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article imageBritish Prime Minister Praised by Nobel Prize-Winning Economist

By Chris Dade     Jun 16, 2009 in World
Recent weeks have not been happy ones for British Labour Prime Minister Gordon Brown. Ministerial resignations, reports of a potential challenge to his leadership and devastating results in local and European elections have all made the headlines.
Yet the damning verdict delivered on Mr Brown and his government by the British electorate, and many in his own Labour Party, is not shared by at least one respected voice in the world of Economics.
Paul Krugman is, among other things, the 2008 winner of the Nobel Memorial Prize in Economics, a professor at Princeton University and a columnist for the New York Times. When most criticisms of the economic policies being pursued by US President Obama and his administration have come from his opponents on the right, Mr Krugman has been one of his most prominent critics on the left.
In one of his New York Times columns in March he went so far as to describe the plans being formulated by US Secretary of the Treasury Timothy Geithner to tackle the crisis affecting both the US economy and those worldwide as containing "zombie ideas". He argued in his column and interviews elsewhere that the reform necessary to address the current problems and prevent their future repetition was unlikely to come from officials who enjoyed close connections to the people and institutions of Wall Street.
However Mr Krugman has recently given an interview to the British newspaper the Guardian in which he said of Mr Brown and his Chancellor of the Exchequer Alistair Darling, the Minister chiefly responsible for economic and financial policy: I still think his economic policies have been pretty good. They really kind of lost their nerve on fiscal policy, but I do understand it's harder to do it here. I think the UK economy looks the best in Europe at the moment. I have no position on all of the crazy stuff. But I think the policies are intelligent. The fact of the matter is that Britain did manage to stabilize the banking situation. I'm not ecstatic, but I'm not sure I know what I could have done better.These comments follow Mr Krugman's praise of the British Prime Minister in October 2008 when Mr Brown and Mr Darling oversaw the recapitalization of the British banking system.
In the same interview Mr Krugman did concede that his initial unhappiness with the policies of the Obama administration was starting to abate, noting:I'm increasingly happy with him. I was unhappy; I think they could have gotten a bigger stimulus coming out the gate. But they've become more forceful. I would have been more aggressive on the banks; we'll see if we need to re-fight that battle later on. Healthcare is looking really good. I'm getting increasingly optimistic on healthcare reform. Climate change looks like it's going to happen. So my odds that this will in fact be the kind of New Deal I was hoping for are rising. I had my scepticism, but he is smart. He's impressive. And it is such a relief to have somebody whom you can respect in the White House.
In reality, Mr Krugman's remarks concerning what he believes is Britain's position of relative strength in terms of a possible recovery are not likely to influence the thinking of the majority of the British public. Indeed it is probable that most people, except the most avid observers of economics, will be unaware of both their existence and their relevance. Even a miraculous economic recovery may not necessarily guarantee the reelection of Mr Brown. The sentiment may simply just be that Labour, perhaps more specifically Mr Brown, led the country in to a recession and they or he were therefore duty bound to led the country out of that same recession. That the time has come for change may be the prevailing view. One thing is for certain though. By 2010, at the very latest, we shall know what exactly Mr Brown's fate is to be.
More about Gordon brown, Britain, Economics
 
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