President of Estonia Rips Paul Krugman: 'Smug, Overbearing and Patronizing'

Noel Sheppard
June 7th, 2012 12:39 AM
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New York Times columnist Paul Krugman appears to be angering people all over the world these days.

After getting trashed by the British Telegraph and schooled by a member of Parliament last month, the Nobel laureate took to attacking the Republic of Estonia Wednesday only to be slammed in return by its President Toomas Hendrik Ilves via Twitter hours later:

What drew the President's ire was something Krugman posted at his blog Wednesday: "Since Estonia has suddenly become the poster child for austerity defenders — they’re on the euro and they’re booming! — I thought it might be useful to have a picture of what we’re talking about."

After presenting a chart of Estonia's Gross Domestic Product since 2007, Krugman wrote, "So, a terrible — Depression-level — slump, followed by a significant but still incomplete recovery. Better than no recovery at all, obviously — but this is what passes for economic triumph?"

As Hot Air noted, "That post was in turn a Keynesian belch at this widely linked Global Post story describing how Estonia managed to kickstart rapid economic growth while the rest of Europe got sucked into a black hole. Three words: 'Austerity, austerity, austerity.'”

Those that have been paying attention know that currently nothing bothers Krugman more than austerity despite him clearly not understanding that few countries in Europe are actually practicing it.

It must really be getting under his knickers that a real case of austerity across the Atlantic is showing genuine success.

As for Ilves, he was was born in Sweden, but grew up in New Jersey.

No academic slouch he, for after graduating valedictorian of his high school, Ilves received a bachelor's degree in psychology from Columbia University and a master's degree psychology from the University of Pennsylvania. He's also fluent in Estonian, English, German, and Spanish.

In his final salvo concerning Krugman, Ilves linked to an article he wrote for the Hoover Institution in March:

We would not be in the mess we are in today in Europe if a large number of fellow member states had not taken a fundamentally different tack to thrift, deficits, and borrowing than what they themselves agreed to only a couple of years earlier. My country would never, ever have been able to adopt the euro had we done what was standard operating procedure among many members of the eu-17. At the same time, I would aver that there is little in the fundamental approach taken by Germany, the Netherlands, Estonia, Finland, or Austria that differs from what such noneuro countries as Sweden, Denmark, and Poland have been doing. My country would never have been able to adopt the euro had we done what was standard among many in the EU.

Thus the institutional arrangements and the behavior of countries do not jibe. I submit this is unsustainable. For ultimately, the inability or unwillingness of parts of the eu-17 to submit to agreed-upon rules will be defended by an appeal to the position that “our democracy cannot withstand the kind of austerity demanded of us.” The first shoots of this position we have already seen emerge. Yet let us be clear about what this means: Fiscally responsible countries will be asked to support fiscally profligate countries in the name of democracy.

You can do it for a while, but if you are a country like Estonia, where the gdp per capita is almost the same as Greece but where the average salary is lower than the Greek minimum wage and where the pensions and agricultural supports within an internal market are three times lower, it is a matter of time before our voters revolt. The government in my country and the opposition voted to support the European Financial Stability Facility to aid a country richer than us and profligate. Three quarters of the parliament voted in favor. But, note: 75 percent of the population was against.

Here we see in my own country the first seeds of the populism that has recently caused concern throughout the north — in the Netherlands, in Denmark, in Sweden and most recently also in Finland. Sorry, it’s not just the democracies of the south that are under threat. The bankrolling of Southern Europe has already and ever-increasingly threatened the fiscally responsible countries, the ones who have shown solidarity and voted to commit to bailing out those better off than we. Moreover, while much has been made of the change of governments in countries that broke the rules, far too little attention has been paid to what to my mind is a far more significant reverberation: the fall of a responsible, poor, new member state government coalition (in Slovakia) that made the hard choice and voted to support a country richer than it is, all for the sake of European solidarity.

How'd you like to see Ilves debate geoeconomics with the 'smug, overbearing and patronizing' Krugman?

All those in favor say "Aye."

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