Tiny, tiny people

[koganbot]

This long post by Steve Randy Waldman has been getting attention in the econ blogosphere and is a slamming bit of writing that's also clear and coherent and seems to explain a lot.

http://www.interfluidity.com/v2/5965.html

The two money quotes, so to speak:

With respect to

Comments

Re: My perspective (responding mainly to the original Renzi query):

[koganbot]

Thank you for this terrific commentary, most of which I'm not yet ready to respond to.

About the IMF, and its recent report (which I haven't read but wouldn't have understood if I had): as soon as the report came out there was a battle over how to spin it. The first news account I saw was actually claiming - perhaps correctly - that fundamentally the report was an attack on Syriza for hurting the Greek economy over the last five months, about how things would have been progressing well if only Syriza had not come to power, and that the release was intended to hurt the "No" campaign and help the "Yes." Then I read commentary that emphasized how the report called the current debt burden unsustainable and was an implicit call for debt relief, and the claim (has it been verified, or this just more spin?) that the other two troiks had attempted to suppress the report's release for fear it would encourage a "No" vote.

Can "troiks" be a coinage? I do like your "prongs" as well, implying that the troika are a fork to jab with. Unfortunately, etymology identifies "troika" as being a Russian three-horse open sleigh (or something), the term deriving from the Russian word for "three," not the Russian word for "fork."

In any event, Simon Wren-Lewis thinks the IMF (or its leadership, at any rate) is still stooging (my word) for the other two troiks, and he links Peter Doyle, who apparently thinks the report itself is half-assed (my word); I say apparently because I haven't read the Doyle paper, out of fear of not understanding it. I'd assume there are rifts within the IMF.

As for austerity, Krugman's claim has been that, for its proponents, it's never really been about balancing budgets, but rather about destroying public spending for education and social security, etc., but also that its proponents have no clue what it does to an economy at the zero-lower bound.

Btw, according to news accounts the Greek surrender proposal doesn't even guarantee that the Greeks get actual debt relief, only the promise that debt relief will be discussed; meanwhile, Greece gets money (is it a loan or a gift?) and an extension, right? - the money presumably being for immediate needs and to meet payments to creditors. (I know, this seems weird, the troika forwarding money to Greece that Greece turns around and pays back to the troika, but isn't this what at least some or even a lot of the Greek "bailout" has fundamentally been?) Anyway, where's the path by which Greece grows its economy, rather than continuing to tread water or even to lose more by contraction than it gains by spending cuts? How does unemployment go down? And how does Europe overall get going? Even without Greece, recovery is tenuous throughout, right? (Again, I'm not an economist and anyway haven't been keeping up with the ongoing story.)