Monday, June 11, 2012

Krugman on Spanish bank bailouts and "sado-monetarism"

Krugman is less "shrill" than rueful in Another Bank Bailout New York Times 06/10/2012. Well, okay, he's "shrill", too:

What’s striking, however, is that even as European leaders were putting together this rescue, they were signaling strongly that they have no intention of changing the policies that have left almost a quarter of Spain’s workers — and more than half its young people — jobless. ...

Whatever the deep roots of this paralysis, it’s becoming increasingly clear that it will take utter catastrophe to get any real policy action that goes beyond bank bailouts. But don’t despair: at the rate things are going, especially in Europe, utter catastrophe may be just around the corner.
Krugman there makes the very important point that Occupy protesters have been making with with slogans like, "Banks got bailed out, we got sold out". And he notes:

Spanish banks did indeed need a bailout. Spain was clearly on the edge of a “doom loop” — a well-understood process in which concern about banks’ solvency forces the banks to sell assets, which drives down the prices of those assets, which makes people even more worried about solvency. Governments can stop such doom loops with an infusion of cash; in this case, however, the Spanish government’s own solvency is in question, so the cash had to come from a broader European fund.
He's adopted "sado-monetarism" as his word for central banks ignoring obvious major unemployment problems. I heard it the first time in his Netroots Nation presentation on Saturday.

Tags: , ,

| +Save/Share | |




FEATURED QUOTE

"It is the logic of our times
No subject for immortal verse
That we who lived by honest dreams
Defend the bad against the worse."


-- Cecil Day-Lewis from Where Are The War Poets?


ABOUT US

  • What is the Blue Voice?
  • Bruce Miller
  • Fdtate
  • Marcia Ellen (on hiatus)
  • Marigolds2
  • Neil
  • Tankwoman
  • Wonky Muse

  • RECENT POSTS

  • Civil liberties at Netroots Nation 2012
  • Lyndon Johnson, Robert Caro and the Cuban Missile ...
  • Germany and Greece, not always a happy interaction...
  • Postpartisanship: for Obama, the dream never dies
  • Charlie Pierce on the democratic movement in Wisco...
  • Image of a Romney future?
  • European banks, balance of payments and thinking o...
  • June in the European crisis: showdown in Athens, s...
  • David Sirota notices President Middle-Man picking ...
  • Andrew Bacevich on the problem of Special Forces s...

  • ARCHIVES




    RECENT COMMENTS

    [Tip: Point cursor to any comment to see title of post being discussed.]
    SEARCH THIS SITE
    Google
    www TBV

    BLUE'S NEWS





    ACT BLUE











    BLUE LINKS

    Environmental Links
    Gay/Lesbian Links
    News & Media Links
    Organization Links
    Political Links
    Religious Links
    Watchdog Links

    BLUE ROLL


    MISCELLANEOUS

    Atom/XML Feed
    Blogarama - Blog Directory
    Blogwise - blog directory

    Blogstreet
    Haloscan


    Blogger

    hits since 06-13-2005

    site design: wonky muse
    image: fpsoftlab.com