J\u00f6rg Asmussen<\/a> is Germany\u2019s man at the ECB, which means that what he says matters. Here\u2019s his speech in Riga<\/a> earlier this week, asserting that the Baltic<\/a> experience shows that austerity and internal devaluation actually do work. Notice that his evidence comes entirely from one year of fairly fast growth after an incredible decline. So it\u2019s important to say that this proves very little.<\/strong><\/p>\n One of the things to note about many liberals is that when the facts disagree with their theories, they dismiss the facts as irrelevant. Anyway, Estonian President<\/a> Toomas Hendrik Ilves<\/a> responded to Mr. Krugman’s comments with a number of tweets (follow the above link to Investor’s Business Daily to read some of them), but the facts tell the true story.<\/p>\n The article reports:<\/p>\n Estonia did the opposite of what Krugman prescribed over three years, and as a result shook off recession and returned to high economic growth<\/a>. It now stands like a colossus disproving Krugman’s policy prescriptions.<\/strong><\/p>\n America, on the other hand, has been following Mr. Krugman’s advice for three years. What have we got to show for it? Results matter.<\/p>\n Most of us grew up hearing the story of the little engine that could–the train that made it up the incredibly steep mountain despite being small and seemingly insignificant. In today’s economic news we have another little engine that could. … Continue reading ![\"Enhanced](\"http:\/\/img.zemanta.com\/zemified_e.png?x-id=687caa21-d948-4927-a21c-4da1c405072d\")
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