Re: Krugman's Love Letter to Markets, not to Enron

[Clifford Poirot <cpoirot@xxxxxxxxxxx>]

I think the important thing about Krugman is to criticize him for what he
deserves to be criticized for. For some strange reason he has emerged as the
whipping boy of the right. Perhaps because of his pseudo-Keynesianism and
identification with Al Gore, Bill Clinton and Lawrence Summers.

If you actually read most of his work, it is clear that by and large, he is
a fairly conventional mainstream economist, who occasionally says something
interesting or non-mainstream, and tries to tie it to Keynes.

Galbraith he is not. Not even close.

But he has succeeded in making a sort of luke warm centrism intellectually
attractive, selling the idea that government policy can be effective. From
the perspective of the right, that is the unpardonable sin.

>From the perspective of Post-Keynesians, Krugman's "sin" was not in taking
money from large corporation, but in praising the entire system of
deregulation.

-----Original Message-----
From: Ian Murray [mailto:seamus2001@xxxxxxxxx]
Sent: Thursday, May 23, 2002 12:29 AM
To: pkt@xxxxxxxxxxxxxxxx
Subject: Re: Krugman's Love Letter to Markets, not to Enron



----- Original Message -----
From: "Henry C.K. Liu" <hliu@xxxxxxxxxxxxxx>


> THE ASCENT OF E-MAN
> By Paul Krugman
> SYNOPSIS: The failure of big industry and the success of Information
was
> never predictable
>
[snip]
> What happened to the man in the gray flannel suit? No doubt he was
> partly a victim of sex (er, I mean gender) and drugs and rock & roll-
> -that is, of social change. He was also a victim of information
> technology, which ended up deconstructing instead of reinforcing the
> corporation.
================

This is pure bunk. IT has made life a living hell for millions of workers
and led to lots of top heavy firms that David Gordon's "Fat & Mean" talks
about. Just ask the drivers of UPS or FedEx trucks. The clothing may have
changed, but the jerks in love with hierarchy, authority and power are
still everywhere. That they come from business schools in "liberal arts"
universities and colleges is part of the tragedy of education under
capitalism.

Ian







But probably the biggest force has been a change in
> ideology, the shift to pro-market policies. It's not that government
has
> vanished from the marketplace. It's still a good guess that in a
> completely unregulated phone market, long-distance companies would buy
> up local-access companies and deny their customers the right to connect
> to rivals, and that the evil empire--or at least monopoly
> capitalism--would rise again. However, what we have instead in a
growing
> number of markets -- phones, gas, electricity today, probably computer
> operating systems and high-speed Net access tomorrow -- is a
combination
> of deregulation that lets new competitors enter and "common carrier"
> regulation that prevents middlemen from playing favorites, making
> freewheeling markets possible.
>
> Who would have thunk it? The millennial economy turns out to look more
> like Adam Smith's vision--or better yet, that of the Victorian
economist
> Alfred Marshall--than the corporatist future predicted by generations
of
> corporate pundits. Get those old textbooks out of the attic: they're
> more relevant than ever.
>
> ME AND ENRON
>
> SYNOPSIS: Krugman responds to an erroneous personal attack by
> conservative columnist Andrew Sullivan
>
> Some people have accused me of an ethical lapse because I served
briefly
> on an Enron advisory board in 1999 - even though I disclosed that
> relationship the only time I wrote about the company (rather favorably)
> for Fortune, back in May1999, and again the first time I wrote about
the
> company (in a highly critical article) for the New York Times, which I
> did in January 2001. Since then I've been pretty hard on Enron, to say
> the least: I criticized the firm's role in the California energy
crisis,
> and have not been kind as the firm's own problems have surfaced.
>
> By the way, here's the  piece I wrote in Fortune. It looks a bit naive
> now,  but it's a love letter to markets, not to Enron.
> http://www.wws.princeton.edu/~pkrugman/eman.html
>
> So what was my relationship with Enron?  I was offered a $50,000 fee
for
> a year's participation in the advisory board, which would entail
> attending and presenting at two meetings, each of which would extend
> over two days. The year I was on the board only one meeting took place;
> the other was canceled because of weather.
>
> These meetings were not about Enron business, nor were they about
policy
> in areas closely related to Enron business; basically they were
seminars
> on world affairs. From my point of view this was much like a paid
> speaking engagement, of the kind that is common for academic
economists,
> at least those who work on issues that bear on matters of business
> interest, like the state of the world economy. The only difference was
> that in effect I had agreed to deliver several talks, and join in an
> extended discussion of other peoples' talks.
>
> At the one meeting I attended, I talked about the Asian financial
> crisis, then still in full swing.
>
> My critics seem to think that there was something odd about Enron's
> willingness to pay a mere college professor that much money. But such
> sums are not unusual for academic economists whose expertise is
relevant
> to current events. And there were other academics, such as the Harvard
> Business School's Pankaj Ghemawat, on the panel; presumably they had
the
> same arrangement.
>
> Remember that this was 1999: Asia was in crisis, the world was a mess.
> And justifiably or not, I was regarded as an authority on that mess. I
> invented currency crises as an academic field, way back in 1979; anyone
> who wants a sense of my academic credentials should look at the
Handbook
> of International Economics, vol. 3, and check the index. Here's my
> current  cv .
> http://www.wws.princeton.edu/~pkrugman/cv.html
>
> And I wasn't an ivory-tower academic. In 1994 I had published an
article
> in Foreign Affairs, "The myth of Asia's miracle", which was skeptical
> about the region's economic prospects, and seemed vindicated by the
> crisis. In August 1998 I had advocated temporary capital controls as a
> way to deal with the crisis, just days before Mahathir put them into
> effect in Malaysia. Also in 1998 I had taken on the Japanese situation,
> with a series of papers that introduced the idea of inflation targeting
> as a way out of the trap; "It's baack: Japan's slump and the return of
> the liquidity trap" was published in Brookings Papers in late 1998.
>
> Because of my role in the debates of the time, I was asked to advise
> various Asian and Latin American countries (offers which still come
in),
> but declined.
>
> I mention all this not as a matter of self-puffery, but to point out
> that I was not an unknown college professor. On the contrary, I was
very
> much in demand as a speaker to business audiences: I was routinely
> offered as much as $50,000 to speak to investment banks and consulting
> firms.
>
> When I accepted the position at the New York Times, I severed the Enron
> connection, and also dropped any paid speaking and consulting that
might
> violate the strict Times conflict-of-interest rules.
>
> My critics, ignoring the fact that I have been extremely tough on
Enron,
> seem desperate to find something unethical in all of this. Sorry:
> there's nothing there.
>
>
>