I saw this article (via the Daily Paul) at the Huffington Post. I have to write about Estonia, which along with Latvia and Lithuania, are three of my favorite nations in all the world. Independent between the world wars, annexed illegally by the Soviet Union in 1940, and thank Almighty God, the Father of our Lord Jesus Christ, was liberated again in 1991. The Baltic activists who took on Gorbachev and the Kremlin were unbelievably brave and courageous.
Today the Baltics are favorable to libertarian government. All three are in the EU and Estonia uses the euro. Estonia’s President, Toomas Hendrik Ilves, responded to a short critical article by the apostle of free spending, Prof. Paul Krugman. Here’s Krugman’s article, complete with chart!, and his conclusion:
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?
The recovery is slightly over 50% of the so-called Real GDP since the fall of 2008, by the way. I bet our President would like to brag about those numbers!
The President of Estonia refused to take this lying down (Ilves worked for Radio Free Europe and was in politics prior to 1991; he lived in New Jersey, too!) so he tweeted several comments:
Let’s write about something we know nothing about & be smug, overbearing & patronizing: after all, they’re just wogs: http://t.co/EWZ5YCIT
Guess a Nobel in trade means you can pontificate on fiscal matters & declare my country a “wasteland”. Must be a Princeton vs Columbia thing
(By the way, Ilves went to Columbia and Krugman to Princeton!)
But yes, what do we know? We’re just dumb & silly East Europeans. Unenlightened. Someday we too will understand. Nostra culpa.
Let’s sh*t on East Europeans: their English is bad, won’t respond & actually do what they’ve agreed to & reelect govts that are responsible.
This guy’s got style! My money’s on the Baltic leader from New Jersey anytime! Here’s another article on the President of Estonia and this wonderfully delicious tidbit:
It’s time to go. My [the author's] next stops are neighbouring Lithuania and Latvia, where I learn from some English-speaking local women that he is not only a respected politician but also something of a regional sex symbol. Not bad for a guy from New Jersey.
Nobody calls a right-wing blogger from Virginia a regional sex symbol! It’ll be great to visit Estonia and the other two Baltic Republics. I need some liberty inspiration.
UPDATE: Estonia’s doing great! Don’t take my word for it: Take Bloomberg’s instead. Fitch rates Estonia at A+ (If the President gets reelected, we may be tied with Estonia soon!), they have a budget surplus (Can we elect Ilves instead of Romney/Obama? We’ll waive the birther clause!) and would do better except for that pesky EU:
Estonia was the only euro-area member to report budget surpluses for the last two years and had the lowest public debt among the region’s 17 members in 2011 at 6 percent of gross domestic product. Still, debt is expected to rise to 11 percent by next year, mainly due to the nation’s contribution to Europe’s temporary rescue mechanism. The interest rate on government debt with the World Bank would rise to 4.9 percent by 2016 from 3.4 percent last year, the ministry said April 26.
How about the Christian Science Monitor if you don’t like Bloomberg? Here’s their article on Estonia (I especially like the anti-euro poster):
A somewhat better argument for dismissing Estonia as an austerity success story is that they were in part lucky. Strong recoveries in Sweden and to a lesser extent also Finland helped boost Estonia’s exports to those countries. Yet even if you adjust for that, Estonia’s performance the last two years have been strong.
The place I got the CSM piece from (Rawstory) says that Estonia raised taxes and cut spending.
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.
Paul Krugman ought to like the tax hike! I would agree – if Congress could be trusted to not raise spending to exceed the new taxes, just as they did when taxes were cut under Reagan.
BLOGGER’S NOTE: I owe President Ilves an apology: I completely misread his name and used his middle name as last! I have corrected it accordingly.
Article written by: Elwood "Sandy" Sanders
