It's no small thing, then, that the two found something to agree on--a mere 7,000 short miles away: Dubai's debt crisis. Krugman writes:
[Y]ou can see this as basically just another commercial real estate bust. Either you view Dubai World as nothing special, despite sovereign ownership, as Willem Buiter does; or you think of the emirate as a whole as, in effect, a highly leveraged CRE investor facing the same problems as many others in the same situation. Finally, you can see Dubai as sui generis. And really, there has been nothing else quite like it.McArdle agrees:
I agree with Professor Krugman--it's hard to see this presaging a sovereign debt default by, say, the United States.The truce in the McArdle-Krugman econo-war is unlikely to stand, so enjoy it while it lasts.