It’s New York Times columnist vs. New York Times columnist.
Paul Krugman hammers his colleague Andrew Ross Sorkin for getting Krugman’s stance on bank nationalization wrong, saying “Andrew Ross Sorkin Owes Several People An Apology.”
Here’s what Sorkin wrote:
Some economists, including Nouriel Roubini of New York University and The Times’s own Paul Krugman, declared that we should follow the example of the Swedes by nationalizing the entire banking system.
They argued that Wall Street was occupied by the walking dead, and that no matter how much money we threw at the banks, they would eventually topple the system all over again and cause a domino effect worldwide.
It’s indeed sloppy (leave aside the way-too-narrow scope of what Sorkin and the Journal include in their calculation of bailout costs, which is what the column is about). Krugman said the opposite of that, as Joe Weisenthal points out. That second paragraph doesn’t make any sense, either. Does anyone believe that “no matter how much money” we put into the banks it wouldn’t be enough? And if the point is about moral hazard, well, give the banks some time!
But Krugman is hardly innocent here. He says this:
If you want to say that the advocates of nationalization were excessively pessimistic about the prospects for a light-touch bank strategy, fine. But caricaturing their position, making it sound far more extreme than it actually was, is definitely not OK.
First thing that reminds me of is Krugman’s own caricaturing of a position to make it sound extreme, as I pointed out two weeks ago, when Krugman painted anti-Too Big to Failers as not caring about regulation.
Worse, Krugman was still at it in yesterday’s column:
As I see it, it’s a caution against silver-bullet views of reform, the idea that cracking down on just one thing — in particular, breaking up big banks — will solve our problems.
Does anybody think that? No. So don’t go “caricaturing their position, making it sound far more extreme than it actually was.” That’s “definitely not OK.”