The Daily Currant, a parody website, reported that New York Times columnist and Keynesian economist Paul Krugman filed for bankruptcy. Although the story is untrue, many news organizations picked it up as fact.
According to the article, Krugman had declared personal bankruptcy after he attempted to spend his way out of debt. The bankruptcy filings showed he had $7.34 million in debt compared to only $33,000 in debt. Most of Krugman’s debts were in relation to mortgage financing on an $8.7 million lower Manhattan apartment. The debts also included $621,537 in credit card debt and $33,642 in store financing at Tiffanys and Co.
“Rather than tighten his belt and pay the sums back, the pseudo-Keynesian economist decided to ‘stimulate’ his way to a personal recovery by investing in expenses he hoped would one day boost his income,” the report stated.
It was a tongue in cheek article and perhaps a critique against the Keynesian viewpoint that a government has to stimulate an economy even if it is massively in debt. Although it was purely satirical, a number of news outlets picked it up.
The Prudent Investor blog, Austria’s Format online magazine, The Boston Globe and Breitbart.com reported on the story. Three of them have since taken the articles down, while the Austrian publication kept the story intact but with a disclaimer at the top.
Krugman commented on the fake news story.
“On Friday I started hearing from friends about a fake story making the rounds about my allegedly filing for personal bankruptcy; I even got asked about the story by a reporter from Russian television, who was very embarrassed when I told him it was fake,” Krugman stated in a blog post Monday. “But I decided not to post anything about it; instead, I wanted to wait and see which right-wing media outlets would fall for the hoax. And Breitbart.com came through! Now, if you’ll excuse me, I have to go give a lavishly paid speech to Friends of Hamas.”
This isn’t the first time that the Daily Currant tricked the mainstream media. Last month, the satirical publication reported that Sarah Palin had signed on as a contributor for Al Jazeera and was picked up by the Washington Post.