Sex and drugs and markets’ role... and Ireland – Paul Krugman

Paul Krugman

CELEBRATED economist and columnist Paul Krugman, a professor of Economics and International Affairs at Princeton University, blogs this over at The New York Times and makes special mention of Ireland.

Sex and drugs and markets’ role

Kevin O’Rourke has a post, What do markets want, raising the same issues I’ve been discussing about debt, austerity, etc.

But never mind all that: read the comments, specifically this one:

The markets want money for cocaine and prostitutes. I am deadly serious.

Most people don’t realize that “the markets” are in reality 22 to 27-year-old business school graduates, furiously concocting chaotic trading strategies on excel sheets and reporting to bosses perhaps 5 years senior to them. In addition, they generally possess the mentality and probably intelligence of junior cycle secondary school students. Without knowledge of these basic facts, nothing about the markets makes any sense—and with knowledge, everything does.

What the markets, bond and speculators, etc, want right now is for Ireland to give them a feel good feeling, nothing more. A single sharp, sweeping budget would do that; a four year budget plan will not. Remember that most of these guys won’t actually still be trading in four years. They’ll either have retired or will have been promoted to a position where they don’t care about Ireland anymore. Anyone that does will be a major speculator looking to short the country for massive profit.

In lieu of a proper budget, what the country can do — and what will work — is bribe senior ratings agencies owners and officials to give the country a better rating. Even a few millions spent on bumping up Ireland’s rating would save millions and possibly save the country. [An Phoblacht's emphasis.]

That’s what I call a policy recommendation — and it’s better than most of what passes for wisdom these days.

Bread and circuses for the masses; cocaine and prostitutes for the markets. This can be looked on a unethical obviously, but since the entire system is unethical, unprincipled and chaotic anyway, why not just exploit that fact to do some good for the nation instead of bankrupting it in an effort to buy new BMWs for unmarried 25-year-olds.