PETER SAGAL, HOST:
And now the game where we ask very, very smart people to answer questions about something pretty, pretty dumb. Professor Paul Krugman of Princeton, with his New York Times column and his many books, is the most famous economist in America, meaning he's the only economist you've probably ever heard of. Professor Paul Krugman, welcome to WAIT WAIT...DON'T TELL ME.
PAUL KRUGMAN: Hi there.
SAGAL: It's a pleasure to have you. So you were once called, we found, the Mick Jagger of political economic punditry. Does that sound about right to you?
KRUGMAN: Yeah, except for the - you know, the strutting and the sex, and all that. Otherwise, I've got it all down.
SAGAL: Oh, no, wait a minute. I have seen you on "This Week with George Stephanopoulos," and you strut like a rooster, sir.
SAGAL: You have a reputation for being very smart, and for not - how to put this; shall we say, suffering fools gladly?
KRUGMAN: Yeah, yeah. There are so many fools that if you try to suffer them at any great length, there's no time left.
SAGAL: The word I have seen associated with you is "shrill." Have you heard that one?
KRUGMAN: Yeah, I kind of like that. That's...
SAGAL: You do?
KRUGMAN: ...tribe of the shrill, and all that. I guess it's - you know, when people call you shrill, that means they don't actually have any way to answer what you just said. So that's a good sign.
SAGAL: And I've seen you - I've seen you debate people on American and British television. And you can be very combative. Is that your style at home, or in class? Or is that just something you bring out when you're doing the pundit thing?
KRUGMAN: Oh, yeah, that's entirely - that's fake. I mean, that's putting on an act. In reality, I'm a pussycat.
SAGAL: So did you have to - sort of conjure up an inner egomaniac, when you became a professional pundit?
KRUGMAN: No, you have to have that - sort of inner egomaniac to, you know, sort of do your academic career. But it's restricted; you only use it on certain things. And punditry gave me a whole new field, to exercise that piece of me.
MO ROCCA: When I read your column, it's very impressive. But I have to say, I'm intimidated when I imagine meeting you. Do you have like, a softer side? Are you cuddly? Are you ticklish? I'm just wondering.
KRUGMAN: Not that, especially. But like those clubs you were talking about - I'm probably the person who sort of wants to find a very dull place to be, most of the time, except when I'm punditizing.
SAGAL: You know, you started with the New York Times around 1999 - if not mistaken - writing about economic issues, primarily. And you became very well-known and very influential. You won the Nobel Prize. By the way, winning the Nobel Prize - does that shut up one's critics?
KRUGMAN: Well, no, it doesn't shut them up. I mean - but it does mean that people stop saying that you're an idiot, for about two weeks.
SAGAL: Two weeks? Because...
KRUGMAN: Two weeks.
SAGAL: I mean...
KRUGMAN: Then it's right back.
ROCCA: It's the honeymoon period.
SAGAL: Because I remember at the time, you were engaged in all of these debates, very - sometimes intense, about the Bush economic program and what it would do. And you had a lot of people criticizing you and dismissing you. And then you won the Nobel Prize. And I, in your shoes, would have such a hard time not saying "a-ha!" to everybody.
ROCCA: You should wear it when you go on Stephanopoulos' show.
KRUGMAN: Yeah. It's - when it happens, it's such a blur. They worked me like a dog. I mean, the thing is all for the sake of the Swedes, not for you. And as my wife said, you know, the two great things are first, that you won this; second, that we're never going to have to do this again.
KRUGMAN: Oh, yeah.
SAGAL: So you're saying it's a pain in the butt to have to win a Nobel?
KRUGMAN: Well, the actual going through the process of collecting it, is thrilling but exhausting and...
SAGAL: Do they make you like, run and chase it? I mean, what are you talking about?
KRUGMAN: I maybe talked to about eight different - or 10 different groups a day. Oh yeah, I shouldn't complain.
KRUGMAN: But it was a very strange, out-of-body experience.
SAGAL: Now, when you've been in an argument with somebody who just won't listen to you, have you ever been tempted to say "Well, my Nobel says you don't know what you're talking about, pal."
KRUGMAN: No, it doesn't work - among other things because there are some idiots who've won Nobels. So...
KRUGMAN: ...it's not...
ROCCA: Wait a minute.
SAGAL: Wait a minute - name a couple.
ROCCA: All right - names.
KRUGMAN: Oh, no. That - there, I'm not going to go.
SAGAL: Yeah, OK.
SIMON AMSTELL: I have a question.
KRUGMAN: Hi there.
AMSTELL: What about the economy?
KRUGMAN: It looks like it might rain.
SAGAL: What about it? Simon, what do you want to know about it?
AMSTELL: Maybe it's time to stop banging on about the Nobel, and sort it out!
ROCCA: Earn that Nobel.
SAGAL: Well, you have...
SAGAL: You have just written a book. It's called "End This Depression Now."
AMSTELL: Good idea!
KRUGMAN: Well, I'm going to have to...
SAGAL: I'm not used to books that shout at me what to do. I found it a little intimidating.
KRUGMAN: Well, yeah. I mean, it's not you that it's supposed to intimidate. It's supposed to intimidate some people who might actually do something.
KRUGMAN: It won't work, of course, but I'm trying.
SAGAL: I mean, here's the thing. I mean, your solution is even - at least, to my amateur eyes - very simple; is that you think that the solution for the current problem is that the government should spend a lot more money than it's spending. And that seems very contrary to the current wisdom. Everybody else, including President Obama, says no, no, no; we have to stop our spending.
KRUGMAN: We've got a lot of history, got a lot of stuff that says that - let's talk about cutting spending after this depression is over, but not now. And now is the time we should actually be spending more.
SAGAL: I mean, here's the thing that I've noticed about you - is that you're usually right, but no one listens to you.
KRUGMAN: Yeah, you know, Cassandra - people forget the myth, right?
KRUGMAN: They call you a Cassandra. People forget, she was always right. The curse was that nobody would listen.
SAGAL: I remember, for example, in the early 2000s, you were saying that the Bush tax plan would create huge deficits. You were correct.
SAGAL: Later on, you talked about a housing bubble that would eventually explode. And you were right about that. And yet still, no one listens to you.
KRUGMAN: Yeah. Well, if you're not telling people what they want to hear, most of the time you're going to get people not listening. But sometimes, they do. It always helps.
ROCCA: Do people listen to you at home?
KRUGMAN: Oh, at home? No. The difference is, on the economy, I'm always right. But at home, I'm always wrong. So...
SAGAL: You had this interesting idea, though, about how we could save our economy, that I thought everybody should listen to because it's a great idea. Stage an alien invasion.
KRUGMAN: Yeah, a fake alien invasion because - which we have to solve by - you know, to be prepared for that alien invasion, we have to improve our infrastructure and educate our kids. And, you know, people always say oh, we can't afford that - unless it becomes an issue of national defense. And then all of a sudden, the restraints are off. So...
SAGAL: So if we were to all of a sudden, manage to convince people that - say, the Borg were coming, then all of a sudden, all of our concerns about spending would vanish. And we'd spend the money that we'd need to - to revitalize the economy, and build armament, and build highways, and improve ourselves in all the right ways.
KRUGMAN: Yeah. I mean, that's how the Great Depression ended, right? I mean, FDR could never get enough - get approval to spend enough money. You know, WPA and all of those programs helped...
SAGAL: So he faked an alien invasion?
KRUGMAN: No. Well, it was the threat of war. And we were actually out of the Depression before Pearl Harbor; because we'd started our build-up to prepare, in case we got involved in World War II. So, you know, what you want is the same thing, except without the actual war part.
SAGAL: Really? Do you have any - sort of clever way of doing that? Can you like...
KRUGMAN: Well, I mean, maybe I gave the game away with the fake aliens. But, you know, National Public Radio can do this by having the fake aliens.
SAGAL: That's true. That's true.
SAGAL: Hold on. Carl, you have a newsman's voice. Can you announce an alien invasion?
CARL KASELL: Oh, absolutely.
SAGAL: Go for it.
KASELL: Ladies and gentleman, turn on your radios and your television sets. Instructions are coming down on how to handle this. Please follow those instructions.
SAGAL: There, economy saved. Bingo.
SAGAL: Well, Paul Krugman, we are delighted to talk to you, but we have also invited you here to play a game that we're calling...
KASELL: "Well, It's A Nice Gift, But We're Still Going To Invade You And Take Your Stuff."
SAGAL: You are known for your direct, confrontational style - so we think you wouldn't do well in the delicate art of diplomatic gift-giving. We're going to ask you three questions about diplomatic gifts. Get two right, you'll win our prize for one of our listeners, Carl's voice on their home answering machine. Carl, who is Professor Paul Krugman playing for?
KASELL: He is playing for Arne Bathke and Amy Lett of Lexington, Kentucky.
SAGAL: Ready to do this?
SAGAL: Here is your first question. It is well-known that on his historic visit to China, President Nixon received a pair of pandas from Chairman Mao. Panda diplomacy, they called it. But what did Nixon give to Mao in return? Was it A, a pair of musk oxen; B, a chainsaw sculpture made by his aide Chuck Colson; or C, a secret tape of his and Chairman Mao's private conversations?
KRUGMAN: I'm going to go with the musk oxen although I have to say, it doesn't sound so plausible.
SAGAL: It was, in fact, the musk oxen.
(SOUNDBITE OF BELL)
KRUGMAN: All right.
SAGAL: They were named Matilda and Milton. And after they were transferred to the Chinese, it was discovered they had mange. And this is all true. President Nixon told Kissinger to deal with it. I don't know why he gave them musk oxen, but he did.
ROCCA: Is that the scent? What is musk?
SAGAL: It's a breed of ox - en.
SAGAL: Next question: In 2009, President Obama gave British Prime Minister Gordon Brown a set of DVDs of great American films. There was one problem, though; what? A, 18 of the 25 movies featured a British villain; B, they were American DVDs, and would not play in British machines; or C, Brown complained to Obama that he had already seen all of them?
KRUGMAN: I'm going to guess B, because I've had that problem.
KRUGMAN: Not being able to play European DVDs on our machine.
SAGAL: Yes, you're right.
(SOUNDBITE OF BELL)
SAGAL: They were Region 1 DVDs.
SAGAL: This was discovered when Brown sat down to watch one at 10 Downing Street. All right, you're doing very well. This befits a Nobel Prize winner. Last question: One of the oddest gifts presented to an American president in recent years, was the gift from the billionaire Sultan of Brunei to President George W. Bush in 2004. What was it? Was it A, a concubine; B, a copy of the book "The Worst Case Scenario Handbook"; or C, a simple plastic beach bucket and shovel?
KRUGMAN: Oh, boy.
KRUGMAN: None of these is possible. So I'm going to go with the beach bucket.
SAGAL: Here, President, we want you to play with this.
AMSTELL: What voice were you doing there?
SAGAL: That was my Sultan of Brunei.
AMSTELL: It's very good.
SAGAL: Thank you.
SAGAL: You went for the beach bucket. No, it was actually the book "The Worst Case Scenario Handbook."
KRUGMAN: Oh, good god.
SAGAL: The Sultan of Brunei presented that to the president of the United States, even though it's an American book. We don't understand why. It must prove that even the Sultan of Brunei, a billionaire who flies in a private 747, sometimes buys a last-minute gift at the airport.
KRUGMAN: All right.
SAGAL: Carl, how did Paul Krugman do on our quiz?
KASELL: Well, Paul had two correct answers, Peter, and that was enough to win for Arne Bathke and Amy Lett of Lexington, Kentucky.
SAGAL: I'm guessing this is right up there with the Nobel Prize.
KRUGMAN: Oh, it's great. Yes.
KRUGMAN: I'll treasure this memory always.
SAGAL: I'm sure you will. Paul Krugman is a Nobel Prize-winning economist, and columnist for the New York Times. His latest book is "End This Depression Now." Professor Paul Krugman, thank you so much for joining us.
KRUGMAN: Thanks so much.
SAGAL: Thank you.
(SOUNDBITE OF MUSIC)