Bob Rubin awakes in the University’s
Executive Residence before the crack of dawn. The former Treasury
secretary and current chairman of Citigroup extricates himself from
the 1,000 threadcount Egyptian cotton sheets. After showering and
dabbling his digits in a jade finger bowl, he reclines on an
original Chippendale chair, sipping guava nectar and reading The
New York Times. Sitting stiffly in his Brooks Brothers suit, he
devours the omelet and the paper, eager to lunge into another day
as a champion of finance, a master of the universe.

Kate Green

Meanwhile across town, Paul Krugman, the Princeton economist and
New York Times columnist, drags himself out of bed. After a night
of shoveling down hashbrowns and coffee at the Fleetwood Diner,
Krugman awakes in a daze. He spits the cigarette butts out of his
parched mouth and tries to remember what happened last night.
Between hanging out with the Residential College kids at Rendezvous
Café and that last slice of pizza from In ’n’
Out, he’s a little sketchy on the details.

The past few days have featured an
embarrassment of riches for University students with an interest in
economics. Rubin spoke at the Law School Tuesday in front of a
dignified crowd of the Ann Arbor establishment. Law and Business
students crowded the aisles, desperately jockeying for an
unobstructed view of the great Rubin. A liberal whom the
capitalists can love, a filthy rich businessman whom the liberals
can respect. His every word is soaked in moderation. The 2001 and
2003 tax cuts undermined “the fragile political consensus
that existed around fiscal discipline.” This country needs to
“increase the seriousness of purpose in the political
system.” Decreasing Chinese subsidization of the yuan
“probably would help some,” but the effect “is
greatly overestimated.” And on and on and on, with the
pitch-perfect tone of a staid and stolid banker. No bursts of
enthusiasm, no harangues of emotion or rhetorical explosions.

The world that Krugman now inhabits is a bit different. Lately,
Krugman has fallen in with a bad crowd. The Ann Arbor activist set
was out in full force last night to hear Krugman plug his new book
“The Great Unraveling” at the School of Education. This
crowd engages in the economic equivalent of skipping school to
sniff glue: They hate free trade. But this is OK, according to
Krugman, because we are now in a revolutionary moment. “The
next year, politically, is going to be hell on wheels …
it’s going to be like nothing you’ve seen since
Bleeding Kansas.” This is a moment where political
differences should be subsumed in the great crusade to oust the
Bush administration from office and restore all that is good and
pure in the world.

For Krugman, the current administration is a diabolical
concatenation of tax-cutting extremists hellbent on the
obliteration of the welfare state, foreign policy intellectuals
with “Sharonist tendencies” and Christian
fundamentalists. The ubiquitous nods of affirmation and the yelps
of agreement cascaded upon the economist. He threw bombs and the
crowd ate them up with glee. This was a support group for

After the 1992 Democratic victory, Bob Rubin and Paul Krugman
were both expected to hold high profile positions in the Clinton
economic team. Rubin got a job heading up the National Economic
Council and Krugman, because of his prominent disagreements with
Robert Reich, was rebuffed and spent the next two terms exiled from
Washington. Rubin picked up a nuanced understanding of the
political system, recognizing how the political structure conspires
against sound economic policy. This theme occupied a significant
portion of his lecture Tuesday. Krugman knows a lot of facts about
politics, but possesses no rigorous theory to understand the world
that surrounds him. He repeated shibboleth after shibboleth,
sketching the crudest political caricatures known to man.

Last evening, Paul Krugman broke my heart. The intelligence and
vitality of his economic thought have been corrupted by an
inability to recognize that we are not living in a revolutionary
era. On my nightstand, I have a thin volume, “Geography and
Trade,” by Krugman. It is a beautiful, elegant book. It is
both a daring masterpiece of economics and a chance to examine the
crisp thought processes of an iconoclast in minute detail. I fear
that the mind that created it no longer exists.

Peskowitz can be reached at












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