Monday, October 13, 2008

Gordon is "Nobel" Krugman's Man

Congratulations to American economist Paul Krugman whose credentials were already formidable.... professor at Princeton University, columnist for The New York Times... who today was awarded the Nobel Prize for Economics.

And today Krugman has also written an op-ed, "Gordon Does Good" (NYTimes) in which he asks, "Has Gordon Brown, the British prime minister, saved the world financial system?"

Not George Bush. Not Henry Paulson. Not Ben Bernanke. But our long-suffering staunch ally, Britain's Gordon in concert with his chancellor of the Exchequer Alistair Darling, by thinking clearly and acting quickly.

Krugman explains, "On Wednesday, Mr. Brown’s officials announced a plan for major equity injections into British banks, backed up by guarantees on bank debt that should get lending among banks, a crucial part of the financial mechanism, running again. And the first major commitment of funds will come on Monday — five days after the plan’s announcement."

"And," Krugman continues, "whaddya know, Mr. Paulson — after arguably wasting several precious weeks — has also reversed course, and now plans to buy equity stakes rather than bad mortgage securities (although he still seems to be moving with painful slowness)."

For anyone who has watched the painful politicalization of our government by The Decider, even of the office of Attorney General, it'll come as no surprise that Krugman believes that... "It’s hard to avoid the sense that Mr. Paulson’s initial response 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."

Hopefully Krugman is on Barack Obama's short list for Treasury secretary. In the meantime, on a day when Krugman is receiving bouquets for his prestigious Nobel prize, he is also throwing bouquets of his own.... "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.

If we can all just keep a stiff upper lip.

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