Ice And Fire Update

To all those advocating AUSTERITY: this from Krugman's blog - Conscience Of A Liberal (please follow link to original)


Ice And Fire Update

Iceland is growing again. Of the excessive peripherals — Ireland, Iceland, Latvia, Estonia — Iceland had by far the biggest excesses, with a totally ludicrous buildup of debt. Yet through the magic of default and devaluation, it’s actually doing better than the other three.

One of the remarkable things about the crisis of the past three years is that it has ended up strengthening the political hand of hard-money, austerity-imposing orthodoxy — yet the reality is that heterodoxy has worked much better in practice.
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So, Ireland which was O.K. until the bubble burst did "the right thing" - and they are screwed for at least 10 years. Iceland who followed a different course -- are now officially out of recession.

Gee-whiz, punishing an entire nation for the sins of the bankers is not only wrong - it doesn't seem to work.

Perhaps it's because the Icelandic folks are considered more "serious" than are the Irish -- after all, you rarely hear a joke that begins, "An Icelandic chap walks into a bar ..... " --- well, do you?