Blogonomics: Setting the Agenda

Remember the Tim Geithner speech last week? The wires covered it, dutifully enough, but it didn't get much traction beyond that, outside the wonkier end of the econoblogosphere. What makes me very happy, however, is that the wonkier end of the econoblogosphere turns out to be reasonably influential these days. Paul Krugman saw the speech at Economist's View, wrote a long blog entry on it, and helped contribute to some pretty high-level debate over the weekend from the likes of Steve Waldman, Yves Smith, and Brad DeLong.

Yesterday, Krugman upgraded his blog entry to fully-fledged NYT column, complete with hat-tip to Calculated Risk and an actual link to Interfluidity (which is more than there is to the Geithner speech). He describes Geithner's text as "the scariest thing I've read recently," and concludes with a call for the government to explicitly guarantee the debt of Fannie Mae (FNM) and Freddie Mac (FRE), which he says "really are too big to fail".

In the April issue of Portfolio, Matt Cooper takes the opposite view, saying that the government should cut free Fannie and Freddie, much as they did Sallie Mae (SLM). (I'm not entirely clear how they're meant to do this; with luck, I'll have some clarification from Cooper later.)

I'm quite sure that a lot of these debates are going to play themselves out in the storied news pages of the NYT and the WSJ sooner rather than later. But I think it's clear that increasingly blogs are getting there first and setting the agenda. Krugman worked this out a long time ago; the concerned public will surely follow. Which is one reason why I think blogs in aggregate are going to continue to grow faster than the internet more generally at least for the next few years.