Paul Krugman says a lot of funny things.
Indeed, if one is predisposed to being cynical about the 7-year bout of Keynesian madness that has infected DM central banks in the post crisis world, virtually everything Paul Krugman says is funny.
But some caution is warranted because while Krugman may be an endless source of entertainment for anyone who has even a shred of respect for sound money policies, he is also — as we pointed out when the Nobel prize winner took his economic insanity on a field trip to its natural habitat in Japan last year — there are two words that should strike fear in the hearts of any rational-thinking citizen of the world, and those two words are “Paul Krugman.”
At no time in history is the above more apparent than now, with seemingly the entire world on its way to becoming Japan because at the end of the day, everyone's answer to why central planning hasn’t delivered on its lofty promises is simply this: not enough Keynes.
Having thus set the stage, we bring you this classic Krugman throwback quote from 2010:
"The real lesson from Europe is actually the opposite of what conservatives claim: Europe is an economic success, and that success shows that social democracy works."
Shortly thereafter, that “economic success” would turn into an unmitigated nightmare both from an economic and political perspective, with the entire periphery losing bond market access in mid-2012 due to the perception of fiscal irresponsibility, an event which was promptly followed up by a Keynesian rhetorical haymaker from Mario Draghi that temporarily stemmed the crisis but wasn’t enough to bring the EU economy back to life and so finally, the ECB went (nearly) full-Kuroda in March, all just to celebrate the fact that "hey, at least inflation isn’t negative anymore" and at least now, only Greece is on its way out because, ironically, it has “too much debt.”
Certainly doesn't look like “success” to us, although, as Krugman reminds us, you have to look past math when you’re evaluating economic outcomes:
“Actually, Europe’s economic success should be obvious even without statistics.”
And because we couldn’t resist, here's why things have gone from bad to worse in Greece over the past month: