Bubble, trouble and Krugman

Economist Paul Krugman has always been a Cassandra. Anyone who has been a faithful reader of his New York Times op-ed column knows just how unrelentingly bleak he can be.

So imagine reading a collection of those op-ed pieces in one sitting. The Great Unraveling: Losing Our Way in the New Century (Norton, $25.95, 426 pp) is not for the fainthearted. Even the title makes you want to reach for antidepressants.

Hired in 2000 by the then-New York Times editorial page editor Howell Raines (who later lost his job as executive editor in the Jayson Blair debacle) to help readers make economic sense of the dot-com boom, the cheerless Krugman certainly was an anomaly at a time when nearly everyone else was, well, irrationally exuberant about the stock market. The writing style of the Princeton University professor of economics also stood out. In a field not noted for its crystalline clarity, Krugman has had the enviable knack of talking about complex economic ideas in plain English, making them accessible even to those of us who have trouble balancing our checkbooks.

In a piece that appeared in Fortune magazine in 1998, for example, Krugman, arguing that enthusiasm for the bull market was misplaced, told a simple story about the Clan of the Cave Bears (who safely hunt rabbits) and the Clan of the Cave Bulls (who go after more risky game) to illustrate the dangers of following instincts rather than economic logic. As our prehistoric ancestors running after giant mammoths would eventually learn, he warned, the supply of ever-increasing profits was going to run out.

"The whole situation gives me the chills," he wrote. "It could be that I don't get it, that I'm a Neanderthal too thick-skulled to understand the new era. But if you ask me, I'd say that there's an Ice Age just over the horizon."

Raines hired Krugman to write about economics, but as the economy went into a tailspin, he began more and more to address the political and corporate policies he felt were to blame for the decline. And as the war drums began to beat, the economist began writing as much about guns as butter.

The columns, covering December 1997 through March 2003, remind us just how quickly the dot-com bubble burst and how deeply corrupt the corporate system had become. But it is in the later columns, a number of them accusing the Bush administration of wrapping itself in the flag after Sept. 11, and the added essays included in A Great Unraveling where Krugman really sharpens his knives.

In his introduction, for example, not only does Krugman reiterate his opposition to Bush's tax cuts as a boon for the rich and the war in Iraq as the opening salvo in an imperialistic foreign policy, he warns, in true Cassandra style, that both are part of a right-wing agenda aimed at dismantling our political and social system. The press and public opinion, he contends, are not taking this revolutionary attack by the radical right seriously enough.

"Yes, Virginia," he writes, "there is a right-wing conspiracy. It's not even especially hidden: anyone with a modem and spare time can inform himself about the network of institutions that systematically harass prominent liberals and bully news sources that don't toe the line. (I have, of course, been a target myself.)"

And who is this Paul Krugman, sounding the alarm?

Casting himself as a journalistic outsider ("I'm not part of the gang _ I work from central New Jersey, and continue to live the life of a college professor"), Krugman presents himself as a kind of modern-day I.F. Stone. Like Stone, he doesn't rely on inside information and leaks from highly placed sources. He doesn't hobnob with the powerful. "I rely almost entirely on numbers and analyses that are in the public domain; I don't need to be in the good graces of top officials, so I also have no need to display the deference that characterizes many journalists," he writes.

He also calls himself a liberal, but points out that that doesn't mean he is a "liberal big-government type." His strong defense of globalization and free trade has earned him the wrath of Ralph Nader and several liberal publications, he points out. He also believes trade is not enough. "It's our human duty to provide aid to poor countries, and it's a duty that we as a nation shirk."

Arrogant and at times condescending ("I began pointing out the outrageous dishonesty of the Bush administration long before most of the rest of the punditocracy"), knowledgeable and always engaging ("I have also been willing to see things differently, and report on what I see, because I'm not properly socialized"), Paul Krugman certainly is a voice in American journalism like no other. He isn't infallible: Although he was always a stock market skeptic, he wasn't skeptical enough in the '90s. He understated the risks of the dot-com collapse. And, like everyone else, he played catch-up in reporting on corporate corruption (all admissions he points out himself).

But in describing (and cautioning against) the dangers of a radical right agenda _ "a country that basically has no social safety net at home, which relies mainly on military force to enforce its will abroad, in which schools don't teach evolution but do teach religion and _ possibly _ in which elections are only a formality" _ he may be on to something. "Critics called me a Cassandra," he points out, when he was the one of the lone voices predicting an economic slump, "and they were right _ for though nobody believed Cassandra's prophecies, they did come true."

Margo Hammond is the Times book editor.