Friday, April 23, 2010
Krugman begs to differ
Having listened to President Obama's speech, Paul Krugman has a few differences with him. And in a change of position, Krugman now believes that size does matter.
On Thursday, President Obama went to Manhattan, where he urged an audience drawn largely from Wall Street to back financial reform. “I believe,” he declared, “that these reforms are, in the end, not only in the best interest of our country, but in the best interest of the financial sector.”This is the fight that Main St wants to see and Wall St is busy bribing Congress to avoid. Obama himself, chose to go into the lions den and say "Nice kitty" instead of looking for a lion skin rug. Paul does a nice job of showing why this was the wrong choice.
Well, I wish he hadn’t said that — and not just because he really needs, as a political matter, to take a populist stance, to put some public distance between himself and the bankers. The fact is that Mr. Obama should be trying to do what’s right for the country — full stop. If doing so hurts the bankers, that’s O.K.
More than that, reform actually should hurt the bankers. A growing body of analysis suggests that an oversized financial industry is hurting the broader economy. Shrinking that oversized industry won’t make Wall Street happy, but what’s bad for Wall Street would be good for America.
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