Gideon Rachman takes on Krugman on Eur-austerity

Since the fullest flush of the financial crisis, Paul Krugman has been a relentless voice for stimulus, infrastructure spending and all-out war against high unemployment. Throughout his tenure at the Times, he has been so often right on fundamentals -- the Bush tax cuts, the housing bubble, the size of the 2009 stimulus -- that I would guess his credibility is unsurpassed among lay liberal readers.

So it's interesting to see a fact-based, more or nonideological commentator take on Krugman with regard to Euro-austerity. The dissenter is the Financial Times'  Gideon Rachman, repeat winner of xpostfactoid's Wolf Munch Rock award, so named because the truth is hard to digest.  Krugman calls European austerity policies "insane," Rachman notes, "with characteristic understatement."  There's a bit of a tonal joke there, methinks, because for Rachman, understatement really is characteristic.

Rachman shares the FT Comment page with Martin Wolf, Wolfgang Munchau and others who have lamented the slow-motion Eurozone train wreck these past two years -- and the drastic effects of cutting spending as economies contract. He recognizes the basic Keynesian equation. But his argument about stimulus in Europe is a kind of mirror image of progressives' take on tax cuts for the wealthy in the US: we are tapped out on that front. So is much of Europe, he argues, on infrastructure spending, government payrolls and social services: