At the London Review of Books, of all places, Christian Lorentzen has a less-than-admiring portrait of Paul Krugman, who was in London in May plugging his latest book. Krugman went on the BBC’s “Hardtalk” to take questions from journalist Sarah Montague:
A strange theatre ensues whenever Krugman is engaged by a journalist rather than a peer with similar expertise or a politician with actual if undeserved authority. The journalist reminds him of the people who’ve dismissed his ideas and he just shakes his head and says these Very Serious People are wrong. When the journalist goes the other way and flatters him, his ego creeps out:
Montague: If you were advising the Greek government now, what would you say to them?
Krugman: Ah well, you know, I’ve actually had conversations, not with them, but you know, with European politicians.
Montague: With whom?
Krugman: Um, I can’t tell you that.
Montague: But has there been a European government that’s asked for your advice?
Krugman: No, no, I’ve just had conversations.
His face takes on a pained expression, he stammers, puts his finger to his cheek, and for a moment shuts his eyes. You get the sense he’s thinking, why am I not in charge? There’s something sad about the spectacle.
It is, as James Taranto might say, the sad spectacle of a former Enron adviser.
Krugman went on another show to argue against Jon Moulton, chairman of Better Capital, and Andrea Leadsom, a Tory MP and former banker. Lorentzen recounts the following exchange:
“I find his view reckless, frankly,” Leadsom said, “I can’t believe that somebody as incredibly highly regarded as you could honestly think that the answer is to go and borrow more money.” Krugman told her she was confusing an economy with a household.
Late yesterday afternoon, Krugman posted a mini-classic of Krugmanesque analysis on his New York Times blog. It seems “totally obvious to me,” he wrote, that economists and Fed officials are making erroneous assumptions “without realizing it.” They’re making “exactly the same mistake” he demonstrated in 1998 with a chart. We should “pursue unconventional policies on a sufficient scale,” by which I think he means going out and borrowing a lot more money: totally obvious to him.
Back in Europe, a lot of countries are learning that the comparison of a country’s budget to that of a household is not quite as irrelevant as Krugman suggested. In fact, for some of them, the analogy may now be totally obvious.