How just one blogger (Paul Krugman) can change the world

Dear reader,

@mathijsbouman just tweets a link to his latest piece (dut) on his latest change of mind, facing the epic crisis out of the vicious downward spiral in the south of Europe.

He stated 'The column I never thought i would write'. (Twitter Apr. 18th 2012 09:59 CET) In his column he confessed to be influenced by latest doomsday predictions from Paul Krugman like those in his post Europe's Economic Suicide (and possibly also Insane in Spain ) 

Thus Mathijs Bouman so far was not a fan of 'socialism' (governmental spending programs), but the shocking analysis of Paul Krugman did achieve a change of mind.
It's just now reaching the conscience of economists, that this current crisis is not just a matter of fiscal or monetary policy effecting one or more economies, but it is at a level much below the balance sheets of central banks or state budget calculations threatening the lives of individuals. It has become a matter of life and death for some European citizens , who feel the need of shooting themselves in front of parliaments (Greece) or setting themselves ablaze in front of a tax office (Italy). Where now some Greek chambers of commerce set up psychological help for their members in difficult financial situations in order to prevent mass suicides. 

Mr Krugman states that "it's getting harder and harder to believe that anything will get them to change course" (them= policy makers)

But since those responsible for fiscal policies (politicians) as well as those in charge of monetary policy (central bankers) are depending also (possibly foremost) on the advice given by economists like the well respected Dutch Mathijs Bouman, it helps a great deal when the reputation of leading economists like Paul Krugman is at least making some people to rethink what they have been doing and what they intend to recommend for the future.

Not one economist or politician can be blamed for not experiencing the events of the 1930s him/herself, where bankers splashed sometimes on the tarmac of the streets (after jumping from high buildings) or people died of starvation and voted extremists and mass murderers into office.  And as times are extraordinary again it is not the time for being dogmatic but for seeking pragmatic solutions to prevent more misery also on the personal level.

The author here agrees with most of Mr Bouman's conservative views, but would like to add that spending on infrastructure doesn't have to be financed exclusively by governments. (described in this article on the EIB). It's sufficient to allow those private funds willing to invest in European infrastructure to do so. But enabling the EIB to do more is also welcomed here.

So far missing completely besides improving our European infrastructure, is the chance to develop the so far underdeveloped regions of the globe. New thinking involves also to go further than the usual government spending programs as injections in local economies to stimulate growth by their counter-cyclical effect. Growth can be achieved by engaging in regions where there is almost no economy at all so far and where new demand can be generated for decades to come.

latest update: June 7th 2012