Pity - sounds like you though. Travis wrote: > FYI: That "Travis" is not me. LOL > > On Mon, Jun 22, 2009 at 9:56 AM, bruce majors <[email protected] > <mailto:[email protected]>> wrote: > > > > > > > *Krugman's Intellectual Waterloo > *by Lilburne > Posted on 6/22/2009 > > Last Monday evening, Lew Rockwell, from a tip by someone named > "Travis," posted > <http://www.lewrockwell.com/blog/lewrw/archives/027541.html> this > damning quote of Paul Krugman's from a 2002 /New York Times/ > editorial > > <http://www.nytimes.com/2002/08/02/opinion/dubya-s-double-dip.html?scp=4&sq=krugman%20mcculley%20bubble&st=cse>: > > To fight this recession the Fed needs…soaring household > spending to offset moribund business investment. [So] Alan > Greenspan needs to create a housing bubble to replace the > Nasdaq bubble. > > Krugman. 2002. Calling for a housing bubble. > > What's more, by explicitly calling for a new bubble to replace the > recently burst one, he anticipated by 6 years the /Onion/'s > hilarious " report > <http://www.theonion.com/content/news/recession_plagued_nation_demands>" > that "demand for a new investment bubble began months ago, when > the subprime mortgage bubble burst and left the business world > without a suitable source of pretend income." Except Krugman was > being /serious/. > > The quote caught on in the blogosphere, to such an extent that > Krugman actually responded > > <http://krugman.blogs.nytimes.com/2009/06/17/and-i-was-on-the-grassy-knoll-too/> > in his New York Times blog Wednesday morning: > > Guys, read it again. It wasn't a piece of policy advocacy, it > was just economic analysis. What I said was that the only way > the Fed could get traction would be if it could inflate a > housing bubble. And that's just what happened. > > So with a deft little two-step, Krugman paints himself as a doctor > who gave an excellent diagnostic, and not a disastrous > prescription. One of his ditto-heads posted on his blog that > saying Krugman advocated or caused the housing bubble was "Like > saying Nostradamus caused the rise of European fascism." > > At the same time, with his headline of "And I was on the grassy > knoll, too" he paints his critics (especially the Austrians) as > conspiracy theorists, akin to the Lone Gunmen (the > Kennedy-assassination theorists from the X-Files TV show). Just > like with the matter of Jekyll Island and the events leading up to > the creation of the Fed, an obvious conclusion from a matter of > public record is portrayed by establishment sophistry as unmoored > crankiness. And once again, it works: another ditto-head > dismissively remarked "no need to reason with those folks." > > Even economist Arnold Kling bent over backwards > <http://econlog.econlib.org/archives/2009/06/defending_what.html> > to interpret the column in a benign light: > > He was not cheerfully advocating a housing bubble, but instead > he was glumly saying that the only way he could see to get out > of the recession would be for such a bubble to occur. > > Krugman thanked Kling for his "gracious, sensible explication". I > can just imagine Kling running around his office in glee at having > been nodded at by a celebrity Nobel Laureate, exclaiming, "He > likes me! He likes me!" > > Mark Thornton on the Mises blog followed up with a devastating > collection <http://blog.mises.org/archives/010153.asp> of 2001 > Krugman quotes clearly documenting his support for inducing a > housing bubble. The most damning of this batch is the following > from a 2001 interview > <http://www.pkarchive.org/economy/ML071801.html> with Lou Dobbs: > > Meanwhile, economic policy should encourage other spending to > offset the temporary slump in business investment. Low > interest rates, which promote spending on housing and other > durable goods, are the main answer. [emphasis added] > > How the hell can anyone spin that as a purely academic musing, and > not a policy recommendation for artificially inducing housing > spending? > > Ignoring the other quotes for a moment, and just judging from the > 2002 column, 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: > > 1. He did not support inducing a housing bubble, and wanted the > Fed to not fight the recession. > 2. 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 > <http://en.wikipedia.org/wiki/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. > > [VIEW THIS ARTICE ONLINE] <http://mises.org/story/3530> > > ________________________ > > Lilburne is a teacher and writer based in San Francisco. 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