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Monday, October 13, 2008

New Trade Economist Paul Krugman Wins Nobel Prize

During the past few days, I've mentioned certain people who had the foresight and wisdom to predict the fundamental changes to our national and international economy, and Paul Krugman was just awarded the Nobel Prize for Economics.

Krugman, the New York Times Columnist, author,economist and Princeton Professor, is no fan of national sovereignty and some of his harshest economic criticism is directed toward President Bush and the United States. Krugman's economic publications, which call for powerful and rich countries to subsidize the third-world, earned him sufficient international attention to win the Nobel.

Krugman's global-welfare stance should come as no surprise from the self-proclaimed liberal.His theories have been applauded by many scholars and foreign leaders. If you analyze Krugman's work, some of it is very similar to the to the statements of recognized international socialist leaders such as Hugo Chavez. I'm not a huge fan of Krugman or any form of a global currency/bailout model (even though we're already headed in that direction). I believe nations should be self-sufficient, but Krugman was correct when he warned that global economic interdependence is more fragile than we imagine and can be sustained only if all major governments act sensibly. He also warned that we could be nearing the next great depression.

On the surface, most of his work reads as innocent rhetoric, but if you read between the lines, you'll notice global welfare economic undertones. For example, he said:

As industry and modern economic activity spreads around the world, the question of what goes where and whether the world can get locked into production that is not the most efficient is going to become extremely important. Our grandfathers lived in a world of largely self-sufficient, inward-looking national economies - but our great-great grandfathers lived, as we do, in a world of large-scale international trade and investment, a world destroyed by nationalism.

By the end of World War II, the world was fragmented economically as well as politically....  War among the nations of Western Europe really does seem inconceivable now, not so much because of economic ties as because of shared democratic values

Judging from some of Krugman's  statements, he favors global redistribution of wealth over national heritage or independence. I think he would even go as far as to favor the gradual eradication of American capitalism and free trade. He went on to say:

.Much of the world, however, including nations that play a key role in the global economy, doesn’t share those values. Most of us have proceeded on the belief that, at least as far as economics goes, this doesn’t matter - that we can count on world trade continuing to flow freely simply because it’s so profitable. But that’s not a safe assumption.

There are no easy, quick-fix answers for America and the world right now, and for that reason alone, I hope that each nation carefully considers any radical new legislation or policy change. Otherwise, we might be paying an even steeper price down the road. After all, I think most of us would agree that the scariest words in the english language are "I'm from the government, and I'm here to help."

By Matt O'Hern at 02:38 PM | Comments (0)

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