Conscience of a Comedian: Paul Krugman is the Jon Stewart of Economics - without the Funny

Ever hear the joke about the funny economist?

Neither have I. The dismal science, after all, isn't the kind of fertile ground from which springs comic talent.

Nonetheless, the Nobel Laureate, bestselling author, people's choice for Treasury Secretary and pint-sized warrior of liberal academia Paul Krugman has taken on some of the very (worst) characteristics of America's best-known funnyman, Jon Stewart, in his relentless drive to capture the conscience of a nation, and a world, seemingly obsessed with the new economic zeitgeist.

But the Princeton University professor isn't doing it with a nightly television programme and an army of like-minded producers who punch up his scripts and craft "bits" in which Stewart can excoriate the political and financial elite that displease him.

Rather, Krugman has taken the comic low road and invented the new highbrow in his twice-weekly New York Times column, substituting funny with insulting and torching everyone who disagrees with him as either stupid or crazy, or, ideally if they're a conservative, stupid, crazy and evil.

He's taken on economic historian Niall Ferguson ("unethical"), vice-presidential candidate Paul Ryan ("gets his ideas from fantasy novels") and Germany's Angela Merkel ("boneheaded").

His latest salvo in the public debate comes amid the rather surreal back-and-forth between people who should know better about the feasibility of minting a trillion dollar coin to end around Republican reticence at lifting the $16.4tn debt ceiling.

Using the sweeping tone of accusation that has defined his column for more than a decade, Krugman casually refers to the platinum coin strategy as "silly but benign" while castigating the efforts of elected lawmakers to seek any spending reductions in a $3.8tn budget in a country that's already $16tn in the hole as "equally silly but both vile and disastrous".

But hey, Krugman the cut-up is someone we should all heed, given his bull's eye-accurate predictions before, during and after the global financial crisis when he not only won the Nobel Prize for Economics but also cemented his position as 'Thorn-in-the-side-in-Residence' of the global financial class, right?

Maybe.

Most of his musings during that time are peppered with the same nerd-rage phraseology and selective data cherry-picking that decorate both his column and his "Conscience of a Liberal" blog. At times, it can be mildly amusing.

Oil's not well

What's *really* funny, though, is to look back at some of his big-picture assumptions with the admitted benefit of hindsight (and a bit of horrible stand-up comedy).

Oil prices seemed to have loomed large in professor Krugman's mind back in 2004, even as they hovered in a tidy $35 to $45 a barrel range despite the recent invasion of Iraq and the dire predictions of a titanic spike in global crude prices.

Accusing the Bush administration of "completely botching" its foreign policy goals in the Middle East, Krugman predicted in May 2004 that "an oil-driven recession does not look at all far-fetched".

It turned out to be very fetched, in fact, with the US economy expanding merrily along at a 2 percent plus clip for the next four years - taking major equity indices to all-time highs and creating persistently and progressively lower rates of unemployment - until the spectacular collapse of Lehman Brothers in late 2008 that had absolutley and empirically nothing to do with the price of oil.

I've seen more accurate predictions from the Mayan!

Warming to his theme of greasy Armageddon, Krugman pilloried all and sundry for suggesting that oil might be a tad overpriced in the wake of the Lehman wreckage as speculators pushed the black stuff to a record $147 a barrel. Understanding the crude oil market was "easy", he lectured his readers on 13 May 2008: "You either consume it or store it". Permanent high prices were here to stay.

He was partly right. High prices stuck around for a least a few more weeks before plunging more than $100 a barrel in less than six months.

I haven't seen a freefall like that since Lindsay Lohan!

His anti-prescience wasn't confined to the commodity markets, either.

Taking issue with then Treasury secretary Hank Paulson's idea to use the Troubled Asset Relief Programme (TARP) to buy dud mortgage bonds and free-up bank balance sheets, Krugman argued his preference for "world-saving" tactics of former British Prime Minister Gordon Brown and his Chancellor Alistair Darling (who at the time had been in the job for just over a year).

"The Brown government has shown itself willing to think clearly about the financial crisis, and act quickly on its conclusions," he sagely declared on 12 October, 2008. "And this combination of clarity and decisiveness hasn't been matched by any other Western government, least of all our own."

The clear and decisive action - injecting capital directly into the banks instead of buying the toxic assets - didn't stop the failure of one bank (Northern Rock), the near failure of two more (RBS and Lloyds and HBOS) and virtual collapse in personal and small business lending.

Fast-forward to the present day, where in news of no importance whatsoever, the American taxpayer has been made almost entirely whole from TARP (with the auto industry being the only laggard) while their rate-paying brethren across the pond are £66bn in the red on Lloyds and RBS and ate a £2bn loss on the sale of Northern Rock.

That's the worst idea since the Winklevoss twins told Mark Zuckerberg 'We've got a great new a website'!

Well, nobody's perfect, least of all your correspondent (who's been calling the top of equity markets since the Clinton administration) but certainly also not a liberal bull-terrier who argues against a minimum wage while pocketing some $20,000 a speech on the rubber chicken circuit, served on the Council of Economic Advisors for Ronald Reagan and toiled briefly in the paid consultant salt-mines of Enron.

Valuable real estate

Moreover, who the hell am I to question the intellectual soundness of a Nobel winner's views on fiscal stimulus, labour market flexibility, wage driven inflation and currency convertibility? He's surely forgotten more than I'll ever know about macro economics and will live a happy, contented life having never heard my name before or after.

He may be right in his tireless advocacy of stimulus over austerity.

He may have a point about the foolishness inherent in agreeing a budget but not providing the authority to create the money in which to spend on it.

He might be on to something when he says the need to ignite long-term growth now is more compelling than the concern that it might stoke hyper-inflation later.

He might even have nailed it with his blithe assumption that conjuring up $1tn with a single coin wouldn't torpedo the dollar, sink stock markets and mutual funds and irrevocably stain the US bond markets for decades to come.

But he could be wrong, too.

What's intensely irritating - and what I've tried to highlight through the selection (by no means comprehensive) of his past howlers - is the now imbedded assumption that debate begins with a statement of fact and ends with an ad hominem attack on the personal and intellectual failings of those on the other side.

In an interview with Canada's Globe & Mail newspaper in 2011, Krugman dismissed the idea of a return to public policy, acknowledging: "The best place for me is exactly where I am, with twice-a-week access to the most important journalistic real estate in the world and chance to weigh in on stuff."

Sadly, like Stewart, he's taken that real estate and built an obnoxious ivory tower from which he can hurl insults at his intellectual inferiors below.

Only without the funny.