Suddenly, Even Nobel Proze Winner Think US Is Right

Paul Krugman, Princeton University professor, New York Times op-ed columnist and winner of the 2008 Nobel Prize for Economics, had been very critical of Treasury Secretary Henry Paulson’s original bailout plan, saying it was distorted by ideology.

Today, however, Krugman told CNBC he thinks the new plan, which will inject $250 billion into U.S. banks, “looks much better.”

“In the last six days this thing has come together with a plan that really does address the critical problem of inadequate capital at the banks (and) addresses the need for guarantees to calm the markets down," said Krugman. "We don’t know this is going to work, I wish we were sure, but this is a much better. For the first time I’m starting to feel that policy is really getting some traction on the crisis.”

Krugman said the current financial crisis repudiates the financial-markets-are-always right principle.

“A certain amount of public intervention, oversight and—in crisis—partial takeover of the financial system is something you have to do," he said. "Leaving the financial system to work things out on its own was disastrous in the 1930s and brought us to the brink of disaster again now.”

“This is not a case for socialism, it’s a case for regulation, oversight and for government-led rescues when there’s an emergency," he added. "We’re not going to go back to Karl Marx, but we are going to rediscover some of the things Franklin Roosevelt learned 75 years ago.”

Even with the new bailout plan, Krugman thinks we're headed toward a "serious recession."

"Even before the financial markets went crazy four weeks ago…there was a lot of downward momentum in the economy, and this isn’t going to reverse that. This is just preventing that from getting much worse.”

“I think this is the right thing for the immediate financial crisis, but I would say let’s have aid to state and local governments, let’s have public spending, let’s have some expanded unemployment benefits, partly because people need it, partly to put cash in the hands of people who are likely to spend it.”

Sources: CNBC

I copy this article exactly as seen on CNBC.com about Paul Krugman, the recipient of Nobel Prize Winner this year and frankly, i think he is wrong about that.

I know he is a very smart man and what he did is great. However his opinion for the plan is wrong. It's clear that he change his mind right after he receipt his nobel. Is that a coincidence? or political power come in play?

“This is not a case for socialism, it’s a case for regulation, oversight and for government-led rescues when there’s an emergency,"

I like this sentence so i highlighted it. So Paul, if you can hear me, how can the 700 billion bailout plan and 250 billion in bank nationalization is not socialism but regulation.

Glen Beck said once and i could not agree more: We are either a free market or we are socialism. We can't be both.

So you tell me is bailout most financial companies with trouble, ban short selling, nationalize banks are free market mechanism and not socialism?????????????

Name me a country that would do that. Argentina, China, Russia.... Are they capitalism or socialism?

So Paul, if you wanna repay US for awarded you with a nobel prize, at least say something wiser and with more intelligent because that's a joke!