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Krugman and the Housing Bubble: A Love Story
For those following the "Did Krugman advocate a housing bubble?" debate, first ably blogged here by Big Tim Cavanaugh last week, a skilled summation, and I think a pretty definite settling of the question (answer: yes!) from the Mises blog:
....did Krugman support pumping up a housing bubble or not? Given that, even in his recent blog defending himself, he explicitly stated his belief that "the only way the Fed could get traction would be if it could inflate a housing bubble," there are only two possibilities:
He did not support inducing a housing bubble, and wanted the Fed to not fight the recession.
He did support inducing a housing bubble.
Anyone even somewhat familiar with Krugman's attitude toward Fed activism should know that proposition #1, that Krugman supported a do-nothing policy, is preposterous. So, especially after bringing back in the quotes gathered by Mark Thornton, the case for proposition #2 is overwhelming.
And what about his strawman protests that he didn't cause the housing bubble, much less the Enron scandal or Kennedy's assassination? The man is willfully missing the point. What is damning about these quotes is not that he necessarily caused anything. What is devastating about them is that they expose the intellectual bankruptcy of his economic principles. Those who look up to him like the second coming of Adam Smith should realize that the neo-Keynesian principles that lead him to advocate aggressive interest-rate cuts and mammoth public spending now, are the very same principles that led him to advocate inducing a housing bubble then. He would himself affirm that his economic principles haven't fundamentally changed since then. So the conclusions and policy prescriptions he infers from them are just as wildly wrong now as they were then.
The Thornton collection of Krugman's bubblicious quotes.
Gimpy|6.23.09 @ 8:06PM|#
"Krugman and the Housing Bubble: A Love Story"
I look forward to Welch reworking this with a McCain angle.
Shannon Love|6.23.09 @ 8:12PM|#
My favorite comment on Krugman was back in 2007.
"Krugman has successfully predicted six of the last zero
recessions."
Of course, Kurgman was eventually correct in the same fashion as a
stopped clocked.
Krugman is a Keynsian because Keynsian policies require people like
Krugman to tell the government how to spend money. That kind of
power attracts a lot of people.
beth|6.23.09 @ 8:23PM|#
From the LoneWacko's link:
The superintendent of the Tanque Verde Unified School District has
been arrested on federal charges related to the sexual exploitation
of children.
On Friday in Yuma, Immigration and Customs Enforcement agents
arrested 51-year-old Albert Thomas Rogers, known as "Tom Rogers," a
press release from the federal agency says. Rogers had arrived in
Yuma for a tour that was set to include sexual exploitation of 13-
to 14-year-old boys in Mexico, the release says.
-------
Now more than ever, we need to build that wall. Gotta keep
pedophiles away from those poor kids down in Mexico.
|6.23.09 @ 8:56PM|#
You have to admit the dude brings up some pretty good
ideas!
RT
www.anon-tools.tk
Rich|6.23.09 @ 10:14PM|#
On Oct 7 '01 Krugman noted: " ... it seems inevitable that there will also be a fiscal stimulus package." How 'bout *that* for expertise?
Sean W. Malone|6.23.09 @ 10:20PM|#
My own Krugman Pwn from last week:
reply to this
hmm|6.23.09 @ 10:46PM|#
Krugman is still a tard. Check. Got it.
He's a hack, has always been a hack, and has been dreaming of this
day all his life.
LarryA|6.23.09 @ 11:24PM|#
I still think it's too bad we don't do for "experts" what we do for sports celebrities, i.e. keep statistics. Krugman's earned prognostication average would be really interesting.
Warty|6.23.09 @ 11:29PM|#
Thought experiment.
You are stranded on a desert island. One day, a container washes
ashore containing a rifle and one cartridge. A short time later,
another, far more sinister, raft washes ashore. This one contains a
disheveled Paul Krugman and a gibbering Chris Kelly aka Lonewacko
aka Orange Line Special aka 24AheadDotCom.
Question: who do you kill, and how?
Warty|6.23.09 @ 11:30PM|#
Oh yes, and neither Krugman nor Lonewacko will shut the fuck up. It's just like real life.
Paul|6.24.09 @ 1:00AM|#
Question: who do you kill, and how?
Trick question. Neither.
You convince lonewacko that Krugman is a Mexican. A completely
stunned Lonewacko will demand that he "go back to where he came
from", and so committed in this outcome, Lonewacko will sail back
off the Island to return Krugman to his 'homeland'. Before they
leave, you stick a note in Krugman's pocket. The note reads
something like the following:
Dear President Obama:
Paul Krugman left his yet-unprinted New York Times article, titled
"How to manage an economy" on my desert island. Also, I am in
possession of an illegal firearm.
You'll be picked up in 72 hours by a marine helicopter.
Done, done and...done.
|6.24.09 @ 1:11AM|#
Who do you kill, and how?
I shoot lonewacko in the head, and beat krugman to death with the
empty rifle.
alan|6.24.09 @ 1:15AM|#
Thought Experiment:
The evil Paul Krugman kidnaps Lone Wacko in the middle of the
night. When LW comes to, he finds himself in a basement with
Krugman giving him an evil smile while waving a gun.
To his horror, Lone Wacko sees his parents tied up, nekad and with
their asses in the air.
Krugman says: "We are going to play a game, you Nazi fuck*. You are
going to fuck one of your parents, but the one you don't choose
will get a bullet in the head. If you choose neither, they both
die!"
Question: What does Lone Wacko do?
Answer: He jumps up, unties both parents. Just like old times, he
then gets between the two, sucking off his dad while fucking his
mother, thus, heroically saving both parents.
* beth's summary of LW's news item gives me the impression LW may
be Underzog. If that is the case, make that 'self hating Nazi
fuck'.
|6.24.09 @ 1:21AM|#
Krugman will always have a bit of love for the whole
"quasi-murderer" thing. That should be taught in Rhetoric
101.
But the negatives far outweigh the positives.
|6.24.09 @ 2:18AM|#
who do you kill, and how?
Is this a trick question?
Seems like the obvious answer is to off them both by shoving
Krugman down Lonewhacko's throat.
Or, you could just evacuate the area, and let their combined
density collapse into a black hole.
-jcr
|6.24.09 @ 2:42AM|#
You are stranded on a desert island. One day, a container
washes ashore containing a rifle and one cartridge. A short time
later, another, far more sinister, raft washes ashore. This one
contains a disheveled Paul Krugman and a gibbering Chris Kelly aka
Lonewacko aka Orange Line Special aka 24AheadDotCom.
Question: who do you kill, and how?
You kill the stronger one with the bullet, and then club the
survivor to death with the rifle butt.
If they are both equally strong, you shoot Krugman, since then you
won't have to listen to him any more. Lonewhacko is easier to
ignore.
robc|6.24.09 @ 7:53AM|#
I add Krugman to my island incif filter, then I dont have to worry about either.
|6.24.09 @ 8:23AM|#
robc,
I just had a disturbing vision of a grayed-out "Krugman" tag
arguing with a coconut tree about fiscal policy.
|6.24.09 @ 8:27AM|#
He also advocated bursting the bubble in 2004, long before
anyone else recognized the problem.
This "there are only two possibilities" stuff is ridiculous
absolutism.
Fluffy|6.24.09 @ 8:40AM|#
I don't kill either of them.
I tell Lonewacko that Obama's "real" birth certificate is hidden
under a rock a mile out to sea.
I then tell Krugman that we're instituting a Keynesian economy on
the island. I point the still-loaded-with-one-bullet gun at him and
demand that he collect coconuts and fruit and build me a shelter as
part of the island's "stimulus package".
|6.24.09 @ 8:44AM|#
He also advocated bursting the bubble in 2004, long before
anyone else recognized the problem.
Site? If this is true, then why wasn't _that_ his defense instead
of "if you thought I said something stupid in 2002, you must also
think I killed Kennedy"?
Xeones|6.24.09 @ 8:54AM|#
Question: who do you kill, and how?
Trick question. LoneWacko never leaves his mom's basement -- how
would he end up on a boat?
Gilbert Martin|6.24.09 @ 8:55AM|#
"Krugman is a Keynsian because Keynsian policies require people
like Krugman to tell the government how to spend money."
Bingo.
Krugman is an authoritarian asshole. There is no actual proof that
Keynesean economics has ever actually accomplished anything.
But that doesn't matter. The only intellectual exercise necessary
for his ilk is to shop for a theory that fits his predetermined
desire to tell everybody else what to do.
|6.24.09 @ 9:28AM|#
I agree guys... today is the day to end Fluffy's long-standing refusal to provide evidence for arguments he disagrees made by other posters. He's freeloaded on our goodwill long enough.
|6.24.09 @ 9:38AM|#
RC Dean and jsh:
http://krugman.blogs.nytimes.com/2006/10/30/credit-where-credit-is-due/
http://www.nytimes.com/2005/08/08/opinion/08krugman.html
Spoonman|6.24.09 @ 9:39AM|#
Yes, chroma, he advocated doing what he admitted wouldn't happen back when he advocated inflating the bubble.
|6.24.09 @ 9:49AM|#
Sorry Fluffy, my bad. I shall paddle myself w/ my hardback copy of Atlas Shrugged as punishment.
|6.24.09 @ 9:52AM|#
chroma, these are '05 and '06, and you claimed '04. That, and the "credit-where-credit-is-due" link totally undercuts Krug's earlier defense that he was saying they could inflate a bubble but shouldn't, as he (writing in 2006), called those actions in 2002 a good idea at the time.
robc|6.24.09 @ 10:24AM|#
He also advocated bursting the bubble in 2004, long
before anyone else recognized the problem.
Except the Austrians. And Ron Paul.
RP proposed a bubble busting bill in 2003 (and 2002 IIRC). His
methodology was to remove the government guarantees for Fannie and
Freddie. His reason, amongst many, was to prevent the housing
bubble that was looming. Deflate it before it got too big.
Of course, that went against the whole "ownership society"
concept.
|6.24.09 @ 10:28AM|#
Something from 2004, though it's not clear whether it's
prescriptive or descriptive:
http://www.nytimes.com/2004/04/20/opinion/questions-of-interest.html
Here's a question not often raised around here: since economists
don't know shit about macroeconomics, why should we listen to
Friedman and von Mises?
|6.24.09 @ 10:34AM|#
Here's a question not often raised around here: since
economists don't know shit about macroeconomics, why should we
listen to Friedman and von Mises?
If you don't want to listen to any of them (Krug, Friedman, or von
Mises), go ahead. Just don't throw Krug's Nobel in our faces and
ignore the other two recipients mentioned.
I don't see anything in your 2004 quote that's particularly
relevant.
|6.24.09 @ 11:06AM|#
Here's a question not often raised around here: since
economists Krug don't know shit about
macroeconomics, why should we listen to Friedman and von
Mises?
Gilbert Martin|6.24.09 @ 11:17AM|#
"Here's a question not often raised around here: since
economists don't know shit about macroeconomics, why should we
listen to Friedman and von Mises?"
Since there is no actual ennumerated power delegated to the federal
government in the text of the Constitution that authorizes it to
attempt to manage the economy in the first place, it shouldn't
matter what any of them say.
|6.24.09 @ 11:35AM|#
Gilbert, the Constitution was written by people who had no idea that humanity would Progress morally and intellectually to the point where we would collectively spawn a Krug. Constitutional limits on power don't apply to a Krug. The Founders would have made Krug Immunity explicit in the Constitution if they had any inkling such a wonderful gift to humanity was possible.
Gilbert Martin|6.24.09 @ 12:03PM|#
"such a wonderful gift to humanity was possible."
Oh yeah, he's a peach.
mark|6.24.09 @ 12:29PM|#
I love watching George Will deliver a smackdown to Paul Krugman weekly on CBS. It's therapeutic.
|6.24.09 @ 12:31PM|#
If you don't want to listen to any of them (Krug, Friedman,
or von Mises), go ahead. Just don't throw Krug's Nobel in our faces
and ignore the other two recipients mentioned.
I won't, and haven't.
I don't see anything in your 2004 quote that's particularly
relevant.
You're not looking closely:
Just two months ago, Mr. Greenspan went out of his way to
emphasize the financial benefits of adjustable-rate, as opposed to
fixed-rate, mortgages. Let's hope that not too many families
regarded that as useful advice.
Also:
My calculations keep leading me to a 10-year bond rate of 7
percent, and a mortgage rate of 8.5 percent -- with a substantial
possibility that the numbers will be even higher.
Krugman's main talent appears to be saying nothing, so he can't be
proven wrong. They should move his column right next to the
astrology section. "You will meet with high interest rates in the
near future. Now that the world is flat, it is the time to take
that trip you've been thinking of."
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