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Nobel laureate and folk hero?

Paul Krugman, economist, scholar and columnist for The New York Times (and the News & Record), may be the only one in his field to have a YouTube music video posted in his honor.

The ode by pop musician Jonathan Mann is eloquently titled "Hey, Paul Krugman" and wonders why Krugman isn't treasury secretary instead of Tim Geithner.

"When I listen to you, you seem to make sense/ when I listen to him, all I hear is blah blah blah," the lyrics say.

With all due respect to Geithner, Krugman's resume is impressive.

He won the Nobel Memorial Prize in Economics in 2008 for his scholarly work on new trade theory and economic geography.

Krugman also was ranked sixth in Prospect magazine's 2005 global poll of the world's top 100 intellectuals.

In addition to his post as professor of economics and international affairs at the Woodrow Wilson School of Public and International Affairs at Princeton University, he also is Centenary Professor at the London School of Economics,.

Greensboro residents got the chance to listen to Krugman recently when he spoke on Election Day, Nov. 3, as part of Guilford College's Bryan Series.

Editorial Page Editor Allen Johnson got the chance to listen to him on the same day in a one-on-one interview. Here's some of what he had to say:

You've been a critic of the Obama administration's stimulus policies. Why?

Even in January, when they were putting the stimulus bill together, if you looked at the best estimates of how deep this thing was gonna be, the stimulus bill looked like it would help but wouldn't be enough.

And after the fact, that's even more the case.

We're down about 8 million jobs at this point and we're down almost 10 million from where we should be.

We've got a bill that will lead to 3 million more jobs than we would have had, but that's not enough.

That's still leaving us with deep unemployment.

The bill has mitigated this thing; it's limited the impact but it's fallen way short.

I wanted a bigger package -- particularly I wanted a bigger package because I thought, back in the beginning of the year, that if it didn't turn out to be enough, that it would be really hard to get the political will to come back for a second round, which is the way it's turning out right now. 

So, if you were in charge, what would you do?

Well, if I didn't have to worry about Congress, if I didn't have to worry about 60 votes in the Senate, I'd say let's have at least another $500 billion of stimulus and maybe something else major. Maybe we need to go back in and buy 80 percent of Citigroup and go in there and get money flowing again.

We need a big boost here. We're sitting at 10 percent unemployment with no light in sight. We're still losing jobs. We've avoided the end of the world but we are not recovering in any sense that really matters.

What about the mounting federal deficit?

The deficit is a problem. You can't run deficits this big forever. But that's not the plan. The plan is to run them now, which is an emergency, and to get us through this rough patch.

And, for what it's worth, people are actually putting money on the table -- and they're not acting worried. The U.S. government is able to borrow money long term at 3.4 percent interest. People who sell default insurance charge almost nothing.

Nobody in the markets thinks the U.S. has a fundamental budget problem. They all think we're going to make this work. So this is entirely something that's coming out of the political media echo chamber. It's not out there in the world of people betting with real money.

On top of that, even to the extent that you are worried about the deficit, shortchanging economic stimulus is almost the definition of penny-wise and pound-foolish.

I say we need at least another $500 billion (in stimulus funds). Suppose we don't do that $500 billion? Does it actually save $500 billion? No, nothing like that, because the economy will be weaker, tax receipts will be weaker. There will be less business investment because of a depressed economy. Education will suffer because of the effects on state budgets. Long term, it would mean the economy was going to grow less -- that means less revenue.

I won't say completely that you get no progress against the deficit by not spending that $500 billion. ... But the point is it would be crazy to shortchange what the economy needs right now because you're worried about a number that doesn't seem to bother the markets at all.

You sound like you're channeling Dick Cheney from a couple of years ago.

Ah, but the difference is, when the economy is anywhere near full employment, then I'm as much of a deficit hawk as anybody.

Get me back to 5 percent unemployment, even 6 percent unemployment, and I'll say now is the time to start raising taxes, to look for economies, to start cutting off the stimulus programs.

But we're at 10 percent unemployment and it's still rising. This is not the time to be worrying about deficits.

Cheney said deficits don't matter. I say deficits matter, but sometimes other things matter more.

Time was when it seemed if you did the right things -- worked hard, got an education -- you could do well and be productive in this country. That doesn't seem to wash now.

This state that we're in right now is ruining people's lives, possibly not just for a year but permanently. It's throwing people's lives totally off track.

There is the broad definition of unemployment. If you include the people who have given up looking because there are no jobs, and the people who are working part time because there are no full-time jobs, we're up to 17, 18 percent unemployment now.

That means that there is hardly anyone in America who doesn't have someone close to them who is suffering from this crisis and who is, in fact, having a hard time holding their lives together in the face of it.

And that's something we've got to do something about. This is a really dreadful, really damaging thing and the worst hit are the young.

To graduate -- to go out into the job market this year -- is a terrible thing that will probably cast a shadow over your working life for decades.

Much has been said -- a lot of it not good -- about Wall Street bonuses. Your take?

First of all, it is outrageous. The fact of the matter is that Wall Street survived this year only because taxpayers put enormous amounts of money on the line. Not all of that money was lost but it was potentially at loss.

We put value at risk for U.S. taxpayers. We lost substantial amounts of money.

As Larry Summers (director of the White House's National Economic Council) said, there is no financial firm in the country that is not the beneficiary of trillions of dollars of implied U.S. government aid.

So, for this industry to be going out there and paying itself enormous bonuses, after almost bringing the world to a complete crash, is an outrageous thing.

Policy to make it not happen is a little bit tricky, but we do need to do something. This is not acceptable.

Is Wall Street tone-deaf?

There is a lot of arrogance there. There is a famous quote from somebody in the hedge-fund industry complaining about taxes and saying, "People like us have the right to earn our $10 million or $100 million and not pay taxes on it."

So yes, it's a different universe. And some of them may be figuring that regulation is coming and meanwhile, they might as well get theirs.

We've debated a lot in North Carolina about offering economic incentives as a way to recruit industry -- or not. Your thoughts?

It can work, but two things: One is that, from the point of view of the nation as a whole, it's a zero sum gain. Everybody's out there trying to bribe the same companies. And we all lay out a lot of money, but the total number of jobs in America hasn't changed. Talk about sloshing it back and forth.

The other point is this tremendous tendency to overstate the benefits of persuading somebody to locate.

There are probably a hundred places in America that all think they're going to be the next Silicon Valley.

It's kind of like the dotcoms, when there were 50 firms that were going to be the next Microsoft. It's not gonna happen. ...

But you get caught up in it. Politicians like to stand there and point at the new development and say, "I did that" at the ribbon cutting. But it almost always winds up being a waste of money.

The ones that work are a lot more subtle.

Better to have a good research university and have the chips fall where they may than to actually bribe someone to locate a plant that's going to wind up disappearing a few years later.

Now, if you're OK with it, a brief game of word association -- beginning with Fox News.

(Laughs). I don't know that I have a verbal response to that, They are what they are, and what they are not is actually a news network -- and they should be treated accordingly. If it's infotainment, fine, but it's not real news.

But you've been on Fox News any number of times.

Only a couple of times when my publishers force me to, to sell books. Otherwise, I don't; I don't believe in it.

Public option for health reform.

Good thing. It can work without, works better with. It's become a touchstone for progressives and, to some extent should be, because it's kind of a warrant that we're not just going to turn this into another profit opportunity for the insurance industry. It's not the be-all or end-all but let's have some form of it in the bill.

Barack Obama's Nobel Prize.

I wouldn't have done it. It wasn't an outrage, but it also probably wasn't a help to him. And that's what I mostly care about. I want to see this guy succeed, because if he succeeds, America succeeds, and I actually think the Nobel Prize was a bit of a liability for him.

Finally, from a long-term economic perspective, what's your prognosis?

The prognosis isn't good. But we could have had a second Great Depression and we haven't. And the reason we haven't had a second Great Depression is because people learned something -- not enough -- but they learned something. We did better. So this past year, in a peculiar sort of way, is a triumph in policy because we did stare into the abyss and we were able to turn our back on it and that's good.

Longer term?

Beyond that, it's going to be hard. I wish I could be really encouraging but I think we could be headed toward a long period of subpar performance. "Lost decade" is the phrase people use, and that's what happened in Japan.

I wish I saw a clear reason I didn't think that's what's going to happen.

So, will it be a decade before we're back to where need to be?

Well, yes, it could easily be. No one really knows. If somebody comes along with a really strong technology that leads to a lot of business investment, then it'll be over pretty quickly.

Or if policy gets more active than I think it's going to be, then we could be back more quickly.

But if you take the economy the way it's growing now? To get back to anything close to full employment will take well into Sarah Palin's second term in the White House.