He answers them here, on a short (and fun) video. They’re tough questions.
Addendum: The whole Krugman interview is here. And Mark Thoma indexes further questions.
Tyler Cowen poses two questions to Paul Krugman
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What’s up with his parting shot about recruiting people from Wall St? “Hopefully not people from Goldman Sachs?” Like it or not, in the end it turns out that Goldman was one of the better-run of those banks. They were the good-er guys.
His first response was terrible. He only focused on recruiting problems, and not institutions themselves and the incentives they create. The problem of focusing coercive power into social benefit is obviously something a bit harder than having the right people available to hire.
His second answer was expected, and can’t really be challenged without challenging Keynesianism.
His third answer seemed like a reasonable one, given his beliefs. I think he really should have discussed the chances of this temporary institution actually being temporary, given a democratic congress and president (while Reagan was president during the S&L crisis).
His view of the quality of people at the UK Treasury seems generous. He should spend more time here.
Mark
Parts of the answers sound like Herbert Simon–satisficing. Unlike many academics, people faced with the need for action tend to find “good enough (for government work)” something they can live with.
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