Krugman: “when Argentina tried to act as a serious country, it was “a disaster”
Nobel Prize winner Paul Krugman took to his blog in the New York Times to say he didn’t see how Argentina’s default could be seen as a cautionary tale for Greece, and questioned a local economist who assured Argentina was not considered “a serious country.”
His reply came in response to a story in which experts assured that if Greece defaulted, it would have negative consequences, like the ones that affected Argentina a decade ago.
“Argentina suffered terribly from 1998 through 2001, as it tried to be orthodox and do the right thing. After it defaulted at the end of 2001” the economist points out.
“And after it defaulted at the end of 2001, it went through a brief severe downturn, but soon began a rapid recovery that continued for a long time,” he adds.
The 2008 Economy Nobel Prize winner assured that “surely the Argentine example suggests that default is a great idea; the case against Greek default must be that this country is different (which, to be fair, is arguable).”
“I was really struck by the person who said that Argentina is no longer considered a serious country; shouldn’t that be a ‘serious’ country? And in Argentina, as elsewhere, being ‘serious’ was a disaster,” he concluded.
His statements were made in response to a piece published this week in the New York Times, in which an economy expert from Rosario discussed the Greek reality, warning that Argentina’s situation should be considered a “cautionary tale,” since the country was still “not considered serious
“OK, I guess I don’t quite see how Argentina’s default, of all examples, can be viewed as a cautionary tale for Greece”.
The New York Times article “As Greece ponders default, lessons from Argentina” by Charles Newbery and Alexei Barrionuevo was published this week and quotes an economic consultant from Rosario (soy-bean capital), Jaime Abut.
“A default is not free; you have to pay the consequences and for a long time. Argentina is no longer considered a serious country”, said Jaime Abut.
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It pains me to see someone like him dismiss the collapse of the Argentine economy as something akin to a short-term, minor suffering followed by miraculous economic growth and stability. He should go and listen to the stories of the people that lived through that time. The real, personal tragedies. And Argentina is still paying the price of that very recent crisis. Defaulting - and the country had no choice but to default - still has it marked as financial pariah. (It takes time for confidence to invest to build again).
Greece may well have to default but likening it to pulling a plaster off a wound in order to for it to heal quicker does not even begin to consider the people it will effect for a very long time.
JMO. (As always)
There is no easy way out but I think your predictions are made out of spite rather than a consideration for the individuals that will suffer.
Both were irresponsible. Similar like in Argentina. But the point is, it's not the people's debt. It's debt created from thin air abused by corrupted policians who just added it after wasting the money on the national debt who are the people who will be forced to pay it back. That's part of the Austerity Measures. The more people understand the banking and it's shadow banking system, the more people will understand how to fix it, because the debt is fake, let the banks eat cake, let them go down, take a hit and by time the economy will rise again. who gave us all a good example is Iceland.
correction:
If the banksters succeed, Portugal, Ireland, Italy, Spain and by time..UK are next..include the US..the mother of all debt that will explode and were the people will get robbed by creative math.
You always put Britain down, just because of personal hatred,
Great Britain is at this time already giving over 6 billion to poor countries, does that sound like a country that’s about to collapse,
personally i think people underestimate Britain,,, Germany Holland and France may well be economically sound, but to be fair, the EURO was a mugs game, one size does not fit all, and the big three will lose billions trying to shore it up, if the others default then Europe will be hit hard,
And those countries that are tightening their belts may survive, others may well be in for a shock, the best bet for Greece is to leave the euro,
until it sorts out its problems, throwing billions at it , won’t solve the problem, but please, do not underestimate Britain, we are all hurting,
But give us all time, and hopefully Europe may well ride this out, hopefully, at least have some confidence .
You seem to forget that the banks you want to see fail have the money of the individuals. If the banks fail, every hard-working individual loses everything. I agree that financial institutions have had too much de-regulation and free-rein to act irresponsibly in the name of greed.
Protesting about cuts is a right but whinging about it is not going to solve the problem. Pay-freezes and cutting costs is with us for a while so we may as well get used to it. Sure, some greedy people will strike to try to get more than others out of the shrinking pot but not many poeple will have sympathy for that behaviour. Ultimately the UK is pretty good in times of adversity with a sense of fair-play. JMO
Despite all the problems in the world today
I’m sure we will come through it ok
The future is bright.
There is light at the end of the tunnel..
space awaits us, in the decades to come, And the problems will have to be sorted out, can you imagine a bunch of lunatics like us lot running around space, fighting and claiming every bit of dust,
[That was a bit light hearted]
But truthfully wouldn’t it be nice if the whole world got on together and lived in peace,
After all how difficult can it be, ?????????
Holland didn't escape the crisis and is still in it, because two of their major banks are in reality insolvent. rather than keeping them alive, they should let them go down and Holland will be fine, though like the Germans,they like this game because it will bring the Euro down what is good for their exports.
Elaine,
I do not predict the countries that will fail. You don't see it quite the same way because don't do your homework about something like you to comment about and learn the facts. Those countries who took the bailout are broke and cannot and will not pay that debt. What will happen to them is simple, they become slaves when the IMF (is USA) snap up their assests for pennies and sell it to their crony friends who will charge more money from the people in those nations who are broke. Does that make sense for you? It seems it does.
“You seem to forget that the banks you want to see fail have the money of the individuals”
Ugh, it seems you don't understand that those banks are BROKE. Greek banks are insolvent and even after more bailouts (the money goes to the other banks to who they owe money) will go BUST. What is the Greek government doing now? Squeeze their own people for life by robbing them from their pensions, gold reserves and other Austerity measurments what won't make the economy grow for years. That is what is happening now include in Ireland, Portugal etc etc.
You also don't want to see what's happening in front of your eyes, just like briton in your beloved UK. They, the banks and crony friends in the government will do the same thing there. It may look negative for you, but that's reality.
I do my homework but not by reading The Daily Mail.
@13 You are right to be positive. The UK was in dire financial straits after the two World Wars and we saw better times. It will be tough for a while for a lot of people but nothing is forever.
You “saw” better times, and went BUST. If it was fine, they wouldn't bailout their own banks and ask for more by printing, printing and printing more money (that's why you have inflation that's getting higher and higher) from thin air. Do you understand that?
I bet you don't even understand that the Bank of England is a PRIVATE BANK that works against the people. From there you keep the “zombie” banks alive, zombie banks are BROKE.
@14 You drip with venom. Issues, much.
Hard huh, to read and accept the truth. It doesn't fit in your head, I understand that. It must be hard for you to accept that you left a broke economy for a broke economy.
It's good to be positive, but it's much better to be realistic, rather act positive while having your head stuck in the sand and refuse to see the facts (truth). This is why Europe (include UK) aren't capable to solve this mess they are in. Same thing happening here in the US. deny deny deny and act as if everything is fine.
As for the UK. We've been consistently broke since the 14th Century. Hasn't stopped us doing much!
Some people are only happy when revelling in the perceived misery of other. Usually because they are miserable people. You must be a joy to be around.
Life will be tough, people will still love and laugh, countries will survive, however much it annoys the hell out of the terminally malicious.
I'm not talking about those public workers. The government that was chosen by it's people are now being sold to their debt masters. Great huh..oh wait that already happened to the people in the UK, so it's normal. No big deal.
“Hasn't stopped us doing much!”
Like what? After world war 1, the UK has stopped what it once was, a super power. Now it's nothing than just a pretender while the people will suffer more. I guess that's fine for you all. Again After the PIIGS, UK will enjoy more Austerity measures, and it seems you folks love it.
That Argentina isn't considered a 'serious country' - whatever that is supposed to mean - is just one of the many evidences regartding the folly of establishment's economists. Displaying fast growth and reducing unemployment - as Argentina has done the last 8, 9 years - isn't enough for an economic policy to be considered as successful: at any rate, it isn't enough to earn the praise of sovereign debt agencies and finances publications. Instead, what is really necessary to be seen as serious, is that inflation be kept low and that the finance sector's profits be high, even if this situation doesn't really benefit the real economy's sectors or reduce unemployment.
And you are right of course, what's Britain done since 1945?
www.guardian.co.uk/education/2006/jul/05/highereducation.uk2
www.impalapublications.com/blog/index.php?/archives/4793-Iimportant-recent-British-scientific-discoveries,-by-James-OFee.html
en.wikipedia.org/wiki/Commonwealth_of_Nations
www.britains-smallwars.com/
www.britsattheirbest.com/ingenious/ii_penicillin_miracle.htm (clinical trials only ended in 1945)
..... sitting around weeping over past glories! Bit of a bugger but there you go. So tell me, how's Holland been getting on ?
But that's very good ElaineB, he/she/it does drip with venom.
Who cares.
Btw 2012 UK's collapse started by National debt crisis.
: )
Of course, that is not the entire reality of Argentina but they certainly do not behave like they will spend the rest of eternity in a hellish existence; quite the opposite in my experience. They often remark that they have lived through many ups and downs and will always survive. I like that attitude.
Take a walk down any street in micro center and it will be as dirty and broken as it was 10 years ago with as many children juggling in the streets and begging in the restaurants.
I am glad I don't have to go back for at least another 10 years.
Casa Lopez South America(not North) is hiring!
“ I am glad I don't have to go back for at least another 10 years”..... or don't go back at all. The country doesn't need us!!!
On a more serious note, i believe Europe has a big hill to climb, but will sooner or later get over it,
As for Libya this will one way or another come to an end, when their leader falls,
Then the British will hopefully concentrate on , other things like sorting Argentina out over the Falkland’s,
It is impossible to run a business and do everything legally without having to pay bribes or lie on gov't forms. I stopped doing any business in Argentina 8 years ago when it was recommended to me to do lie on a customs form or just pay a bribe to them.
There are parts I love and I think that is what the Argentinian posters are trying to remember and convey. Now it is gross and will just get dirtier and poorer year after year after year.
BTW Marcos don't you live in The USA? At least you can walk down the streets without having to walk around piles of garbage being picked though and seeing 5 year old kids working on the streets at night. Who knew cardboard and plastic bottles had value?
“One in six Americans is fighting hunger”
feedingamerica.org/get-involved/donate.aspx?convio_source=Y11X1GSEM&convio_subsource=hungerinamerica&gclid=CMPu1r_R0akCFQg_bAodixbYOQ
About 15 million children -- one out of every four -- live below the official poverty line.
22% of Americans under the age of 18 -- and 25% under age 12 -- are hungry or at the risk of being hungry.
Everyday 2,660 children are born into poverty; 27 die because of it.
Children and families are the fastest growing group in the homeless population, representing 40%.
heartsandminds.org/articles/childpov.htm
Good that you can use Google, too bad you can't vote in a decent government that doesn't steal you blind and your next generation is going to be poorer and less educated that the last.
During my exchange with West Point cadets in '84, I had the privilege to meet the Director of the Military Academy and his wife. When I introduced myself and told her that I was from Argentina, she responded the Rio was a beautiful city !!! education anyone??
Timmerman ruined any chance of The Obama administration warming up relations. Obama certainly won't be elected again so Argentina will be frozen out of relations for another 8 years. Plus I hear Chavez is almost dead so there goes their only ally.
BTW Marcos, I looked up the USA welfare payments for food for children, if you are under 150% of the poverty line ( so 45K) you get $500/mo, that's a lot of McDonalds so I doubt anyone is really starving. Plus low income kids get free breakfast/lunch and now dinner at school. It seems like your links are just progressives lies trying to get more money out of rich people. Plus I hope they cut those benefits back big time next month huge budget cuts are on their way.YAY!
Have fun with this fredbdc turnip……………
I had mine sometime ago………….
Until Isolde ruined the party :-)))
en.mercopress.com/2010/12/27/drought-stricken-uruguay-praises-argentina-s-formidable-gesture
(Comments 2 to 47 )
why is it that some people forget their nationality when they migrate. I don't agree with the government, pero la Patria no se deja de amar o no?
Peronista you ?? no way !! :-))))))))))))))))))))))))
To give you an idea what this moron is talking about , “an American want to be”.
The tax cut to the rich cost this country 770 billion plus 2 wars at 9 billion a month for 10 years?? you do the Math.
Do you know that GE did not pay any taxes last year?? they have @970 tax attorneys to find loopholes ...
With a 9.1% unemployment rate, this guy is cutting welfare???
the poor will always lose,
and the rich and powerfull get more,
why should they care about the poor
a sad world we live in
Clearly a non sequitur. If that were true, then one should also doubt economic statistics produced by the Chinese and Indian governments. India is a case in point. Its GDP has been growing 6-9% a year since the early 90s, yet India is still considered a low or lower middle income country, and the average Indian is much poorer than the average Latin American. Even China's average income is lower than that of most Latin American countries (certainly lower than the Argentina's).
bem disse ...
Your mention of Patria makes me think about one of my old ”power places” in Buenos Aires, just meters away from the Circulo Militar……..
commons.wikimedia.org/wiki/File:Buenos_Aires-esclavos.jpg
Today, my ”Patria” is, once again, Argentina…....
Libertad o Libertinaje ? which one?
Hay un concepto que ustedes no entienden... el amor a la Patria y la voluntad de morir por ella. .... eso no es para todo el mundo y menos para la “gilada” de este foro ....... (no todos por supuesto)
Like I said is NOT FOR EVERYBODY !!!!!!!!
In spite that our country improuved a lot it's social situation, we are still a very unequal society, and it will take many years to solve all our problems.
Beyond the numbers from the indec, or those that belong to those so called private analists, no one can deny that we are in a much better situation and got many achievements.
Respecting the numbers of the indec, and the private analists, there are so many politic and mediatic operations arround this issue, if the indec is not reliable, all those private analists, are even less reliable than the indec, including they recognize that they dont have enough recources to create an index of prizes, they only can make an estimation, and their analysis dont include others provinces from the country, like the indec does, but the statal institution doesn't have any social legitimity by the society.
Respecting the fact if argentina is a serious country or not, none country is totaly serious nor a total disaster, we have positive and negative aspects like any other nation.
Anyway we must keep the economic independence that we have now, to avoid to fell again into those terrible crisis, and return to the imf, to follow finally all those fucking recomendations that took the country to the disaster.
Respecting the economists, most them in argentina have less legitimity than the indec, most them, except for just a few, are just diviners who work for powerful corporations which are interested on the fact that argentina returns to the imf, that's why since 2003 they predict all the time economic disaster and finally nothing happens luckily.
If the government didn't handle correctly the crisis of 2009, it would have collapsed our economy, this crisis was almost a joke if we compare it with others that decimated our reserves, and made fell diferent governments.
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