Krugman: Populism is Good Economics

bankerPaul Krugman, in his column of September 20th, talks about how the Federal Reserve, “now awakened from its Greenspan-era slumber,” is considering imposing new rules on financial-firm compensation (to reward long-term investment success, rather than merely short-term profits).

But, he recognizes that “the industry — supported by nearly all Republicans and some Democrats — will fight bitterly against these changes.”

“I was startled last week when Mr. Obama, in an interview with Bloomberg News, questioned the case for limiting financial-sector pay: “Why is it,” he asked, “that we’re going to cap executive compensation for Wall Street bankers but not Silicon Valley entrepreneurs or N.F.L. football players?”

That’s an astonishing remark — and not just because the National Football League does, in fact, have pay caps. Tech firms don’t crash the whole world’s operating system when they go bankrupt; quarterbacks who make too many risky passes don’t have to be rescued with hundred-billion-dollar bailouts. Banking is a special case — and the president is surely smart enough to know that.

All I can think is that this was another example of something we’ve seen before: Mr. Obama’s visceral reluctance to engage in anything that resembles populist rhetoric. And that’s something he needs to get over.”

Speak Your Mind (You Must Use Your Real Name)

Tell us what you're thinking...
and oh, if you want a pic to show with your comment, go get a gravatar!

Bitnami