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Why Paul Krugman is not cut out for treasury secretary

Nobel winning economist Dr. Paul Krugman during his speech at the Economic Club of Canada on June 29, 2011, in Toronto.

Fred Lum/The Globe and Mail

Actor Danny Glover has started a petition urging President Barack Obama to nominate New York Times columnist Paul Krugman – a Nobel laureate in economics – as the next U.S. treasury secretary. More than 220,000 people have added their names so far.

With all respect, this is terrible idea. Just ask Paul Krugman.

"The skills needed to be an effective force within an administration are real and good – and I don't have them," Prof. Krugman told me in an interview in his cluttered office at Princeton University in the autumn of 2011.

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Just as great athletes don't make great coaches (Wayne Gretzky, please stand up!), great economists aren't necessarily cut for politics.

Prof. Krugman is the bane of economic conservatives everywhere. He has argued forcefully in favour of fiscal and monetary stimulus at home, and against hurried austerity in Europe. And he sees little reason to treat his opponents charitably, which certainly raises the entertainment value of his twice-weekly columns.

The halting nature of the recovery from the financial crisis, and central banks' embrace of radical policy measures, has emboldened Prof. Krugman's many admirers in making the case for their man. If the world had listened to Paul Krugman we wouldn't be in this mess, they say. Mark Weisbrot, co-director of the Washington-based Center for Economic Policy Research, wrote in The Guardian that someone of Prof. Krugman's stature would be able to hold the line against the Republican position that deficit reduction should be the country's No. 1 priority. (If you haven't guessed Mr. Weisbrot's politics yet, he calls the Republican point of view on the threat posed by a $1-trillion (U.S.) deficit "crap.")

It is fun to dream, I guess, but one could question the utility of making the case for Prof. Krugman as treasury secretary, even as a lark. Prof. Krugman has spent the last several years characterizing Republicans as morons. There are 45 Republicans in the Senate and it only takes one of them to block an administration appointment.

Mr. Weisbrot suggests senators could be wowed by Prof. Krugman's many academic achievements, including the Nobel. But Mr. Weisbrot apparently forgot the sad story of Peter Diamond, another Nobel laureate who was denied a position at the Federal Reserve because Alabama's Richard Shelby didn't think Prof. Diamond's work on labour markets qualified him to shape monetary policy.

The main economic challenge facing Mr. Obama over the first half of his presidency, if not the entirety of it, will be negotiating budget compromises with Republicans.

Prof. Krugman's stridency makes him entirely ill-suited for the task. He gave policy making a try early in his working life, spending a year in Washington as a staffer at Ronal Reagan's Council of Economic Advisers in the early 1980s. And in 1992, he said he was in the mix for a post in Bill Clinton's administration. "There was kind of an audition during the '92 campaign," Prof. Krugman told me. "I clearly flubbed the audition. … I would have done it and it would have been a mistake. I realized afterwards that that was probably one of the best things that ever happened to me."

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Jack Lew, currently Mr. Obama's chief of staff and a long-time Washington insider, is favoured to replace Timothy Geithner, who is expected to quit any day.

This would irritate idealists, who would see yet another triumph of the status quo. Mr. Glover's petition states that Prof. Krugman would "protect Social Security and Medicare from benefit cuts, promote policies to create jobs, and help defeat the austerity dogma in Washington and around the world."

If this is what Mr. Glover and the tens of thousands of signatories of his petition want, they should hope Mr. Obama ignores their suggestion for treasury secretary. Again, just ask Paul Krugman.

"I had no interest whatsoever in being in this government," Prof. Krugman said when I asked him if he had aspirations to serve Mr. Obama. "I knew the best place for me is exactly where I am, with twice-a-week access to the most important journalistic real estate in the world and chance to weigh in on stuff."

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