Liberals aren't used to winning -- which may explain the shock as the world woke up to learn that Princeton's Paul Krugman, the New York Times columnist and bete noire of the American right wing, is the 2008 winner of the Nobel Prize for Economics (and $1.4 million richer -- whoo hoo!)
He's well-known as a strong opponent of Bush administration policies that have led to higher deficits while widening the gap between the rich and the rest of American society.
Of his 2007 book, The Conscience of a Liberal, Publisher's Weekly wrote: "Conservative initiatives to cut taxes for the rich, dismantle social programs and demolish unions, he argues, have led to sharply rising inequality, with the incomes of the wealthiest soaring while those of most workers stagnate."
He has lamented how his economic analysis has often generated partisan fervor.
"The most distressing thing I find right now," he said in a 2005 video bio for the Times, "is that everything is political, including the truth. There just is no nonpolitical truth."
Meanwhile, Krugman has fulfilled the ultimate fantasy of everyone who has ever pounded on a keyboard for a newspaper, bypassing the Pulitzer and going straight to the Nobel. (Not unprecedented -- as a former ink-stained wretch by the name of Ernest Hemingway showed.)
Krugman won his prize for his research on global trade issues, but I also suspect he may be the first of a series of economists who will lauded for predicting our current economic calamity at a time when the Powers That Be refused to listen. Here's what Krugman wrote back in 2005:
If Mr. Greenspan had said two years ago what he's saying now, people might have borrowed less and bought more wisely. But he didn't, and now it's too late. There are signs that the housing market either has peaked already or soon will. And it will be up to Mr. Greenspan's successor to manage the bubble's aftermath.
How bad will that aftermath be? The U.S. economy is currently suffering from twin imbalances. On one side, domestic spending is swollen by the housing bubble, which has led both to a huge surge in construction and to high consumer spending, as people extract equity from their homes. On the other side, we have a huge trade deficit, which we cover by selling bonds to foreigners. As I like to say, these days Americans make a living by selling each other houses, paid for with money borrowed from China.
One way or another, the economy will eventually eliminate both imbalances.
Yup. As this Huffuington Post honor roll shows, there were a number of smart people who saw this coming -- and were ignored or treated like party poopers. If Barack Obama maintains his lead in the race and inherits this mess in January, it seems clear that a) he doesn't have the answer right now but b) he's demonstrated a willingness to listen and absorb the advice of others, unlike the current occupant of 1600 Pennsylvania Avenue. Hopefully he will listen to people like Paul Krugman.
