Saturday, January 10, 2009
Krugman: The Essential Man
I got to know Krugman in the 90s via email exchanges. At that time he was essential understanding the large macro currency and trading flows of hedge funds and prop desks. No one had a better understanding of the implicit options in currency trading. His thoughts then on Long Term and oil and the raid on shorting Hong Kong were essential. Others in the trading community realized this and Krugman took on an assignment from Enron - remember in those days everyone thought they were aggressive but great traders. He got scorched and then seemed to become disenchanted with the econ game as he professed to me he was certain he would never get a Nobel as his work lacked the complex math most economists were pursuing and deploying at that time. In fact it seemed a Krugman working paper were the only ones you could read as they had the grace and robust simplicity of an essay by Keynes.
But off he went to being a political newspaper guy for the NY Times and I lost interest in his work and found it sad that the best economic mind (my view then and now) was off to partisan politics.
Now Krugman is emerging again onto the economic scene. His editorials now in the NY Times and especially his blogs are as he wrote in the 90s - clear elegant and powerful. That part if economics which is science is what he writes on now and being a science means it is applicable to all parties and political stance. And what I am starting to see as an important new aspect of his work is he is adept now in the political space and while in the 90s he could be impatient and even brutal in correcting fallacies or popular economic views (his writing on Soros "reflexivity" in the 90s were hilarious and almost Defoe like) while now he has grace and patience and is intent on being effective and providing a good versus being right.
The last series of blogs and editorials are a call to arms for all thoughtful folks who know a thing or two about markets and econ. If you do not read his work now it is essential you start It is essential you pass on his material to your elected rep in case they have not read his work. I do.