Paul Krugman, European celebrity

In the United States, Krugman writes a newspaper column. In Europe, his ideas make headlines

Topics: Paul Krugman, Europe, Editor's Picks,

Paul Krugman, European celebrityPaul Krugman (Credit: AP/Heribert Proepper)

Paul Krugman is not a name you’d expect to see plastered onto the sides of Madrid’s buses. But last we heard, his Spanish publisher was planning to use the rolling billboards to sell the Nobel laureate’s new book, “End This Depression Now.” Titled “¡Acabad ya con esta crisis!” in Spanish, it’s already in its fourth printing in a country where more than 50 percent of workers under 25 cannot find a job. They know firsthand why Krugman calls it “economic suicide” to cut public spending massively when the economy is taking a nosedive. Germans, who tend to see such cuts as only prudent, are also reading Krugman, often with distaste, while the British have put him front and center as the queen floats down the Thames for her diamond jubilee and ordinary blokes wonder why their economy has sunk into a double-dip recession.

Like Americans, Europeans either love or hate our rock-star economist, but his reception on their side of the Atlantic drives home a hard truth that few aside from Krugman have bothered to tell. Eurodämmerung, as he calls it, came to Spain and Ireland neither from public extravagance nor from Goldman Sachs fiddling the accounts with credit default swaps, but from genuine efforts to bail out over-indebted private banks sucked in by low-interest loans from German and American lenders. Easy money and European Union grants to build motorways were the euro’s early blessings. The curse came only after Wall Street wrecked the world’s financial system by selling derivatives based on shaky subprime mortgages.

For Krugman, Spain is “the emblematic euro crisis economy,” where huge inflows of easy money fed an unprecedented housing bubble aimed significantly at British tourists and retirees. It tasted good, pushing more euros into workers’ pockets and booming tapas bars — until the global collapse. That’s when Spaniards discovered how the artificial boom had made their country uncompetitive. Trapped in a currency they could not devalue, they had no easy way to cut their prices and make their products, workers and vacation spots more attractive. Krugman tells the story clearly and sympathetically, which makes him highly popular with Spaniards. They read his columns in one of the country’s leading newspapers, El País, and find his pronouncements in headline stories throughout the media. He is, as one unhappy right-winger put it, a guru becoming superguru.

Telling Madam Merkel

The Germans, little wonder, appear more skeptical. Krugman has been telling them for years that they don’t understand the crisis and that Chancellor Angela Merkel’s budget-cutting demands during an economic downturn makes the situation worse. Nor do the Germans like hearing that they are the biggest beneficiaries of the euro. Much of the easy money that poured into Greece, Spain and other peripheral countries went to buy German subway trains Volkswagens, BMWs and other exports, which is what brought the German economy out of the doldrums after the costly reunification with the formerly Communist East Germany. And much of the bail-out money they hate to hand out to those they see as shiftless southerners comes back to pay good German bankers. Why are the Germans so mad at the Greeks and not at their own bankers? That is a question more Germans need to ask themselves.

What’s obvious is that few Germans share or fully fathom Krugman’s mindset, as came through a couple of weeks ago when the magazine Der Spiegel interviewed him at length.

Spiegel: …you have repeatedly pointed out that Germany’s pushing for austerity will lead Europe on a death trip and that prosperity through pain is a fantasy.

Krugman: That’s right. I thought it was obvious from the beginning that this is never going to work. If the policy makes any sense at all, it’s through mass unemployment, driving down Spanish wages. How many years is that supposed to take…?

Spiegel: …4 or 5 percent inflation may be fine for a short while, but how do you make sure that it doesn’t rise to 7 and 8 percent or more once the expectation is there?

Krugman: …Just raise interest rates once it’s creeping up to the level you don’t like … If you actually look at the histories of the inflations that we’ve had, hyperinflations come from a very different story. They come from governments that can’t raise revenue and just rely on the printing press…

Spiegel: What do you think about the growth programs that are currently being discussed within the European Union? Are they enough?

Krugman: This is a water pistol against a charging rhinoceros. This is ridiculous. These are ludicrous, trivial things compared with the scale of what’s going on…

Spiegel: More stimulus also means more debt. Many European nations, as well as the US, are already drowning in debt.

Krugman: I’m not saying that I don’t ever care about debt, but not now. If you slash spending, you just depress the economy further. And, given the low interest rates and what we now know about long-run effects of high unemployment, you almost certainly actually even make your fiscal position worse. Give me a strong-enough economic recovery that the Fed is starting to want to raise interest rates to head off inflation — then I become a deficit hawk.

In Krugman’s view, the question of economic policy was never either-or, but simply when to do which, as Keynes figured out three-quarters of a century ago. Krugman even quoted the master to his clearly discomfited German interviewers. “It’s the boom, not the slump, that is the time for austerity.”

Solving debt with more debt

Krugman has been making the same Keynesian case this week in Britain, where he frontally attacked the coalition government over its self-imposed austerity policy. Selling his new book like the professional he is, he gave a scholarly lecture Tuesday to a packed house at the London School of Economics and then appeared on several BBC current affairs programs. To get a taste, take a look at the highly regarded Newsnight, where he nimbly dispatched two high-powered government defenders. Large economies are not individual households, Krugman schooled them. My spending is your income, and your spending is my income. So, if everyone slashes spending, we end up producing a depression.

Jon Moulton (venture capitalist and Tory donor): The issue about austerity here is, really, we have too large a state. We’ve let the economy go from 30-odd percent to pushing 50 percent public sector. If you want growth you need a larger private sector, not a larger public sector…

Krugman: …Actually, none of this is at all about fiscal responsibility. It’s all about exploiting the current situation to pursue an ideological goal of a smaller state. We can argue about whether the British state is too large, but look at Sweden, which is actually weathering this well with a much larger state than you have. So, that’s a great diversion. That’s suggesting that you’re not actually sincere. It’s not really the budget deficit that concerns you. You’re looking for a way to exploit the deficit situation to pursue an agenda.”

Nor did the intrepid Krugman stop with bashing Tories and their ideology. In an interview with the New Statesman, he also castigated the Labour Party for their tepid opposition to the government’s spending cuts and their plan to halve the deficit over four years. Their position, he said, was “We’re like them but only less so.” He could have said the same thing of François Hollande in the French president’s less-than-epic battle with Merkel.

So, what does Krugman himself think of his starring role in Europe’s economic debate? In his Thursday column, he summed up his best fighting words. “So the austerity drive in Britain isn’t really about debt and deficits at all; it’s about using deficit panic as an excuse to dismantle social programs. And this is, of course, exactly the same thing that has been happening in America.”

Frank Browning reported for nearly 30 years for NPR on sex, science and farming. He is the author of, among other books, "A Queer Geography" and "Apples."

More Related Stories

Featured Slide Shows

  • Share on Twitter
  • Share on Facebook
  • 1 of 11
  • Close
  • Fullscreen
  • Thumbnails

    Ten spectacular graphic novels from 2014

    Beautiful Darkness by Fabien Vehlmann & Kerascoët
    Kerascoët's lovely, delicate pen-and-watercolor art -- all intricate botanicals, big eyes and flowing hair -- gives this fairy story a deceptively pretty finish. You find out quickly, however, that these are the heartless and heedless fairies of folk legend, not the sentimental sprites beloved by the Victorians and Disney fans. A host of tiny hominid creatures must learn to survive in the forest after fleeing their former home -- a little girl who lies dead in the woods. The main character, Aurora, tries to organize the group into a community, but most of her cohort is too capricious, lazy and selfish to participate for long. There's no real moral to this story, which is refreshing in itself, beyond the perpetual lessons that life is hard and you have to be careful whom you trust. Never has ugly truth been given a prettier face.

    Ten spectacular graphic novels from 2014

    Climate Changed: A Personal Journey Through the Science by Philippe Squarzoni
    Squarzoni is a French cartoonist who makes nonfiction graphic novels about contemporary issues and politics. While finishing up a book about France under Jacques Chirac, he realized that when it came to environmental policy, he didn't know what he was talking about. "Climate Changed" is the result of his efforts to understand what has been happening to the planet, a striking combination of memoir and data that ruminates on a notoriously elusive, difficult and even imponderable subject. Panels of talking heads dispensing information (or Squarzoni discussing the issues with his partner) are juxtaposed with detailed and meticulous yet lyrical scenes from the author's childhood, the countryside where he takes a holiday and a visit to New York. He uses his own unreachable past as a way to grasp the imminent transformation of the Earth. The result is both enlightening and unexpectedly moving.

    Ten spectacular graphic novels from 2014

    Here by Richard McGuire
    A six-page version of this innovative work by a regular contributor to the New Yorker first appeared in RAW magazine 25 years ago. Each two-page spread depicts a single place, sometimes occupied by a corner of a room, over the course of 4 billion years. The oldest image is a blur of pink and purple gases; others depict hazmat-suited explorers from 300 years in the future. Inset images show the changing decor and inhabitants of the house throughout its existence: family photos, quarrels, kids in Halloween costumes, a woman reading a book, a cat walking across the floor. The cumulative effect is serene and ravishing, an intimation of the immensity of time and the wonder embodied in the humblest things.

    Ten spectacular graphic novels from 2014

    Kill My Mother by Jules Feiffer
    The legendary Pulitzer Prize-winning cartoonist delivers his debut graphic novel at 85, a deliriously over-the-top blend of classic movie noir and melodrama that roams from chiaroscuro Bay City to Hollywood to a USO gig in the Pacific theater of World War II. There's a burnt-out drunk of a private eye, but the story is soon commandeered by a multigenerational collection of ferocious women, including a mysterious chanteuse who never speaks, a radio comedy writer who makes a childhood friend the butt of a hit series and a ruthless dame intent on making her whiny coward of a husband into a star. There are disguises, musical numbers and plenty of gunfights, but the drawing is the main attraction. Nobody convey's bodies in motion more thrillingly than Feiffer, whether they're dancing, running or duking it out. The kid has promise.

    Ten spectacular graphic novels from 2014

    The Motherless Oven by Rob Davis
    This is a weird one, but in the nervy surreal way that word-playful novels like "A Clockwork Orange" or "Ulysses" are weird. The main character, a teenage schoolboy named Scarper Lee, lives in a world where it rains knives and people make their own parents, contraptions that can be anything from a tiny figurine stashable in a pocket to biomorphic boiler-like entities that seem to have escaped from Dr. Seuss' nightmares. Their homes are crammed with gadgets they call gods and instead of TV they watch a hulu-hoop-size wheel of repeating images that changes with the day of the week. They also know their own "death day," and Scarper's is coming up fast. Maybe that's why he runs off with the new girl at school, a real troublemaker, and the obscurely dysfunctional Castro, whose mother is a cageful of talking parakeets. A solid towline of teenage angst holds this manically inventive vision together, and proves that some graphic novels can rival the text-only kind at their own game.

    Ten spectacular graphic novels from 2014

    NOBROW 9: It's Oh So Quiet
    For each issue, the anthology magazine put out by this adventurous U.K.-based publisher of independent graphic design, illustration and comics gives 45 artists a four-color palette and a theme. In the ninth issue, the theme is silence, and the results are magnificent and full of surprises. The comics, each told in images only, range from atmospheric to trippy to jokey to melancholy to epic to creepy. But the two-page illustrations are even more powerful, even if it's not always easy to see how they pertain to the overall concept of silence. Well, except perhaps for the fact that so many of them left me utterly dumbstruck with visual delight.

    Ten spectacular graphic novels from 2014

    Over Easy by Mimi Pond
    When Pond was a broke art student in the 1970s, she took a job at a neighborhood breakfast spot in Oakland, a place with good food, splendid coffee and an endlessly entertaining crew of short-order cooks, waitresses, dishwashers and regular customers. This graphic memoir, influenced by the work of Pond's friend, Alison Bechdel, captures the funky ethos of the time, when hippies, punks and disco aficionados mingled in a Bay Area at the height of its eccentricity. The staff of the Imperial Cafe were forever swapping wisecracks and hopping in and out of each other's beds, which makes them more or less like every restaurant team in history. There's an intoxicating esprit de corps to a well-run everyday joint like the Imperial Cafe, and never has the delight in being part of it been more winningly portrayed.

    Ten spectacular graphic novels from 2014

    The Shadow Hero by Gene Luen Yang and Sonny Liew
    You don't have to be a superhero fan to be utterly charmed by Yang and Liew's revival of a little-known character created in the 1940s by the cartoonist Chu Hing. This version of the Green Turtle, however, is rich in characterization, comedy and luscious period detail from the Chinatown of "San Incendio" (a ringer for San Francisco). Hank, son of a mild-mannered grocer, would like to follow in his father's footsteps, but his restless mother (the book's best character and drawn with masterful nuance by Liew) has other ideas after her thrilling encounter with a superhero. Yang's story effortlessly folds pathos into humor without stooping to either slapstick or cheap "darkness." This is that rare tribute that far surpasses the thing it celebrates.

    Ten spectacular graphic novels from 2014

    Shoplifter by Michael Cho
    Corinna Park, former English major, works, unhappily, in a Toronto advertising agency. When the dissatisfaction of the past five years begins to oppress her, she lets off steam by pilfering magazines from a local convenience store. Cho's moody character study is as much about city life as it is about Corinna. He depicts her falling asleep in front of the TV in her condo, brooding on the subway, roaming the crowded streets after a budding romance goes awry. Like a great short story, this is a simple tale of a young woman figuring out how to get her life back, but if feels as if it contains so much of contemporary existence -- its comforts, its loneliness, its self-deceptions -- suspended in wintery amber.

    Ten spectacular graphic novels from 2014

    Through the Woods by Emily Carroll
    This collection of archetypal horror, fairy and ghost stories, all about young girls, comes lushly decked in Carroll's inky black, snowy white and blood-scarlet art. A young bride hears her predecessor's bones singing from under the floorboards, two friends make the mistake of pretending to summon the spirits of the dead, a family of orphaned siblings disappears one by one into the winter nights. Carroll's color-saturated images can be jagged, ornate and gruesome, but she also knows how to chill with absence, shadows and a single staring eye. Literary readers who cherish the work of Kelly Link or the late Angela Carter's collection, "The Bloody Chamber," will adore the violent beauty on these pages.

  • Recent Slide Shows



Comment Preview

Your name will appear as username ( settings | log out )

You may use these HTML tags and attributes: <a href=""> <b> <em> <strong> <i> <blockquote>