Friday, April 16, 2010

Krugman vs. Sorkin; They Talk, Krugman "It wasn't much fun."

What exactly did Paul Krugman say and what did Nouriel Roubini say, about bank nationalization? The Great Debate continues

WSJ has this further report:

New York Times public editor Clark Hoyt weighs in on a back-and-forth minifeud between columnists Paul Krugman and Andrew Ross Sorkin. “Krugman and Sorkin told me that they talked Thursday. Sorkin said the conversation was "very cordial." Krugman called it "not much fun." They agreed that they disagree on the definition of nationalization. I think the right thing to do is to simply acknowledge that, in trying to quickly summarize Krugman's nuanced position, Sorkin over-simplified and got it wrong. Krugman did not call for the nationalization of the entire banking system, and, unless Sorkin can produce a citation to the contrary, he did not say it was necessary because otherwise the banks would fail again and cause a worldwide domino effect. Sorkin said he is going back to his editors to discuss whether some sort of clarification is needed.”
Earlier this week, it should be noted that I was able to get Nouriel Roubini on the record  denying that he called for a nationalization of the entire banking sector. Sorkin in his original piece wrote that both Krugman and Roubini had done so.


  1. What a meaningless debate. While banks and the Federal Reserve are technically owned by "private investors", they cannot exist without government approval. And they can take no action without government approval. The only real product they have to offer (credit) is actually produced and distributed by the government thru the federal reserve. The quality and price of that product is controlled by the government. What is left to be nationalized? The "investors" have become wards of the state and replacing them with state ownership would change nothing in the banking industry's operation. The banking industry was defacto nationalized in 1913 and Krugman and Sorkin only perpetuate the myth of a private banking industry with their pretend debate.

  2. Efinancial,

    Well said. This is your typical false dichotomy.