Krugmann has it right, imo

[barrym]

In todays NYT - an extract -

"In other words, the straight economics of the situation suggests that Spain doesn’t need more austerity. It shouldn’t throw a party, and, in fact, it probably has no alternative (short of euro exit) to a protracted period of hard times. But savage cuts to essential public services, to aid to the needy, and so on actually hurt the country’s prospects for successful adjustment.

Why, then, are there demands for ever more pain?

Part of the explanation is that in Europe, as in America, far too many Very Serious People have been taken in by the cult of austerity, by the belief that budget deficits, not mass unemployment, are the clear and present danger, and that deficit reduction will somehow solve a problem brought on by private sector excess.

Beyond that, a significant part of public opinion in Europe’s core — above all, in Germany — is deeply committed to a false view of the situation. Talk to German officials and they will portray the euro crisis as a morality play, a tale of countries that lived high and now face the inevitable reckoning. Never mind the fact that this isn’t at all what happened — and the equally inconvenient fact that German banks played a large role in inflating Spain’s housing bubble. Sin and its consequences is their story, and they’re sticking to it.

Worse yet, this is also what many German voters believe, largely because it’s what politicians have told them. And fear of a backlash from voters who believe, wrongly, that they’re being put on the hook for the consequences of southern European irresponsibility leaves German politicians unwilling to approve essential emergency lending to Spain and other troubled nations unless the borrowers are punished first.

Of course, that’s not the way these demands are portrayed. But that’s what it really comes down to. And it’s long past time to put an end to this cruel nonsense."

+1 but who agrees with him, certainly not the Euro Group??

[Holly]

Paul Krigman makes a lot of sense. He is a Keynesian.

[C. Flower]

Austerity is not mainly to do with the financial crisis and debt. It is to do with driving down wages and living conditions to drive up the rate of profit on capital. "Global rebalancing" now that skilled manufacturing is increasingly happening outside the EU and US.

Krugman is clearly right that the results will be to force people into poverty - but seems to miss that point that this is the intention.

[MPB]

When they aboloshed slavery, they forgot to abolish it,s twin brother, globalisation.

Why bring the slaves to the factory, when you can bring the factory to the slaves?

Children sold by their parents are making branded products sold and bought in Europe and the U.S.

The companies that exploit these children sponsor premier league football teams. The banks that lend to these companies have been bailed out with taxpayers money.

Why are people allowed become billionaires on the back of child abuse? Surely these people should be jailed? They cannot live in a country with laws that make child abuse a criminal offence, while living off the wealth created by the abuse of children.