Krugman’s Delusion

Paul Krugman in a review writes, inadvertently, what would be a good descriptiion of himself,

…one’s career, reputation, even sense of self-worth can end up being defined by a particular intellectual approach, so that supporters of the approach start to resemble fervent political activists – or members of a cult.

Krugman won a Nobel Prize more for his anti-Bush fulminations than his enduring contribution to his actual field. The Nobel committee has a habit of finding such voices and rewarding them. Since that time, with the excess of rhetoric retired and the Democrats having won handily, Krugman has gone back to his field with some circumspection. His review of three books of putative financial geniuses says,

Do the lives of the sages carry useful lessons for the rest of us? Soros doesn’t really seem to have a method, except that of being smarter than anyone else. Buffett does have a method – figure out what a company is really worth, and buy it if you can get it cheap – but it’s not a method that would work for anyone without his gifts. And Volcker’s main asset is his implacable integrity, which most mortals would find hard to match…

…what I hear from my finance professor friends is that there’s a lot less soul-searching under way than you might expect. And Wall Street’s appetite for complex strategies that sound clever – and can be sold to credulous investors – survived L.T.C.M.’s debacle; why can’t it survive this crisis, too?

The rule is there are no rules and things go on pretty much as they always had before. People don’t change their fundamental selves – except in the rarest of instances. Check with Shakespeare about that.