Estonia VS Paul Krugman Part 2

Yesterday, Estonian President Toomas Hendrik Ilves got into a twitter war with Paul Krugman. I included as many relevant links as I could find, to preserve it all for posterity’s sake, and for less-savvy relatives and Estonian-American family friends. Now there’s some more commentary about it. It all started when Ben Smith of Buzzfeed reported that Ilves was “going nuts on Paul Krugman.” At that point, Ilves started trending on twitter in the DC area. 

Ilves has since explained his comments about Paul Krugman.

Yesterday evening, Estonian President Toomas Hendrik Ilves made a series of angry posts on Twitter taking issue with a blog post written by the New York Times’ Paul Krugman criticizing Estonia’s economic performance. Many who saw the Twitter spat doubted the account actually belonged to Mr. Ilves, but The Politicker reached out to the Estonian government and received confirmation and a statement from the man himself.

“Yes I send my own tweets,” Mr. Ilves said. “It was a sincere and immediate defense of the major and often difficult efforts of Estonia to deal with the economic crisis and to stick to the rules adopted in the European Union.”

The Huffington Post had a piece about the twitter war. This included praise of Estonia’s financial situation.

Estonia, which in 2011 became the latest country to join the eurozone, has beenheralded by some as an austerity success story. That year, it clocked a faster economic growth pace than any other country in the European Union, at 7.6 percent. Estonia is also the only EU member with a budget surplus, and had the lowest public debt in 2011 — 6 percent of GDP. Fitch affirmed its A+ credit rating last week.

Ilves, a strong austerity advocate, told Bloomberg News in May that the EU should implement austerity in order to boost economic expansion. “You can achieve growth through austerity. Estonia has done that,” he said during the interview. “Growth policy — that doesn’t make sense to me.”

Krugman has yet to reply to Hendrik’s harsh words.

Swedish economist Stefan Karlssonn had some objections to Ilves’ tone. He did agree with the substance.

Personally, I prefer a less emotional and more fact filled response to Krugman and others, like the one I wrote, but then again twitter doesn’t allow lengthy arguments (that’s the main reason why I haven’t joined twitter), and it is still interesting and refreshing to see the President of a country responding to Krugman’s misleading writings about his country.

New York Magazine’s write-up is notable mainly for the title “Estonia’s President Wants Y’All to Chill”

Balticbusinessnews.com mentioned the tiff, exploring the origins.

The Twitter account then linked to a lengthy March essay by Ilves to explain “why we might be a bit peeved.”

In the essay, called “I’ll Gladly Pay You Tuesday,” Ilves argues, “The bankrolling of Southern Europe has already and ever-increasingly threatened the fiscally responsible countries, the ones who have shown solidarity and voted to commit to bailing out those better off than we.”

As of Wednesday afternoon, Krugman hadn’t responded to the tweets of the Estonian President.

Dan Mitchell of Cato argues that Krugman’s graph about Estonia’s GDP was misleading.

Mitchell notes that you get a different impression if you’re looking at Estonia since its independence, instead of by starting at its 2007 third quarter peak.

Thomas Lifson of American Thinker got out the popcorn.

Let’s see: an academic theorist versus a guy actually running an economy that is growing and who doesn’t mince words. This promises to be entertaining

Estonian Public Broadcasting includes responses from other Estonian politicians and business leaders.

At a government press conference, Finance Minister Jürgen Ligi, praised internationally in some circles for being one of the key architects of Estonia’s fiscal policies, gave the president his backing.

“This is a matter of principle and I strongly support the president. This person [Krugman] has become a hack writer and a champion of the [US] president’s policies,” Ligi said, adding that Krugman received the Nobel prize because there is no such thing as a “Nobel Prize for journalism.”

“In reality, Krugman has to a great extent supported the system that created our poverty and which is now over – and which regulated and printed money according to their own interpretation of economic rules. In the US that is possible, but we cannot solve our porverty according to those recipes – by borrowing money and buying ourselves expensive things,” Ligi said.

Sitting in for the prime minister, Defense Minister Urmas Reinsalu said that Krugman’s influence cannot be underestimated, but that Estonian story is an unsolved puzzle for the economist.

“Above all, even his most voluminous writings assert that the public sector must grow, be indebted and foster state-sponsored jobs,” Reinsalu said. “Estonia is a problem for Krugman because Estonia doesn’t fit into his theoretical model.”

Another person to take the president’s side, a private banking strategist for SEB, called Krugman’s blog post “absurdly superficial” and said it was time that someone bring the economist “back to earth.”

The most satisfying part of it so far is the constant references to Krugman’s failure to respond to the President of Estonia.

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About Thomas Mets

I’m a comic book fan, wannabe writer, politics buff and New Yorker. I don’t actually follow baseball. In the Estonian language, “Mets” simply means forest, or lousy sports team. Currently, I’m writing a few comic books about my grandparents’ experiences in Soviet Estonia for Grayhaven comics. You can email me at mistermets@gmail.com
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