The Fall of France – Paul Krugman –

Paul Krugman, Laureate of the Sveriges Riksban...

Paul Krugman, Laureate of the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2008 at a press conference at the Swedish Academy of Science in Stockholm (Photo credit: Wikipedia)

This is a MUST-READ article from Nobel Prize winning, liberal economist, Paul Krugman, in the NYT. Check it out!

via The Fall of France –

Personally, I prefer Krugman when he focuses on economics, rather than venturing opinion on politics – his politics are colored by his liberal views. But his article on France’s economic performance yesterday was excellent.

However, I must say that I agree that President Hollande has been a failure. Hollande has completely failed to live up to his anti-austerity rhetoric.

In my mind, we are witnessing German hegemony over Europe, via fiscal constraints. A similar point has been made by leading Oxford economist, Simon Wren-Lewis, using different language.

As I looked at the news this morning, every major newspaper and economic commentator seems to be again focusing on the Euro, vying for headline space. I am sure that speculators are sitting in the wings, looking to short-sell weak prey. Meanwhile, yesterday we learned that perhaps Germany might dilute austerity medicine in exchange for reform.

One last point, the new French Finance Minister is a thirty-seven year old former investment banker, so I fear he will understand the markets but alas perhaps not the people?


2 responses

  1. Dr Alf is right about France and Paul Krugman’s incisive and thoughtful analysis.

    Francois Hollande is and always has been a socialist and a leveller so his credentials are always about spending and distributing money whether he has it or not.

    Germany by controlling Europe and insisting that people behave in a more financially disciplined way is expecting the impossible which is why in the case of France, they are contemplating a loosening of Mrs Merkel’s financial straight-jacket, but only to help their main backer in Europe, France.
    Angela Merkel does not particularly rate the useless and libidinous Hollande but needs to back him because he is there for the time being at least and in charge of France.

    Northern Europe more or less works and functions quite well but Southern Europe does not.

    Overall the continent is still mired in stagnation and is about £4.5 trillion gbp short of what it needs to flourish and reverse the growing youth unemployment problem it has.

    Writing off not one but 2 generations of young people is not wise if you want a harmonious society and in the meantime the currency speculators like vultures and hyenas are closing in for the kill looking for the weakest country in the Eurozone to attack first.

    France, of the countries of Southern Europe, is its strongest link yet when compared to Europe as a whole it fails to make enough or sell enough of what people want and it taxes people and companies too heavily.
    This encourages a flight of people and capital which pushes France into a downward spiral.

    Europe is in reality 2 blocs both of which are controlled by Germany but which operate to different economic cycles within themselves and at the level of the countries which form them.

    Thus we have the UK going through a pre election credit fuelled boom and Germany exporting strongly but slowing, Spain, Italy, Greece and Portugal teetering on the abyss of bankruptcy and Holland, Sweden and Poland operating steadily and, in the case of Poland, improving strongly from a low base.
    For Europe to ever function as if it were one country, these differences would have to be a lot less pronounced and there would have to be rotating shared control of the kind we have not yet seen.

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