Krugman & the Obama administration.

In his March the 21st blog – The Conscience of a Liberal – Paul Krugman, the Nobel Prize-winning economist and Op-Ed columnist for The New York Times, has some harsh things to say about the way the Obama administration is handling the US banking crisis.

The Obama administration is now completely wedded to the idea that there’s nothing fundamentally wrong with the financial system — that what we’re facing is the equivalent of a run on an essentially sound bank. As Tim Duy put it, there are no bad assets, only misunderstood assets. And if we get investors to understand that toxic waste is really, truly worth much more than anyone is willing to pay for it, all our problems will be solved.

There are those in the media who have begun to treat Krugman as a something crank, who has turned on an administration to which he should be aligning himself.

Andrew Leonard of Salon is not one of them Indeed, in an article published yesterday, he presented readers with what seems to me a single compelling reason to taking Krugman’s critique of Obama seriously.

 

We take Krugman seriously as an Obama critic because he was right about George Bush, and therefore he may well be correct about Obama (or Geithner). This is not a “15 minutes” phenomenon. This is the culmination of a groundswell long in the making. CNBC’s Rick Santelli gets his 15 minutes when he rants about “mortgage losers.” Paul Krugman will be a force to be reckoned with for many, many years to come. There’s a difference.

 

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