The Economy: Nobel Prize Winner

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THE ABSURD TIMES

Paul Krugman

I first saw Paul Krugman on Countdown on MSNBC. Keith Olbermann was about to question him and he looked into the camera lens with a very unusual expression on his face. It was similar to the one above, but a bit more animated, revealing a bit more. Essentially, I gathered that he did not know the interviewer but did consider him a member of the mass media. The look carried with it some apprehension as well as curiosity, as if waiting for the question before deciding whether he was being asked questions by an idiot or not. In later interviews, he was much more relaxed and his sense of humor came across and there was considerable mild laughter on the part of both.

I am reprinting one of his articles that regularly appear in the New York Times because it was released to ZNET and a sketch of him from Wikkepedia. He is what I consider a moderate, but what the right wing Milton Friedman crowd call leftist and Keynesian. His discussions speak for themselves and it is worth a great deal to know about him and hs ideas. I'm presenting them without comment.

I just wanted to take the opportunity to include myself in the category of "Whiner" as described by Phil Graham, John McCain's guru, who also said we were in an intellectual recession, at least that the trouble with the economy was all in our minds.

March 09, 2009

By Paul Krugman
Source: NYT

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Last month, in his big speech to Congress, President Obama argued for bold steps to fix America's dysfunctional banks. "While the cost of action will be great," he declared, "I can assure you that the cost of inaction will be far greater, for it could result in an economy that sputters along for not months or years, but perhaps a decade."

Many analysts agree. But among people I talk to there's a growing sense of frustration, even panic, over Mr. Obama's failure to match his words with deeds. The reality is that when it comes to dealing with the banks, the Obama administration is dithering. Policy is stuck in a holding pattern.

Here's how the pattern works: first, administration officials, usually speaking off the record, float a plan for rescuing the banks in the press. This trial balloon is quickly shot down by informed commentators.

Then, a few weeks later, the administration floats a new plan. This plan is, however, just a thinly disguised version of the previous plan, a fact quickly realized by all concerned. And the cycle starts again.

Why do officials keep offering plans that nobody else finds credible? Because somehow, top officials in the Obama administration and at the Federal Reserve have convinced themselves that troubled assets, often referred to these days as "toxic waste," are really worth much more than anyone is actually willing to pay for them - and that if these assets were properly priced, all our troubles would go away.

Thus, in a recent interview Tim Geithner, the Treasury secretary, tried to make a distinction between the "basic inherent economic value" of troubled assets and the "artificially depressed value" that those assets command right now. In recent transactions, even AAA- rated mortgage-backed securities have sold for less than 40 cents on the dollar, but Mr. Geithner seems to think they're worth much, much more.

And the government's job, he declared, is to "provide the financing to help get those markets working," pushing the price of toxic waste up to where it ought to be.

What's more, officials seem to believe that getting toxic waste properly priced would cure the ills of all our major financial institutions. Earlier this week, Ben Bernanke, the Federal Reserve chairman, was asked about the problem of "zombies" - financial institutions that are effectively bankrupt but are being kept alive by government aid. "I don't know of any large zombie institutions in the U.S. financial system," he declared, and went on to specifically deny that A.I.G. - A.I.G.! - is a zombie.

This is the same A.I.G. that, unable to honor its promises to pay off other financial institutions when bonds default, has already received $150 billion in aid and just got a commitment for $30 billion more.

The truth is that the Bernanke-Geithner plan - the plan the administration keeps floating, in slightly different versions - isn't going to fly.

Take the plan's latest incarnation: a proposal to make low-interest loans to private investors willing to buy up troubled assets. This would certainly drive up the price of toxic waste because it would offer a heads- you-win, tails-we-lose proposition. As described, the plan would let investors profit if asset prices went up but just walk away if prices fell substantially.

But would it be enough to make the banking system healthy? No.

Think of it this way: by using taxpayer funds to subsidize the prices of toxic waste, the administration would shower benefits on everyone who made the mistake of buying the stuff. Some of those benefits would trickle down to where they're needed, shoring up the balance sheets of key financial institutions. But most of the benefit would go to people who don't need or deserve to be rescued.

And this means that the government would have to lay out trillions of dollars to bring the financial system back to health, which would, in turn, both ensure a fierce public outcry and add to already serious concerns about the deficit. (Yes, even strong advocates of fiscal stimulus like yours truly worry about red ink.) Realistically, it's just not going to happen.

So why has this zombie idea - it keeps being killed, but it keeps coming back - taken such a powerful grip? The answer, I fear, is that officials still aren't willing to face the facts. They don't want to face up to the dire state of major financial institutions because it's very hard to rescue an essentially insolvent bank without, at least temporarily, taking it over. And temporary nationalization is still, apparently, considered unthinkable.

But this refusal to face the facts means, in practice, an absence of action. And I share the president's fears: inaction could result in an economy that sputters along, not for months or years, but for a decade or more.

---

From:	Z Net - The Spirit Of Resistance Lives
URL:	http://www.zcommunications.org/znet/viewArticle/20825

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Krugman earned his B.A. in economics from Yale University in 1974 and his Ph.D. from the Massachusetts Institute of Technology (MIT) in 1977. From 1982 to 1983, he spent a year working at the Reagan White House as a staff member of the Council of Economic Advisers. He taught at Yale University, MIT, UC Berkeley, the London School of Economics, and Stanford University before joining the faculty of Princeton University in 2000. He is also currently a centenary professor at the London School of Economics, and a member of the Group of Thirty international economic body as well as the Council on Foreign Relations.

When Bill Clinton came into office in 1993, he considered Krugman for a leading post; Krugman was flown out for a meeting in Arkansas. Krugman's outspokenness was reported to be "the main reason the Clinton administration didn't offer him a job."^[8] Krugman says he would not have been interested in such a job; he told Newsweek, "I'm temperamentally unsuited for that kind of role. You have to be very good at people skills, biting your tongue when people say silly things."^[8] In his New York Times blog, Krugman repeated that statement, saying that he was "temperamentally unsuited to politics".^[9]

[edit] Nobel Prize

Krugman was awarded the Nobel Memorial Prize in Economic Sciences, the sole awardee for 2008. This award, created in 1968 by the Swedish central bank in Alfred Nobel's memory, includes a prize of about $1.4 million and was awarded to Krugman for his work associated with New Trade Theory.^[10][11] In the words of the prize committee, "By having integrated economies of scale into explicit general equilibrium models, Paul Krugman has deepened our understanding of the determinants of trade and the location of economic activity."^[12]

[edit] Academic contributions

Paul Krugman has done extensive work in international economics, including work on international trade, economic geography, and international finance. According to the Research Papers in Economics project, he is among the 50 most influential economists in the world today.^[13] Krugman's International Economics: Theory and Policy, co-authored with Maurice Obstfeld is a standard introductory textbook on international economics. He also writes on economic topics for the general public, sometimes on international economic topics but also on income distribution and public policy.

[edit] International trade theory

As the Nobel Prize Committee explains, Krugman's main contribution is to analyze the impact of economies of scale in international trade. Prior to Krugman's work, trade theory (see David Ricardo and Hecksher-Ohlin model) emphasized trade between countries with very different characteristics, like a poor country exporting agricultural goods to a rich country in exchange for industrial products. However, in the 20th century, an ever larger share of trade occurred between countries with very similar characteristics. For example, the Nobel committee mentions Sweden exporting Volvo cars to Germany while Germany exports BMW cars to Sweden.

Krugman's explanation of trade between similar countries was proposed in a 1979 paper in the Journal of International Economics. He assumes that consumers prefer a diverse choice of brands, and that production favors economies of scale. Consumers' preference for diversity explains the survival of different versions of cars like Volvo and BMW.^[14] But because of economies of scale, it is not profitable to spread the production of Volvos all over the world; instead, it is concentrated in a few factories and therefore in a few countries (or maybe just one). This logic explains how each country may specialize in producing a few brands of any given type of product, instead of specializing in different types of products.

Most models of international trade nowadays follow Krugman's lead, incorporating economies of scale in production and a preference for diversity in consumption. This way of modeling trade has come to be called New Trade Theory.

When there are economies of scale in production, it is possible that countries may become 'locked in' to disadvantageous patterns of trade.^[15] Nonetheless, trade remains beneficial in general, even between relatively similar countries, because it permits firms to save on costs by producing at a larger, more efficient scale, and because it increases the range of brands available and sharpens the competition between firms.^[16] Therefore, Krugman has usually been supportive of free trade and globalization^[17], and critical of industrial policy. (He writes on p. xxvi of his book The Great Unraveling that "I still have the angry letter Ralph Nader sent me when I criticized his attacks on globalization.")

On a lighter note, in 1978, Krugman wrote The Theory of Interstellar Trade, a tongue-in-cheek essay on computing interest rates on goods in transit near the speed of light. He says he wrote it to cheer himself up when he was 'an oppressed assistant professor'.^[18]

[edit] Economic geography

If trade is largely shaped by economies of scale, as Krugman's trade theory argues, then those economic regions with most production will be more profitable and will therefore attract even more production. That is, Krugman's trade theory implies that instead of spreading out evenly around the world, production will tend to concentrate in a few countries, regions, or cities, which will become densely populated but also have higher levels of income.^[19] This forms the basis of Krugman's theory of economic geography, which he began to develop in a 1991 paper in the Journal of Political Economy.^[20]

[edit] International finance

Besides his work on international trade, Krugman has also been influential in the field of international finance economics. In 1979 he published a model of currency crises in the Journal of Money, Credit, and Banking showing that fixed exchange rate regimes are unlikely to end smoothly: instead, they end in a sudden speculative attack. Krugman's paper is considered one of the main contributions to the 'first generation' of currency crisis models.^[21]

Krugman predicted problems with the fixed exchange rates in East and Southeast Asia, and Thailand's economic policies before the 1997 East Asian financial crisis, and also criticized investors such as Long-Term Capital Management whose profits depended on the maintenance of fixed exchange rates prior to the 1998 Russian financial crisis.^{[citation needed]}Japan's economic depression in the 1990s, arguing that the country was mired in a Keynesian liquidity trap.^[22] He also advocated aggressive fiscal policy to counter

[edit] Income distribution

In the 1990s, Krugman increasingly focused on writing books for a general audience on issues he considered important for public policy. In The Age of Diminished Expectations and The Conscience of a Liberal, he especially wrote about the increasing US income inequality in the "New Economy" of the 1990s. He attributes the rise in income inequality partly to changes in technology, but mostly to a change in political atmosphere which has been widely manipulated by Movement Conservatives, as Krugman refers to Neo-Conservative Republicans.

[edit] Other contributions

In the early 1990s, he helped popularize the argument made by Laurence Lau and Alwyn Young, among others, that the growth of economies in East Asia was not the result of new and original economic models, but rather increased capital and labor inputs, which did not result in an increase in total factor productivity. His prediction was that future economic growth in East Asia would slow as it became more difficult to generate economic growth from increasing inputs.^[23]

[edit] Author and journalist

Krugman wrote first for Fortune and Slate, later for The Harvard Business Review, Foreign Policy, The Economist, Harper's, and Washington Monthly. Krugman said that to answer what he called Pop Internationalism, "I would have to write essays for non-economists that were clear, effective, and entertaining."^[24]

Since January 2000, Krugman has contributed a twice-weekly column to the Op-Ed page of the New York Times, which has made him, in the words of the Washington Monthly, "the most important political columnist in America... he is almost alone in analyzing the most important story in politics in recent years — the seamless melding of corporate, class, and political party interests at which the Bush administration excels."^[25] In 2007, he began supplementing his Times column with a blog. In introducing it, he wrote, "Many of the posts will be supplements to my regular columns; I'll be using this space to present the kind of information I can't provide on the printed page – especially charts and tables, which are crucial to the way I think about most of the issues I write about."^[26][27]

In September, 2003, Krugman published a collection of his columns under the title, The Great Unraveling. Taken as a whole, it was a scathing attack on the Bush's administration's economic and foreign policies. His main argument was that the large deficits generated by the Bush administration—generated by decreasing taxes, increasing public spending, and fighting a war in Iraq — were in the long run unsustainable, and would eventually generate a major economic crisis. The book was a best-seller.^[28][29][30]

In 2007, Krugman published The Conscience of a Liberal. The book is a history of wealth and income gaps in the US in the 20th century. The book documents that the gap between rich and poor declined greatly in mid-century, then widened in the last two decades to levels higher than those in the 1920s. Most economists (including Krugman) have regarded the late-20th century divergence as resulting largely from changes in technology and trade, but Krugman writes that government policies had played a much greater role both in reducing the gap in the 1930s through 1970s and in widening it in the 1980s through the present. He rebuked the Bush administration for policies that currently widen the gap between the rich and poor. Krugman proposed a "new New Deal", which included placing more emphasis on social and medical programs and less on national defense.^[31] The book was praised in The New York Review of Books. ^[32]

[edit] Subprime mortgage crisis

In 2008, amid the subprime mortgage crisis in the US, Krugman predicted that housing prices would drop 25% overall and up to 50% in locations such as Miami or Los Angeles.^[33]MSNBC, particularly since the onset of the economic crisis in September 2008. He has repeatedly expressed his view that Alan Greenspan and Phil Gramm are the two people most responsible for causing the crisis.^[34] As early as 2005 Krugman was critical of Greenspan's reluctance to regulate the mortgage and related financial markets, and his shifting positions on the impending housing bubble.^[35] Krugman has appeared several times as a guest on

[edit] Political views

Krugman is a self-described liberal. His choice of the book title "The Conscience of a Liberal" is a play on Barry Goldwater's "Conscience of a Conservative". Krugman has explained that he views the term "liberal" in the American context to mean "more or less what social democratic means in Europe".^[36] He was an ardent critic of the George W. Bush administration and its foreign and domestic policy.

Krugman has sometimes advocated free markets in contexts where the American leftrent control,^[37] and that "sweatshops" are an inevitable reality.^[17] He has likened the opposition against free trade to the opposition against evolution via natural selection.^[38] Unlike many economic pundits, he is regarded as an important scholarly contributor by his peers.^[39][40] He has written over 200 scholarly papers and 20 books—both academic and non-academic.^[41] condemns them, by writing against

Krugman has written in opposition to increasing farm subsidies,^[42] ethanol mandates and subsidies/tax breaks,^[43] manned NASA space flights,^[44] and has written against some aspects of European labor market regulation.^[45][46]

He has, however, declared himself an ardent supporter of the welfare state. His appointment in the Reagan Administration, he has reiterated in an autobiographical essay, was not expected or fitting. "It was, in a way, strange for me to be part of the Reagan Administration. I was then and still am an unabashed defender of the welfare state, which I regard as the most decent social arrangement yet devised." ^[47]

[edit] Criticism

Throughout his career as a columnist, Krugman has been highly critical of what he regards as dubious economic ideas, such as: strategic trade and its main exponents, Robert Reich, whom he called "offensive" and Lester Thurow whom he called "silly,": protectionism, with attacks on Pat Buchanan on the Right and Ralph Nader on the Left; a return to the gold standard as promoted by editorial writers in the Wall Street Journal; and especially supply-side economics, which he described as economic "snake oil" in Peddling Prosperity. He has frequently been criticized in turn by exponents of these ideas; the journalist James Fallows spoke of his "gratuitous spleen," and Clinton commerce secretary Jeffrey Garten complained that "He behaves like someone with a massive chip on his shoulder."^[48]

A November 13, 2003 article in The Economist ^[49] reads: "A glance through his past columns reveals a growing tendency to attribute all the world's ills to George Bush…Even his economics is sometimes stretched…Overall, the effect is to give lay readers the illusion that Mr Krugman's perfectly respectable personal political beliefs can somehow be derived empirically from economic theory."

Krugman's critics have accused him of employing what they called a "shrill" rhetorical style.^[25][50][51]

Economist Daniel B. Klein published during 2008 a paper in Econ Journal Watch (of which he is the chief editor) that reviews and criticizes Krugman's columns for the New York Times. Klein contends that Krugman's "social-democratic impetus sometimes trumps people's interests, notably poor people's interests... Krugman has almost never come out against extant government interventions, even ones that expert economists seem to agree are bad, and especially so for the poor." Klein lists these examples of government interventions that Krugman's columns have opposed: "rent control; US agricultural subsidies; international trade; [...] ethanol mandates and subsidies/tax breaks; NASA manned-space flight; European labor-market restrictions; and the Terry Schiavo case."^[52]

Neo-classical economist Robert Barro has criticized Krugman's work frequently and Krugman has referred to him as "boneheaded".^[53][54] A blog article by Krugman stating that the argument that temporary protectionism "needs to be taken seriously" due to the 2008-2009 world economic recession drew strong criticism from Barro, who accused Krugman of hypocrisy.^[53]

Another frequent critic of Krugman's arguments is Donald Luskin. Krugman has alleged that Luskin has personally stalked him, which Luskin disputes.

[edit] Enron

Krugman was one of many economists to serve as a consultant for an advisory board for Enron; he did this in 1999, being paid $37,500^[55] before New York Times rules required him to resign when he accepted an offer to be an op-ed columnist in the fall of 1999. He stated later the consulting was to offer "Enron executives briefings on economic and political issues," and that it had required him to "spend four days in Houston."^[55]

When the story of Enron's corporate scandals broke, critics^[who?] accused him of having a conflict of interest and the job of having been a bribe to control media coverage, charges he denies forcefully, referring to it as "a game of gotcha" and "tabloid journalism." He states that the payment from Enron did not "cause me to write anything I would not have written otherwise." For one thing, he says, he was not a journalist at the time: "when Enron approached me there was no hint that a Times connection lay in my future. As soon as I shook hands with the Times, I resigned from that board." Further, his "normal fee for a one-hour business speech in Boston or New York was $20,000 - more if the speech involved long-distance travel. The Enron board required that I spend 4 days in Houston"; thus the sum involved was not large, in his view. He says that in columns written before and after the scandal, he disclosed his past Enron relationship when he wrote about the company.^[55][56]New York Times on December 10, 2000 called "California Screaming"); Enron was the largest in this market - "I have been criticizing Enron since January 2001, long before everyone else started bashing the company."^[57] He was critical of the company: he was one of the first writers to argue that deregulation of the California energy market had led to market-manipulation by energy companies (in a column in the

He writes in The Great Unraveling that:

I was no more perceptive than anyone else; during the bull market years [of the late 1990s] some people did send me letters claiming that major corporations were cooking their books, but - to my great regret - I ignored them. However, when Enron - the most celebrated company of its time, lauded as the very model of a modern business enterprise - blew up, I immediately saw the implications: if such a famous and celebrated company could have been a Ponzi scheme, it was very unlikely that the rest of U.S. business was squeaky clean. In fact, it quickly became clear, the bubble years were both the cause and effect of an epidemic of corporate malfeasance. (p. 26)

[edit] Awards

• 1991, American Economic Association, John Bates Clark Medal.^[39] Since it is awarded to only one person, once every two years, The Economist describes the Clark Medal as 'slightly harder to get than a Nobel prize'.^[29]
• 1995, Adam Smith Award of the National Association for Business Economics
• 2000, H.C. Recktenwald Prize in Economics, awarded by University of Erlangen-Nuremberg in Germany.
• 2002, Editor and Publisher, Columnist of the Year.^[58]
• 2004, Fundación Príncipe de Asturias (Spain), Prince of Asturias Awards in Social Sciences.^[40]
• 2004, Doctor of Humane Letters honoris causa, Haverford College[1]
• 2008, Nobel Prize in Economics, formally The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel - for his contributions to New Trade Theory.^[59]John Bates Clark Medal winner to be awarded the Nobel Prize. He became the twelfth

[edit] Published work

[edit] Academic books (authored or coauthored)

• The Spatial Economy - Cities, Regions and International Trade (July 1999), with Masahisa Fujita and Anthony Venables. MIT Press, ISBN 0262062046
• The Self Organizing Economy (February 1996), ISBN 1557866988
• EMU and the Regions (December 1995), with Guillermo de la Dehesa. ISBN 1567080383
• Development, Geography, and Economic Theory (Ohlin Lectures) (September 1995), ISBN 0262112035
• Foreign Direct Investment in the United States (3rd Edition) (February 1995), with Edward M. Graham. ISBN 0881322040
• World Savings Shortage (September 1994), ISBN 0881321613
• What Do We Need to Know About the International Monetary System? (Essays in International Finance, No 190 July 1993) ISBN 0881650978
• Currencies and Crises (June 1992), ISBN 0262111659
• Geography and Trade (Gaston Eyskens Lecture Series) (August 1991), ISBN 0262111594
• The Risks Facing the World Economy (July 1991), with Guillermo de la Dehesa and Charles Taylor. ISBN 1567080731
• Has the Adjustment Process Worked? (Policy Analyses in International Economics, 34)ISBN 0881321168 (June 1991),
• Rethinking International Trade (April 1990), ISBN 0262111489
• Trade Policy and Market Structure (March 1989), with Elhanan Helpman. ISBN 0262081822
• Exchange-Rate Instability (Lionel Robbins Lectures) (November 1988), ISBN 0262111403
• Adjustment in the World Economy (August 1987) ISBN 1567080235
• Market Structure and Foreign Trade: Increasing Returns, Imperfect Competition, and the International Economy (May 1985), with Elhanan Helpman. ISBN 0262081504

[edit] Academic books (edited or coedited)

• Currency Crises (National Bureau of Economic Research Conference Report)ISBN 0226454622 (September 2000),
• Trade with Japan : Has the Door Opened Wider? (National Bureau of Economic Research Project Report) (March 1995), ISBN 0226454592
• Empirical Studies of Strategic Trade Policy (National Bureau of Economic Research Project Report) (April, 1994), co-edited with Alasdair Smith. ISBN 0226454606
• Exchange Rate Targets and Currency Bands (October 1991), co-edited with Marcus Miller. ISBN 0521415330
• Strategic Trade Policy and the New International Economics (January 1986), ISBN 0262111128

[edit] Economics textbooks

• Economics: European Edition (Spring 2007), with Robin Wells and Kathryn Graddy. ISBN 0716799561
• Macroeconomics (February 2006), with Robin Wells. ISBN 0716767635
• Economics (December 2005), with Robin Wells. ISBN 1572591501
• Microeconomics (March 2004), with Robin Wells. ISBN 0716759977
• International Economics: Theory and Policy, with Maurice Obstfeld. 7th Edition (2006), ISBN 0321293835; 1st Edition (1998), ISBN 0673521869

[edit] Books for a general audience

• The Return of Depression Economics and the Crisis of 2008 (December 2008) ISBN 0393071014
• The Conscience of a Liberal (October 2007) ISBN 0393060691
• The Great Unraveling: Losing Our Way in the New Century (September 2003) ISBN 0393058506
  • A book of his New York Times columns, many deal with the economic policies of the Bush administration or the economy in general.
• Fuzzy Math: The Essential Guide to the Bush Tax Plan (May 4, 2001) ISBN 0393050629
• The Return of Depression Economics (May 1999) ISBN 039304839X
  • Considers the long economic stagnation of Japan through the 1990s, the Asian financial crisis, and problems in Latin America.
  • The Return of Depression Economics and the Crisis of 2008 (December 2008) ISBN 0393071014
• The Accidental Theorist and Other Dispatches from the Dismal Science (May 1998) ISBN 0393046389
  • Essay collection, primarily from Krugman's writing for Slate.
• Pop Internationalism (March 1996) ISBN 0262112108
  • Essay collection, covering largely the same ground as Peddling Prosperity.
• Peddling Prosperity: Economic Sense and Nonsense in an Age of Diminished Expectations (April 1995) ISBN 0393312925
  • History of economic thought from the first rumblings of revolt against Keynesian economics to the present, for the layman.
• The Age of Diminished Expectations: U.S. Economic Policy in the 1990s (1990) ISBN 026211156X
  • A "briefing book" on the major policy issues around the economy.
  • Revised and Updated, January 1994, ISBN 0262610922
  • Third Edition, August 1997, ISBN 0262112248

[edit] Selected academic articles

• (1996) 'Are currency crises self-fulfilling?' NBER Macroeconomics Annual 11, pp. 345-78.
• (1991) 'Increasing returns and economic geography'. Journal of Political Economy 99, pp. 483-99.
• (1991) 'Target zones and exchange rate dynamics'. Quarterly Journal of Economics 106 (3), pp. 669-82.
• (1991) 'History versus expectations'. Quarterly Journal of Economics 106 (2), pp. 651-67.
• (1981) 'Intra-industry specialization and the gains from trade'. Journal of Political Economy 89, pp. 959-73.
• (1980) 'Scale economies, product differentiation, and the pattern of trade'. American Economic Review 70, pp. 950-59.
• (1979) 'A model of balance-of-payments crises'. Journal of Money, Credit, and Banking 11, pp. 311-25.
• (1979) 'Increasing returns, monopolistic competition, and international trade'. Journal of International Economics 9, pp. 469-79.

[edit] References

1. ^ See inogolo:pronunciation of Paul Krugman.
2. ^ Foreign Policy: Top 100 Public Intellectuals. May 2008. Accessed 10-13-08. Krugman ranks in their top 100 list.
3. ^ Krugman Wins Nobel for economics, BBC News, 10-13-08, accessed 10-15-08.
4. ^ Economics 2008, Nobelprize.org, accessed 10-15-08.
5. ^ Paul Krugman, "Your questions answered", blog, January 10, 2003, retrieved December 19, 2007
6. ^ Paul Krugman, "About my son", New York Times blog, December 19, 2007
7. ^ Interview, U.S. Economist Krugman Wins Nobel Prize in Economics "PBS, Jim Lehrer News Hour", October 13, 2008, transcript retrieved October 14, 2008
8. ^ ^{a b} Hirsh, Michael (4 March 1996). "A Nobel-Bound Economist Punctures the C[onventional] W[isdom]--and Not a Few Big-Name Washington Egos". Newsweek.
9. ^ "2008 January - Paul Krugman - Op-Ed Columnist - New York Times Blog". Krugman.blogs.nytimes.com. http://krugman.blogs.nytimes.com/2008/01/30/. Retrieved on 2008-10-13.
10. ^ Catherine Rampell (October 13, 2008). "Paul Krugman Wins Economics Nobel - Economix Blog - NYTimes.com". Economix.blogs.nytimes.com. http://economix.blogs.nytimes.com/2008/10/13/paul-krugman-wins-economics-nobel/?em. Retrieved on 2008-10-13.
11. ^ http://economix.blogs.nytimes.com/2008/10/13/paul-krugman-wins-economics-nobel/?em
12. ^ "Microsoft Word - sciback_cover_ek_2008_FINAL.doc" (PDF). http://nobelprize.org/nobel_prizes/economics/laureates/2008/ecoadv08.pdf. Retrieved on 2008-10-13.
13. ^ "Top 5% Authors, as of September 2008". Research Papers in Economics. 2008-09. http://ideas.repec.org/top/top.person.all.html. Retrieved on 2008-10-13.
14. ^ Note: Krugman modeled a 'preference for diversity' by assuming a CES utility function like that in A. Dixit and J. Stiglitz (1977), 'Monopolistic competition and optimal product diversity', American Economic Review 67.
15. ^ P. Krugman (1981), 'Trade, accumulation, and uneven development', Journal of Development Economics 8, pp. 149-61.
16. ^ 'Bold strokes: a strong economic stylist wins the Nobel', The Economist, Oct. 16, 2008.
17. ^ ^{a b} In Praise of Cheap Labor by Paul Krugman, Slate, March 21, 1997
18. ^ Economics: the final frontier
19. ^ Nobel Prize Committee 'Information for the Public', page 3.
20. ^ 'Honoring Paul Krugman' EconomixNew York Times, by Edward Glaeser, Oct. 13, 2008. blog of the
21. ^ Craig Burnside, Martin Eichenbaum, and Sergio Rebelo (2008), 'Currency crisis models', New Palgrave Dictionary of Economics, 2nd ed.
22. ^ Paul Krugman's Japan page
23. ^ Krugman, Paul (December 1994). "The Myth of Asia's Miracle". Foreign Affairs (www.foreignaffairs.org). http://www.foreignaffairs.org/19941101faessay5151/paul-krugman/the-myth-of-asia-s-miracle.html. Retrieved on 2008-12-26.
24. ^ (Krugman 1996a, Introduction)
25. ^ ^{a b} Confessore, Nicholas (December 2002). "Comparative Advantage". Washington Monthly. http://www.washingtonmonthly.com/features/2001/0212.confessore.html. Retrieved on 2007-02-05.
26. ^ Krugman, Paul (September 18, 2007). "Introducing This Blog". The New York Times. http://krugman.blogs.nytimes.com/2007/09/18/introducing-this-blog/. Retrieved on 2007-09-19.
27. ^ Washington Monthly profile from December 2002
28. ^ ""The Great Unraveling: Losing Our Way in the New Century"". Powell's Books. http://www.powells.com/biblio/61-0393326055-0. Retrieved on 2007-11-22.
29. ^ ^{a b} The Economist - The one-handed economist Paul Krugman and the controversial art of popularising economics, November 13, 2003
30. ^ Krugman, Paul. "The Great Wealth Transfer." Rolling Stone. November 30, 2006
31. ^ Oct 17 2007- Krugman On Healthcare, Tax Cuts, Social Security, the Mortgage Crisis and Alan Greenspan, in response to Alan Greenspan's Sept 24 appearance with Naomi Klein on Democracy Now!
32. ^ November 22, 2007- Tomansky, Michael The Partisan
33. ^ "How bad is the mortgage crisis going to get?". http://money.cnn.com/2008/03/14/news/economy/krugman_subprime.fortune/?postversion=2008031705. Retrieved on 2008-03-17.
34. ^ http://www.youtube.com/watch?v=YwqcLbZJ4HA
35. ^ Krugman, Paul (2005-8-29). "Greenspan and the Bubble". New York Times (New York Times). http://www.nytimes.com/2005/08/29/opinion/29krugman.html. Retrieved on 2008-12-07.
36. ^ Nobelpristagaren i ekonomi 2008: Paul Krugman, speech by Paul Krugman (accessed December 26, 2008)
37. ^ Reckonings; A Rent Affair, by Paul Krugman, The New York Times, June 7, 2000
38. ^ Ricardo's difficult idea
39. ^ ^{a b} Avinash Dixit, The Journal of Economic Perspectives, Vol. 7, No. 2 (Spring, 1993), pp. 173-188, In Honor of Paul Krugman: Winner of the John Bates Clark Medal, Retrieved March 28, 2007.
40. ^ ^{a b} Paul Krugman, 2004. Retrieved March 28, 2007.
41. ^ The New York Times, "Columnist Biography: Paul Krugman". Retrieved April 15, 2007.
42. ^ True Blue Americans, by Paul Krugman, The New York Times, May 7, 2002
43. ^ Driving Under the Influence, by Paul Krugman, The New York Times, June 25, 2000
44. ^ A Failed Mission, by Paul Krugman, The New York Times, February 4, 2003
45. ^ Reckonings; Pursuing Happiness, by Paul Krugman, The New York Times, March 29, 2000
46. ^ Reckonings; Blessed Are the Weak, by Paul Krugman, The New York Times, May 3, 2000
47. ^ Incidents From My Career, by Paul Krugman, Princeton University Press, Retrieved 10 December 2008
48. ^ "Newsweek, The Great Debunker: A Nobel-bound Economist Punctures the CW - and Not a Few Big-Name Washington Egos". http://www.j-bradford-delong.net/Economists/paulkrugman.html.
49. ^ The Economist, Face Value: Paul Krugman, one-handed economist
50. ^ Peter Ferrara, National Review, The Hysterical Opposition, August 22, 2001. Retrieved March 28, 2007.
51. ^ Jack Shafer, Slate, Raines-ing in Andrew Sullivan
52. ^ Daniel B. Klein with Harika Anna Bartlett, "Left Out: A Critique of Paul Krugman Based on a Comprehensive Account of His New York Times Columns, 1997 through 2006", Econ Journal Watch 5:1, 109-133.
53. ^ ^{a b} Dismal science, revisited. By Clive Cook. The Atlantic. Published 10 February 2009.
54. ^ War and non-remembrance. By Paul Krugman. The New York Times. Published January 22, 2009.
55. ^ ^{a b c} Paul Krugman, "My Connection With Enron, One More Time", Retrieved March 28, 2007.
56. ^ Paul Krugman, "Me and Enron". Retrieved March 28, 2007.
57. ^ http://www.pkarchive.org/personal/EnronFAQ.html ref name="EnronFAQ">Paul Krugman, "My Connection With Enron, One More Time", Retrieved October 27, 2008.
58. ^ Mother Jones: Paul Krugman., August 7, 2005. Retrieved March 28, 2007.
59. ^ "Nobel Prize in Economics". Swedish Academy. http://nobelprize.org/nobel_prizes/economics/laureates/2008/. Retrieved on 2008-10-13.

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NAME	Krugman, Paul
ALTERNATIVE NAMES	Krugman, Paul Robin
SHORT DESCRIPTION	American economist, columnist, author and Nobel Laureate
DATE OF BIRTH	February 28, 1953
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Economy, 1 -- general background

THE ABSURD TIMES

Illustration: Dali is the only artist I can think of when I want an illustration for the economy. The site Absurd Times features reproductions of his work.

Speaking of the absurd, I have to relate the statement of the month. Last weekend Dick, er, Dick Cheney was interviewed by John King on CNN. King is a tall, light-haired, and air-headed, news reader. At any rate, Cheney was talking about how Saddam Hussein was responsible for terrorist acts and he included the, gasp, Oklahoma City bombing in the list. King just let it pass as if he had not even heard it.

So, just a brief history. Roosevelt instuted a series of regulations and programs in order to help the country recover from the Great Depression and to prevent another one from happening. Subsequent Presidents added to them despite the die-hards who opposed any regulation from the start. Letting all the banks fail was Herbert Hoover's solution and it didn't work.

With the election of Reagen, however, things changed. Deruglation was the "in" thing. "Get the government off the people's backs." Supply-side economics and Milton Freidman ruled. A wierd thing called the Laffer Curve was introduced proving that, the lower the taxes, the higher the revenue the government received. Government spending increased, but mainly on scientific warfare research. We out-spent the Soviet Union into collapse with the arms race. The money was spent to "starve the beast," the beast being the lower and middle-classes and the programs that helped them. Finally, by the time of Bush II, almost all regulations had been eliminated and now we are back to what is approaching another world-wide Depression.

I'll be sending or posting a series or documents on this. If you find them cluttering up your inbox, just delete them. I'll let you know when it's over.

One final note: visits to our site for the first two months of 2009 equalled the total number in 2008. I'me not sure how to explain this. Maybe people got network access for Xmas.

This first is an interview from Democracy now:

JUAN GONZALEZ: The CEO of AIG, Edward Liddy, testified on Capitol Hill Wednesday and was repeatedly questioned over why the failed insurance giant is paying out over $165 million in bonuses after it received a $170 billion taxpayer bailout. While President Obama and other officials are expressing outrage over the bonuses, more details have come to light indicating that some officials have known about the bonuses for months.

During an exchange with Congressman Paul Kanjorski of Pennsylvania, Liddy revealed the Federal Reserve had directly approved the AIG bonuses.

EDWARD LIDDY: The decision we made was that we could preserve that unit and continue to wind it down in a very orderly fashion and not expose the taxpayer and the company to the risks that heretofore they've been exposed to. I know $165 million is a very large number. It's a very large number. In the context of $1.6 trillion and the money that's already been invested in us, we thought that was a good trade.


REP. PAUL KANJORSKI: Am I to understand that you're saying that Chairman Bernanke or his designated person at the Federal Reserve was under the—was informed that you were going to make these payments and acquiesced in that decision?


EDWARD LIDDY: Yes. Everything we do, we do in partnership with the Federal Reserve. The Federal Reserve is at our board meetings, at our compensation committee meetings, at our various meetings on strategy, and they have the ability to weigh in, either yea or nay, on anything that we decide.


I would just like to make the point that there's no attempt to do anything under the stealth of darkness or undercover. We wanted to do what was right in these contracts. The contracts called for a payment on March 15th, and we've done that. We've been talking about this within the board and within the—with our representatives of the Federal Reserve literally for three months.


REP. PAUL KANJORSKI: And with the Secretary of Treasury?


EDWARD LIDDY: No. The way our relationship generally works is we review things with the Federal Reserve, and the Federal Reserve, as they think is appropriate, discusses it with the Secretary of the Treasury or with representatives of Treasury.

AMY GOODMAN: During the hearing, AIG CEO Edward Liddy said he had already asked a few hundred AIG executives and employees to give back at least half the extra pay, but he refused to give details on who was keeping their bonuses. More than seventy AIG employees are receiving bonuses worth a million dollars or more.

This is Congressman Barney Frank of Massachusetts questioning Edward Liddy.

REP. BARNEY FRANK: I ask you to submit the names of the people who've received the bonuses, noting that they paid them back or not, and I won't accept them under a confidentiality, personally. In fact, you submitted some confidential information, and I, frankly, threw it away after reading it, because I was afraid I would inadvertently breach the confidentiality. But I do ask that you submit those names without restriction. And if you feel unable to do that, then I will ask the committee to subpoena them.


EDWARD LIDDY: Congressman, if you'll let me explain, I very much want to comply with your request. I would hope it doesn't take a subpoena. If it does, then we will obviously comply with the law.


I'm just really concerned about the safety of our people. So let me just read two things to you. "All the executives and their families should be executed with piano wire around their necks. My greatest hope." "If the government can't do this properly, we the people will take it in our own hands and see that justice is done. I'm looking for all the CEOs' names, kids, where they live, etc."


You have a legitimate request. I want to protect the well-being of our employees.


REP. BARNEY FRANK: Well, I have to say that that is—if we give into these kind of threats, we would never get information made public about a lot of things. And I would certainly ask that the state and local and federal law enforcement officials give full cooperation, and I would urge that any threat that anybody even comes close to carrying out or even threats, which themselves can violate the law, be prosecuted.

JUAN GONZALEZ: Lawmakers grilled AIG's Edward Liddy about the bonuses, but little attention was paid to what might be a bigger scandal. Earlier this week, AIG revealed it had funneled tens of billions of dollars in taxpayer bailout money to other banks facing huge losses AIG had insured. Goldman Sachs received nearly $13 billion in what has been described as a backdoor bailout. Bank of America, Merrill Lynch, JPMorgan Chase and Morgan Stanley also received billions. So did several foreign banks, including Société Générale of France, Deutsche Bank of Germany, Barclays of Britain and UBS of Switzerland.

AMY GOODMAN: Robert Scheer is with us now, longtime journalist, editor of the political website Truthdig. He's author of a number of books; his forthcoming one is called The Great American Stickup: Greedy Bankers and the Politicians Who Love Them. His latest article on Truthdig is "Perp Walks Instead of Bonuses." He joins us from San Francisco.

Welcome to Democracy Now!, Robert.

ROBERT SCHEER: Hi, Amy.

AMY GOODMAN: Perp walks?

ROBERT SCHEER: Yes. I mean, first of all, let me say, the bonuses—I think it's an important glimpse into the cesspool that is Wall Street, but it's a side show, you know, and I know it's confusing—millions, billions, trillions. But the real scandal is—the money—AIG is basically a shell game at this point, and they're passing the money through AIG to the big banks, the former stockbrokers and so forth. Goldman Sachs got the biggest amount, $12.5 billion. The head of AIG was on the board of directors and the head of the audit committee for Goldman Sachs for five years. The Treasury Secretary that put this deal together, Paulson, under Bush was the head, was the CEO of Goldman Sachs. The guy who administered the TARP fund was a vice president at Goldman Sachs. The Democrat who made all of this deregulation possible, Robert Rubin, when he was Secretary of Treasury, and then Lawrence Summers who followed him, Rubin had been the head of Goldman Sachs. And they pushed through the basic deregulation that allowed these banks to become too big to allow to fail.

So while I think it's a terrific teaching moment to see how excessive the pay is for people who basically brought the world economy to its knees, which are these so-called executives, and I think there is a real phony in that they had to be given these bonuses for retention—Andrew Cuomo, in his letter to Barney Frank, pointed out that the eleven of the top people who got these bonuses have already left the firm, so that really doesn't hold water. But I think the real scandal here is that we're supposed to own 80 percent of AIG, and maybe the Fed and the Treasury are in on it, but basically it's being used as a shell to pass on money to these banks, Goldman Sachs being the leading one, and that should be examined, because I think that is really a criminal waste of our money.

AMY GOODMAN: Robert Scheer, we're going to break, then come back to you, veteran journalist, syndicated columnist. His latest piece, "Perp Walks Instead of Bonuses." After we speak with Robert Scheer, we'll be joined by Tariq Ali on the sixth anniversary of the invasion of Iraq and ground zero increasingly Pakistan. Stay with us.

[break]

AMY GOODMAN: Our guest in San Francisco, Robert Scheer, veteran journalist, has written a number of books, and his latest article is "Perp Walks Instead of Bonuses." But, Juan, I wanted to ask you something: in your latest column in the New York Daily News, you were specifically writing about UBS, the Swiss bank, that got, what, $5 billion bailout from AIG?

JUAN GONZALEZ: Right, yeah. I think in the same vein as Bob Scheer is talking about, yes, UBS got $5 billion last fall from AIG. And interestingly, Bob, I'm sure you're aware, UBS was at that very moment involved in a federal case in Florida, charges that it was—had conspired with Americans who held secret accounts at UBS in Switzerland to evade federal taxes. Just a month ago, it paid—it agreed to pay $780 million in fines to the US government, but is still resisting releasing the names of these 50,000 Americans who were evading taxes with the help of UBS. So now you have UBS getting bailout money, $5 billion, through AIG and then paying the federal government $780 million in fines for tax evasion. It's astounding that this continues to happen. And I think you've correctly pointed out that the big scandal here is the amount of money that AIG is basically being used as a pass-through for all of these other banks.

ROBERT SCHEER: Oh, there's no question about it. And you should point out that UBS—that one of the officers of UBS is Phil Gramm, who was the Republican head of the Senate Finance Committee who pushed through the deregulation legislation, the Commodity Futures Modernization Act, the Financial Services Modernization Act, which made—allowed this to happen, which made these crimes legal. And, I mean, these people have no shame. This guy is an officer of a foreign company that we American taxpayers are paying for having caused all of this suffering. That is what I find astounding about this.

First of all, I think that the whole argument that they're too big to fail is utter nonsense. That's why we have bankruptcy courts. If you can't pay your bill, you go through bankruptcy court, there's a resolution of it. There's absolutely no reason why AIG couldn't have gone the way of Lehman. It didn't go the way of Lehman because the head of Goldman Sachs was in on the meeting with Timothy Geithner, who was then head of the New York Federal Reserve, when they decided to save AIG hours after Lehman was allowed to go down the tubes. Why? Because Goldman Sachs had $20 billion insured by AIG. And the CEO of Goldman Sachs was in on that meeting—the only CEO. This is one of the great financial scandals of American history. I don't know why that's not being investigated. I think Timothy Geithner should be asked a lot of tough questions. I think he should be asked to resign, frankly, by the President, because he's up to his eyeballs in this.

JUAN GONZALEZ: Bob, one of the other points that Liddy made in the congressional hearings yesterday was that the reason they had to pay these retention bonuses is because the derivatives deals that the bankers at—that the insurers at AIG were involved in were so complex that if these people left, it would be very difficult to be able to unravel them. And part of the problem—isn't it?—that these derivative deals, precisely because they are so opaque and so complex and nobody knows what they are, create enormous risk for not only the banks involved, but obviously, it turns out, for the taxpayers in general. Wouldn't some kind of way to actually publicize what the deals that were paid off were be one way of being—getting to the bottom of how this crisis occurred?

ROBERT SCHEER: Of course. But first of all, you don't have to have the cooperation of criminals, you know, or potential criminals, if that's—Bernie Madoff, you know, is going to cooperate, and other top officers of his operation. The argument that somehow we have to give these people millions of dollars in order to get them to unravel a crime is utter nonsense.

The other thing is, there was nothing really very complex about the insurance deal. It was a scam. What was happening is that we were doing these credit swaps, which grew because of deregulation. They packaged all these things together that shouldn't have been packaged together. And the way to sell them for a high price was to get a respected insurance company, AIG, which had been a traditional regulated insurance business—"Let's use the AAA rating. Let's use their great reputation." These shysters in London, who are getting most of these bonuses, were the ones who came up with this scam. "And we'll put the sticker of approval of AIG insurance," even though it's not backed by any money, even though they're allowed to leverage up the gazoos, again because of deregulation. But that's really what AIG had to do with it. You have this toxic bundle of securities that you're trying to sell. You say, "Oh, don't worry about it. We've got AIG backing it." And in back of their mind is, the government won't let AIG go down the tubes.

And I don't have any compunction at all about saying let Goldman Sachs, let Citi, let Bank of America go down the tubes, because that's what bankruptcy court is about. And you can take the different pieces, you can save the depositors, you can save the homeowners. They've not been wanting to do that anyway. We should have started the whole resolution of this crisis by saying, "Let's have a freeze on foreclosures. Let's save the people who are being thrown out of their homes." That's the way to put stability. There's $75 billion for the whole mortgage program to save all of these tens of millions of people who are at risk, and yet we have a number twice—more than twice as much going to AIG to help out these bankers.

So I think there's tough questions to be asked. I know the Obama administration is only less than two months old, but Timothy Geithner was head of the Federal Reserve in New York. He should not have been given the Treasury Secretary position. And he is the one that really should be on the spot at this time.

AMY GOODMAN: And Larry Summers, Bob Scheer?

ROBERT SCHEER: Oh, Larry Summers should not be in government at all. Larry Summers was the guy who pushed through—he was, as was Timothy Geithner, Robert Rubin's protégé, but he took over at Treasury after Rubin, and he's the one who pushed through and got Clinton to sign the Financial Services Modernization Act and the Commodity Futures Modernization Act.

The language of the Commodity Futures Modernization Act—you can download it from Truthdig or other places on the internet—says very clearly in Titles III and IV that none of these new derivatives, which is the toxic stuff now, would be subject to any preexisting regulation or government agency. That's the specific language of Title III and IV, which Lawrence Summers pushed through, along with Phil Gramm, who's now an officer of UBS. That's what opened the gates for this corruption. That's what has caused people to lose the value of their 401(k)s and to lose their home.

So, yes, Summers shouldn't—Summers should be being questioned. He shouldn't be in the government. And I think Timothy Geithner, it's time for him to leave, as well.

AMY GOODMAN: We're talking to Robert Scheer. His latest piece, "Perp Walks Instead of Bonuses." The Wyden-Snowe amendment that got taken out in conference committee—Ron Wyden, the Democrat from Oregon, and Olympia Snowe, the Republican from Maine, wanted to put a cap on any bonuses, at something like $100,000, and they would be taxed 35 percent on anything over that. Now Christopher Dodd is saying that he was responsible for taking that out, but at the behest of the Obama administration. I mean, all of this money, the taxpayer bailout money, could certainly have been conditioned, couldn't it have?

ROBERT SCHEER: Oh, and it should have. The whole problem again is Obama has followed the advise of Timothy Geithner and Lawrence Summers, and these people who, you know, are saying, basically, "You must trust the banks. You must trust AIG. You must trust the people behind AIG." And, you know, that's not governance. That's not due diligence. That's not what we're asking.

If we own 80 percent of that company, it is outrageous to say that we have to trust them. And, you know, that—as I say, I think Lawrence Summers and Timothy Geithner should be asked to leave. Barack Obama should start with a clean slate. He should bring in people who have unquestioned integrity on this. And they should be asking the tough questions.

JUAN GONZALEZ: And, Bob Scheer, obviously the issue of—that's been raised repeatedly of the need to respect contracts and not breaking of contracts, obviously labor unions—several of the congressmen in the hearing yesterday made the point that the auto unions are being asked to break their contracts, in essence, in order to be able to save General Motors, but here, in this situation, Mr. Liddy, who, by the way, was a former director of Goldman Sachs, is saying that these contracts were in place before he came in at AIG, and they can't be violated.

ROBERT SCHEER: Yeah, well, I couldn't agree more. You know, I worked for the Los Angeles Times in one capacity or another for almost thirty years, and a few months ago we were told that we no longer have retiree medical. Period. Goodbye. It's gone. You know, I had been paying for it for years. Suddenly I don't have retiree medical. They broke that contract, that agreement, because they're in bankruptcy now, the Tribune Company. Workers all over the country are experiencing that.

These contracts, by the way, were drawn up a year ago, and what is ugly about them is they were guaranteed 100 percent of their 2007 bonus, even though the people running AIG at that time knew darn well that they were going to have a disastrous year, losing hundreds of billions of dollars. Yet they wrote in a 100 percent guarantee.

What we're seeing is how this financial market works: they take care of each other. They feather their nests. And the amount of money they take is obscene. Obscene. You know, hundreds of millions of dollars—for failing! You know, the head of AIG, when he was on the board of directors, according to Forbes, was paid $650,000 for being a director of that company, a company that was engaged in these toxic investments. So these guys—this whole notion of a bonus as something you get for doing well is—they don't respect that. They reward people for failing. That's the key to the system, evidently.

AMY GOODMAN: Robert Scheer, finally, the journalist's role in all of this? Every week, it seems, we're talking about the folding of another newspaper. We just saw the closing of the Seattle Post-Intelligencer Now it will just be online. Tucson Citizen, the bankruptcy of the Philadelphia papers, the Daily News and the Philadelphia Inquirer, the Minneapolis Star Tribune, San Francisco Chronicle in big trouble, even the New York Times, also the Washington Post. What about the role of not only the newspapers, but also the networks in this?

ROBERT SCHEER: Well, you know, the good old days were not so good for mainstream journalism, and certainly not when it came to covering business stories. At your traditional newspaper, you had, you know, maybe fifty—a big newspaper like the Los Angeles Times, New York Times, fifty, a hundred, people covering business. Maybe you had one consumer writer, one labor writer, one writer covering these things from the interests of ordinary people. Much of the reporting was done by press releases.

I covered the Financial Services Modernization Act, Commodity Futures Modernization Act, when I was working as their columnist at the Los Angeles Times. I saw very few mainstream reporters there. There was no critical reporting of those stories. They basically went along with what the lobbyists want. Bank of America and the other banks spent $300 million that year getting the legislation—their license to steal, in effect—and it was not covered. The Telecommunications Act was not covered.

So, yes, I hate to see journalists, good journalists, losing their jobs. I wonder who's going to pay for the reporting and do the really good reporting that has been done in many areas? But business reporting has been a scandal. Why? Because the same people who own the newspapers benefit from the tax breaks, benefit from the loopholes. They're on the other side. I mean, General Electric, which is in trouble, after all, owns NBC. So these are not pristine owners. There are some exceptions of some families that have tried to do a good job, but in the main, the people running media in America, who own it, benefit and want the kind of deregulation of the whole business community that has brought us to our knees.

AMY GOODMAN: I wanted to bring into this discussion Tariq Ali. We actually called you here, Tariq, to talk about Pakistan and Iraq, to talk about Afghanistan, but you had a very interesting piece called "Capitalism's Deadly Logic: Reimagining Socialism." Even when you say that now, when we see all that—what capitalism has wrought, people go nuts over, for example, socialized healthcare. What do you mean by "reimagining socialism"?

TARIQ ALI: Well, I think, given the scale of the crisis in the United States, you need very firm, carefully thought-out structural reforms to the system, what Robert Scheer has been talking about. In order to do this, you have to break down certain prejudices. For instance, if people think that free healthcare for every citizen of the United States is socialism, well, let them think it. I mean, what's the big deal? I think the overwhelming majority of people in the United States, especially the poor segments, want free healthcare. Billions are being spent on bailing out these fat cats, as we've heard. Why can't this money be spent to create a nationalized health service for the United States of America? The fact that a tiny little island, which has been under siege for the last forty, fifty years, Cuba, can have a national health service with cheap medicines, free for the poor, but the United States can't, it's quite shocking. So I'm just saying that we have to completely rethink the way in which these societies function.

Look, lots of people on the right called the New Deal socialist. It was essentially a form of social democracy. Pretty good measures were put through. And it was the deregulations pushed through by the Clinton administration which ended elements of the New Deal program. What we are saying now is, bailing out, spending money, helping Wall Street or its equivalents in the city of London, is not going to do the trick. Some serious thought is needed. This doesn't mean that the capitalist system is totally on the verge of collapse, but, by God, it needs heavy surgery. And if you have a president not capable of doing that in times of crisis, he will not be reelected. I think the economy is going to determine the fate of the Obama administration, not foreign policy.

JUAN GONZALEZ: I think you make the point in one of your latest articles that those who think that capitalism is in collapse underestimate the resiliency of the system itself to rectify its excesses and then to usher in a new age of exploitation. Can you talk about that?

TARIQ ALI: Well, I think, you know, since the nineteenth century, there have been dozens of business cycles very similar to the one we are seeing now, not exactly the same, not analogous, but not that dissimilar: recessions, depressions, massive state intervention, recovery of economy, handing over of that economy back to the rich, recessions, depressions. So, one has to break the cycle.

And I think the cycle can only be broken by teaching. This whole notion that the market knows all, that the market is the best—I mean, people are suffering in the United States and elsewhere in the world because of that particular dogma. And I think we need to say very clearly, no, the market does not know. There's nothing mystical about it. The market consists of human beings, and these human beings are the people who make the decisions, and they've made wrong decisions now for the last twenty-five years.

And the one part of the world where this particular consensus was challenged, South America, they're doing reasonably well. More and more radical governments are being elected in South America. The latest example is El Salvador. Why? Because they challenged the Washington Consensus ten, fifteen years ago and said this system is not working for us.

Now we know it's not working for the United States, either. I mean, I've just been in the Midwest. I mean, walking through Detroit and Flynt is like walking through ghost towns. I mean, you know, you can compare parts of Detroit to anywhere in the third world: you know, burnt mansions, boarded-up buildings, a dead downtown, just casinos in the center of the town. It's quite shocking, actually, and upsetting to see this.

AMY GOODMAN: And the difference between how developing countries were forced to deal with their economic crises versus how the West is dealing with theirs?

TARIQ ALI: Well, look, I mean, what happened, when the Washington Consensus wrecked South America over the last twenty-five years, you had giant social movements. That's the big difference with the United States. In Bolivia, in Ecuador, in Venezuela, in Argentina, in Paraguay, you had giant social movements from below, in many cases fighting the IMF, fighting the privatization proposals. And these social movements produced politicians, political leaders and political parties, which then linked to the movements and said, "Right, we're going to change the system."

AMY GOODMAN: Well, we're going to come back to our discussion with you. I want to thank Robert Scheer, veteran journalist. "Perp Walks Instead of Bonuses," his latest piece, also writing a new book on this issue. Thanks so much for being with us from San Francisco.

ROBERT SCHEER: Thank you.

AMY GOODMAN: Tariq Ali will stay with us. We'll be back in a minute.

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Economics and Satire

THE ABSURD TIMES

Illustration: Swift, from Wikipedia.

I was preparing a series on the economy when an interesting and quite funny exchange developed and it reminded me of my own observation: If you take yourself seriously as a professional, never attack a satirist. Even a mediocre satirist has the advantage as one of his [I use this grammatically as the first person singular and anyone who thinks it makes me a mysoginist has the problem in his brain, not mine, and I am too old now to care if it is politically incorrect] characteristics is that he does not pretend to take himself seriously. I'll start with a famous example.

Jonathin Swift, illustration, once became fed up with a contemporary astrologer named Partridge. The Partridge took himself very seriously and had a number of gullible followers. Here is a short description of him: "Partridge undertook to himself the task of reforming astrology. His program for reform involved eliminating the elements derived for the medieval Arabic tradition in favor of a return to Ptolemy."

Swift finally became too irritated when Partridge attacked the church with which he was affiliated or at least respected. At this point, Swift published a few articles, all talking about the impending death of Partridge and then finally Partidges' obituary.

People crowded around Partridges' house day and night offering condolences, weeping, even as Partridge himself was trying to sleep or was telling them to go home. Finally, in complete anger, Partridge published a short article attacking Swift and laudly proclaiming that he, Partirdge, was still alive.

Swift countered by publishing an article lamenting the passing of the late Partridge and expressing indignation that someone is now pretending to be the late, great, Partridge, spoiling his name and reputation. After that, Partridge was history.

Now for the present: recently a "personality" on CNBC, Jim Cramer, who can be described as a madman giving hypercaffinated stock tips or analysis, had a modest by loyal following. He went on a blithering rant recently attacking Obama for the bailout of the failing banks, ignoring the fact that all of our economic problems result from greed and deregulation, starting from the Reagen Presidency, and going wild buring the last Bush Presidency. At any rate, the rant was so wierd that Jon Stewart featured it and made fun of it.

So far, so good. But Cramer was not content to let it rest at that. He turned around and attacked Stewart, defending himself. Stewart then started to play other clips from Cramer, such as advising that investing in Bear Sterns was a good idea -- a week before it collapsed. All of these clips and such are available on youtube so there is no point in going into more detail. The point is, this Cramer should be washed up -- unless the publicity he got by being humiliated generates curiosity. He then appeared on Stewart's show and Stewart did the best serious interview I've seen since the days of Terkel. It is on comedychannel.com and worth watching. Cramer was glad to leave with his life.

For the most part, politicians tend to make themselves ridiculous. Ari Fleisher recently defended the Bush administration by saying the threat from Saddam Hussein to the United States was real. In a follow-up, Gaffney, another Republican, said that Saddam was responsible for the Oklahoma City bombings! Since he was with serious broadcasters and not satirists, he managed to escape without much ridicule, but these are such obvious straight lines and openings they are hardly worthy of satire. The guy who threw the shoes at Bush was sentenced to three years in prison by Iraqi operatives. No sense of gratitude whatsoever. If he worked for the Bush administration and done that to anybody Spanish Speaking, he would have received a medal of honor as did Paul Bremer who turned Iraq into an enen greater disaster than in was.

And then, even blaming anyone other than God for the 9/11 attacks is absurd. The WTC was constructed to be a taller building that the Sears Tower in Chicago and that's why God destroyed it. Now, some British insurance company bought it and intends to rename it the Willis Tower. Either people will ignore the name change or something horrible is going to happen. You heard it here, folks.

Bernie Madoff (pronounced made off, who would give their money to a guy with a name like that?) stated he was "ashamed." Awwww. I heard one individual complain that he lost Millions to Madoff. Awwww, and what an ASS! If money meant brains, it would not have happened.

We have also learned that there were Bush/Cheney Assassination squads that reported directly to them and that operated overseas. And we thought Nixon's "Plumbers" squad was corrupt?

I'm waiting for prosecution of most of the people in the Bush administration. There is enough evidence, both internal and overseas, to put all of them away for a long time. I wonder if it will happen.

Steele, the Chair of the Republican National Committee gave me much to wonder about. Why pick him? I'm trying to imagine the Republican thought processes (I know, bad idea). "Hip Hop" Republicans? The lines write themselves. I can imagine it went something like this "We gotta appeal to more stupid people. I know, let's get ourselves a black guy -- it worked for the Democrats. And they know how to be republican. Look at Clarance Thomas! Yeah." Just recently he said that abortion should be a woman's choice. Oops! "Lets give him a little more time. If he keeps screwing up, we'll find another black guy, yeah."

Anyway, now I'm going to turn my attention to a coupel Nobel Prize winners in Economics -- you should have the information.

Republican Leadership

THE ABSURD TIMES

Illustration: From Keith Tucker. He now has animated and humorous political cartoons on his site as well as an endorsement from John Pilger. He also has some nice gift ideas.

Republicans are becoming angry at Rahm Emmanuel's and Paul Begalia's designation of Rush Limbaugh as the new leader of the Republican Party. Since he has no official position within that party, he does not qualify as a "Leader" in that sense. Rather, he seems more of a symbol. He is fat like an elephant, a pill-popping blowhard, and anti-minority. Furthermore, much of what he espouses in the economic sphere is beneficial only the the upper one percent of the populace while his audience blesses him as a protector of their interests as it is composed of double digit IQ types. Still, he is not a leader, but one can understand why he is seen as one.

While now most Rs are trying to distance for Bush the 43rd, all along RL seems to have supported him. I must admit that I really am relying on second hand accounts and brief clips shown on other programs, but it seems unlikely that he opposed the war in Iraq and the rampage of the greedy.

In fact, I am not aware of any R that has disowned him as Obama did Reverend Wright (who was right on most controvesial points). In fact, any of them that did ctiricize him were soon on his program begging his forgiveness. Even the current Chairman of the RNC (you know, they guy who said it was time for the hip hop Republican *snicker* had to apologize.

So, the best service RL can perform is this: if you want to know what a Republican is, listen to his show for a while. If you are undecided on an issue, find out his and you can be pretty sure that the opposite opinion is correct.

Thats all folks.

Oral History and Palestine

THE ABSURD TIMES

I came across this today and hasten to reprint it here. Aside from Studs Terkel, we have few Oral Historians and yet it is the basis of our learning. The sequential nature of the message is forgotten, talk radio, with no message, notwithstanding.

Palestinian Refugees and their Oral Histories: History's Silence, Memory's Burden

March 03, 2009

By Randa Farah

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In the Palestinian context, research and scholarly work is unable to keep up with the unrelenting Zionist onslaught unleashed on the Palestinian people. By the time the history of a village or a town, or of a massacre is documented another takes its place demanding recognition and recording. There is no respite. [1] Rather, what changes is the rhythm, the intensity, the type and scope of ethnic cleansing. Between back then, over six decades ago, and now is a refining of a Zionist colonial geography and cleansing cartography on the one hand, and a remarkable Palestinian resistance and resilience on the other.

The 1948 refugees and their refusal to vanish are probably Israel's most terrifying nightmare, perhaps equal only to the peril that the emergence of a unified and effective Palestinian national leadership could pose. Indeed, the refugee "problem" directly cuts to the core of the Zionist project. The refugees and their descendents have remained not only to bear witness to their tragic predicament, but to insist they have claims to their lands illegally seized in 1948, and political rights to self-determination. The past remains open.

Needless to say, refugees did not wait for us (researchers, activists, "intellectuals") or for the PLO to reminisce about the past and recount their histories. They have been orally transmitting their pre-Nakba, Nakba, and post-Nakba stories since their expulsion, retelling and reinterpreting events and experiences to each other and to their children, often against the ways that larger powers, and frequently we as researchers, have organized and/or sometimes imposed history upon them. [2] According to Ilana Feldman, this refrain of home and return was essential for the survival of the Palestinians as a people. [3]

The power differentials before al-Nakba were vast: a vicious and conspiratorial British colonial authority ("Mandate" being the euphemism used) collaborated with Zionists and plotted the Palestinian dispossession and disarmament. Palestinian resistance culminated in 1936 in the Great Rebellion, which lasted three years. The Rebellion was largely a spontaneous movement by small farmers and villagers against their impoverishment and dispossession. Many of them were being forced into urban centers, where they sought to subsidize their livelihood by working in cities like Haifa or Jaffa. In their oral histories of the period, refugees draw attention to the role played by local heroes, leaders, and martyrs, but reveal the failure to produce a national leadership to lead the anti-colonial struggle. They did not constitute a class in or for itself. The urban elites at the helm of economic and political power squandered the revolutionary potential, and most of the villagers, especially old-time fighters, scoffed at them as unfit. When I questioned a seasoned fighter on the role of the urban leaders, he told me in a mocking tone: "I do not know, I did not see them."

Closer to 1948, the situation was even worse. Stories transmitted in my own family portray the sense of loss and disarray. One such story is about Shefa'amr, the town near Haifa where my father's family originates. Zionist forces occupied the town on the 14th of July, 1948. The historical irony of the date did not escape my uncle who narrated the story: it was Bastille Day, symbolizing the end of the French ancien regime. Two weeks prior to its occupation, my grandfather's brother, Salim, along with other men from the small town, went to meet Taha Pasha al-Hashimi, who was appointed by the Arab League to lead the defense effort. Gripped with patriotic fervor, the dignified men requested defensive weapons to be positioned in a strategic location in town, known as al-Saraya. [4] Al-Hashimi raised his eyebrows in lazy surprise and nonchalantly asked: you mean the Jews have not occupied it yet? Shocked and mortified by the response, Salim went back home, his face betraying the dark clouds he portended, and told his family: Palestine is lost! [5]

And so it was. Bereft of leadership and traumatized, the most impoverished among the expelled Palestinians, now classified as refugees, sought shelter in camps. Political resistance against their abrupt dispossession was disorganized and, until the emergence of the PLO in the mid-sixties, most of them believed the Arab world (especially Nasser's Egypt) would come to their rescue. During this period, there was no concerted effort or much interest in recording refugee oral histories, except as a source on "culture," understood then as the volkskunde or folklore, which was limited to folktales, marriage customs, food preservation, and so on. The elite and individual heroes were regarded as the authors of professional "history," in its dual meaning: as its makers and subjects on the one hand, and its objective writers and interpreters on the other.

The emergence of the Palestine Resistance Movement in the mid-sixties was a momentous event. By the late sixties, refugee camps were transformed into symbols of the revolution and the bases for the armed struggle. But all nationalists need to buttress their claims to self-determination and to mobilize supporters. They do so either by heralding a new kind of society, distinguished from the old, or by appealing for the restoration of the old: "as it was back then." Palestinian nationalism took the latter approach; it drew heavily on images from the rural hinterland, conceived as the real Palestine, with its pristine and timeless villages of origin and way of life. The past provided the blueprint for the future, albeit distant and hazy. Out of this context the refugee (former villager) was idealized as the preserver of an untainted pre-1948 culture, and as the fedayee or the freedom-fighter -- the icon of the revolution. Not that there were no bases in the real world for such images, but these ideal constructs seemed to substitute and obscure socio-economic inequalities, and their marginalization in political decision-making processes.

Nonetheless, reconstructing the pre-colonial past was an understandable defensive response against the enormous odds stacked against Palestinians: dispossession, dispersal, erosion of the Palestinian landscape, and the web of falsehoods and omissions disseminated by Zionists who claimed there were no Palestinian people deserving of nationhood. The response was to close ranks and protect history, as it were, and to engage in a politics of affirmation, against what Nur Masalha called the politics of denial. [6]

Politically, factional differences and internal disagreements within the PLO often prevailed over the strategic objectives of liberation. Many of the Palestinian unions, community organizations, and associations became factionalized. With the exception of smaller progressive factions, which introduced debates on class, gender, democracy, and social inequalities, the dominant Fatah praxis and ideology (or lack of it), led by Yasser Arafat, was conservative and entrenched relationships of patronage, and a culture of individual heroes and leaders, instead of popular participation and democratic processes.

In the heyday of the PLO, Palestinian writers, poets, activists, and scholars contributed to the process of recovering the past, centered around the land and its olives, oranges, thyme, cactus: that is, on the pre-1948 "peasant way of life". Refugee camps and villages served as ideal terrains where researchers and activists could find the original Palestine: its rurality, missing historical data, and of course romanticized militancy. To be a Palestinian patriot, entailed in large part the restoration and the preservation of what was and is being erased and fragmented. The refugee camp, stood as the symbol of this effort.

Following the signing of the Oslo agreements in the early nineties, oral history projects increased dramatically, and acquired a different political message. The "peace" agreements represented the straw that broke the PLO's fragile back, the infrastructure of which had been destroyed during the Israeli invasion on Lebanon in 1982. The agreements were critical and represented an official political decision pertaining to the future of the nation as a whole, but were signed without consultation or popular consent. Worse yet, refugees and their rights were implicitly offered as a sacrifice at the negotiating table, despite lip service by PLO officials to the contrary. Among Oslo's repercussions was the entrenchment of old schisms and the emergence of new ones, further fragmenting nation and territory between: inside and outside, for and against Oslo, 1948 refugees and the 1967 displaced, etc. By signing the Oslo agreements, the Palestinian leadership effectively dismembered the refugees from the new official national project. They were cast as external to the new strategic objective of building a statelet on the West Bank and Gaza. This constituted a fundamental setback in the history of Palestinian nationalism: in reshuffling priorities, the PLO leadership lost the consent of a significant segment of the population.

It is thus not surprising that refugees responded to their marginalization by spontaneously establishing committees to protect their rights, most importantly, their right of return in opposition to the PLO's new political platform. These committees and coalitions spread within Palestine, in Lebanon, Jordan, Syria, and in many western countries. Even in Israeli society, an organization was formed with the name Zochrot, from the word "to remember," with the objective of raising awareness about the ethnic cleansing during al-Nakba. These refugee committees warned Arafat that the right of return is a sacred national tenet, not open for negotiation or confiscation in exchange for a statelet on the West Bank and Gaza.

Oral history projects in this period were inextricably linked to these political developments. These reaffirmed historical roots, belonging, and rights, and most importantly reinserted land and return as the cardinal principles that lie at the heart of the Palestinian national struggle. Scholars and activists now began producing standard questions to be used in hundreds of interviews to reconstruct as comprehensively as possible the histories of villages, urban neighborhoods, and al-Nakba. There are of course other reasons for these projects, such as the realization that the older generation was passing away. However, in my view such factors were less important than the political context.

Many scholars and activists now equipped not only with new theoretical or methodological tool kits, but also with new high-tech recorders and cameras, descended on refugee camps, or sought refugees elsewhere, to capture memories before they disappeared. These are now available in books, documentaries, films, and the internet. New ways and new places were found to archive the Palestinian past.

Despite these exciting and valuable contributions, there remains the nagging question: are we still using the refugee, the poor, or the marginal as palimpsests upon which Palestine's history is etched, a resource we plunder? Do we regard him or her as an archive of memory, and not a subject of history? Similarly, do we approach refugee camps as symbols of pre-1948 villages untainted by time and the messy social networks that transcend their boundaries? In this context, I think we should also critically examine the PLO's legacy: the effects that the monopoly on decision-making by the Fatah leadership have had on Palestinian society and its political culture, and the relationships that the PLO established with state and non-state institutions in the region, This is important because it bears on the relationships that emerge between researcher and refugees.

Without dismissing the great value of oral history projects in the Palestinian context, the critical point I want to make here is that we should not confuse them with "giving voice" to the marginal or oppressed. [7] In fact, we must constantly question whether as researchers we are partaking in that political legacy, by treating them as repositories burdened with wasted memories, unless we salvage them from extinction.

Palestinian oral histories, like all historical productions, are riddled with silences, including the refugees' silences before us, betraying the differential access of agents to the means of historical production. [8] In an article on Peruvian peasants, Smith observed that the way the subaltern (the refugees in this case) talk to us about their history is quite different from the way they talk to each other about their history, day after day. The real silences, the author noted, are the hidden passages that link up the momentous events: 1936, 1948, and so on. We need to locate the institutions and practices that make articulations or silences possible in the present.[9]

Furthermore, is it not important to question why it took so long after 1948 to awaken to the value of popular memory, expressed in oral histories or other forms? Is there a deeper malaise we need to examine pertaining to the institutional and structural causes that absents our subjects as actors and agents in "History"? Do we pay attention to what they think as opposed to only what they remember?

The histories I recorded in the mid-nineties expose the effects of the prolonged and the unrelenting ethnic cleansing. Such a history forms a growing burden of memory that concatenates successive generations: children frequently remember with and not only listen to their elders' remembrances, infusing each other's recollections with the images of wars, displacement, and discrimination. Refugee narratives also reveal the attempts to render coherent, visible, and accessible what is shattered, scattered, or no longer there, in order to present a unified and coherent identity. But the stories concurrently exposed class and gender oppression, schisms among families, and especially anger against the PLO leadership, which in their view used them as "fodder" to reap political and economic benefits. In short, refugees have a voice, but the leadership did not listen: that is, the PLO lacked the organizational structures, ideological framework, and political will to ensure popular democratic participation where the refugees could make their voices heard.

In 1995 I asked Imm Nabil, a Palestinian woman living in one of the refugee camps in Jordan, what she thought of Nelson Mandela. She answered: "He was in prison for a long time, ... many people were against him, but his people elected him. Our people did not choose, and we don't have a choice as to who represents us. If our people have the freedom to elect a real president that we can depend on, we can liberate Palestine, unlike this Yasser Arafat, who every time he utters a word, people start clapping and singing for him." The question remains: how do we link the past, with the political present, for a different future?

I will conclude with a quote from Fanon's Wretched of the Earth where he correctly posited that:

"The struggle for freedom does not give back to the national culture its former value and shapes; this struggle which aims at a fundamentally different set of relations between men cannot leave intact either the form or the content of a people's culture." [10]

Notes

1. On memory and the on-going Nakba see Ahmad H. Sa'di and Lila Abu-Lughod, Nakba: Palestine, 1948, and the Claims of Memory, New York: Columbia University Press, 2007.

2.Gerald Sider and Gavin Smith (eds.), Between History and Histories: The Making of Silences and Commemorations, Toronto: University of Toronto Press, 1997, p. 15.

3. Ilana Feldman, "Home as a Refrain: Remembering and Living Displacement in Gaza," History & Memory, 18: 2, Fall/Winter 2006, pp. 10-47.

4. Al-Saraya is an old castle in town used as the centre of regional and local government during the Ottoman and British periods respectively.

5. The story was relayed to me by my uncle, Naji Farah, the author of Zikrayatun Muhajira, (Migrating Memories), which will be published by the Institute of Palestine Studies.

6. This is the title of Masalha's book, The Politics of Denial: Israel and the Palestinian Refugee Problem, London: Pluto Press, 2003.

7. See note 2

8. Michel-Rolph Trouillot, "Layers of Meaning in the Haitian Revolution," in Sider and Smith, Between History and Histories, p. 38

9. Gavin Smith, "Peruvian Peasants and Re-covering the Past" in Sider and Smith, Between History and Histories.

10. Frantz Fanon, The Wretched of the Earth, New York: Grove Press, 1963, pp. 245-46.

Randa Farah is an Associate Professor of Anthropology at the University of Western Ontario.

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From:	Z Net - The Spirit Of Resistance Lives
URL:	http://www.zcommunications.org/znet/viewArticle/20757