In his wildest dreams, Gordon Brown wouldn’t be able to pay for this kind of publicity, yet it’s just what Hank Paulson, George Bush, John McCain and other Republicans don’t need right now – the ‘beatification’ of their most trenchant critic, Paul Krugman, who on Monday was awarded this year’s Nobel prize for economics.
In the past weeks, Krugman has undoubtedly contributed to Paulson’s stress levels with his angry musings on how the Treasury secretary and his team are undermining the US economy.
The other day he described the Paulson plan to bail out US banks as a “half-Gordon” and suggested the US Treasury secretary was “still hoping that the Warren Buffetts and Saudi princes of the world will come in and save the day”.
Meanwhile, the newly annointed Nobel laureate has heaped praise on Gordon Brown, commending his “clarity and decisiveness” in handling the UK banking crisis. This from his latest offering, “Gordon does good”:
It’s hard to avoid the sense that Mr Paulson’s initial response [to the unfolding crisis] was distorted by ideology. Remember, he works for an administration whose philosophy of government can be summed up as “private good, public bad,” which must have made it hard to face up to the need for partial government ownership of the financial sector.
I also wonder how much the Femafication of government under President Bush contributed to Mr Paulson’s fumble. All across the executive branch, knowledgeable professionals have been driven out; there may not have been anyone left at Treasury with the stature and background to tell Mr. Paulson that he wasn’t making sense.
Luckily for the world economy, however, Gordon Brown and his officials are making sense. And they may have shown us the way through this crisis.
It is very cold comfort to the Republican administration that Krugman’s Nobel prize was awarded for work done almost three decades ago in developing what is known as “new trade theory” and “new economic geography”.
Krugman, a professor at Princeton University and a prominent New York Times columnist, has long been seen as a future Nobel laureate, having won all kinds of plaudits over the years for his economic theories and commentary (including the John Bates Clark medal for young economists in 1991).
If the Nobel committee’s choice is not surprising, the timing – just before the US presidential election – might be. Krugman, in the worlds of the FT’s Tim Harford, is “an influential and partisan political commentator”.
His columns, first in Slate magazine and then the New York Times, were at first clever refutations of popular misconceptions about trade protection or the “new economy”, but they have become “far more notable for their stinging attacks on the Bush administration”, adds Harford.