Over the Cliff?

The article I chose to critique was written by Dr. Paul Krugman, an Op-Ed columnist for the New York Times since 1999 and a professor of Economics and International Affairs at Princeton University since 2000. He has written and edited over 18 books, and published hundreds of articles on economics and international affairs. His most recent article, “Edge of the Abyss,” can be found in the opinion section of the New York Times.com website, October 2, 2008.

Dr. Krugman’s intended audience seems to be directed toward readers who are concerned about the ongoing economic plight of the US and the impact of the current administration’s policies on this mess.

The basic argument of this article is that the financial state of the U.S. economy has gone from “not good” three weeks ago to one that is “really, really bad.” Krugman argues that we are entering a time of “severe crisis with weak, confused leadership.” The argument relies on the assumption that officials in the Treasury, specifically Henry Paulson, were aware of the impending financial crisis a year ago, and yet did nothing to address the problem. In fact, they continue to add to it—for example, the hastily and ill-prepared $700B Bailout Plan. The author suggests that the resulting financial chaos is causing panic for both Wall Street and Main Street. His advice is that unless the administration develops a long-term solution to the economic crisis, the US will be in for a depression-like environment. Unfortunately, he does not believe the current administration has enough time nor wits to develop a plan, and he fears that there will not be enough time available for the incoming administration to do so before financial disaster strikes. “The next administration’s economic team had better be ready because it will find itself dealing with the worst financial and economic crisis since the great depression.”

The article presents a very strong warning of impending financial disaster and based on the recent events of the past 3 days, I think he made a very convincing argument. Dr. Krugman’s credentials are exemplary and I believe he has a strong grasp of what has happened and what is needed to fix it. I am convinced that the US government needs stronger leadership and a team of economic experts who understand how we can survive this hardship with the least amount of destruction to our society. Something has to be done quickly, but it is just as important that something be done correctly or we will only continue down the road to financial disaster!