My only hope is that liberals who think Larry Summers and Tim Geithner MUST be wrong about this bailout plan will realize their mistake when Summers and Geithner lead us back to economic growth, reasonable levels of unemployment, etc. If you want an America where “those who proved to be correct/competent were also those who made policy,” you can start by giving Geithner and Summers credit when the economy is back on track in three years.

I completely agree.  The plan should be assessed on its own merits and demerits.  If Hitler were to say that 2+2=4, we’d have to concede the point, ’cause it’s true.

Also, I think Krugman should be criticized for his errors in judgment, analysis, etc.  I think in fact that there’s plenty of ground to criticize his blanket dismissal of the Geithner plan.

My own relatively poorly informed gut assessment of the Geithner plan goes something like this:  no one really knows if Geithner’s plan will work.  No one even quite knows how to define the criteria for “work,” either.  Geithner’s strongest independent defender (that I’ve been able to find), Brad DeLong, explains his support for the plan with a sort of rhetorical shrug of the shoulders, by saying something like:  it can’t hurt, and if it doesn’t work we can just go on and nationalize.

But the reality is that Summers and Geithner are in charge. You can blame Obama for this injustice. But critizing the financial rescue plan put forward by Geithner just because you think it’s unfair that he’s in charge is childish and highly irresponsible. If we’re going to criticize their plan, it should be because we honestly think their plan won’t work.

Furthermore, there is no doubt whatsoever that the burden of proof rests squarely on the sholders of Obama, Geithner and Summers. If their plan fails, it will be their failure and nobody else’s, and the American people will have learned their lesson, which is that they cannot trust Democrats to make sound fiscal policy.

There is no question that the next two years will provide plenty of evidence to show who was correct when the rubber met the road. Was it Obama, who wisely put Larry Summers and Tim Geithner in charge of rescuing our financial system? Or was it Krugman and his followers, who said over and over again that their plan wouldn’t work.

My point in criticizing Krugman is merely to point out that he isn’t a great beacon of insight when it comes to the economy. He’s just a man with an opinion, and people who pay attention to Krugman should actually understand Krugman’s arguments before adopting them as their own.

I endorse the assumption that underlies your claim that a reputation should be linked to the accuracy of predictions…

Let’s call it the Accountability Stress Test, and let’s say it works this way:

(i) When person X says something that proves to be disastrously wrong, person X’s credibility should diminish.  Consequently, we should become more skeptical of subsequent things person X says, keeping in mind that past performance is no guarantee of future success (or failure).

(ii) When Person X is correct about something big that other people miss — like the existence of a housing bubble, the dangers of financialization — we should pay more attention to that person’s views in the future (keeping in mind the same caveat).

So when Robert Rubin, Alan Greenspan, and Larry Summers worked together to prevent the regulation of credit-default swaps and other derivatives, on the theory that firms like AIG would never if unregulated take on potentially self- and system-destroying risk, then we discover — as critics predicted — that AIG and other firms did exactly that — we should think in the future that the burden of proof is on them, not those who were right in warning us about the dangers of the financialized economy in the first place.

Reputation is of course a loose way to assess the seriousness of someone’s claims.  Rubin may be right about one thing, wrong about something else, right today, wrong tomorrow, right the day after.  And the world economy is a complex system even the most talented and educated economist understands only poorly and partially.

Nonetheless, we would be right to observe that the credibility of Rubin, Summers, Greenspan, etc.–though dead–seems to be no barrier to their preferred solution becoming U.S. policy.  It is as if a surgeon botched an operation, leaving you on the cusp of death, then was allowed to resume operating on you, this time to save your life.  You would never let that be done to you, whether or not you understood the technical details of how medicine works; but in areas of economics, the U.S. seems eager to do just that to itself.

Imagine if we lived in a country where those who proved to be correct/competent were also those who made policy.  What a novel fantasy!  Not in our America.