Krugman: The Market Wizards Were Exposed as Frauds -- Obama's Team Still Believes in Their Magic

[rollingrock]

By Paul Krugman, The New York Times
March 29, 2009


On Monday, Lawrence Summers, the head of the National Economic Council, responded to criticisms of the Obama administration’s plan to subsidize private purchases of toxic assets. “I don’t know of any economist,” he declared, “who doesn’t believe that better functioning capital markets in which assets can be traded are a good idea.”

Leave aside for a moment the question of whether a market in which buyers have to be bribed to participate can really be described as “better functioning.” Even so, Mr. Summers needs to get out more. Quite a few economists have reconsidered their favorable opinion of capital markets and asset trading in the light of the current crisis.

But it has become increasingly clear over the past few days that top officials in the Obama administration are still in the grip of the market mystique. They still believe in the magic of the financial marketplace and in the prowess of the wizards who perform that magic.

The market mystique didn’t always rule financial policy. America emerged from the Great Depression with a tightly regulated banking system, which made finance a staid, even boring business. Banks attracted depositors by providing convenient branch locations and maybe a free toaster or two; they used the money thus attracted to make loans, and that was that.

And the financial system wasn’t just boring. It was also, by today’s standards, small. Even during the “go-go years,” the bull market of the 1960s, finance and insurance together accounted for less than 4 percent of G.D.P. The relative unimportance of finance was reflected in the list of stocks making up the Dow Jones Industrial Average, which until 1982 contained not a single financial company.

It all sounds primitive by today’s standards. Yet that boring, primitive financial system serviced an economy that doubled living standards over the course of a generation.

...more

www.alternet.org/story/133775/

© 2009 The New York Times All rights reserved.

[Thrill]

1. Thanks for your opinion Paulie!

[w4rma]

2. Well analyzed and written, Mr. Krugman. He hit every nail on their heads. (nt)

[CBR]

3. Krugman wrote this...

"It's strange now to read the critiques of America's business system during the bad years--the accusations that our companies were too focused on stock prices and financial returns, and that the U.S. was at a disadvantage compared with countries where the government actively regulated competition and promoted particular technologies. These days, those supposed vices sound like virtues: a stock market that does not allow established firms to rest on their laurels, the resulting responsiveness of companies to market incentives, fierce competition to develop the new new thing, and the ability of this wild and crazy system to boldly go where no bureaucrat ever thought there was a potential payoff. Either the old critiques were wrong or the world has changed in a way that turns America's characteristic weaknesses into strengths. Whatever the reason, right now we feel pretty good about our way of doing business."

Citation: Krugman, P. (March 6, 2000). Unleashing The Millennium: After 100 years of trial and error--and some mighty dark days during the '30s and '70s--Economic Man is free at last. Fortune Magazine. 141:5

[Windy]

4. crickets????? nt

[girl gone mad]

7. No link.

A Google search brings up just one hit: to another DU thread containing an identical post from this user.

[stillcool]

33. I had no problem..

Unleashing The Millennium After 100 years of trial and error--and some mighty dark days during the '30s and '70s--Economic Man is free at last.
(FORTUNE Magazine)
By Paul Krugman
March 6, 2000
http://money.cnn.com/magazines/fortune/fortune_archive/2000/03/06/275234/index.htm

[girl gone mad]

37. Hmm, as I suspected, this poster was picking and choosing.

From the same article:

So it turns out that we don't necessarily understand economic crises--or how to prevent them--as well as we thought. Economists, me included, have scrambled to explain how Japan got itself caught in a seemingly permanent slump or how the Asian tigers went from world beaters to disaster areas in just months, but it would be more reassuring if we had predicted these crises instead of rationalizing them after the fact. You can't help having the uneasy feeling that the next crisis, too, will surprise us.

Moreover, the defenses we build against crisis tend to be eroded by the process of economic change itself. Rules of the game that cope pretty well with domestic financial upsets may not work when the problem becomes hot money flowing across borders. Financial safety nets that protect the banking system may not help much when the institutions in trouble are nonbank intermediaries like LTCM. In the 21st century we may face the problem of trying to regulate virtual nonbanks that exist only in cyberspace.

To get a sense of how the 21st-century economy may already be slipping from our grasp, consider the strange death of monetarism. Twenty years ago Milton Friedman and his followers used to claim that the Fed and its counterparts could keep the real economy on an even keel simply by holding the growth of the money supply stable, say at 3% per year. It probably wasn't a very good idea even then, but now it is out of the question because nobody can agree on what the money supply is. Instead of Friedman's rule, central banks have had to fall back on judgment calls--and some of them worry that they may eventually lose even that ability. The Fed and its counterparts abroad still have a lot of power to move the economy because, despite the proliferation of new forms of finance and new kinds of markets, accounts are ultimately settled via pieces of green paper--or via deposits at the Fed that amount to the same thing. But economists are already thinking about a world where physical money has become obsolete and where electronic accounts can be cleared without any officially sanctioned medium of exchange. Who controls the monetary system in such a world? Who rescues it when something goes wrong?

Eventually we will work out answers to those questions. But it may take a few nasty crises to get the method down. And meanwhile there will be other problems.

Not to mention that the broader argument Krugman is making here has to with the lack of necessity for government intervention into means of production, not with limiting regulations on finance.

[CBR]

38. Sometimes we need government intervention in to the means of

production. See Mountaintop Removal.

[Baikonour]

90. You mean the anti-Krtugman crowd carefully cherry pick their criticisms?

Who knew!

:sarcasm:

[rollingrock]

5. I would need to read the whole article before passing judgment

also a link to verify Krugman was the actual author would be nice.

[CBR]

6. Academic Onefile Database search...

Title:Unleashing The Millennium: After 100 years of trial and error--and some mighty dark days during the '30s and '70s--Economic Man is free at last.(Special Section/The Capitalist Century).
Author: Paul Krugman.
Source:Fortune 141.5 (March 6, 2000): pF-16+. (2771 words)
Document Type:Magazine/Journal


Full Text :COPYRIGHT 2000 Time, Inc.

There's a new television show, I'm told (I haven't seen it), about seemingly normal high school students who are actually space aliens. I can relate: I sometimes feel as though I got my economics degree on another planet. That planet--the world of the 1970s--was one in which capitalism in general and America in particular seemed to be, figuratively and literally, running out of gas. Every year seemed to bring more bad news: another country falling under communist rule, another bout of inflation despite high unemployment, another poor productivity number.

It was not a world where it was easy to be a free-market economist. Oh, we tried--indeed, academic economists were considerably more in favor of free markets and more skeptical of planning in 1977 (the year I got my Ph.D.) than they had been a decade earlier. But you couldn't help feeling that you were defending a losing cause--that however fuzzy the thinking of those who criticized both the market system and the conventional economists who believed in it, the poor performance of the real economy gave them the rhetorical edge.

And then, bit by bit, the tide turned. Here on the millennial cusp, both the American economy and the free-market system it epitomizes seem everywhere triumphant. Not only are things going well for capitalism; hardly anyone seriously proposes an alternative.

The question that we ought now to be asking is whether this new confidence is as misplaced as our earlier pessimism. What, exactly, went right with the free-market system--and will it continue?

HOW AMERICA GOT ITS GROOVE BACK

Back in 1967 the futurist Herman Kahn, who had made his reputation with titles like On Thermonuclear War, published a surprisingly upbeat tome entitled The Year 2000. The book's basic premise was that the economic and technological good times of the 1960s were here to stay; low unemployment, rapid productivity growth, and a steady stream of technological improvements would characterize the next 33 years. For a long time it seemed that optimists like Kahn had made a big mistake. Circa 1974 everything seemed to fall apart. Productivity growth slowed to a crawl, inflation and unemployment surged, glitzy new technologies seemed to do little for productivity or the quality of life--and besides, the profits from American technologies always seemed to go to Japan. The national mood went sour, as was reflected in the title of Donald L. Barlett and James B. Steele's influential 1991 book, America: What Went Wrong?

And then, just in time for the millennium, everything started going right again. By the numbers, the economy of the late 1990s looks a lot like the economy of the late 1960s. Productivity is once again growing by a healthy 2% to 3% every year, unemployment is down to around 4%, real wages are rising. Kahn's forecast that Americans in 2000 would live twice as well as they did in 1967, and do it with a 30-hour workweek, has not been realized (real blue-collar wages are about the same now as in 1967, and the workweek has actually gotten a bit longer), but the economy seems once again to have found a groove. Progress--and broad confidence that it will continue--is back.

So what are we doing right? New technology surely plays a big role, especially the use of digital technology to grease the wheels of production throughout the economy. But if technology were solely responsible, the whole world should be doing well; in fact, only the U.S. and a few smaller countries have seen a radical improvement. And those that did well in the era of the industrial robot and the fax machine--Japan in particular--seem to be missing out in the Internet Age.

It's strange now to read the critiques of America's business system during the bad years--the accusations that our companies were too focused on stock prices and financial returns, and that the U.S. was at a disadvantage compared with countries where the government actively regulated competition and promoted particular technologies. These days, those supposed vices sound like virtues: a stock market that does not allow established firms to rest on their laurels, the resulting responsiveness of companies to market incentives, fierce competition to develop the new new thing, and the ability of this wild and crazy system to boldly go where no bureaucrat ever thought there was a potential payoff. Either the old critiques were wrong or the world has changed in a way that turns America's characteristic weaknesses into strengths. Whatever the reason, right now we feel pretty good about our way of doing business.

THE END OF HISTORY?

You could say that we have been here before. Our current prosperity would not have amazed a Rip Van Winkle from the 1960s; even our renewed faith in the capitalist system would not have seemed so strange to someone from the early 20th century, another era in which global capital markets ruled and governments mainly tried to keep those markets happy. Still, someone with a sense of history may note that the seemingly total supremacy of free-market capitalism in, say, 1913 turned out to be a lot less secure than expected. Are we going to repeat that experience?

Well, this time around both the ideology and the political supremacy of free markets are probably on sounder footings. Not that there won't be bad times ahead--more on that below. But it is hard to see how major challenges to capitalism can ever again command the following they had for much of the 20th century. Suppose some would-be 21st-century Lenin were to try to sell the disgruntled masses (and lest we forget, they're still out there) a utopian vision of a world without greed and injustice. What would he propose? State ownership of the means of production? Worker-run cooperatives? Right. After watching one revolutionary country after another come slinking back down the road in our direction, it's going to be hard to muster much enthusiasm for the next big anticapitalist idea.

In fact, even some of the smaller ideas have lost their shine. For a few decades after World War II much of the Third World was led to believe that the path to development lay in government-directed industrialization, aimed mainly at the domestic market. But all the success stories in the developing world--from Chile to China--turned out to be export-oriented. That is, they prospered by becoming more, not less, linked to the global market economy.

Or consider the strange case of the Asian model. As recently as six or seven years ago one influential bloc of opinion held that Japan, Thailand, Singapore, and a few other regional powers had found a better way. Unburdened by America's naive free-market ideology, they had developed a system of government-guided capitalism that seemed to give them an edge in technology and economic growth. Even then, some of us thought that the effectiveness of this model was a myth, that if anything Asian countries had done well despite bureaucratic intervention rather than because of it. And now that much of that "deep strategic planning" has been exposed as mere crony capitalism, any future claims about a system that trumps the free market are going to face severe skepticism.

There is still the question of whether a market system has to be quite as brutal as America's. A few years ago many thought that not just central planning but even the welfare state had been proved unsustainable--that only countries that lowered their safety net to ground level could compete in the new world order. Now that conclusion seems excessive: Some countries with high taxes and social benefits--most notably Sweden--are turning in American-style growth performance.

The story of economics at the turn of the millennium, then, is that free-market capitalism has proved itself a far more durable system than even its admirers might have expected. It isn't perfect, but it wasn't supposed to be, and the alternative routes have turned out to be dead ends. Capitalism's success in weathering the storms of the 20th century means that both policymakers and the public are now willing to cut it some slack, to stick with markets even when they misbehave.

UP-AND-DOWN ECONOMICS

For a few weeks in 1998 the markets misbehaved badly, and it looked as if the millennium might end in a financial meltdown. The crisis that began in Thailand the year before had spread to Russia and Brazil, and finally, via a hedge fund called Long-Term Capital Management, to the U.S. itself. As nervous investors sought safety and liquidity, bond markets froze, and it took all of Alan Greenspan's powerful, if peculiar, charisma to restore confidence.

There are some people who put a positive spin on the 1997-99 financial crisis: They think it showed that we actually do know how to deal with these things, that the worst has happened and it didn't turn out that badly after all. But those closest to the events were not sure they had the answers at the time, and they still aren't quite sure how they got off so easy. Even now, after a turbulent century, it seems that some of the kinks in capitalism have yet to be worked through.

So it turns out that we don't necessarily understand economic crises--or how to prevent them--as well as we thought. Economists, me included, have scrambled to explain how Japan got itself caught in a seemingly permanent slump or how the Asian tigers went from world beaters to disaster areas in just months, but it would be more reassuring if we had predicted these crises instead of rationalizing them after the fact. You can't help having the uneasy feeling that the next crisis, too, will surprise us.

Moreover, the defenses we build against crisis tend to be eroded by the process of economic change itself. Rules of the game that cope pretty well with domestic financial upsets may not work when the problem becomes hot money flowing across borders. Financial safety nets that protect the banking system may not help much when the institutions in trouble are nonbank intermediaries like LTCM. In the 21st century we may face the problem of trying to regulate virtual nonbanks that exist only in cyberspace.

To get a sense of how the 21st-century economy may already be slipping from our grasp, consider the strange death of monetarism. Twenty years ago Milton Friedman and his followers used to claim that the Fed and its counterparts could keep the real economy on an even keel simply by holding the growth of the money supply stable, say at 3% per year. It probably wasn't a very good idea even then, but now it is out of the question because nobody can agree on what the money supply is. Instead of Friedman's rule, central banks have had to fall back on judgment calls--and some of them worry that they may eventually lose even that ability. The Fed and its counterparts abroad still have a lot of power to move the economy because, despite the proliferation of new forms of finance and new kinds of markets, accounts are ultimately settled via pieces of green paper--or via deposits at the Fed that amount to the same thing. But economists are already thinking about a world where physical money has become obsolete and where electronic accounts can be cleared without any officially sanctioned medium of exchange. Who controls the monetary system in such a world? Who rescues it when something goes wrong?

Eventually we will work out answers to those questions. But it may take a few nasty crises to get the method down. And meanwhile there will be other problems.

KNOWLEDGE AND IGNORANCE

Although a combination of heavy-handed business tactics, legal ineptitude, and prosecutorial zeal has apparently put Microsoft in the judicial doghouse, the official antitrust trial of the millennium has by no means resolved the bigger issues raised by the case. Microsoft has now been all but ruled a monopolist--and yet the whole point of spending lots of money developing a new technology is to carve out a few years in which you are selling something nobody else can offer. Microsoft stands accused, more dubiously, of overcharging consumers--but what is the fair price for something that cost billions to develop but nothing to make? Microsoft probably did break the rules--but where, exactly, is the rule book?

The standard theoretical case for free markets is based on the proposition that in a market economy the price of a good tends to reflect both what it is worth to consumers and what it costs to produce--and that any divergence between what consumers are willing to pay and the cost of production provides a signal to allocate resources more efficiently. If it costs twice as much to produce another pound of apples as it does to produce another pound of bananas, but consumers aren't buying the apples, then it is time to grow fewer apples and more bananas--and the market will automatically make the adjustment.

But what does it cost to let another consumer use Windows 1998? Nothing; so maybe it should be free--except in that case it wouldn't have been worth developing in the first place. Nor is there any simple rule about what the price should be. Enough to cover the developer's costs? Whatever the traffic will bear? Or somewhere in between? (And whose call is it, anyway?) What looks to the producer like a fair return for the risk he bears can look to the consumer like profiteering--as in the case of prescription drugs. What looks to the developer like a reasonable leveraging of the initial innovation can look to rivals and antitrust officials like robber-baron tactics.

None of this is entirely new. Rather peculiarly, the basic rules of knowledge-based industries like software--that while their products may be very expensive to develop they cost almost nothing to produce, and tend to be more popular the more consumers there are--have long applied to an industry in which, famously, nobody knows anything: entertainment. In terms of their basic economics, Hollywood and Silicon Valley have a lot in common, and Disney and Microsoft are twins separated at birth. But whereas the weird business of entertainment used to be exceptional, the knowledge-based company seems to be becoming the rule--and we don't know how to handle it. It's actually pretty ironic: Just as the free market finally rules unchallenged, the economy is changing in a way that undermines the assumptions on which free-market economics is based.

So what is society going to do about it? One answer is "complain": Among the remarkable achievements of Bill Gates is that he has managed to get cast as a businessman-villain in a country that seemed to have decided wealth was a sign of virtue. But it may also turn out that the problem of how to deal with the peculiar economics of knowledge will give rise to new ideologies, new challenges to the market system.

There may even be calls for more (say it quietly) government. Not central planning, mind you, but if, as the experts predict, the already serious niftiness gap between American cell phones and those in Europe and Japan grows wider; if drug prices keep going up; if, in general, the romance of commerce loses a bit of its allure--well, who you gonna call?

But surely these will be adjustments at the margin rather than big changes in the ground rules. A company broken up here, a government-industry consortium to promote a technology there, maybe even a bit of price regulation; but basically companies will be allowed to make money as best they can, in the belief that the invisible hand will direct them to more or less the right place.

THE PERFECT AND THE GOOD

So what is the bottom line for the economics of the next century? Put it this way: Much of the 20th century was dominated by a search for perfection. Panglossian advocates of laissez faire claimed markets always got it right, then were discredited by the Great Depression; idealistic revolutionaries promised utopia, and delivered the Soviet Union. What we learned by the end of the century was that capitalism is far from perfect, but we were also reminded of the old line that the perfect is the enemy of the good.

As the new millennium begins, one can say of capitalism what Churchill said of democracy: It is the worst system we know, except for all the others that have been tried.

-QUOT-

The question we ought to be asking is: What, exactly, went right with the free-market system--and will it continue?

There will be adjustments, not big changes in the ground rules.... Companies will be able to make money as best they can.

Source Citation:Krugman, Paul. "Unleashing The Millennium: After 100 years of trial and error--and some mighty dark days during the '30s and '70s--Economic Man is free at last." Fortune 141.5 (March 6, 2000): F-16+. Academic OneFile. Gale. University of Delaware Library. 29 Mar. 2009
<http://proxy.nss.udel.edu:2104/itx/start.do?prodId=AONE>.

[Oregone]

11. LOL. Let the character assassination begin!

Let's dig up old Krugman quotes that make him look more like Kramer from CNBC! We must quash his dissent!

Just please assure me this isn't part of some organized political effort to pour mud on him (So your acting alone?). Wouldn't it be easier to catch him with a hooker? We could even pay for one for him and set him up in the lobby of some hotel.

[CBR]

13. Is it ok to debate his work or not...?

I know that debating HIS writing is fair game. Again, this is not a slam on Krugman. Academia begs for such debate.

[G_j]

15. that was good

people were looking for the article mentioned.
thanks for providing a link.

[Oregone]

20. Perhaps you can debate the writing the OP posted

Rather than just posting a cherry picked quote from a pretty fair analysis written almost a decade ago, to make him look like Jim Kramer. The old article begins with him talking about inner turmoil and growth of his economic theory during the 70s. Conditions of markets can most definitely impact analysis and policies one advocates. In response to the current conditions of our market (which Krugman loosely suggested could happen in this very article), he has a very different point of view of how to respond. And it is, incredibly, a very different market. You are trying to make Krugman from 10 years ago (commenting on that economic climate) debate Krugman from now (commenting on this one). Are you really debating his work? Your approach seems less than balanced.

[CBR]

22. It is just an article of his writing. Again, what is wrong with posting it.

It seems to have sparked debate, which is the goal, is it not? Here is another:
Title:The Ascent of E-Man: R.I.P.: THE MAN IN THE GRAY FLANNEL SUIT.(business practices of the past)(First:)(Brief Article).
Author(s):Paul Krugman.
Source:Fortune 139.10 (May 24, 1999): p42+(1). (878 words)
Document Type:Magazine/Journal
Bookmark:Bookmark this Document
Library Links:

* Get It!

Full Text :COPYRIGHT 1999 Time, Inc.

I grew up in a planned economy. Bureaucrats didn't run everything: Small-business men were more or less free to buy and sell as they saw fit. But those who controlled the economy's "commanding heights," its key industries, were administrators rather than entrepreneurs, conformists who were valued less for their productivity than for their loyalty, whose career advancement depended on their political skill. For ordinary workers, the system had some benefits: It was hard to get ahead, but once you had a good job, your life was secure. Still, the economy was often appallingly inefficient and consistently unresponsive to consumer needs.

No, I am not an immigrant from Eastern Europe. I'm talking about the U.S. economy of the '50s and '60s, when General Motors was the very model of a modern major company.

In those days progressive thinkers like John Kenneth Galbraith used to ridicule economists who still believed what they had learned from Paul Samuelson's textbook, which was that free markets could be counted on to match supply and demand. After all, business itself was clearly moving away from markets and toward planning. More and more of the economy was dominated by large corporations, and those corporations didn't place much faith in the invisible hand. For example, AT&T owned it all--not just the long-distance lines, but the local phone systems, the factories that made telecommunications equipment, even the phones in your home. By contrast, in today's cutting-edge e-businesses (see Cover Stories), the company often owns--or rather, rents--little but brainpower.

That's a long way from the era of the man in the gray flannel suit, when the great business empires were not run according to the principles of supply and demand: They were command-and-control systems, and people did what they were told. As technology grew more complex, as big corporations grew ever bigger, as computers made it easier to impose centralized control, it was clear to smart people that the economy would bear ever less resemblance to the competitive system described in obsolete economics textbooks.

But over the past two decades the market has steadily gained ground--not only against socialism but against big-business capitalism. Large companies account for a steadily declining share of employment and value added. Moreover, even within corporations there is a growing tendency to rely on individual initiative, on independent profit centers free to take risks and do it their way. (True, sometimes individual initiative leads to something that looks like mass conformity--seen one Banana Republic, you've seen 'em all. But we're talking about management here, not tastes.)

The retreat of business bureaucracy in the face of the market was brought home to me recently when I joined the advisory board at Enron--a company formed in the '80s by the merger of two pipeline operators. In the old days energy companies tried to be as vertically integrated as possible: to own the hydrocarbons in the ground, the gas pump, and everything in between. And Enron does own gas fields, pipelines, and utilities. But it is not, and does not try to be, vertically integrated: It buys and sells gas both at the wellhead and the destination, leases pipeline (and electrical-transmission) capacity both to and from other companies, buys and sells electricity, and in general acts more like a broker and market maker than a traditional corporation. It's sort of like the difference between your father's bank, which took money from its regular depositors and lent it out to its regular customers, and Goldman Sachs. Sure enough, the company's pride and joy is a room filled with hundreds of casually dressed men and women staring at computer screens and barking into telephones, where cubic feet and megawatts are traded and packaged as if they were financial derivatives. (Instead of CNBC, though, the television screens on the floor show the Weather Channel.) The whole scene looks as if it had been constructed to illustrate the end of the corporation as we knew it.

What happened to the man in the gray flannel suit? No doubt he was partly a victim of sex (er, I mean gender) and drugs and rock & roll--that is, of social change. He was also a victim of information technology, which ended up deconstructing instead of reinforcing the corporation. But probably the biggest force has been a change in ideology, the shift to pro-market policies. It's not that government has vanished from the marketplace. It's still a good guess that in a completely unregulated phone market, long-distance companies would buy up local-access companies and deny their customers the right to connect to rivals, and that the evil empire--or at least monopoly capitalism--would rise again. However, what we have instead in a growing number of markets--phones, gas, electricity today, probably computer operating systems and high-speed Net access tomorrow--is a combination of deregulation that lets new competitors enter and "common carrier" regulation that prevents middlemen from playing favorites, making freewheeling markets possible.

Who would have thunk it? The millennial economy turns out to look more like Adam Smith's vision--or better yet, that of the Victorian economist Alfred Marshall--than the corporatist future predicted by generations of corporate pundits. Get those old textbooks out of the attic: they're more relevant than ever.

PAUL KRUGMAN is professor of economics at MIT and author of The Return of Depression Economics.

Source Citation:Krugman, Paul. "The Ascent of E-Man: R.I.P.: THE MAN IN THE GRAY FLANNEL SUIT." Fortune 139.10 (May 24, 1999): 42+(1). Academic OneFile. Gale. University of Delaware Library. 29 Mar. 2009
<http://proxy.nss.udel.edu:2104/itx/start.do?prodId=AONE>.

[Oregone]

23. There is nothing wrong with posting his writing...

But do you understand that when people are posting his current economic critique, and you respond (by first ignoring it), and posting articles from 10 years ago that you aren't really addressing the current conditions, that it is a method of character assassination. You are saying "why listen to this guy who wrote that", or "well, he isn't so smart because he said this a decade ago", etc... Do you get that?

You are ignoring his current critique and trying to show how his analysis of an entirely different economy was "wrong" (I actually find that article to be very fair and insightful for the times). A decade ago he was a different person (we all grow) writing to a different audience in a different economic climate. Its a bit silly to use Krugman in the Clinton boom to attempt to discredit Krugman in the post-Bush blowout.

Im sure people will be as willing to fairly look at those older items when you can fairly look and criticize his current writings.

[CBR]

26. It was not my intent to invoke character assasination...

I actually agree with you on the relevance of Krugman's current writings and his insightful role in the modern debate. I am, however, aware (as I am sure you are) that in academia all of your past writings factor in to one's analysis. Again, I did not intend to ruffle any feathers (and I was not aware of the copyright rules) just to spur the debate beyond the stalemate. I am glad you found the articles useful. It was a great exercise reading his articles last night and quite exhausting due to my limited economics background.

[Oregone]

28. Sorry then for jumping down your throat

I tend to think he breaks things down, when writing for a wide audience, pretty well. Its much tougher following his blog at times.

[HughMoran]

55. Laughable

Who's the "cheerleader" now?


Ass.

[Oregone]

60. How can this approach even be taken seriously

Do you think it is fair and wise political duologue to ignore an OP and blindly *attempt* to post contradictory views written by the same source a decade ago?

Should someone search all your past quotes and cut and paste snippets as a response to anything you post now (without so much as commenting on your current content). Its called a hit job.

This is only a valid tactic to cheerleaders on the other side (and Republicans).

[HughMoran]

61. I think the poster should have as much right as Krugman has to voice his opinions

In his case, he's using the published words of that same Pulitzer prize winning writer as an argument that perhaps Krugman's views are not necessarily consistent over time and therefore not sacrosanct as some of his "cheerleaders" would have us believe.

It's clear that you object to this for the same reason that many Obama supporters object to the criticism of their new President - it may actually have some validity to it. I'm somewhat shocked that you can't see the obvious bias of your own objections to this poster. You should be embarrassed IMO.

[Oregone]

62. I object to some *current* decisions that Obama makes

And I also am pleased with other ones.

But, well, if Obama says something in the news, like, he isn't going to bail out GM, and I respond by finding some obscure, out of context quote of his from decades ago that would contradict this decision, that would be character assassination. I am not responding to the *current* action, but trying to tear down who he is by portraying inconsistency. Of course, you wouldn't like this, and of course, I wouldn't do it. We saw enough of that trash politics in the primaries, right?

No, I'm not embarrassed at all. This is equivalent to digging up Ayers and Rev Wright instead of talking about Obama's policies. Why are you supporting this?

[HughMoran]

67. I'm supporting the poster's right to make arguments based on published material

I don't think it's unfair to quote Krugman's past papers in order to determine his possible motivations at this time. It's clear, based on some of his inflammatory headlines of late that he's either really naive, or he believes that he is infallible. In either case, I think it's fair to question his motives. If he was stating the opposite viewpoint 9 years ago to what he is 100% certain is 100% accurate now, that's something that makes me grab my chin and think "hmmmmmm". It's fair because Krugman is being VERY forceful in his writings now AND he is acting like he is infallible.

[Oregone]

68. "If he was stating the opposite viewpoint 9 years ago..."

He wasn't. Read the article. It was quite good actually, although a tad positive (as most things were at the time).

[HughMoran]

73. Well there ya go

Your man is good to his word - now and then.

:D

[girl gone mad]

71. The paper had little to do with financial regulation, government bailouts,

or Keynesian economics.

Krugman was largely writing about market efficiency replacing government interference into the consumer products market. Krugman's arguments actually turned out to be accurate, for the most part. For instance, Krugman writes that the government doesn't need to interfere to make American cell phones more competitive with Japanese cell phones (which were far better at the time) by forcing the upgrade to 3G because American businesses were capable of meeting the needs of consumers when given the freedom to innovate without such burdens. As it turns out, Apple did manage to create a cell phone vastly superior to any of Japan's offerings, and they did it before the roll out of 3G networks.

[AlbertCat]

74. Who said "sacrosanct?"

And one paragraph was cherry picked from a 10 year old OpEd to make the point that Krugman is supposedly a flip-flopper. (I don't buy the "I didn't mean it that way" post)

Krugman is a smart guy and should not be dismissed because he may disagree with Obama.

And trying to paint those who listen to him as fawning fan-boys and engaging in the same gaga eyes as Obama-can-do-no-wrongers is just a bunch of "I know you are, but what am I" crap.

You should be embarrassed.

[HughMoran]

80. Hey, it's more than one paragraph

The retreat of business bureaucracy in the face of the market was brought home to me recently when I joined the advisory board at Enron--a company formed in the '80s by the merger of two pipeline operators. In the old days energy companies tried to be as vertically integrated as possible: to own the hydrocarbons in the ground, the gas pump, and everything in between. And Enron does own gas fields, pipelines, and utilities. But it is not, and does not try to be, vertically integrated: It buys and sells gas both at the wellhead and the destination, leases pipeline (and electrical-transmission) capacity both to and from other companies, buys and sells electricity, and in general acts more like a broker and market maker than a traditional corporation. It's sort of like the difference between your father's bank, which took money from its regular depositors and lent it out to its regular customers, and Goldman Sachs. Sure enough, the company's pride and joy is a room filled with hundreds of casually dressed men and women staring at computer screens and barking into telephones, where cubic feet and megawatts are traded and packaged as if they were financial derivatives. (Instead of CNBC, though, the television screens on the floor show the Weather Channel.) The whole scene looks as if it had been constructed to illustrate the end of the corporation as we knew it.

Sept. 10, 2000: Enron Chairman Kenneth Lay contributes more than $290,000 to George W. Bush's election campaign.

Who would have thunk it? The millennial economy turns out to look more like Adam Smith's vision--or better yet, that of the Victorian economist Alfred Marshall--than the corporatist future predicted by generations of corporate pundits. Get those old textbooks out of the attic: they're more relevant than ever.

Go Enron! Woohoo - now there's an example we can all learn from!

It's strange now to read the critiques of America's business system during the bad years--the accusations that our companies were too focused on stock prices and financial returns, and that the U.S. was at a disadvantage compared with countries where the government actively regulated competition and promoted particular technologies. These days, those supposed vices sound like virtues: a stock market that does not allow established firms to rest on their laurels, the resulting responsiveness of companies to market incentives, fierce competition to develop the new new thing, and the ability of this wild and crazy system to boldly go where no bureaucrat ever thought there was a potential payoff. Either the old critiques were wrong or the world has changed in a way that turns America's characteristic weaknesses into strengths. Whatever the reason, right now we feel pretty good about our way of doing business.

What?? So how has propping up the company to look good for the next quarter's earnings report turned out?

I see very little vision from these writings - he had no idea where we were heading then, so it might be prudent to at least question why he's so sure he knows where we're going to end up this time. If I can't cheerlead Obama, they you can bet that applies to Krugman as well...

[HughMoran]

81. Krugman is digging up decade old stuff on Summers to use against him

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=114&topic_id=62005&mesg_id=62007

[ChimpersMcSmirkers]

31. Ah, it's ok to bash Obama at every turn, but not so ok to examine Mr Krugman. How interesting.

[Oregone]

32. Who bashes Obama at every turn?

Look, here is an instance where someone replied to a CURRENT article with an out-of-context quote from a decade ago. What does that accomplish?

Is that how you "examine" someone?

[AlbertCat]

75. Ah, it's ok to bash Obama at every turn

SEE?

This is ridiculous!

[OwnedByFerrets]

36. OMG, if they could just find him with an intern under

his desk. LOL They are out for blood.:rofl:

[cbayer]

16. CBR

Please note that DU rules require limiting the amount of copyrighted material to four paragraphs or less with a link.

Thanks,

cbayer
DU Moderator

[CBR]

24. Thanks for letting me know. I apologize. nt.

[Oregone]

17. What a fair and insightful capturing of the late 90s economic zeitgeist

Yes, Krugman kept posing the question of if this capitalistic system will derail, but he was clearly in a positive frame of mind when talking about it--but wasn't everyone at the time?

You can probably dig up some more damning Krugman quotes than the one from that article you cited.

[rollingrock]

27. In the full article

Krugman criticizes Microsoft for its monopolistic practices and says advocates of laissez-faire were discredited by the Great Depression. He also praises countries with high taxes and social benefits such as Sweden for their ability to achieve high economic growth with a strong social safety net. As opposed to the US, where you may have high or low economic growth but the social safety net is relatively weak.

Krugman was never an advocate of unregulated capitalism back in 2000, if that is what you were suggesting.

[paulk]

43. is your point that krugman, having realized he was wrong

about a few things, is now an even more credible critic where the Wall Street status quo is concerned ?

[Mithreal]

63. DU rules regarding copyright: link with no more than 4 paragraphs

Copyrights: Do not copy-and-paste entire articles onto this discussion forum. When referencing copyrighted work, post a short excerpt (not exceeding 4 paragraphs) with a link back to the original.

http://www.democraticunderground.com/forums/rules.html

[Donnachaidh]

8. nice cherrypicking there.

Where's the link to the FULL article?

[CBR]

9. See post #6

[Luminous Animal]

10. Yes. Krugman did write that...

Your point?

[CBR]

12. Just thought it was interesting...

I read a bunch of his articles due to the debate online (academic and news) and he is a great economist. I think that it is fair to debate his work as he is a hot topic. This is not a slam on Krugman.

[Luminous Animal]

18. You've neglected

the cautionary aspect of this article.


"There are some people who put a positive spin on the 1997-99 financial crisis: They think it showed that we actually do know how to deal with these things, that the worst has happened and it didn't turn out that badly after all. But those closest to the events were not sure they had the answers at the time, and they still aren't quite sure how they got off so easy. Even now, after a turbulent century, it seems that some of the kinks in capitalism have yet to be worked through.

So it turns out that we don't necessarily understand economic crises--or how to prevent them--as well as we thought. Economists, me included, have scrambled to explain how Japan got itself caught in a seemingly permanent slump or how the Asian tigers went from world beaters to disaster areas in just months, but it would be more reassuring if we had predicted these crises instead of rationalizing them after the fact. You can't help having the uneasy feeling that the next crisis, too, will surprise us. (Note- it is interesting that Krugman has, in fact, been predicting the oncoming crisis.)


But economists are already thinking about a world where physical money has become obsolete and where electronic accounts can be cleared without any officially sanctioned medium of exchange. Who controls the monetary system in such a world? Who rescues it when something goes wrong?

Eventually we will work out answers to those questions. But it may take a few nasty crises to get the method down. And meanwhile there will be other problems. "

[Political Heretic]

40. In 2000. Coming out of the 90s - before Bush obliterated all regulation and oversight

[Mike 03]

14. Yes, Krugman has really helped us a lot.

Thanks for everything, Professor. I think they call this "too little too late" or something like that.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x5323553

Dear Mr. Krugman: I admire the hell out of you, but if you know so much, please cough it up.
Edited on Tue Mar-24-09 03:38 PM by Mike 03
Krugman is someone I admire greatly. I've written at least five or six posts praising this educated, eloquent man to the skies over the past six months. I vigorously recommended his latest book (which is in actuality a revision of an earlier book) "The Return of Depression Economics."

Krugman is a brilliant analyst of prior fiscal disasters, especially those in other countries. He's passionate and extremely bright. His analysis of currency fluctuations and the consequences of them is insightful to say the least.

But when it comes to offering his plan for our current disaster, I have to be honest.

Speaking of his new book--a 191 page volume--Krugman reserves his solution for pages 184-191 (and that's stretching it, because a lot of this has to do with long term financial reform rather than solving the "emergency.") Krugman's solution to our current emergency runs from halfway through page 184 to the bottom of page 188.

I turn once against to his solution to this emergency, on page 184, and I'm sure you will agree it's not terribly detailed:

"...we need to deal with the clear and present danger. To do this, policy-makers around the world need to do two things: get credit flowing again and prop up spending..." He goes onto say that "the first task is the harder of the two, but it must be done..."

Short on specifics, totally lacking in helpful advice or even minimalistic details.

He suggests capital injection to unfreeze the credit markets: "The obvious solution is to put in more capital."

It didn't work in Japan for a number of reasons... He doesn't tell us where it has worked.

Okay, yes...and...? "...A financial rescue along similar lines is now underway in the United States and other advanced economies, although it was late in coming, thanks in part to the ideological tilt of the Bush administration..."

Okay, it's too late. It's probably too late to stave off this emergency through rampant recapitalization.

He goes on to write:

"It seems doubtful, however, that ("a recapitalization scheme" as opposed to the "buying up of $700 billion in troubled assets from banks and other financial institutions," which by his own admission he finds useless), will be enough to turn things around for at least three reasons."

So, on page 186 he lists three reasons that recapitalization won't work anyway:

To little relative to GDP.

It's "not clear how much of the bailout will reach the shadow banking system, the core of the problem."

"Third, it's not clear whether banks will be willing to lend out the funds as opposed to sitting on them..."

That's great. That's terribly helpful, especially reason #2.

Dear Mr. Krugman. Since you pinpoint the "Shadow Banking System" as the crux of the problem, what IS the solution to attack this crisis at the root, debilitating and disarming the "shadow banking system" and ending the crisis?

Not a word on that. He drops it like a hot potato.

So he disapproves of buying toxic assets and disapproves of recapitalization. He suggests nationalization. So did I and a number of other DU'ers, but that didn't go over so well, just like it's not going over well with investors or the American people.

He seems to grudgingly approve of a stimulus package:

"The point in all of this is to approach the current crisis in the spirit that we'll do whatever it takes to turn things around; if what has been done so far isn't enough, do more and do something different, until credit starts to flow and the real economy starts to recover.

These are not details.

These are not helpful suggestions.

Although Krugman's analysis of prior foreign financial disasters is priceless, what is he offering in the way of specific advice to our current administration?

Something like this paraphrase from his Bloomberg interview back in December or January?: "I have no idea what it should consist of, but it has to be huge. The world has to believe it will work."

[ihavenobias]

21. The Krugman Strawman

Far too many people are holding up Krugman as if he's the ONLY economist who disagrees with the Obama team's economic plans. I guess that's partly because Krugman is so well known and progressive, but also partly because it's a strawman IMO.

There are other brilliant and prestigious economists and otherwise qualified progressives who take serious issue with the Obama economic team. Two easy examples:

Joseph Stiglitz: http://www.reuters.com/article/reutersEdge/idUSTRE52N1IQ20090324

James K. Galbraith: http://www.youtube.com/watch?v=YLn2ghl92Gk&feature=channel_page

And believe me, they are not alone.

[rollingrock]

29. Most economists are opposed to the Wall Street bailouts

Including the two Nobel-prize winning economists Paul Krugman and Joseph Stiglitz.


What economic awards has Summers and Geithner ever won?
Oh, that's right. You don't get Nobel prizes for playing a key role in the systematic defrauding of investors that inevitably brought down the Wall Street house of cards.

Who's information am I going to trust? The Wall Street crooks or the Nobel laureates?
Gee, that's a tough one.

[ihavenobias]

34. But you don't understand!

Krugman and Stiglitz are number wonks, they don't have any practical experience to know how things REALLY work. We NEED to hire Wall Street, pro-deregulation guys because no one else has the experience to be part of the economic team!

;)

[rollingrock]

52. Ever notice how there isn't a single economist on Obama's economic team?

I find that troubling to say the least.

It's being run by the same lobbyists and loan sharks he promised to keep out.

[JTFrog]

70. Well Krugman was on Reagan's economic team. How'd that work out for you? n/t

[Wetzelbill]

77. that's misleading

He was a staff member for one year to the Council of Economic Advisors. Staff work isn't necessarily partisan, they do research and are typically recent college graduates or people who are working towards a PHD. And he worked on that staff with Larry Summers.

[NorthCarolina]

92. Hmmmm....whose more credible on the economy...

the Nobel Prize winning economist OR the guy that uses Turbo Tax and files an underpayment on his taxes?

[malaise]

19. He is correct

The system is broken and no plaster can cover this sore.

[MarjorieG]

25. Rather than saying the sky is falling, failure irrevocable, Krugman never discusses our options,

governing, and the downside to nationalist takeovers, or that we are going as far as we can with the little money we have and doing it prudently.

I think he's dishonest.

[KittyWampus]

44. at this point YOU are dishonest because he and otheres certainly HAVE talked about alternatives

if you stopped plugging your ears, you'd know that.

I am very disappointed in a lot of DU'ers right now. :(

[MarjorieG]

47. Referring to the columns, short by necessity, which get the attention. Simple and bold, without the

downsides, many find it appealing. We are the site of down with corporate pigs, blow it all up with trillions of dollars, but that's not an option, however satisfying.

[sicksicksick_N_tired]

45. Obviously, you have read not one of his entire columns, let alone one of his books.

The man is one of the most incredible economists on the planet because he balances the scales of capitalism and democracy.

He is one of the few doctors of economics who ACTUALLY takes into account the VALUE of other interests (like human life and survival of THE EARTH) into consideration when weighing financial interests.

pfft

[amborin]

48. Krugman has presented detailed alternatives; clearly you've never read his works

[Skittles]

59. you're being dishonest

read his books

[JackRiddler]

64. The sky isn't falling - the earth is being given away to the bankers who fucked it.

[Wetzelbill]

78. unless you read his work

If you don't he never discusses it I guess.

[bridgit]

30. Is this all Paul "go-go years" Krugman talks about these days, it's becoming...

like a babel-fish just swimming in place

[OwnedByFerrets]

35. Kick and HUGE REC!

[Skittles]

39. YOU KNOW IT PAUL

KEEP SPEAKING THE TRUTH

[sicksicksick_N_tired]

41. Krugman,...has analyzed and forecast nearly every rise and fall of our capital. Few have listened.

He's not even "extreme", fer gawd's sake!!!

LISTEN!!!!

Just because there is a "system" in place DOES NOT MEAN playing into it is the answer.

***sigh****

LISTEN,...to the sounds of a dysfunctional system screaming to maintain itself and,...steer towards health.

I agree with this man who is suggesting that, appeasing those who advantaged themselves of a 'wild west' economy is BAD BAD BAD.

[Political Heretic]

42. I believe Krugman is right, no matter how pissed it makes some of you.

When he stops saying things I would say if I had his public access, then I'll stop agreeing with him. :)

[sendero]

50. Krugman...

... and as far as I can tell MOST reputable economists not employed by Wall Street.

People it is really simple. Geithners plan is for you, the taxpayer, who stood to gain NOTHING from the shenannigans of the banks and IBs, are now, through an elaborate shell game that fools no one expected to MAKE THE BANKS WHOLE, BUYING WORTHLESS ASSETS to save their asses.

That ANYONE could possibly think that this is the best we can do blows my mind. It is NOT, it is nothing more than a money grab from the taxpayers to the bankers.

And over the long term, it will not stand and if Obama does this, he is ONE TERM.

[earth mom]

66. I wonder how people would react if they were told they were bailing out Enron.

Because it's the same damn idea.

Good post btw. :thumbsup:

[TBF]

83. It's very transparent & embarrassing. n/t

[cliffordu]

65. Oh, sure, as long as he's parroting what YOU want him to.....

:rofl:

[Marie26]

46. Go, Krugman, go! nt

[Uben]

49. Keep your enemies closer!

Da man know what he do.

[Name removed]

51. Deleted message

Message removed by moderator. Click here to review the message board rules.

[bertman]

53. And, of course, everything would be just fine had we let the Wall Street guys make ALL

the rules--which they did by proxy through campaign contributions, aka legal bribery.

The government did not tell even one of the financial giants to slice and dice their investments and overvalue them. They did that on their own greedy, short-sighted time.

[JHB]

54. "government caused the problem" by NOT GOVERNING

Welcome to DU.

The current financial crisis is the result of thirty-odd years of the systematic removal of regulations that kept things fairly stable since the Great Depression. So you're right that "the government" caused the problem, but it did so by NOT governing.

It's easy to figure out who the "adults" are these days, though. They're the ones being called "socialists" by the RW smear machine.

[HughMoran]

56. Yep

The latest infighting has (not surprisingly) attracted the opposition.

[jumptheshadow]

57. Some bankers agree with him

I listened to some of the most knowledgeable voices in the industry a couple of months ago. One of them, the primary economic forecaster of a large bank, said we cannot and will not ever go back to unregulated banking again.

This does seem like an orchestrated campaign against Krugman on the part of both the right *and* the Obama staff. And for what reason? If he is wrong, it will be abundantly clear within a year. But if he is even partially right, then shouldn't we be listening to him rather than ostracizing him?

[defendandprotect]

58. Experts -- even people here at DU believe how "complicated" economics

is . . . no one can understand it but the experts -- !!!

BS -- it's plain ole theft!

[JTFrog]

69. Yea... says the guy who was on Reagan's Council of Economic Advisors and who was for Enron before

he was against them.

That fucker sure has some awesome hindsight don't he?

Has anyone ever read Ascent of E-Man?

:rofl:
:rofl:
:rofl:

[CaptJasHook]

72. What I find so disturbing is the intellectual dishonesty around here.

All these DU voices crying for health care reform, education reform, equality and justice... pretending that those things are free.... pretending that a country of 300,000,000 people can somehow achieve prosperity without the theft we call Wall Street.

Wall Street will be reformed, for now. A generation from now (when all of this becomes badly written, seldom taught, boring history lessons passed over in High School) the wolves will be back. in the meantime, I will support this president's attempts to implement systems of reform that will not easily be changed (ie. health care, education and green energy). These reforms are possible because of money that Wall Street has generated/stolen, to pretend otherwise is silly. How do you think Europe was able to implement socialism? They have been sitting on a shitload of wealth gained/stolen during a couple of centuries of colonialism.

Krugman is cherry-picking his facts about the 50s and 60s as well. He forgets to mention that most of the world was recovering from a couple of world wars, fought on their own soil. Their industry centers were bombed to hell, ours were intact. Banking as part of GDP was so low because everything else was so high. As other countries rebuilt their industries, competition became fiercer for market share. Americas predominance in the world began to shrink (ie. the late 70s), Wall Street began to panic, looking for ways to make money legally or illegally. Thus, they elected morally bankrupt Reagan/Bush and goons to deregulate (ie. break the laws, both morale and codified). And here we are.

Commerce for profit is graft. But the reality is that is why we have the privilege of entering into discussions about health care reform. Try having that level of conversation in Nigeria, Brazil or even China.

[AlbertCat]

79. Try having that level of conversation in Nigeria, Brazil or even China.

Krugman didn't mention the rest of the world after WWII because:

A) He's talking about the 1960's at that point in the OpEd

and

B) He's talking about AMERICA today generally, not Nigeria, Brazil or even China.

[CaptJasHook]

88. And I am comparing present day America's

incredibly fortunate circumstances and privileges to lack of said privileges in modern Nigeria, Brazil and China.

[SlingBlade]

76. Obama Bashing Using Krugman ?

I doubt very much that this was the intention of the article which I’ve admittedly have not fully
read yet.

So to these arm chair quarter backs, What is your plan ?

Impeachment ?
Draft McCain ?
Draft Bush ?
Complain ?

I'll go with complain judging by the postings made here recently
It's like the front page of Freeper Land for Christ Sake. :puke:

Are there any Dems left at D.U ?
:kick:

[Owl]

82. Has Krugman offered constructive solutions or beneficial guidance to the financial woes?

[noiretextatique]

84. have you read any of krugman's articles or books?

probably not.

[Owl]

89. Articles yes, books no.

Krugman's a smart man and I want to see his talents used constructively.

It seems his short writings tend only to criticize. Perhaps those are the ones the MSM highlights?

[amborin]

91. yes, and in great detail

[JoseGaspar]

85. Try the same exercise with Larry Summers...

Krugman and Stiglitz are neo-Keynesians (which in today's parlance means "less-than-Keynesians"). Hell, Stiglitz was the Chief Economist of the World Bank and Krugman was on Reagan's Council of Economic Advisers. They are on the left side of a very narrow plank - and not that "left" to begin with. They got caught up in the orgy? Well, who didn't?

There are many economists who would never be considered for a job with this administration. You will like what they say about the current plans even less.

[McCamy Taylor]

86. As I wrote not long ago, the fundamentals of our economy are fucked, because we have allowed these

financial con artists to take control of our economy.

One case in point. It is now clear that three out of the four dollars we were paying for gasoline were tacked on by speculators. The high price of gas brought ruin to the travel industry, the transportation industry (and with that the food industry), the manufacturing sector. The only people who benefited from the artificially inflated price of gas were oil producers like Exxon and Saudi Arabia. That made our economy so lop sided that it could not function. All the old fashioned ways of making money, esp. manufacturing became money sinks. Anyone who wanted to make money got into oil or financial speculation.

[chimpymustgo]

87. Gazillionaires just pushing paper around.

[GreenTea]

93. I support Obama but Krugman is correct the Bush holdovers in the Treasury certainly want status quo

no real change....so the corporations can get even - too "bigger" to fail - Indeed years down the line the same thing (bailouts) will inevitably occur, why not, easy money, the banks and corporations know this and will use it again & create it again, it's their safety net and sure a way to steal our tax dollars...monopolies too big to fail.

Without going in to it......just simply look at the architect for the bailout Bush's republican Sec. of Treasury, Goldman Sachs, Henry Paulson saying just a couple of days ago that ex Bush appointee, Tim Geithner knows what he's doing, and what a fine job it is that Geithner is doing, for the corporations that is....Paulson is loving keeping the corporate status quo, no penalties, no real change...If you love Hank Paulson, you must adore the two corporate fucks Tim Geithner & Lawrence Summers!

Great for the corporations, very unfortunate for us...That's why republicans aren't bitching about the way their republicans buddies Geithner & Summers are doing this, they scream socialism for everything else...as republican pretend not to like bailouts for their rich contributor friends & donating corporations.

[LooseWilly]

94. We all need to just calm down...

... soon Geithner will have access to 9th level wizard spells... and he'll wish the economy back to life.