Paul Krugman to join UKIP

Well, perhaps not, but his economic analysis is certainly on our side:

But such action, we keep being told, is off the table. The statutes … supposedly prohibit this kind of thing, although one suspects that clever lawyers could find a way to make it happen. The broader problem, however, is that the whole euro system was designed to fight the last economic war. It’s a Maginot Line built to prevent a replay of the 1970s, which is worse than useless when the real danger is a replay of the 1930s. …

The … European elite, in its arrogance, locked the Continent into a monetary system that recreated the rigidities of the gold standard, and — like the gold standard in the 1930s — has turned into a deadly trap.

Now maybe European leaders will come up with a truly credible rescue plan. I hope so, but I don’t expect it.

The bitter truth is that it’s looking more and more as if the euro system is doomed. And the even more bitter truth is that given the way that system has been performing, Europe might be better off if it collapses sooner rather than later.

Just an entirely stupid idea right from the start, that euro thing.

As we\’ve been saying.

5 thoughts on “Paul Krugman to join UKIP”

  1. We are constantly told what a disaster a Greek default will be.
    Will it? By comparison with staying in the euro?
    There’s a deal of analysis, but also a lot of wishful thinking, and it’s hard to separate the two.
    Could it be that in a few months time the PIIFS will envy the Greeks?
    After all, Argentina defaults on any day of the week with a “y” in it, and noone actually starves.

  2. If only the pro-EU crowd hadn’t backed themselves into a corner with all their rhetoric that those opposing the Euro were dribbling lunatics, they might have recognised the impending reality a bit sooner.

    Then again, maybe not. For the European establishment, insanity is defined as seeing reality as it really is.

  3. Well more accurately I’d say, “Paul Krugman joins the euro is doomed brigade at bit late in the day”.

    As for Krugman himself, “…. that recreated the rigidities of the gold standard, and — like the gold standard in the 1930s — has turned into a deadly trap.” Ahem, as any economic fule ought to know, debt bubbles always burst and the ability to print money doesn’t really matter much.

  4. …..We are constantly told what a disaster a Greek default will be. Will it? By comparison with staying in the euro?……

    The beauty of leaving the Euro is that you get two for the price of one.
    1) You effectively default by switching debts to Drachma.
    2) The economy grows due to devaluation

    So leaving the Euro offers extra benefits

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