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it's analysis, not an advocacy for a bubble http://krugman.blogs.nytimes.com/2009/06/17/and-i-was-on-the-grassy-knoll-too/ http://krugman.blogs.nytimes.com/200

• ajross 17y ago
  Exactly. Not sure how this bit of "gotcha" suddenly popped up in so many places, but it's missing the point. If you read the article, Krugman isn't saying that a housing bubble is a good idea at all. What he's saying, in essence, is that the only way to avoid a recession (again, this was in 2002) was for Greenspan and the Fed to kick off a housing bubble to sustain consumer spending. And, by implication, that that was unlikely to work. As it happened, he was wrong about that. We did experience a housing bubble (although one driven more by irresponsible bank behavior than by interest rates), and it did keep consumer spending high for the next 4-5 years. And, now that it's popped, we're experiencing the recession that Krugman predicted. He was just off by a few years, and missed one proximate cause.
  • profgubler 17y ago
    Krugman is not to fault for the recession I agree. But he is still advocating the theory of creating a new bubble to keep us from the effects of a previous bubble. I would have more respect for him if he had a solution to reign in the bubble he said the US had to create to fight of the recession.
• chaostheory 17y ago
  imo it's only analysis when it's wrong. I'm not a mises guy; I'm just trying to bring more awareness that economists at large aren't much different from criminal profilers and tarot card readers. http://www.newyorker.com/reporting/2007/11/12/071112fa_fact_gladwell http://www.newyorker.com/reporting/2007/11/12/071112fa_fact_... http://www.reason.com/news/show/134059.html http://www.reason.com/news/show/134059.html