{"id":5318,"date":"2010-11-29T09:50:31","date_gmt":"2010-11-29T14:50:31","guid":{"rendered":"http:\/\/ssgreenberg.name\/PoliticsBlog\/?p=5318"},"modified":"2010-11-29T10:22:10","modified_gmt":"2010-11-29T15:22:10","slug":"the-spanish-prisoner","status":"publish","type":"post","link":"https:\/\/ssgreenberg.name\/PoliticsBlog\/2010\/11\/29\/the-spanish-prisoner\/","title":{"rendered":"The Spanish Prisoner"},"content":{"rendered":"<p>Paul Krugman writes in his oped column <a title=\"Paul Krugman column\" href=\"http:\/\/www.nytimes.com\/2010\/11\/29\/opinion\/29krugman.html\" target=\"_blank\"><strong>The Spanish Prisoner<\/strong><\/a>,<\/p>\n<blockquote><p>So Spain is in effect a prisoner of the euro, leaving it with no good options.<\/p>\n<p>The good news about America is that we aren\u2019t in that kind of trap: we still have our own currency, with all the flexibility that implies. By the way, so does Britain, whose deficits and debt are comparable to Spain\u2019s, but which investors don\u2019t see as a default risk.<\/p>\n<p>The bad news about America is that a powerful political faction is trying to shackle the Federal Reserve, in effect removing the one big advantage we have over the suffering Spaniards. Republican attacks on the Fed \u2014 demands that it stop trying to promote economic recovery and focus instead on keeping the dollar strong and fighting the imaginary risks of inflation \u2014 amount to a demand that we voluntarily put ourselves in the Spanish prison.<\/p><\/blockquote>\n<p>It has always been my contention that the way the U.S. will adjust to the fact that countries like India and China can do all the jobs that Americans can do and for much lower wages, that our wage rates will come into line with those of India and China.\u00a0 Either our wages will decline in dollar terms or the dollar will decline.\u00a0 As Krugman says, I think the decline of the dollar will be the less painful way to accomplish the adjustment. (Of course Indian and Chinese wages will rise some to ease our pain a little.)<\/p>\n<p>If we go the route of lowering wages in dollar terms, the wealth of the rich will be preserved.\u00a0 Their wages will also be preserved because the wealthy don&#8217;t get wage cuts.\u00a0 If we let the value of the dollar decline, then everyone in the country gets to take the ride together.\u00a0 Now you know why the Republicans are so dead set against letting the value of the dollar decline.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Paul Krugman writes in his oped column The Spanish Prisoner, So Spain is in effect a prisoner of the euro, leaving it with no good options. The good news about America is that we aren\u2019t in that kind of trap: we still have our own currency, with all the flexibility that implies. By the way, [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[166],"tags":[],"class_list":{"0":"post-5318","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-stevegsposts","7":"czr-hentry"},"_links":{"self":[{"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/posts\/5318","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/comments?post=5318"}],"version-history":[{"count":3,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/posts\/5318\/revisions"}],"predecessor-version":[{"id":5320,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/posts\/5318\/revisions\/5320"}],"wp:attachment":[{"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/media?parent=5318"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/categories?post=5318"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/tags?post=5318"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}