Paul Krugman Blog- Got that 30's feeling, all the way.

[n2doc]

August 2, 2011, 9:51 AM
Macroeconomic Folly
All of a sudden, people seem to have noticed that policy is moving in exactly the wrong direction. We’re getting headlines like this: Debt Deal Puts U.S. on Austerity Path as Economy Falters.

I’ll need to write up my thoughts here at greater length, but let’s just say for now that what we’ve witnessed pretty much throughout the western world is a kind of inverse miracle of intellectual failure. Given a crisis that should have been relatively easy to solve — and, more than that, a crisis that anyone who knew macroeconomics 101 should have been well-prepared to deal with — what we actually got was an obsession with problems we didn’t have. We’ve obsessed over the deficit in the face of near-record low interest rates, obsessed over inflation in the face of stagnant wages, and counted on the confidence fairy to make job-destroying policies somehow job-creating.

It’s a disaster – and maybe not only an economic disaster.

Fears of far-right rise in crisis-hit Greece

ATHENS, Greece — They descended by the hundreds — black-shirted, bat-wielding youths chasing down dark-skinned immigrants through the streets of Athens and beating them senseless in an unprecedented show of force by Greece’s far-right extremists.

In Greece, alarm is rising that the twin crises of financial meltdown and soaring illegal immigration are creating the conditions for a right-wing rise — and the Norway massacre on Monday drove authorities to beef up security.

more
http://krugman.blogs.nytimes.com/2011/08/02/macroeconomic-folly/

[ej510]

1. I've been telling people this for months.

The avalanche is coming.

[alterfurz]

2. you and Ambassador Kosh

The avalanche has begun. It's too late for the pebbles to vote. -- Ambassador Kosh, "Babylon 5"

[RaleighNCDUer]

3. In any of the dozens of nations that have tried it over the last 30 years

has 'austerity' actually worked?

The IMF and World Bank have effectively imposed 'austerity' on dozens of countries, as a prerequisite of their getting international loans, but has it EVER done anything but put those countries in debt?

OTOH, what is the result of rejecting the international monetary community and their protection racket - what countries have refused to adopt 'austerity' measures, and the loans tied to them, but relied instead on their own resources to pull out of their difficulties?

Anybody know?