With Beijing sending mixed signals, veteran pundits offer their own 20/20 hindsight on China’s crisis.

(Originally published Aug. 22 in “What in the World“) China’s looming financial and economic crisis is now sufficiently durable to allow the armchair quarterbacks to take the field.

First is Pulitzer Prize-winning economist and The New York Times columnist Paul Krugman, who when he writes about China is careful to warn readers that he doesn’t know what he’s talking about. “I am very definitely not a China expert,” he advised readers in July when he commented that China’s crisis would likely be worse than Japan’s because China lacks Japan’s social cohesion. So, caveat emptor. This week, Krugman warns that “I’m not confident enough in my understanding of China” to assess whether Beijing has the level of control necessary to prevent growing defaults from spiraling into a complete crisis of liquidity that eliminates all creditworthiness—a so-called “Minsky moment.”

But Krugman steams ahead anyway, this time worrying that officials in Beijing lack sufficient “resolve or intellectual clarity,” then concluding that there’s little risk any China crisis would have a major impact on the United States.

China’s debt bubble is, thankfully, still largely domestic despite Beijing’s efforts in the past decade to encourage foreign investment in Chinese bonds. While the property developer China Evergrande has sufficient foreign debt to declare bankruptcy in the U.S., not enough foreign lenders are exposed to China to pose a risk to the financial system beyond China.

Chinese investment in the U.S. could add to problems facing the U.S. commercial real estate market. But U.S. investment in China—and potential American losses on those investments—are relatively small. Krugman glosses over the fact that China is a major holder of U.S. Treasuries, so any major sell-off—in response to falling Chinese exports, investment income or just to shore up China’s falling yuan—could theoretically push U.S. interest rates higher. On the contrary, Krugman points out that Chinese deflation and falling demand for commodities could ease inflationary pressures in the U.S. Higher U.S. bond yields would only help curb inflation further, even if increasingly attractive bond yields are now prompting investors to abandon stocks.

Former Treasury Secretary Henry Paulson aims closer to the market’s concerns with his piece in The Washington Post. Paulson warns that a crisis in China would have serious global repercussions. As Krugman postulates, Paulson foresees a wave of disinflationary, cheap Chinese exports, as well as a sharp drop in Chinese demand for imports. While Krugman might see that as a welcome relief from inflation, Paulson recognizes it as a blow to global growth and, by extension, to global security. Paulson notes that, while the U.S. may not rely on Chinese imports or exports, it does rely on China for some vital inputs whose significance might be much higher than trade volumes suggest. He also worries about the U.S. Treasury market.

Then Paulson echoes the market’s concerns by worrying that, far from trying to salvage China’s financial system as it has evolved so far with a managed default/bailout (the “third scenario”), Beijing may decide to let the market collapse in order to pivot back to a more Marxist-Leninist, state-guided economic model. Paulson implies that this would result in a more isolationist, nationalist, and dangerous China.

Monday’s decision by China’s central bank not to cut the benchmark rate for mortgages lent fuel to the theory that Beijing might not be interested in argument, prompting Wall Street economists to cut their projections for China’s growth even further.

Former Morgan Stanley Asia economist and now Yale Law School fellow Stephen Roach offers perhaps the most realistic appraisal of the situation: authorities in Beijing aren’t idiots, as Krugman frets, nor are they latter-day Maoist extremists, as Paulson worries. They are, instead, battling an economic hydra of their own creation, a mix of free-market economics and state-controlled industries. And while the fashion pendulum may have swung towards olive-green suits in recent years, there is no unified solution to China’s multifaceted problems and so no single philosophy behind them. The problem, as Roach sees it, is that officials are pursuing contradictory policies that end up achieving nothing but undermining confidence.