New Mises Daily Praising Paul Krugman and Post Wondering if He is Blind

My second Mises Daily article was published today praising Paul Krugman's book Pop Internationalism for his stance on free trade.  So far 50 people have Facebook liked it, which I am assuming is a good sign.  Though Krugman's book is good (read my article to see why), his op-ed today in the New York Times is really out-there as far as consistency goes.  See this claim:

Greece’s government, finding itself able to borrow at rates only slightly higher than those facing Germany, took on far too much debt.

Slightly higher!? Are you kidding me?  The current yield on a 10 year bond from Germany is about 3%.  The yield for a 10 year bond from Greece just reached a whopping 16.76% today!!  Is Krugman blind or just being disingenuous?  I am gonna go with the latter.  Surely Krugman wouldn't suggest that Greece, Ireland, Portugal all have their debt reduced through transfer payments from the likes of the U.S. and Germany though:

Realistically, then, Europe needs to prepare for some kind of debt reduction, involving a combination of aid from stronger economies and “haircuts” imposed on private creditors, who will have to accept less than full repayment. Realism, however, appears to be in short supply.

On one side, Germany is taking a hard line against anything resembling aid to its troubled neighbors, even though one important motivation for the current rescue program was an attempt to shield German banks from losses.

Krugman has a Nobel Prize in economics yet fails to realize that nobody wants their tax dollars going to bailout countries whose public sector has grown to an unsustainable level.  And he thinks we are the crazy ones.  I love how he pointed out the losses that could occur to German banks though.  He is totally right as everyone with a brain knows that bailing out the PIIGS is really about bailing out banks in Germany, France, and the U.K.   Krugman does mention the real solution to the debt crisis, but of course warns against it:

On the other side, the E.C.B. is acting as if it is determined to provoke a financial crisis. It has started to raise interest rates despite the terrible state of many European economies. And E.C.B. officials have been warning against any form of debt relief — in fact, last week one member of the governing council suggested that even a mild restructuring of Greek bonds would cause the E.C.B. to stop accepting those bonds as collateral for loans to Greek banks. This amounted to a declaration that if Greece seeks debt relief, the E.C.B. will pull the plug on the Greek banking system, which is crucially dependent on those loans.
If Greek banks collapse, that might well force Greece out of the euro area — and it’s all too easy to see how it could start financial dominoes falling across much of Europe.

Krugman is one puzzling guy.  First he decries the excess profits big banks make and then he wants them bailed out to save them from bankruptcy and losses.  At least he does acknowledge the inevitable:

It’s now clear that Greece, Ireland and Portugal can’t and won’t repay their debts in full, although Spain might manage to tough it out.

Except he may be wrong about Spain.  The anti-bailout sentiment has finally come to the ballot box:

Spanish Prime Minister Jose Luis Rodriguez Zapatero’s Socialist party had its worst electoral setback in more than 30 years, prompting a shift in regional power that risks swelling the public deficit.
Spanish bonds fell after results showed the opposition People’s Party won 38 percent of the vote in municipal elections yesterday, compared with 28 percent for the ruling Socialists. The Socialists lost control of Barcelona for the first time since 1979 and ceded Seville, leaving the party in opposition in the nation’s four biggest cities. The central region of Castilla-La Mancha, held by the Socialists for three decades, fell to the PP, as did the Balearic Islands.
The transfer of power in the regions may spark doubts over Spain’s ability to contain its budget deficit. Spanish bonds declined amid concern newly elected officials may reveal weaker finances than their predecessors reported. The defeat, capping a week of street protests, may further weaken Zapatero as he cuts the euro-region’s third-largest shortfall to avoid following Greece, Portugal and Ireland in needing a bailout.

It's only a matter of time before the market forces Spain's hand and pushes up bond yields.  From my knowledge, both the E.C.B. and the IMF won't be able to bailout Spain without huge Euro printing.  Krugman will love that.  As for more signs of the slowing down of the world economy, see this Bloomberg article:

A Chinese manufacturing index fell to its lowest level in 10 months, adding to signs that economic growth is cooling after the government raised interest rates and curbed lending to rein in inflation.
The preliminary purchasing managers’ index compiled by HSBC Holdings Plc and Markit Economics dropped to 51.1 in May from a final reading of 51.8 in April. A number above 50 indicates expansion.

The Central Bank of China can't keep the printing presses running forever, which means higher prices could be coming to a Wal-Mart near you.  I wonder what Krugman's solution for that will be.

Update- Forgot to add this before, see this hilarious clip of the car (Cadillac I believe) Obama was riding in break down while leaving the Dublin embassy:

It's even more hilarious that he was riding in a GM.

Update again- I was told that Obama's care got stuck on a pole/barrier in the ground type of thing.  It didn't break down.  It's not as funny as a break down but still pretty good.

Update once more- By far the best comment on my Mises Daily comes from poster R.J. Moore II:

Krugman doesn’t write his own articles anymore. His champagne-socialist harpie wife does. He’s admitted as much. The reason he was better before was because he was his own man. Now he’s a sock puppet for an ‘activist’ woman.