Krugman: "To fight this recession - Greenspan needs to create a housing bubble"
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Re: Krugman: "To fight this recession - Greenspan needs to create a housing bubble"
#2it's analysis, not an advocacy for a bubble
http://krugman.blogs.nytimes.com/2009/06/17/and-i-was-on-the...
Re: Krugman: "To fight this recession - Greenspan needs to create a housing bubble"
#3[deleted]
Re: Krugman: "To fight this recession - Greenspan needs to create a housing bubble"
#4Published: Friday, August 2, 2002
(It made much more sense to me after realizing I was reading something from 7 years ago.)
Re: Krugman: "To fight this recession - Greenspan needs to create a housing bubble"
#5it's analysis, not an advocacy for a bubble http://krugman.blogs.nytimes.com/2009/06/17/and-i-was-on-the...
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.
Re: Krugman: "To fight this recession - Greenspan needs to create a housing bubble"
#6Published: Friday, August 2, 2002 (It made much more sense to me after realizing I was reading something from 7 years ago.)
Yeah with an 80 character limit for titles - I was forced to be minimalist
Re: Krugman: "To fight this recession - Greenspan needs to create a housing bubble"
#7While that 2002 is probably Krugman's most blatant call for a housing "bubble". Mises.org just compiled a list of 7 other pre-2002 Krugman calls for lowering interest to stimulate home buying: http://blog.mises.org/archives/010153.asp
Like another commenter on this page states, Krugman didn't think a housing bubble was a good idea...but it was necessary to avoid a recession. Still, why not just deal with the consequences of the dot-com bubble then? Inflating another market just kicked the recession down the road and made it worse.
Unfortunately, Krugman and most politicians think we can fix the housing bubble by creating a currency bubble. Instead of focusing on a single market like housing, the current plan is to, yet again, kick the recession down the road. This time, however, we're promoting spending across all government-controlled and regulated markets with massive stimulus. Obviously, creates a bubble of dollars. When the dollar bubble deflates, there won't be anything left to blow up.
Re: Krugman: "To fight this recession - Greenspan needs to create a housing bubble"
#8While that 2002 is probably Krugman's most blatant call for a housing "bubble". Mises.org just compiled a list of 7 other pre-2002 Krugman calls for lowering interest to stimulate home buying: http://blog.mises.org/archives/010153.asp Like another commenter on this page states, Krugman didn't think a housing bubble was a good idea...but it was necessary to avoid a recession. Still, why not just deal with the conseque…
I keep wondering what bubble they will create next to offset the burst of the housing bubble... any guesses? I am thinking it will either be another housing bubble (housing starts are already up 17% this quarter) or maybe a green energy bubble?
Re: Krugman: "To fight this recession - Greenspan needs to create a housing bubble"
#9it's analysis, not an advocacy for a bubble http://krugman.blogs.nytimes.com/2009/06/17/and-i-was-on-the...
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_...
Re: Krugman: "To fight this recession - Greenspan needs to create a housing bubble"
#10While that 2002 is probably Krugman's most blatant call for a housing "bubble". Mises.org just compiled a list of 7 other pre-2002 Krugman calls for lowering interest to stimulate home buying: http://blog.mises.org/archives/010153.asp Like another commenter on this page states, Krugman didn't think a housing bubble was a good idea...but it was necessary to avoid a recession. Still, why not just deal with the conseque…
I keep wondering what bubble they will create next to offset the burst of the housing bubble... any guesses? I am thinking it will either be another housing bubble (housing starts are already up 17% this quarter) or maybe a green energy bubble?
Certainly the alt-energy bubble. Read this, it's old from 01/2008 but still relevant: