Krugman’s blog, 12/20/15

There was one post yesterday, “Disdain in Spain:”

Defenders of austerity have lately taken to citing Spain as a success story; actually, as I and others have argued, Spain’s recent growth reflects the combination of a leveling off of austerity and the slow effects of very painful internal devaluation. David Rosnick and Mark Weisbrot offer further analysis here.

Furthermore, if you look at levels rather than rates of change, the situation is still terrible — as shown in the chart above. And whaddya know, Spanish voters don’t seem enthused about the situation.

I have no clue how this works out; apparently every possible structure for a new government is impossible, except in comparison with all the others. And meanwhile the euro effectively imposes a straitjacket whatever voters say. But anyway, those getting ready to toast the vindication of austerity after all might want to put the cava back in the fridge.

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