Paul Krugman backs Gordon Brown
The Nobel Prize-winning economist says PM’s ‘intelligent’ policies could get Britain out of the worldwide recession early
You could forgive Gordon Brown for feeling a tiny bit smug this morning, despite everything. After the National Institute of Economic and Social Research (NIESR) reported last week that Britain was now out of the recession having recorded GDP growth in April and May, here comes another pat on the back for the PM.
This time it's from the Nobel Prize-winning Princeton economist Professor Paul Krugman who has proved a scourge of the new White House administration's economic team in his regular Oped columns for the New York Times, even referring to Treasury Secretary Timothy Geithner's policies as "zombie ideas".
But in an interview with Will Hutton for the Observer, Krugman had nothing but praise for the Brown-Darling strategy. Britain had stabilised its banking system and was in the best shape of any European economy. Not only were British government policies for getting out of the global eco-meltdown "pretty good", they were "intelligent".
The earlier fall in the value of sterling may have helped, Krugman said. "The UK has achieved a lot of monetary traction in the way that no one else has through the depreciation of the pound. In effect, you've carried out a successful beggar-my-neighbour devaluation. I think the UK economy looks the best in Europe at the moment."
As a result, Krugman had been watching the "bizarre political circus" concerning the prime minister's fate with a sense of puzzlement. "If the Government can hold off having an election until next year," he told Hutton, "Labour might well be able to run as 'We're the people who brought Britain out of the slump'."
Arise, Sir Paul!