Estonian president blasts Krugman over GDP graph
Estonian president Toomas Hendrik Ilves mocked Nobel Prize-winning economist Paul Krugman on Wednesday over a column published in the New York Times.
“Let’s write about something we know nothing about & be smug, overbearing & patronizing: after all, they’re just wogs,” Ilves wrote on Twitter in response to the column.
“Guess a Nobel in trade means you can pontificate on fiscal matters & declare my country a ‘wasteland’. Must be a Princeton vs Columbia thing,” he later added. “But yes, what do we know? We’re just dumb & silly East Europeans. Unenlightened. Someday we too will understand. Nostra culpa.”
In his column, Krugman described Estonia as “the poster child for austerity defenders” and presented a graph of the country’s real GDP. The graph showed a large dip starting at the end of 2008, which slowly began going back upwards a year later but still remained well below pre-2008 levels.
“So, a terrible — Depression-level — slump, followed by a significant but still incomplete recovery,” he wrote. “Better than no recovery at all, obviously — but this is what passes for economic triumph?”
In response to the economic collapse of 2008, Estonia cut spending and raised taxes to reduce its budget deficit. The move ran directly counter to Krugman’s own Keynesian brand of economics. Krugman believes that the government should increase spending during economic depressions to stimulate the economy, and cut the ensuing deficit once the economy is doing well.
Estonia has recently been described as an austerity success story.
[Image via Wikimedia Commons, Creative Commons licensed]