Scott Sumner  

Where the Stress Falls

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Marcus Nunes has a highly critical post contrasting Paul Krugman's views on Argentina in 2012 and today. I won't be quite as critical. As is often the case with Krugman it's almost impossible to figure out what he is "really saying." So let's do something else instead. Let's look at where the stress falls (title taken from an set of essays by Susan Sontag.)

1. Back in 2012 I used to argue that the Argentine decision to exit the currency peg in 2002 led to a rapid cyclical recovery from the tight money depression of 1998-2001. I also argued that the recovery was accompanied by counterproductive statist policies that would hurt Argentina in the long run.

2. Back in 2012 Matt Yglesias argued that the Argentine decision to exit the currency peg in 2002 led to a rapid cyclical recovery from the tight money depression of 1998-2001. Matt added:

That's hardly a panacea. The abandonment of the dollar peg has cemented Argentina's reputation as a bad place to invest your money. The governments of Nestor and Cristina Kirchner have pursued a series of dubious energy policies, and give off a strong air of dynastic cronyism.

3. Back in 2012 Paul Krugman argued that the Argentine decision to exit the currency peg in 2002 led to a rapid cyclical recovery from the tight money depression of 1998-2001. (Yup, this is a copy and paste post.) Then Krugman added:

And conversely, articles about Argentina are almost always very negative in tone -- they're irresponsible, they're renationalizing some industries, they talk populist, so they must be going very badly. Never mind this:

[Graph of Argentina growing faster than Brazil]

Just to be clear, I think Brazil is going pretty well, and has had good leadership. But why exactly is Brazil an impressive "BRIC" while Argentina is always disparaged? Actually, we know why -- but it doesn't speak well for the state of economics reporting.


I'm not sure if there is anything there that is directly in conflict with anything I said or Yglesias said. But look at where the stress falls. No wonder in his recent post he associates himself with Yglesias's defense of his 2012 post. Does anyone deny that Yglesias's "to be sure" type of approach looks much more prescient today?

You could read the past 1000 Krugman posts and still have no idea whether or not he is a neoliberal. In the 1990s you couldn't read 10 Krugman posts without quickly recognizing that he was a neoliberal.

PS. If you don't like Sontag at least give me credit for not using the phrase 'cry for Argentina' in the post title.


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COMMENTS (3 to date)
Eric Falkenstein writes:

"actually we know why"...then he doesn't say, so he can accuse without accusing. Does he really think journalists are, on average, free-marketers?

Scott Sumner writes:

Eric, That's a good example of when he's hard to read. If I said he was implying journalists are biased towards neoliberalism his fans would write in and say "no, he meant they were biased toward austerity." If I said it meant that he was accusing journalists of being biased towards austerity, his fans would write in and say that it meant he was accusing journalists of being biased towards neoliberalism.

Interestingly, he can communicate extremely well when he wants to. Perhaps he's sometimes vague to avoid stirring up controversies over conflicts with things he said in the 1990s.

I'd rather hear Krugman's thoughts on Venezuela. Especially now that Brookings is on board for a war for oil.

President Maduro, who came to power in a highly-contested election last April, has reacted to the economic crisis with interventionist and increasingly authoritarian measures. His recent orders to slash prices of goods sold in private businesses resulted in episodes of looting, which suggests a latent potential for violence. He has put the armed forces on the street to enforce his economic decrees, exposing them to popular discontent.
Although the volume of crude oil that Venezuela supplies to the United States has declined in recent years, it is in the U.S. interest that Venezuela remain a reliable source of oil. Popular unrest in a country with multiple armed actors, including the military, the militia, organized crime and pro-government gangs, is a recipe for unwelcome chaos and risks an interruption of oil production. A violence-induced regime change in Venezuela would create a volatile situation regionally.

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