Former economist Paul Krugman picked up his Nobel Prize last week. This week, he received recognition for another accomplishment: producing two pithy soundbites in his current career as a pundit. As reported by the AP:
Palin tops list of memorable quotesUnfortunately, this is one award that Krugman should decline, because the latter quote was borrowed from a former classmate, a Harvard economics professor, who wrote in his blog:
December 14, 2008 - 3:34pm
By The Associated Press
(AP) - The Top 10 quotes of 2008, as compiled by the editor of the Yale Book of Quotations:
10. (tie) "Cash for trash." _ Paul Krugman discussing the financial bailout, New York Times, Sept. 22.
10. (tie) "There are no atheists in foxholes and there are no libertarians in financial crises." _ Krugman, in an interview with Bill Maher on HBO's "Real Time," broadcast Sept. 19
Someone this week asked me what I thought of policy-makers who ex ante profess a free-market ideology and acute sensitivity to the dangers of moral hazard from financial bailouts, but who toss that ideology overboard when faced with a financial crisis. The reference was to Treasury Secretary Henry Paulson's lobbying this week in support of a rescue for Fannie Mae and Freddie Mac, the two big home mortgage agencies, following on the rescue of Bear Stearns in March. My reply was: “They say there are no atheists in foxholes. Perhaps, then, there are also no libertarians in financial crises.”The comment (also posted to Seeking Alpha) references this news account:
— Jeffrey Frankel
Harpel Professor of Capital Formation and Growth, Kennedy School of Government
July 17, 2008
Paulson Hit by Investors as He Seeks to Halt CrisisYou would think that someone with a Nobel Prize would acknowledge borrowing a one-liner from an old friend. But I guess rules about intellectual honesty only apply to the common riffraff, not Nobel Laureates.
By Rebecca Christie and Brendan Murray
July 16 (Bloomberg) -- U.S. Treasury Secretary Henry Paulson, who arrived in Washington two years ago from the summit of American capitalism, has been pummeled by the markets that nurtured him.
Paulson has repeatedly emphasized the virtues of “market discipline” — code words for self-policing. Now, with Fannie Mae and Freddie Mac in crisis, he has endorsed what critics say may be an open-ended commitment to save them.
“They say there are no atheists in a foxhole,” said Harvard economist Jeffrey Frankel, a former Clinton administration official. “Well, there are no libertarians in a financial crisis, either.”
(As it turns out, both men were premature in their prediction, as 200 economists signed a petition in September opposing Bush’s (first) bailout plan.)
In fact, the Frankel and Krugman were classmates at the MIT economics department: Krugman got his Ph.D. in 1977 and Frankel got his in 1978. As Frankel recounted in congratulating Krugman for his prize, the two did a skit together as graduate students making fun of Paul Samuelson. Presumably they are not as close today as they once were, after Frankel won appointment to Clinton’s Council of Economic Advisors while Krugman was snubbed.
The assessment of the former economist seems remarkably convergent across a broad spectrum of economists. In October, Frankel described his onetime classmate thus:
For those readers of the New York Times who can only think of him as a columnist, let me assure you that long before he ever wrote a newspaper opinion piece, Krugman had become the leading international economist of my generation.which sounds remarkably similar to what a Hoover Institute economist wrote that week in the WSJ:
A professor at Princeton University, Mr. Krugman is known to the American public mainly for his column in the New York Times, which reflects his highly partisan political views -- he hates George Bush and Republicans in general -- more than his solid economic understanding. Nevertheless, he is an original theorist in international trade and economic geography.The divergence of views is so dramatic that one industry economist argued that Krugman’s prize was the Nobel committee’s first posthumous award. If the committee wanted to set a precedent on posthumous awards, it should have started with Mahatma Gandhi.
Update 3:45pm: Prof. Frankel points out that he earlier published the “libertarians in crises” line in the Spring 2007 issue of the Cato Journal.
Update Dec. 17: 14 hours after this item was posted, Krugman admitted the quote wasn’t his. Quite plausibly, he explained the oversight: “If I’d put it in a column, I would have given credit; but citations don’t work when you’re live on Bill Maher.”