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That is bunk. That blog article is pulling a few quotes from 2001. In 2001 we had a recession with high unemployment, and lowering interest rates was sound advi

• ksraines 17y ago
  Please see my comment above. You are evidently confused about the history of the housing bubble: it was beginning just as Krugman was making these comments and writing the article I link to below. The burden is, in fact, on you to find a link from circa 2004-6 by Krugman calling for restraint of the bubble whose inflation he advocated so fiercely. See above for a more detailed exposition of this point. Anyways, here is another article from 2002. I don't know how you can get any more incriminating: Quoting Krugman: To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble. http://www.nytimes.com/2002/08/02/opinion/dubya-s-double-dip.html http://www.nytimes.com/2002/08/02/opinion/dubya-s-double-dip... BTW, asking for a quote from 2004 calling for the creation of a housing bubble is a bit ridiculous: by then the housing bubble was in full bloom. http://upload.wikimedia.org/wikipedia/en/c/c1/Median_and_Average_Sales_Prices_of_New_Homes_Sold_in_United_States_1963-2008_annual.png http://upload.wikimedia.org/wikipedia/en/c/c1/Median_and_Ave... As you can see, late 2002 (when the above article was written) would have been just at the beginning of the disaster. (sorry for the delayed reply; at work all day.)