Sunday, July 19, 2015

Paul Krugman: "I may have overestimated the competence of the Greek government"

Paul Krugman, during an interview with  Fareed Zakaria on CNN, had this to say about Greek officials:
…it didn’t even occur to me that they would be prepared to make a stand without having done any contingency planning ...amazingly - they thought they could simply demand better terms without having any backup plan. So certainly this is a shock. But, you know, in some sense, it’s hopeless in any case. …it’s not as if the terms that they were being offered before were feasible. I mean, the new terms are even worse, but the terms they were being offered before were still not going to work. So I, you know, I may have overestimated the competence of the Greek government.
Krugman is absoulutely correct here. The Greek government was in way over its head during its negotiations with the Eurozone officials and it is simply stunning that they had no backup plan, such as a return to the drachma. They are one bunch of economically clueless extreme lefties.

Krugman was also correct about what is likely from here:
My guess is - nothing can ever be certain - but. …either in the end they will get this sort of enormous debt relief that they’re not getting or they will have to exit. And I guess - my money, in some currency or other, is on exit one way or another. …A Greek exit would have huge implications for the future of the European project. And if Greece exits and then starts to recover, which it probably would, that, in turn, would be, in a way, would be encouragement for other political movements to challenge the Euro....
I am going to stop here, when you have Krugman making to very sound observations in one interview, it is an event as frequent as a passing of Haley's comet. The event should be observed without expecting more of the same.



  1. Krugman sounds like an articulate child trying to comprehend some new and shocking insight about something he thought he already knew everything about.

  2. Maybe he'll get to this point eventually:

    "I may have overestimated the competence of government."

  3. It's possible that the Germans are stunned by the Greek response and are trying to figure out what to do about it. Like in a war movie where someone says "something is wrong ... this is too easy". In any case, it may turn around 180 degrees: the Germans try to push them out and the Greeks try to stay in at any price. One thing is clear though: if the Greeks leave the Euro, the banksters need to make sure they suffer badly.