Vol. LXII, No. 42
Wednesday, October 15, 2008
Economics Professor and 2008 Nobel Prize winner for Economics Paul Krugman shook his head in wonder as Princeton University President Shirley M. Tilghman spoke at the beginning of a press conference for him on Monday at the Woodrow Wilson School of International Affairs.
Questions at Mondays press conference, which included ones phoned-in by journalists abroad, focused on the current economic crisis and the coming Presidential election. Mr. Krugman, who is also a regular New York Times columnist and frequent television and radio commentator, was quick to say no when asked if he would accept a cabinet appointment in the new Presidential administration that will take over in January. I say the wrong things, commented the outspoken critic of the Bush administration, amid much laughter. He earlier referred to the University as home, and ultimately who I am.
This is a very exciting day for Professor Krugman, said Ms. Tilghman, suggesting that the upswing in the days market was, perhaps, an acknowledgment of Mr. Krugmans long, distinguished career.
In her own opening words, Woodrow Wilson School Dean Anne-Marie Slaughter (who identified herself as Paul Krugmans dean) called him a boundary crosser, who has combined Nobel-quality theoretical work with his role as a public intellectual who has tried to educate as wide an audience as he can, while producing noted textbooks that introduce students to the study of economics.
When Mr. Krugman first took the stage, it was to express amazement at winning the prize, and to thank the teachers and colleagues who helped him along the way. Theres something awkward about having an individual get the prize, he observed. I ought to be sharing it with all the others who made it possible.
His story of receiving the news of the prize was classic: he took the call stark naked just before getting into the shower, and, hearing an obviously fake Swedish accent, assumed it was a joke. The prize committee cited Mr. Krugman, 55, for his analysis of trade patterns and location of economic activity, and at the press conference he thanked them for recognizing this 30-year old field.
Beginning in 1979, noted the Universitys press release on Mr. Krugmans award, Krugman proposed a new model that provided a theory for the effects of globalization and free trade. It offered a better explanation than the well-established theory of foreign trade that certain countries have a comparative advantage over others in more effectively producing particular goods based on their supplies of natural resources, labor or capital.
Referring to decisions that came out of a Monday summit meeting of economic leaders from Europe and the U.S., Mr. Krugman noted that it was the first day that policy-makers exceeded expectations, and that he was finally feeling more optimistic about the economy. I think were intellectually starting to get a grip on this thing, he commented, adding that financial control was, however, not yet evident. Asked whether deregulation was to blame for the economic downturn, he suggested that it wasnt what people did, but rather what they didnt do that created the problem, suggesting that a financial system had evolved around an existing framework that didnt keep up with it. As for whether or not those responsible for the crisis would be held legally accountable, he acknowledged the grotesque greed that lay beneath the crisis, but noted that greed isnt illegal, so punishment was unlikely.
Referring to the two Presidential candidates, Mr. Krugman cited Senator Obamas belief in market regulation as closest to his own. Asked whether the Nobel Committee had taken an anti-Bush stance in giving out awards this year, Mr. Krugman said that he thought not. The prizes, he observed, are usually given to a lot of intellectuals, and a lot of intellectuals are anti-Bush.
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