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Wish upon a czar

Paul Krugman could be Obama’s economic dream come true
By STEVEN STARK  |  February 18, 2009

090220-krugman_Mian

It’s one month into Barack Obama’s presidency and it’s already clear that the economic team isn’t making the grade. Larry Summers helps craft a stimulus plan that almost no other economist thinks will work — at least as well as it should. Timothy Geithner announces his bank-rescue plan and the market immediately drops 300 points.

The solution? Appoint Paul Krugman economic czar.

Krugman, of course, is a Nobel Prize–winning economist from Princeton, who’s also a formidable columnist for the New York Times. He obviously knows Fed Chairman Ben Bernanke well from Princeton (Bernanke made Krugman the job offer that brought him to campus), so they’ll work well together. And he offers three huge advantages over anyone Obama has appointed so far:

1) HE KNOWS WHAT TO DO Admittedly, this is a subjective category — you have to buy into Krugman’s notions (which I do) that the stimulus package was vastly under-funded and untargeted; that we’re suffering from a solvency problem, not a liquidity problem with the banks; that some banks need to be nationalized, etc., etc.

But whether you agree with Krugman or not, at least his prescriptions are coherent and dramatic. The good news about Obama’s economic policies so far is that they’ve managed to fulfill his campaign promise of uniting both sides. The bad news is that they’ve done so largely by fusing left and right in opposition to what he’s done. Krugman’s appointment would eliminate half the opposition, and the Republicans are never going to support Obama anyway.

2) HE’S UNTAINTED In legal ethics, the standard is not whether an individual has done anything wrong, but whether he or she gives “the appearance of impropriety.” Applying that standard, Summers and Geithner don’t cut it because they’re too identified with the policies of the past, and with Bob Rubin.

During his tenure under Bill Clinton, Summers curtailed Commodity Future Trading Commissioner Brooksley Born’s attempts to regulate derivatives. His protégé Geithner, as president of the New York Federal Reserve Bank from mid-2003 on, was in a position to try to address this crisis years ago. But he didn’t see it coming, either.

Every time these men take an action that seems to help an old friend at a bank — and they seem to be doing it often — they raise questions about their impartiality. That’s unacceptable — and it’s a problem Krugman doesn’t have.

Besides, Summers’s and Geithner’s experience may be limiting them. This is a new kind of crisis that requires a new kind of thinking. To this point, to use the old cliché, Obama’s mainstream-to-a-fault economic team hasn’t been able to think outside the box.

3) HE’S A TERRIFIC COMMUNICATOR This may, in fact, be Krugman’s most important attribute. Whatever one thinks of Geithner, public speaking is not one of his strengths: one wag described his recent bank-bailout-plan announcement as akin to “an elf giving a book report.”

As for Summers, his communication problems have been well publicized. Suffice it to say that he’s been in office only a month and he’s already managed to alienate Obama appointee and former Fed chairman Paul Volcker.

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Related: Fair is foul, The wrong man for hard times, Hallelujah!, More more >
  Topics: Stark Ravings , Barack Obama, Barack Obama, Politics,  More more >
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6 Comments / Add Comment

Mohamed

I totaly agree with you, so far, Krugman has been the only one to explain "clearly" how we can deal with this recession.

You may not agree with him but at least, he knows what he's talking about opposed to Geitner or Summers.

Each time you hear them, it's seem to me that they really dont have a long term view in how we can recover from this deep recesssion.

Why not publishing a website for those who think he could be a top ecomic adviser and see what's the public reaction ? 

 thks 

Ameth

Posted: February 20 2009 at 6:39 AM

adirondax

 What we've got so far from Obama is the Harvard Law Review thing all over again.  Reach out to the right, reach out to the left.  Try to make nice.

 Sorry, but I don't wanna make nice with the assholes who got us into this mess.  We need real change that we can believe in.  Now.

 We need Krugman and others in the adminstration who are going to foment revolution.  That's right.  Revolution.  What's it going to consist of:

 - A fair tax code in which the rich pay their fair share.  Corporations too.  They don't like it?  Tell them to move to China or Brazil.

- Health care in which everyone gets treated, and we don't pay radiologists $1 million a year to read films.

- A world class public transit system, including bullet trains taking people and goods all over the country.

- An education system where we pay our teachers $100K+ a year and then watch them turn out a string of high performers.

- A military that is really run by civilians, and is told to get in shape on a budget that is 30% of the current bloated one.

 If Krugman can be part of that team that does this, I'm all for it.  I'll miss his columns at the Times, but what the heck.

Posted: February 20 2009 at 3:18 PM

JaneHWB

 I have tried to e-mail you to congratulate you on this article.

 I have been confounded for some time now that Paul Krugman who has all the attributes you note is not even part of a presidential advisory group. What gives with that?

   I've noted that the adminstration sometimes changes their tune on economic policy, and the change reflects stuff that Krugman has recently written in his column. So I think he is read and he is respected by the White House folks. (afterthought--can they worry he'll outshine them?)

    If president Obama can reach across the aisle to unlikely and unwilling bedfellows, what stands in the way of his inclusion of Mr. Krugman, our country's current Nobel Prize winner, in some capacity in the administration?  'Tis a puzzle.

    One of the reasons I rely on his column as a guide through all of this economic turmoil is that he is a person who has a clear moral compass, and values nearly all of us share. 

Posted: February 20 2009 at 4:47 PM

JaneHWB

 I have tried to e-mail you to congratulate you on this article.

 I have been confounded for some time now that Paul Krugman who has all the attributes you note is not even part of a presidential advisory group. What gives with that?

   I've noted that the adminstration sometimes changes their tune on economic policy, and the change often reflects stuff that Krugman has recently written in his column. So I think he is read and he is respected by the White House folks. (afterthought--can they worry he'll outshine them?)

    If president Obama can reach across the aisle to unlikely and unwilling bedfellows, what stands in the way of his inclusion of Mr. Krugman, our country's current Nobel Prize winner, in some capacity in the administration?  'Tis a puzzle.

    One of the reasons I rely on his column as a guide through all of this economic turmoil is that he is a person who has a clear moral compass, and values nearly all of us share. 

Posted: February 20 2009 at 4:49 PM

skylolo99

Thanks for the article. I've long thought that Paul Krugman would be the ideal person to be in charge of rehabilitating our economy. Surely President Obama is aware of Mr. Krugman's formidable talents? Let's hope he sees the light and drafts this Nobel Prize winner into public service.

Posted: February 23 2009 at 3:19 PM

skyblu5555

 It is clear to this American the fact Krugman was passed over to begin with and scum bag Geitner, former President of the NY Federal Reserve was selected, Obama is part of the problem.  But of course all you Obama Cultists even now can't see the forest for the trees.

Posted: March 20 2009 at 8:07 PM
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