Paul Krugman’s Rusty Chains


Howard Gold Image Howard Gold Founder & President, GoldenEgg Investing

The Nobel-winning economist loves to play the Marley to conservatives’ Scrooge, but it may be he who gets the visit from the ghosts of depressions past, writes editor-at-large Howard R. Gold.

Update: An earlier version of this column called it a "liquidity trap" when consumers are saving or paying down debt rather than spending. The correct term is "paradox of thrift," and the text has been changed to reflect that.

He is by far the best-known economist of our time, a Nobel laureate, and a popular columnist for The New York Times.

And he’s the most prominent, unapologetic Keynesian in a profession that until recently had considered the Master of the 1930s passe. But the financial crisis and the Great Recession have given John Maynard Keynes’ ideas new currency, and elevated Paul Krugman to international celebrity.

Still, his certitude and breezy dismissal of dissenting opinions are troubling in a discipline whose aspirations to scientific validity have been shattered in recent years. And Krugman exposes deep problems in Keynesianism through his vast body of writing, including a new book, End This Depression Now!, which sums up his ideas clearly and concisely in a way that’s accessible to a general audience.

I’m approaching this column with some trepidation—Krugman has one more Nobel Prize than I do—but the problems with his thinking have been flagged by others, mainly conservatives. I contacted Krugman and his publicist by e-mail and forwarded some questions but hadn’t heard back by deadline.


Can Paul Krugman’s preferred theories work in a peacetime economy?