From the political community that brought you “our weakass appeasement of Iran let them get nukes so now we have to continue appeasing them,” via Megan McArdle:
The basic point is that the recession of 2001 wasn’t a typical postwar slump, brought on when an inflation-fighting Fed raises interest rates and easily ended by a snapback in housing and consumer spending when the Fed brings rates back down again. This was a prewar-style recession, a morning after brought on by irrational exuberance. 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.
Glittering Eye provides the punchline:
Here’s Paul Krugman from March 2008: “Oh, and the man who failed to see the housing bubble and refused to do anything about subprime — and has yet to admit to making any mistakes — ends by reaffirming his laissez-faire faith…”
In fairness to Krugman, he just followed up his sweeping proclamations – issued from his perch of self-styled expertise – with petulant and hypocritical tirades. It’s not like he’s Barney Frank, who after demagoguing the country into a financial meltdown threatened executives with the specter of pitchfork wielding mobs.
But in any case, they really do just say stuff, don’t they?
References:
* Paul Krugman’s Prophetic Prescience [McArdle / Atlantic]
* Dammit They Did What I Said [The Glittering Eye]
* Video: Guy who helped wreck the economy touts his “work” on the subprime crisis [Hot Air]
* Obama: AIG Is Like A Suicide Bomber. One Of Those Bad Suicide Bombers. [MR]
* FP Blogger: Let’s “Use This Crisis” To Eliminate Tech Transfer Restrictions To Rogue States [MR]
Previously:
* Super Smart Stimulus Czar: Knowing About The Economy Is "Above My Pay Grade"
* The Return Of Stagflation
* Stimulus Czar Biden: In Fairness To Me, "Everyone Guessed Wrong" About How Few Jobs Stimulus Would Create
