Economist and New York Times columnist Paul Krugman is a vocal austerity critic who once called Berlin’s insistence on belt-tightening during the euro crisis “just insane.”
In a Wednesday blog post, Krugman challenged the argument that Estonia, which has returned to impressive growth after tightening its own belt, proves the merits of austerity.
Referencing a chart that shows Estonian GDP recovering modestly since a free fall in 2009, he writes:
“So, a terrible – Depression-level – slump, followed by a significant but still incomplete recovery. Better than no recovery at all, obviously – but this is what passes for economic triumph?”
Estonian President Toomas Hendrik Ilves responded with a Twitter blitz of invective.
“Let’s write about something we know nothing about & be smug, overbearing & patronizing: after all, they’re just wogs,” one Tweet reads.
“Guess a Nobel in trade means you can pontificate on fiscal matters & declare my country a ‘wasteland,’ ” goes another.
Though Krugman obliquely defends his point in another post, The Wall Street Journal saysIlves’ ire isn’t unjustified. Estonian GDP cratered 14 percent in 2009, and unemployment quintupled. Now Estonia boasts the third-fastest growth in the European Union.
But did Ilves really post those Tweets?
“Yes …” he tells The WSJ. “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.”