Nobel Prize for economics winner’s article on current crisis
October 14th, 2008 by adminSo I claim to know what is going on the recent economic crisis, but that doesn’t mean I know how to fix anything, nor do I have any influence on people who do. But this guy Krugman sure does, I have been watching him for a few months on TV, but I had no idea he was so powerful. He is even more powerful, now that he won the Nobel Prize for economics this week. Here are some of his thoughts about the most recent rescue plan, there is a link to the full article below too:
Krugman: Revised Rescue Plan ‘Looks Much Better’
Topics:Interest Rates | Inflation | Ben Bernanke | Employment | Consumers | Federal Reserve | Federal Budget (U.S.) | Economy (Global) | Economy (U.S.)
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Paul Krugman, Princeton University professor, New York Times op-ed columnist and winner of the 2008 Nobel Prize for Economics, had been very critical of Treasury Secretary Henry Paulson’s original bailout plan, saying it was distorted by ideology.
Today, however, Krugman told CNBC he thinks the new plan, which will inject $250 billion into U.S. banks, “looks much better.”
“In the last six days this thing has come together with a plan that really does address the critical problem of inadequate capital at the banks (and) addresses the need for guarantees to calm the markets down,” said Krugman. “We don’t know this is going to work, I wish we were sure, but this is a much better. For the first time I’m starting to feel that policy is really getting some traction on the crisis.”
Krugman said the current financial crisis repudiates the financial-markets-are-always right principle.
“A certain amount of public intervention, oversight and—in crisis—partial takeover of the financial system is something you have to do,” he said. “Leaving the financial system to work things out on its own was disastrous in the 1930s and brought us to the brink of disaster again now.”
“This is not a case for socialism, it’s a case for regulation, oversight and for government-led rescues when there’s an emergency,” he added. “We’re not going to go back to Karl Marx, but we are going to rediscover some of the things Franklin Roosevelt learned 75 years ago.”
Click here to go to full article: http://www.cnbc.com/id/27180035
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