Secretary Scrooge? Jude Wanniski December 26, 2001

Memo To: Paul Krugman, NYTimes
From: Jude Wanniski
Re: Ebenezer O’Neill?

Shame on you, Professor. Your Christmas column, “The Scrooge Syndrome,” shakes a crooked finger at Treasury Secretary Paul O’Neill for supposedly saying he opposes giving taxpayer funds to the World Health Organization (WHO) to combat malaria and tuberculosis in the poorest nations: “[He] contemptuously dismissed proposals for increased aid to poor nations. And his justification -- that he ‘would like to see evidence of what works before making new commitments’ -- was pure humbug.” This suggests you have a nasty, mean streak, Prof. Krugman, which you have cleverly concealed. You know darned well that O’Neill was talking about sending another several billion down the Argentine rathole, not mosquito control in Mozambique. Readers of the Times generally have a soft spot in their hearts for poor people, so for you to twist words around on Christmas Day to make it sound as if O’Neill is a miser will turn them against him. He has enough trouble as it is, having to carry Larry Lindsey around on his back.

There are other problems I have with the Christmas column, although I have generally been known to be a soft touch for poor people myself. O’Neill is wrong, you say, “for the truth is that we already know what works.” That’s quite a mouthful, Dr. Krugman, as you are a practicing economist, and the best you can do to help the poorest countries is to have “advanced countries... provide resources for a plan to ‘scale up the access of the world’s poor to essential health services.’” How about making the poor countries rich, so they can kill mosquitoes themselves? Instead, you endorse the commission whose report you cite that says the United States should hand over $6 billion on top of all the other money we send the United Nations and its related financial institutions, like the International Monetary Fund and the World Bank, all of which are supposedly dedicated to helping the poor get rich. And who was the chairman of the commission that came up with this brainstorm? None other than your buddy Jeffrey Sachs!!

Wow, this is the very same Jeffrey Sachs who came up with the cuckoo idea of having the Communist countries go cold turkey in converting to capitalism at the end of the Cold War. He called it “shock therapy” and sold the concept to the editorial board of The New York Times, which ran it up the flagpole. The International Monetary Fund loved the idea of little electrodes sticking out of the ears of the USSR while Professor Sachs threw the switch. And lo and behold, the ruble went from four to the dollar to six thousand to the dollar. The life savings and pensions of the Russian people vanished and in the first cold winter, more Russians died of starvation and exposure than all who had died at the hands of Russian mosquitoes in decades. Tuberculosis also made a comeback in the wake of Dr. Sachs march through Moscow. “Shock therapy” was such a success in Russia that the IMF and World Bank marched it into Yugoslavia, where the local currency, the dinar, went from $25 per each to 0.000001 per each. One year the Catholics and Muslims and Serbian Orthodox citizens of Yugoslavia were happy as clams, doing business with each other and even marrying each other. The next thing you know they are killing each other faster than Jeff Sachs can say “tuberculosis.” And the fellow who had the electrodes stuck into his head, because you guys already know what works, is now in the dock at the International Court of Justice at the Hague, accused of war crimes and genocide. Slobodan Milosevic’s disadvantage is he does not have a Ph.D. in economics from an Ivy League university, which works like a get-out-of-jail-free card.

Shock Therapy turned out to be Shlock Therapy, Krugman. Why not write a column about that, the miserable failed experiment of Sachs and his buddies at the NYTimes editorial page, who have moved on to bigger and better things. I noted with glee a week ago the Times high praise for Russian President Vladimir Putin, for figuring out that supply-side economic reforms really work a lot better than “shock therapy.” A 13% flat tax on personal-income taxes in Russia -- and you guys are still pushing 39% rates for the South Bronx and Mozambique, to raise money for WHO.

No thank you. Treasury Secretary Paul O’Neill may not be so quick to play Santa Claus, but he is less of a threat to the health and well-being of the six billion people on the planet than you Ivy League economists. I hear the Times is letting you teach at Princeton the same time they give you two columns a week on the editpage. My suggestion is you quit one of the jobs and give it to a poor person.