No, no, don’t worry. We don’t need to bail out Paul Krugman. As far as I know, the Nobel-laureate economist has his personal finances under control. Rather, we need to help him get an attitude adjustment.
Paul Krugman’s most recent NY Times blog post is titled “Worries about next year” and like most of his writing these days it is gloomy. It ends with the rhetorical question: “will it, in fact, even be possible to pull the economy out of its nosedive before unemployment goes into double digits? I’m starting to wonder.”
Considering that we have longer to wait for a competent and engaged president than GM has cash on hand, it doesn’t take a nobel laureate to read between the lines that “wonder” is some sort of euphemism.
Gloom and doom. Doom and gloom. Of course, I can’t really blame him.
Now, Krugman knows more about economics than a dozen of me rolled up in a ball, so far be it from me to criticize him for sounding the alarm. And my readers by now know that I’m a bit pessimistic about things myself (and admittedly, I’m not aware that Krugman has recommended the book “Collapse” by Jared Diamond, which is a pretty gloomy thing to do). However, I’m always careful to follow my own apocalyptic ravings with concrete, constructive suggestions.
Nevertheless, Krugman is a big ol’ sourpuss. I know he’s got a Nobel Prize in Economics, and that economics is a pretty gloomy field nowadays, but I still wish that he could come up with some constructive ideas that the average person (i.e. non-Fed chairman) can apply in his or her life.
Collapse of the mortgage market? Find ways to keep people in their homes and get their heads back above water through cooperative financing arrangements?
Major industrial downturn? Help the employees get new businesses off the ground that are structured in ways that won’t repeat the mistakes for which we are currently suffering.
Investor-driven business has resulted in a severe concentration of wealth? Implement business models that tend to spread the wealth around by allocating profits based on patronage rather than existing wealth.
Skyrocketing hunger and food related health issues? Help people get organized to supply their own food.
These models all exist. Similar approaches have played key roles in helping people survive past crises until government programs can kick in. I’m not just making up stuff. However, every situation is a bit different, and my knowledge of how exactly these models might apply to our current, severely messed-up economy is rather limited. It would be fantastically helpful to have a nobel laureate looking at these existing and historic models, and critiquing how they might be applied now.
Yes, there will eventually need to be government help on whatever happens, but as Krugman points out, this will take some time. And meanwhile we all still need to eat and stay warm and keep ourselves productively busy so we don’t just sit around and freak out at how bad things are.
We have already established that things are bad. So what do we do now, Dr. Krugman?