Economists' duel

Don't Be So Aggressive, Mr. Krugman

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Dueling economists.
  • Why it matters

    Why it matters

    Economists disagree strongly over whether and how Greece should pay back its debts to its international creditors.

  • Facts

    Facts

    • New York Times columnist Paul Krugman has strongly criticized Germany’s opposition to a further debt haircut for Greece.
    • Mr. Krugman and other left-leaning economists, such as Thomas Piketty and Joseph E. Stiglitz, have been critical of austerity in Europe.
    • Even John Maynard Keynes saw value in the kind of supply-side reforms that Germany is now demanding of Greece, the author argues.
  • Audio

    Audio

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In a column for the New York Times this week, Paul Krugman strongly criticized Germany’s “morality-play economics”; he said the demands of the Eurogroup were “madness,” and said the suggestion that Germany’s demands mask a coup d’état mentality were “exactly right.”

The demands of the Eurogroup constituted an offer which Greece should not accept under any circumstances, Mr. Krugman wrote. But even if Greece were to accept the offer, it would mark “a grotesque betrayal of everything the European project was supposed to stand for.” 

Is this a case of somebody finally telling it like it is, without worrying about the diplomatic niceties of the job? Is an eminent expert – Mr. Krugman is a Nobel Prize winner in economics – revealing for us the dark side of international politics?

Far from it, unfortunately.

It is true that columnist Mr. Krugman has done a great deal for economic theory, but his contributions to economic policy in practice are nearly always polemical and sometimes highly aggressive.

His tirades against the group of euro states, Germany in particular, regularly cross the line of personal decency and are right up there with criticisms by other left-leaning economists like Thomas Piketty and Joseph E. Stiglitz. Speeches by German left-leaning Social Democratic politicians like Oskar Lafontaine are often based on the thoughts of Mr. Krugman & Co.

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