NYT: Krugman praises the UK and questions Paulson

Newly mint Nobel-laureate Paul Krugman’s Monday article in the New York Times (he writes Monday and Friday) heaps praise upon Britain’s initiatives to stem or slow the global financial crisis, especially the actions of the past few days committing to an equity injection, and expresses his dismay that the US is failing to live up to the expectations of the largest economy in the world.

He manages to subtly absolve his Princeton colleague, Ben Bernanke, from some of the blame by citing reports that Bernanke had favoured a direct injection over spinning yourself around in a chair until you’re dizzy and want to vomit (the TARP plan, as originally constructed) and attributes the US government’s atrocious response to Henry Paulson, the Bush administration’s blind faith in free market ideology (which is really much more accurately described as a belief in poor governance), and the lack of “knowledgeable professionals… with the stature and background to tell Mr. Paulson that he wasn’t making sense”.

Which makes me wonder:  What about Ben Bernanke?  As the head of the Department of Economics at Princeton, which includes Nobel laureate PAUL KRUGMAN, and as someone who clearly held the belief at least for a time that a direct injection of capital would be the most effective method of saving banks, why did he fail to change Paulson’s mind?  Why instead did Paulson apparently change Bernanke’s mind (evidenced by Bernanke’s defense of the TARP, even being the first to posit hold-to-maturity pricing as its mechanism of salvation)?

I understand Paul Krugman is an editorialist and not an investigative reporter, and I also udnerstand the social constraints that would keep him from directly questioning Mr. Bernanke or revealing anything that Bernanke told him.  But I have to say, it is a bit much for Mr. Krugman to once again give Ben Bernanke a pass without some sort of explanation as to why Bernanke lacked the knowledge, stature, or background to set Paulson straight, and truly, as an expert in economic crises, who in the world would be more qualified to confront Paulson than Bernanke?  Academic cordiality be damned.

(And although he already has over 1800 of these on his blog when I visited this morning: CONGRATULATIONS to Mr. Krugman on his shiny new Nobel!  Now go get all up in Bernanke’s business!)

… and the cow goes moo