The Dario Fo of Economics


What is the secret formula for winning a Nobel Prize? A bit of historical revisionism, a dash of Maoist puppet theater, and a heaping of terrible economic advice? Via Megan McArdle, Arnold Kling revisits this prophetic Paul Krugman column (Nobel in economics, 2008) from 2002:

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.

Kling, who once worked at Freddy Mac, spoke with back in September about the forthcoming bailouts: