26. Paul Krugman and Raghuram Rajan
for their spirited debate over the roots of the global financial meltdown.
Economist, Princeton University | Princeton, N.J.
Economist, University of Chicago | Chicago
In invariably stinging tones, Nobel laureate Paul Krugman uses his influential New York Times column to place himself at the center of international debates. In the United States, he has held the banner for unabashed deficit spending, ripping Barack Obama's administration for not pushing for a bigger stimulus package, while excoriating Republicans for demanding austerity. His advice may be predictable, but it never lacks a certain power -- or a certain provocation for economists who think differently.
Chief among them at the moment is Raghuram Rajan, former IMF chief economist and now a finance professor at the University of Chicago's Booth School of Business. This year Krugman and Rajan have fought a running battle across the pages of a half-dozen publications over the causes of the financial crisis.
Rajan, author of this year's influential Fault Lines, argues that Krugman understates the role mortgage giants Fannie Mae and Freddie Mac played in the crisis because their culpability is inconvenient for Krugman's big-government liberalism. "U.S. policies encouraged over-consumption and over-borrowing," he wrote on ForeignPolicy.com, "and unless we understand where these policies came from, we have no hope of addressing the causes of this crisis." Krugman disses Rajan's thesis as "a structure built on foundations of sand" and places the brunt of the blame on imbalances in the global economy. Pass the popcorn.
Krugman: Jeff Zelevansky/Getty Images; Rajan: Stephen Jaffe/IMF via Getty Images