COMMENT: New York Times columnist and Nobel-Prize-winning economist Paul Krugman weighs in on the thinking of European political leaders. (Perhaps one could say German political leadership, in that they seem to be calling this particular tune.)
Noting that the austerity programs being prescribed for Eurozone economies in trouble are being linked to memory of the German inflation of the 1920’s, Krugman notes that the current policies of German and European leaders mimic those of German Chancellor Heinrich Bruning. (Bruning is pictured at right.)
One might note in this context that those same austerity programs are being advocated by the GOP and American right wing!
“Euro Zone Death Trip” by Paul Krugman; The New York Times; 9/26/2011.
EXCERPT: . . . . And I see no sign at all that European policy elites are ready to rethink their hard-money-and-austerity dogma.
Part of the problem may be that those policy elites have a selective historical memory. They love to talk about the German inflation of the early 1920s — a story that, as it happens, has no bearing on our current situation. Yet they almost never talk about a much more relevant example: the policies of Heinrich Brüning, Germany’s chancellor from 1930 to 1932, whose insistence on balancing budgets and preserving the gold standard made the Great Depression even worse in Germany than in the rest of Europe — setting the stage for you-know-what. . . .
I don’t know all that much about Paul Krugman, tbh, but he does seem to be a decent & honest man.
And you know something? You are exactly correct, Dave, when you wrote that “One might note in this context that those same austerity programs are being advocated by the GOP and American right wing!”
Scary stuff, but this has to be put out there.
This is just a reminder that unwarranted obsessions over the historical dangers of inflation can destroy economies:
It’s a theme: