Academia loves Paul Krugman. He earned his bachelor's degree from Yale University, and his Ph.D. from MIT -- he has taught for both universities as well as Stanford University -- and he currently teaches at Princeton University as a Professor of Economics and International Affairs." (In the real world, those terms are lowercase.)
Had he accepted our e-mail Q&A, the discussion would have been ethics in journalism, although we agree, that is a strange question to ask someone who is not a journalist. (Editor's note: T&A does not pay for interviews.) Krugman says online that his Enron days are long past. In 2005, he is not the only former associate making that claim.
"It's amazing what sleazy things people on the right will do to undermine someone who doesn't agree with them," writes Paul Krugman. More about Enron to come, but let's get the sleaze out of the way first. The words printed on this page are not from a right-winger. Ask questions of both sides, find the answers, and catch the spinning middle if you can.
Not all black and white for Columnist Paul Krugman
Krugman, 51, is not a journalist by definition -- he does not gather news or edit stories, he is a book author, guest speaker, and is the blue sky above the same middle class he pretends to enlighten in twice weekly columns at The New York Times. No one can (or should) argue that Krugman is not a knowledgeable expert on theories of international trade and finance. Should theories be practiced, these could be validated or questioned in much the way this article treats his skills to observe his own environment. His latest focus is upon currency rises; but anyone can explain why the dollar tanked against the EURO. Read story
So, pre-Times' job, Krugman was an economics consultant (and served as chief international economist for the White House Council of Economic Advisers,) and he writes that a $20,000 fee (for 1 hour) was what he charged for clients in New York or Boston to deliver a speech.
Enron's $37,500 fee for four days in Houston was below Krugman's normal rates. He would have earned more from Enron, except he quit the board before the last payment was issued. Or... the panel. His sentences flip-flop on whether he was a "board member" or a "panel expert." Those terms are in no way the same; even though the White House and UNOCAL have successfully rewritten history and call Hamid Karzai, now president of Afghanistan, a "consultant" rather than the UNOCAL board member that he was, but that is another story.
Is it out-of-line to ask Krugman, knowing of his top standing in the economic theory community, that he not have suggested to Enron they were headed in the wrong economic and financial direction? In case you've forgotten, Enron is basically closed -- for restructuring. Six thousands employees lost their jobs in the largest bankruptcy scandal pre-WorldCom.
For any advisor to be involved with Enron at a time when the tremors were already building its tsunami, either the advice given was bloody horrible, and thus certainly not worth a nickel, or it was simply ignored. No answer. Board meeting minutes were destroyed.
"As far as I knew at the time, they (Enron) genuinely wanted to learn something. I resigned from that board in the fall of 1999, when I accepted an offer to write for The New York Times," writes Paul Krugman.
True journalists have instincts. Perhaps this is not the same for economists.... let's be honest, the two professions are not a good dating match. "When I was on (the Enron board) it did not strike me as a board of pundits. It included Larry Lindsey and Bob (Robert) Zoellick - future (President George W) Bush administration officials, though I had no way of knowing that...." writes Paul Krugman.
In 1999, Lindsey was already helping (then Texas Gov.) Bush on his presidential election campaign. Zoellick at the time of this Enron party was a member of the U.S. Trade Deficit Review Commission. All of these men had ties with, or attended and graduated from, Harvard University.
"The only person there I thought of as a journalist was William Kristol - I thought he was there to regale us with Washington gossip," writes Paul Krugman. Kristol led the Project for the Republican Future --and he served as chief of staff to Dan Quayle under George Bush Sr.-- long before Enron meetings in 1999. Here is a surprise: Kristol taught politics...at Harvard.
Maybe Krugman, in all his fuzzy-wuzzy-furry nature, is truly such a wonderfully nice guy; that he is simply the type who trusts in the common good of all men. Maybe he did not research his Enron teammates prior to accepting the board's offer. This naivety could be acceptable grounds for making a mistake... now and then... But wouldn't one expect someone who charges $20,000 per hour to be the brightest bulb in the pack?
Can one of the world's top economics experts not have the simple sense to Google names of those you'll break bread with prior to accepting a profitable engagement? Well, he stops at the obvious conclusion.
"I didn't say (in The New York Times' article about Enron) that I was paid to serve on the board, but I thought that was obvious: Who volunteers his services to for-profit corporations?" writes Paul Krugman. Nope, the guy is not naive. He knew full well what he was getting into. Is basic journalist instinct all he is missing?
His columns in The New York Times certainly did not hold back against Enron after the company fell to the same government so many of its board members were apart of.
"Some people seem to think that because I had nice things to say about Enron's energy trading in a Fortune (Magazine) article - in which I disclosed my connection - I was being out of character. But I have always been a free-market Keynesian: I like free markets, but I want some government supervision to correct market failures and ensure stability," writes Paul Krugman.
Was Enron attempting to by his soul? "That's for them to answer," he writes, but what a strange comment ask himself and answer on a blog website where he also said The New York Times' offer came out of the blue.
If journalist instinct kicks-in, one would question whether or not Enron knew of his offer at The New York Times, and felt it best to invite him to join the board....even if for only one weekend.
"But I wasn't selling," Paul Krugman writes... No, as history shows, that would have been an impossible game to play through. Or at least as impossible as it is to read Krugman's columns and take away any value past The Times' single dollar newsstand price.
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