Out of habit Krugman begins “advising” the Sharks. It seems more like hectoring to them. They notice his advice is always to lend more money, explaining, sometimes in English, as there are not local words for many of the things he is telling them. The Bangans think Krugman knows nothing of fishing or their life. Krugman thinks the Bangan Sharks are shortsighted and greedy, only considering the merits of investments on an individual basis, ignoring the welfare of the whole community.
Another month passes and Krugman begins to feel hopeless. He is certain the world would make a massive effort to find him. But, still, here he is, stranded; Thurston Howell the third, but without the Professor, or even Gilligan, there to help him with the drudgeries of daily life.
One morning he was awakened by the sound of metal banging. Immediately recognizing that as unusual, he followed the noise to the water’s edge where the fishing fleet is docked. Astonishingly he finds the fishermen opening two of the metal drums that were tossed into the ocean with him. They are emptying the barrels, placing the currency in piles, and trying to work out how to use the metal drums to best effect as additions to their boats.
Krugman immediately shoos the curious island children away from the piles of money, forgetting that the money is worthless on the island. Or is it?
Krugman collects all of the wads of bills that have not been taken back to his humble shack.
At the next Shark meeting, Krugman makes his pitch. He explains that this paper money is valuable, even more valuable than the shark’s teeth the islanders use for currency. He explains that one of the bank notes marked as ‘100’ could buy nearly all of the food consumed by the islanders in a day. The natives are initially skeptical. Krugman negotiates with the Sharks well into the night, and through sheer willpower, manages to convince them that , at a minimum, each paper note is worth one of their shark’s teeth. With their assent, the stacks of paper bills make the lowly rice worker the richest man on the island.
However, Krugman has very little interest in spending his money on the small-time investments the Sharks make each month. He doesn’t know that much about the island industries and frankly sees them as quite simple and rudimentary. After all, his expertise is central banking and this cash windfall has placed him in a position to use that knowledge to lift these islanders out of the primitive life they lead.
Before the next shark meeting Krugman meets with all of the Sharks to explain to them that he does not want to compete with them, he wants to help them. He pronounces himself a “Whale Shark” whose job it is to lend money to the Sharks and “enhance” and “stabilize” the island economy.
From his vantage point he is convinced that the way for the islanders to prosper is to invest in more and bigger boats. To that end Krugman immediately lends, at very favorable terms, an armful of cash to any of the Sharks who promise to lend to those islanders willing to invest the money to build new and bigger boats.
The following meeting, every islander that proposed buying or building a new boat was funded without hesitation. News spread quickly. By the next meeting, after it became known that almost anyone could borrow money to build a boat, the normally very selective process of earning the right to build a boat and be chosen a captain is watered down to a very large degree. With Krugman’s paper money now available to loan, more than a few fisherman who would not have qualified for years can buy and begin to build boats.
Krugman cheerleads for the biggest, most expensive boats to be built. ‘More bigger, more stimulus’ he keeps telling the blank faced natives.
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