On Paul Krugman's blog he posted
http://krugman.blogs.nytimes.com/2009/12/22/a-strange-complacency
which starts thus:
"Many people have written about this WaPo article on the Fed’s failure to foresee the crisis. I was particularly struck by the complacency over housing prices. I mean, there had just been an enormous increase in prices; the dotcom bubble was fresh in our memory; simple indicators like the price-rent ratio were flashing red. How could they have been so sure nothing was wrong?"
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In reply I posted the following comment and he, or the moderators, didn't approve it yet. I wonder why?
“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.”
- PAUL KRUGMAN, New York Times, August 2, 2002
http://www.nytimes.com/2002/08/02/opinion/dubya-s-double-dip.html
haha! That's just unbelievably hilarious. Keep up the good work.
The past always comebacks to bite you.
What I noticed Paul Krugman does in these situations is:
1. He posts a bunch of new blog posts. People read and comment on the new blog posts and ignore the old ones.
then
2. He either approves the embarrassing comment or deletes it.
Maybe he has another reason but that's the pattern I noticed.
Krugman is the ex post prophet.
"If we wish to preserve a free society, it is essential that we recognize that the desirability of a particular object is not sufficient justification for the use of coercion."
Props on the pwnmanship.
Periodically the tree of liberty must be watered with the blood of tyrants and patriots.
Thomas Jefferson
Did you guys see his post "Historical Notes"?
3. Some commenters ask for proof that I warned early about the housing bubble. As it happens, I ran across this interesting piece from 2005, denouncing the lying liberal media — mainly me — for asserting that there was a bubble in housing.
I wrote:
Dr. Paul Krugman,
In regards to your point on the housing bubble, please avoid dishonesty. There is plenty of evidence, going through your pieces since the beginning of the millennium, that you actively supported decreased interest rates and you believed that a housing bubble was of utmost necessity to drag the economy out of the recession of 2001. Furthermore, I find it extremely telling that in order to defend yourself you have to link to a piece that is not even yours, but simply alludes to something you said in which it is not even clear that you are warning of an impending housing bubble.
I looked up the relevant article (”Fear Itself”), and here is the quote within the larger context:
“By Sept. 10, however, the Fed had already cut rates seven times, and it was still hard to see where a recovery would come from. Indeed, some business economists had started referring privately to the Fed chairman as ”Greenspan-san.” Business investment was still falling, because corporations clearly invested way too much back when optimism was the rage. Housing was doing better, thanks to low interest rates, but some analysts were warning about a housing bubble — and even if they were wrong, how solid a recovery could we have from housing alone?”
At the time, it was unclear whether or not cutting interest rates would help pull the economy out of recession. I would venture to guess that you and other Keynesian economists were looking for the infamous “liquidity trap”. Even without the greater context of the quote, it is obvious that you do not necessarily ascribe to the idea of a housing bubble. You are simply stating that it was a common objection. In fact, you concede that they may be wrong, but simply you doubt the efficacy in cutting interest rates in providing for economic recovery.
Dr. Krugman, linking to third party articles which misrepresent your argument (which did not need misrepresentation, since it was wrong regardless) will not help to convince the skeptics. You are simply fueling what has become known as your “intellectual Waterloo” (a phrase coined by a J. Grayson Lilburne).