing genuine success.

    As for Ilves, he was was born in Sweden, but grew up in New Jersey.

    No academic slouch he, for after graduating valedictorian of his high school, Ilves received a bachelor's degree in psychology from Columbia University and a master's degree psychology from the University of Pennsylvania. He's also fluent in Estonian, English, German, and Spanish.

    In his final salvo concerning Krugman, Ilves linked to an article he wrote for the Hoover Institution in March:

    We would not be in the mess we are in today in Europe if a large number of fellow member states had not taken a fundamentally different tack to thrift, deficits, and borrowing than what they themselves agreed to only a couple of years earlier. My country would never, ever have been able to adopt the euro had we done what was standard operating procedure among many members of the eu-17. At the same time, I would aver that there is little in the fundamental approach taken by Germany, the Netherlands, Estonia, Finland, or Austria that differs from what such noneuro countries as Sweden, Denmark, and Poland have been doing. My country would never have been able to adopt the euro had we done what was standard among many in the EU.

    Thus the institutional arrangements and the behavior of countries do not jibe. I submit this is unsustainable. For ultimately, the inability or unwillingness of parts of the eu-17 to submit to agreed-upon rules will be defended by an appeal to the position that “our democracy cannot withstand the kind of austerity demanded of us.” The first shoots of this position we have already seen emerge. Yet let us be clear about what this means: Fiscally responsible countries will be asked to support fiscally profligate countries in the name of democracy.

    You can do it for a while, but if you are a country like Estonia, where the gdp per capita is almost the same as Greece but where the average salary is lower than the Greek minimum wage and where the pensions and agricultural supports within an internal market are three times lower, it is a matter of time before our voters revolt. The government in my country and the opposition voted to support the European Financial Stability Facility to aid a country richer than us and profligate. Three quarters of the parliament voted in favor. But, note: 75 percent of the population was against.

    Here we see in my own country the first seeds of the populism that has recently caused concern throughout the north — in the Netherlands, in Denmark, in Sweden and most recently also in Finland. Sorry, it’s not just the democracies of the south that are under threat. The bankrolling of Southern Europe has already and ever-increasingly threatened the fiscally responsible countries, the ones who have shown solidarity and voted to commit to bailing out those better off than we. Moreover, while much has been made of the change of governments in countries that broke the rules, far too little attention has been paid to what to my mind is a far more significant reverberation: the fall of a responsible, poor, new member state government coalition (in Slovakia) that made the hard choice and voted to support a country richer than it is, all for the sake of European solidarity.

    How'd you like to see Ilves debate geoeconomics with the 'smug, overbearing and patronizing' Krugman?

    All those in favor say "Aye."

    Read more:
  2. Max E.

    Max E.

    Here is the article that got Krugman's panties in a bunch.

    It’s the euro zone Jim, but not as we know it.

    Sixteen months after it joined the struggling currency bloc, Estonia is booming. The economy grew 7.6 percent last year, five times the euro-zone average.

    Estonia is the only euro-zone country with a budget surplus. National debt is just 6 percent of GDP, compared to 81 percent in virtuous Germany, or 165 percent in Greece.

    Shoppers throng Nordic design shops and cool new restaurants in Tallinn, the medieval capital, and cutting-edge tech firms complain they can’t find people to fill their job vacancies.

    It all seems a long way from the gloom elsewhere in Europe.

    Estonia’s achievement is all the more remarkable when you consider that it was one of the countries hardest hit by the global financial crisis. In 2008-2009, its economy shrank by 18 percent. That’s a bigger contraction than Greece has suffered over the past five years.

    How did they bounce back? “I can answer in one word: austerity. Austerity, austerity, austerity,” says Peeter Koppel, investment strategist at the SEB Bank.

    After three years of painful government belt-tightening, that’s not exactly the message that Europeans further south want to hear.

    At a recent conference of European and North American lawmakers in Tallinn, Koppel was lambasted by French and Italian parliamentarians when he suggested Europeans had to prepare for an “inevitable” decline in living standards, wages and job security, in order for their countries to escape from the debt crisis.

    While spending cuts have triggered strikes, social unrest and the toppling of governments in countries from Ireland to Greece, Estonians have endured some of the harshest austerity measures with barely a murmur. They even re-elected the politicians that imposed them.

    “It was very difficult, but we managed it,” explains Economy Minister Juhan Parts.

    “Everybody had to give a little bit. Salaries paid out of the budget were all cut, but we cut ministers’ salaries by 20 percent and the average civil servants’ by 10 percent,” Parts told GlobalPost.

    “In normal times cutting the salaries of civil servants, of policemen etc. is extremely unpopular, but I think the people showed a good understanding that if you do not have revenues, you have to cut costs,” adds Parts, who served as prime minister from 2003-2004.

    As well as slashing public sector wages, the government responded to the 2008 crisis by raising the pension age, making it harder to claim health benefits and reducing job protection — all measures that have been met with anger when proposed in Western Europe.

    History helps explain citizens’ willingness to bite the austerity bullet. Estonia broke free from Soviet rule just over 20 years ago, together with its Baltic neighbors Latvia and Lithuania — who are also enjoying a robust recovery, but are outside the euro zone.

    For older Estonians, memories of the grim days of Soviet occupation make it easier to accept sacrifices today. Among the young, there is a widespread awareness that in a nation of just 1.3 million people, the freedom and opportunities their generation enjoy depends on unity in times of crisis.

    “Western Europe has not really experienced a decrease in living standards since the Second World War,” says Koppel. “Historically, austerity is inevitable, but it’s not part of the culture of Western Europe right now. This is what really differentiates us, that we were able to understand that.”

    It still has its share of economic problems. The average monthly take-home pay of 697 euros ($870) is among the lowest in the euro zone and unemployment at 11.7 percent is still above the bloc’s average. The shockwaves of euro-zone collapse radiating from southern Europe could yet snuff out the recovery.
  3. Tsing Tao

    Tsing Tao

    Krugman is a total ass.
  4. Good stuff!
  5. Ricter


    Estonia devalued (relative to their wealthy customers) their own currency early and adopted the Euro late. Not a method that will work for the rest of Europe.
  6. Brass


    If Kim Jong-un took vocal exception to Krugman's or Obama's views on economic policy, Max would be sure to mention it, praising the guy for his exceptional insight and brilliance.
  7. jem


    there is a pattern when things work, since about kennedy years.

    When something works...

    The right learns a lesson, the left points out why that situation was different.

    Whether it be economics, budgets, elections or tax cuts opposing communism... etc.

    And interestingly we almost never see the left pointing to something they have done which has really worked in the last 40 years. I am sure they can think of something... but really... they are always making distinctions instead of showing examples of things which worked.
  8. Ricter


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  9. jem


    1. care to show the chart for tax revenues and employment for say the next 15 years after that chart?

    2. care to show the fall of the berlin wall after that chart

    3. care to show how many human beings experienced freedom because that man and the pope were the few who had the balls to stare down the evil empire. Both men did spend a lot. The pope pretty much bankrupted the Catholic Church and since the dems would not cut back on spending.. the increased spending on star wars and the military did combine to run up deficits.

    4. If only at some point in time after that -- some party would feature a bit of a grass roots effort to stop the crazy spending after the wall came down. How did the economy respond to a responsible budget.
  10. Ricter


    So you're saying the situation was different back then?
    #10     Jun 7, 2012