New York Times columnist Paul Krugman made some striking comments during a recent event held at the City University of New York Graduate Center in Manhattan, where he is a distinguished scholar at the Luxembourg Income Study Center.

Krugman, the 2008 Nobel Laureate in Economic Sciences and a professor of economics and international affairs at Princeton University's Woodrow Wilson School, said he was completely surprised when the 2008 financial crisis hit. He had no idea that half the deposits held by financial institutions resided in non-bank entities that were not subject to proper regulation and insurance mechanisms.

This shadow banking system permitted the extraordinary systemic risk, facilitated by poorly designed securitized derivative products, to metastasize throughout the financial system, wreaking havoc on the global economy.

Jeff Madrick, a former economics columnist for the New York Times and director of policy research at the Schwartz Center for Economic Policy Analysis at The New School, who also participated, went further by suggesting that economists in general do not thoroughly understand how the financial community operates.

For instance, Madrick said most economists were not aware that real estate brokers received much larger commissions for promoting high-risk subprime loans instead of more safe traditional ones. The Clinton administration was instrumental in setting Housing and Urban Development policy that incentivized these high-risk loans to reach dangerously unsustainable proportions by offering them to individuals with little regard to long-term affordability.

This is a sad, yet powerful acknowledgement, especially given the strong potential for the financial industry to have a severely negative impact on global affairs, as we have witnessed in recent years. It may take decades for us to recover from this financial and economic collapse.

Krugman was also quite critical of the Clinton administration for allowing deregulation to propagate via the repeal of Glass-Steagall in 1999 and derivative deregulation in 2000, especially since Lawrence Summers, Treasury Secretary under President Clinton, had previously voiced diametrically opposing views.

Krugman also stated that he does not believe that Fannie Mae and Freddie Mac contributed to the crisis, despite the fact that they implicitly guaranteed many of these poorly structured mortgage derivative products. This public policy construct enabled the private market to package and promote many of these ill-conceived securities, contributing to the capitalistic excesses that decimated the economic environment.

In a hard-to-believe defense of the economic community, Krugman said it's difficult to stand up to high-level financial executives, since they are smart, humorous and have excellent tailors.

Krugman made the case that business leaders are ill-equipped to run a macroeconomy, since the operation of profit-generating enterprises is not synonymous with managing the economics of a country. Given his many statements that evening, especially the fact that he and most other economists were unaware of how the financial industry operates, it is clear that traditional economists are probably not up to the job.

We need a more informed, practical and simplified approach in developing prudent macroeconomic policy.

My elegantly simple, fair and effective tax policy proposal is a reflection of this thinking. It will incentivize investment, employment and economic activity and maintain a strong purchasing power paradigm. Republicans and Democrats alike have expressed support for this idea.

There is a better way. Let's seize it.