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How Keynesian Archduke Krugman Recommended A Housing Bubble As A Solution To All Of America's Post Tech Bubble Problems

Tyler Durden's picture





 

The year is 2002, America has just woken up with the worst post dot.com hangover ever. Paul Krugman then, just as now, writes worthless op-eds for the NYT. And then, just as now, the Keynsian acolyte recommended excess spending as the solution to all of America problems. Only this one time, at band camp, Krugman went too far. If there is one thing that everyone can agree on, is that the Housing Bubble, is arguably the worst thing to ever happen to America, bringing with it such pestilence and locusts as the credit bubble, the end of free market capitalism, and the inception of American-style crony capitalism. Those who ignored it, even though it was staring them in the face, such as Greenspan and Bernanke, now have their reputation teetering on the edge of oblivion. So what can we say of those who openly endorsed it as a solution to America's problems? Enter exhibit A: New York Times, August 2, 2002, "Dubya's Double Dip?" Name the author: "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.
" If you said Krugman, you win. Indeed, the idiocy of Keynesianism knew no bounds then, as it does now. The solution then, as now, to all problems was more bubbles, more spending, more deficits. So we have the implosion tech bubble: And what does Krugman want to create, to fix it? Why, create a housing bubble... Well, at least we know now how that advice played out.

And now what? He wants another trillion in fiscal stimulus... Quadrillion? Sextillion (arguably this cool sounding number is at least 2-4 years away before the Fed brings it into the daily vernacular)? And just like the housing bubble he suggested then brought America to the biggest depression it has ever seen, so his current suggestion will be the economic cataclysm that wipes out America from the face of the earth.

So we have two simple questions:

i) how does Krugman still have a forum in which to peddle his destructive ways, and

ii) why does ANYONE still listen to this Nobel prize winner, a/k/a charlatan?

Being stupid is one thing. Being stupid and learning your lesson after seeing your idea crash and burn is another. Pushing for the same policy response time after time, layering misery upon misery, is an altogether third, and most Krugman, thing.

How many more lunatics in charge of the insane asylum do we need before we finally say "enough" to their deranged ramblings and their illusions of reality...

h/t Papa Swamp

 


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Wed, 09/08/2010 - 01:24 | Link to Comment ACjourneyman
ACjourneyman's picture

I think if Krugman and Burnett hooked up, we would have no worse spawn than that of Bernanke and Geitner.

Wed, 09/08/2010 - 01:28 | Link to Comment A Broken Bear
A Broken Bear's picture

The realm of modern Academia is no longer designed to produce free thinkers who will challenge the currently accepted norms, rather it is designed to produce a slave class that will fight tenaciously to ensure they always prove "true" their currently held dogmatic "beliefs"

Krugman et al are a clear example of this. Keynsianism is the new DDT, people think it helps produce lovely disease free crops, but in truth it only acts to slowly poison us

Wed, 09/08/2010 - 07:08 | Link to Comment JLee2027
JLee2027's picture

A natural outgrowth of the evils of fiat currency, where the lazy can be over-payed for doing nothing but ranting diatribes of hatred.

Wed, 09/08/2010 - 09:48 | Link to Comment Joe Davola
Joe Davola's picture

Nothing is so firmly believed as what we least know.

 

MdMontaigne

Wed, 09/08/2010 - 20:54 | Link to Comment malek
malek's picture

You clearly have become part of some other slave class, opinionwise.

Since DDT was banned worldwide around 1980, about 1 million have died of malaria per year, which would still live with moderate use of DDT in their areas.
And they are still dying every year as no vaccination or other approach has been found against Plasmodium or the spreading through Anopheles mosquitos, after decades of huge research programs! To put it more clearly we still have no other option against malaria than DDT, killing the mosquitos!

BTW parts of the US were malaria infested too, before the National Malaria Eradication Program by use of DDT ended that http://www.cdc.gov/malaria/history/eradication_us.htm

And "DDT slowly poisons us" reminds me of the fluoridation of all elements scare of General Jack D. Ripper and others... there is no f***ing proof for that claim!!!

DDT ban supporters have the blood of 1 million people per year on their hands, mostly children, and countless illnesses. It's as simple as that.

 

Wed, 09/08/2010 - 01:33 | Link to Comment three chord sloth
three chord sloth's picture

He doesn't think he's wrong. I guarantee you he and his defenders think his idea was brilliant, Bush just did it wrong. Obama is doing it wrong. The masses just don't listen and obey enough. The implementers are deceitful and treacherous. Dark and mysterious foreign forces undermined his plans. All of the above... and more.

Wed, 09/08/2010 - 03:34 | Link to Comment 1984
1984's picture

Yep.  The housing bubble didn't work because it wasn't big enough. 

Wed, 09/08/2010 - 06:05 | Link to Comment hugolp
hugolp's picture

LOL

Wed, 09/08/2010 - 06:24 | Link to Comment nmewn
nmewn's picture

"Yep.  The housing bubble didn't work because it wasn't big enough."

Post-Of-The-Year

Wed, 09/08/2010 - 07:08 | Link to Comment JLee2027
JLee2027's picture

+++++, to trillions

Wed, 09/08/2010 - 08:10 | Link to Comment imapopulistnow
imapopulistnow's picture

Most clever!

Wed, 09/08/2010 - 09:47 | Link to Comment P Rankmug
P Rankmug's picture

It wasn't a bubble if someone was still buying a house.

Wed, 09/08/2010 - 12:40 | Link to Comment capitalist bison
capitalist bison's picture

lol

Wed, 09/08/2010 - 01:34 | Link to Comment suteibu
suteibu's picture

Hmmmm...Pimpco advice, too, huh?  I remember watching Bill Gross on CNBS nearly in tears begging for the Fed to cut rates in August 08.  Jack-ass.

Wed, 09/08/2010 - 01:41 | Link to Comment nhsadika
nhsadika's picture

This is totally crazy.   Since he seems like a mouthpiece for someone else's master plans, who were the architects of the housing bubble back then?

 

 

Wed, 09/08/2010 - 01:51 | Link to Comment Millennial
Millennial's picture

I'd put a bullet in his head if I could. That would be a good investment down the drain. Better yet I will use a baseball bat, break his fingers, and legs, and maybe his jaw. 

Make him out like Steven Hawkins. 

I'd already spray painted my baseball "The Fed". When it hits you you feel it. Shock and awe motherfuckers.

Wed, 09/08/2010 - 07:25 | Link to Comment DarkMath
DarkMath's picture

I read this and then saw your avatar and started cracking up. That is too funny.

 

Wed, 09/08/2010 - 02:21 | Link to Comment Caviar Emptor
Caviar Emptor's picture

The key thing is that Krugman is only reflecting the general thinking at the highest level of academia, the Fed and the Government. That's why he can allow himself to be so bold. 

Yes leading economists, self-styled Washington money experts, and self-serving interests like Wall Street and the banks all believe that we can "Spend our way out of debt" because it worked during the Great Depression.

As we discussed yesterday, the situation today is radically different then in the 1930s in 2 key ways that make more spending toxic: 

-In the 1930s the world was not yet awash in an ocean of dollars and dollar debt. There was a gold standard in the US and elsewhere. 

-Within a few short years of massive Federal spending for the Depression, the US became the creditor to most of the developed world as they first fought then reconstructed from the total devastation of world war 2. Today the US ain't no creditor. 

More dollar printing and debt will has only served to make each increment less effective, and the risk of massive inflation is big.

Wed, 09/08/2010 - 02:33 | Link to Comment Bonesetter Brown
Bonesetter Brown's picture

PAUL KRUGMAN THEME SONG

(sung to the tune of the Meow Mix song)

Tool, tool, tool, tool

Tool, tool, tool, tool

Tool, tool, tool, tool, tool, tool, tool, tool...

Wed, 09/08/2010 - 05:22 | Link to Comment Coldfire
Coldfire's picture

Fularious!

Wed, 09/08/2010 - 09:23 | Link to Comment FEDbuster
FEDbuster's picture

Paul's Blackberry ringtone:

http://www.youtube.com/watch?v=vdED3rVgIu4

Wed, 09/08/2010 - 02:36 | Link to Comment yabs
yabs's picture

Krugman should be shot for being a Financila terrorist along with bernanke. How can someone this thick get a Nobel?

KRUGMAN YOU ARE AN UTTER RETARD

Wed, 09/08/2010 - 09:29 | Link to Comment toeser
toeser's picture

"How can someone this thick get a Nobel?"

 

Well, it seems another extreme liberal not doing too well as our President won a Nobel Prize recently.  Seems like the scandi's don't have very high standards for the people they choose.

Wed, 09/08/2010 - 19:51 | Link to Comment TexasAggie
TexasAggie's picture

Remember, the larger the fraud, the faster you get the Nobel prize - Krugman, Gore (a large fraud), and BHO - the largest fraud in History. Madoff should get Krugman's Nobel prize for economics, his was a more honest theft.

Wed, 09/08/2010 - 02:36 | Link to Comment Professor Moriarty
Professor Moriarty's picture

Best. Post. Evah! Faaark Krugman and the horse he rode in on.

Wed, 09/08/2010 - 02:44 | Link to Comment yabs
yabs's picture

question to Paul krugman if you read this

do you actually belive the bullshit that comes out your mouth

 

if the answer to the above question is yes

Did you fall on your head as a baby and suffer irrepairable brain damage

or were you born thick

 

if answer is no you do not believe in it

how much dick and cash are you rewarded with for being a shill?

I can see just from looking at you that you do for sure bat for the other side. I guess you and your fag friend Bernanke both have beard so we cannot see the stubble rashes on your face.

 

YOU ARE A MORON KRUGMAN SO STFU

Wed, 09/08/2010 - 02:54 | Link to Comment A Nanny Moose
A Nanny Moose's picture

Old wisdom, new twist:

Better to keep your mouth shut and be thought a Krugman, than to open one's mouth and remove all doubt.

Wed, 09/08/2010 - 02:54 | Link to Comment 24KGOLD FOIL HAT
24KGOLD FOIL HAT's picture

I often wonder how the US got to this point.  Television keeps coming up.  I read that something like 40% of our brains attention is used up by the eyes [video].  Hearing might be another 10 or 20%.  Does someone learn or think better in a quiet room versus watching news on TV?  Did Hitlers speeches or books convince more people.  Without radio and cinema he might not have took over.

When I watch a debate for President its confusing.  If I jot down a few notes on the point they try to make, it becomes obvious its nonsense.

I was on a jury in a murder trial.  I was surprised how much the lawyers used emphatic language, gestures, emotion, etc to try to sway the jury.  The facts took a back seat.  To read the facts would be much less subject to manipulation.

Peoples minds are way overloaded and distracted and spun by bad video.  The ads use a recent technique of targeting the so-called "reptilian mind."  It was pioneered by a French psychiatrist who left academe to cash in on Fortune 500 consulting.  He bought a castle in New York state and all the CEO's come and worship at his feet.  He will tailor your ads to any of Earths 200 countries.  He is paid millions cuz he shows results; very powerful ads.  I remember a few of his discoveries.  Don't tell Americans what to do.  Tell Germans and French what to do.  Create strong emotions: fear, envy, lust.  Attack the non-cognitive parts of the brain.

Video can be great; like youtube series on "The Money Masters."  It has been overall hijacked for harmful manipulation.

So how do I tie this in to Archduke Krugman?  Maybe we need a youtube gameshow about foolish economists.  Or a videogame that has bounties on swindlers.  My friend Millenial would enjoy that.  Maybe he could produce it?  Much better than getting violent.  The system wants us to get violent so as to spin us as evil to the public.  A Mark Twain, Will Rogers, George Carlin type presenter.

Americans have the brains; they just are up against craftier modern Rasputins.  For those of us who still want to try and improve things, I think we can make a difference.  Plan B with gold, guns, smokes and nylons wil probably be needed to some extent.

Wed, 09/08/2010 - 08:50 | Link to Comment Colonel Boyle
Colonel Boyle's picture

Anytime you read something, and get an immediate emotional reaction (agreement, hate, pity...) you can be sure conditioning has taken place.

Salesman, pop commentators, and politicians look to pace the inner world of their average demographic. One of the most common conditioning is the "virtue" of fairness. n this article Krugman invokes the "hard working American." What American doesn't think they work hard? Maybe 20%? So 80% read his first paragraph and agree emotionally with him. Their brains now have a interest in agreeing with whatever economic bullshit he slings in the rest of the article, because it validates the feeling they had reading the first paragraph.

Wed, 09/08/2010 - 09:26 | Link to Comment Implicit simplicit
Implicit simplicit's picture

I agree. Our minds are bombarded with bullshit everyday. It makes everyone want to complicate things. Then it will be easier for the neurosis in society to infect everyone by complicating every issue.

Be calm. It is not difficult. Simply said Debt bad, not good.

Wed, 09/08/2010 - 16:29 | Link to Comment PeterSchump
PeterSchump's picture

Atlas needs to shrug.

Wed, 09/08/2010 - 21:16 | Link to Comment FEDbuster
FEDbuster's picture

Atlas has dropped the ball this time.  Party at Gault's Gulch for the next couple of decades.

Wed, 09/08/2010 - 03:19 | Link to Comment agrotera
agrotera's picture

thank you Tyler!

 

Wed, 09/08/2010 - 03:33 | Link to Comment Jus7tme
Jus7tme's picture

Get real, Paul Krugman was not advocating a housing bubble. He was simply quoting the PIMCO guy and illustrating how bad the NASDAQ bubble had been.

This is old news, and wrong news. Sorry to say.

Wed, 09/08/2010 - 03:52 | Link to Comment Catullus
Catullus's picture

Yes.  Old news.  And you are wrong. 

Read the whole quotation:

A few months ago the vast majority of business economists mocked concerns about a ''double dip,'' a second leg to the downturn. But there were a few dogged iconoclasts out there, most notably Stephen Roach at Morgan Stanley. As I've repeatedly said in this column, the arguments of the double-dippers made a lot of sense. And their story now looks more plausible than ever.

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.

Yes, he's quoting Paul McCulley, because he's using the McCulley line as a support for his argument.

Wed, 09/08/2010 - 06:13 | Link to Comment chrisina
chrisina's picture

I think it can be interpreted both ways. One that he is supporting the housing bubble, the other that he is doubtful if Greenspan can pull it through.

But one thing is clear, he never asked himself what would be the consequences of a housing bubble collapse. Exactly as now he doesn't seem to ask himself what will happen when there is a Govt bond bubble collapse.

That's the big problem with Krugman and many other economists, they never think about the unintended consequences, they only look at the short term positive effect of leverage and never seem to believe that deleveraging can eventually happen.

Wed, 09/08/2010 - 09:09 | Link to Comment kridkrid
kridkrid's picture

That's teh big problem with everyone, not just economists.  If I'm free to leave out unintended consequences and opportunity costs, I can make a rational sounding case for just about any activity... War, Spending, Taxes, Tax Cuts, Welfare, Expansion, Staff Increases, Staff Decreases, Marriage... literally anything.

Wed, 09/08/2010 - 10:46 | Link to Comment Arseclown
Arseclown's picture

+1 billion and saddle for that jackass Krugman

Wed, 09/08/2010 - 12:16 | Link to Comment TheMonetaryRed
TheMonetaryRed's picture

 

 

...my prediction is that politicians will eventually be tempted to resolve the crisis the way irresponsible governments usually do: by printing money, both to pay current bills and to inflate away debt.

And as that temptation becomes obvious, interest rates will soar. It won't happen right away. With the economy stalling and the stock market plunging, short-term rates are probably headed down, not up, in the next few months, and mortgage rates may not have hit bottom yet. But unless we slide into Japanese-style deflation, there are much higher interest rates in our future.

I think that the main thing keeping long-term interest rates low right now is cognitive dissonance. Even though the business community is starting to get scared -- the ultra-establishment Committee for Economic Development now warns that ''a fiscal crisis threatens our future standard of living'' -- investors still can't believe that the leaders of the United States are acting like the rulers of a banana republic. But I've done the math, and reached my own conclusions...

 

That's also Paul Krugman's own words - not his quoting someone from PIMCO - some months later. 

The unheralded part of the 2002 recession was that it was a default crisis as well. In response to the need for short-term fiscal stimulus, Bush put in long-term tax cuts for the rich. To overcome this fiscal mistake, Greenspan did, indeed need a real estate bubble to replace the NASDAQ bubble - and he got one. 

 

And, of course, the result will be exactly what Krugman predicted: Japan-style delfation or worse (which he would argue we're entering now) or higher interest rates and a punishing inflation. In other words, Krugman was right.

Wed, 09/08/2010 - 16:33 | Link to Comment PeterSchump
PeterSchump's picture

I like your logic better than Krugman's, perfectly counterintuitive.

Wed, 09/08/2010 - 03:47 | Link to Comment Catullus
Catullus's picture

The Mises Institute has actually called him out on this before. Krugman responded in his normal "and I was on the grassy knoll too" to discredit anyone who questions him as a quack. 

http://blog.mises.org/10153/krugman-did-cause-the-housing-bubble/

A total classic by all standards, "Krugman's Intellectual Waterloo".

http://mises.org/daily/3530

To which there are Krugman apologists on this issue:

http://mises.org/daily/3539

Even The Onion has made fun of the situation and he AGREED with The Onion. The man is beyond shame at this point.

Keep it up on the attacks on the failed Keynesian religion.  There needs to be a purging of the economics departments all across the country on this issue.

Wed, 09/08/2010 - 04:20 | Link to Comment yabs
yabs's picture

of all ther shootings that go in the US why oh why can't people shoot clowns like these

Wed, 09/08/2010 - 04:22 | Link to Comment TooBearish
TooBearish's picture

I find it telling that he was talking about a double dip back then, and all the while these MS economists tell you how fukking rare double dips are, hmm 1981, 1937...Krugman is a sniffling fool who so obviously desparate for a seat at the Obama table in the NWO.

Wed, 09/08/2010 - 05:27 | Link to Comment Coldfire
Coldfire's picture

For his tax fetish: Thugman.

Wed, 09/08/2010 - 06:11 | Link to Comment tom
tom's picture

 "It is not the consciousness of men that determines their existence, but their social existence that determines their consciousness." - Karl Marx

Maybe not true of everybody, but surely true of Krugman. He's promoting an economic ideology that suits himself. And it suits a lot of other people who promote his views in print, online and on television.



Wed, 09/08/2010 - 06:49 | Link to Comment chrisina
chrisina's picture

"The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist. ....I am sure the power of vested interests is vastly exaggerated compared with the gradual encroachment of ideas. ... Soon or late it is ideas, not vested interests, which are dangerous for good or evil."  J.M.Keynes, closing paragraph of The General Theory

Yes, Mr Krugman, I'm sure you wouldn't have forgotten this paragraph from Keynes? Well, you see, it is the gradual encroachment of your ideas and of all mainstream economists (who have bastardized Keynes into a completely junk "new synthesis") which have been dangerous for good and evil

Very dangerous indeed, and now it is going to be very painful for most, if not all, of us.

Wed, 09/08/2010 - 07:05 | Link to Comment SWRichmond
SWRichmond's picture

i) how does Krugman still have a forum in which to peddle his destructive ways, and

ii) why does ANYONE still listen to this Nobel prize winner, a/k/a charlatan?

The answers to both questions are obvious: because he tells the status quo power structure exactly what they want to hear, and exactly what they want the masses to be told: that government has the right to, and is capable of running the economy, that the masses are too stupid to make their own decisions, and that without intervention and regulation, the rent-seekers would have to actually compete in the marketplace and liberty would break out all over the place.

Wed, 09/08/2010 - 11:35 | Link to Comment chrisina
chrisina's picture

but if the masses believe that they are too stupid to make their own decisions, doesn't that make them stupid?

 

"without intervention and regulation, the rent-seekers would have to actually compete in the marketplace and liberty would break out all over the place"

Just another "axiom". Just as dangerous as all the other ones. Any system that's based upon property and money, which can easily be accumulated, whether it's collectivist or capitalist or a mixture thereof, will always lead to ever growing concentrations of power and loss of liberty for most. This leaves us with only true anarchism, not capitalist anarchism or socialist anarchism, as a system of ideas that might work to maximize freedom for all. But all system of ideas are dangerous especially when one ignores the uninted consequences of those ideas before they have been implemented.

Thu, 09/09/2010 - 08:10 | Link to Comment SWRichmond
SWRichmond's picture

but if the masses believe that they are too stupid to make their own decisions, doesn't that make them stupid?

They don't believe that, you mischaracterize it.  It is a known fact that, during good economic times, people concentrate on self-interest.  During an extended period of phony, Fed-induced "good times", most people ignored the coming meltdown and the warnings.  Even if you would characterize that as "stupid", it doesn't give you or anyone else the right to make decisions for them at the muzzle of a rifle.

Any system that's based upon property and money, which can easily be accumulated, whether it's collectivist or capitalist or a mixture thereof, will always lead to ever growing concentrations of power and loss of liberty for most.

Only, IMO, due to the rent-seeking that goes with politics.  Economics is about how things get made, politics is about who gets to keep them.  The liberties that were enshrined in the American founding documents clearly recognize this and try to protect the individual from your concentration of power: honest money, low taxes, limited goverment and private property.  As for your "unintended consequences," I give you the creative brilliance that was America.

Wed, 09/08/2010 - 07:06 | Link to Comment JLee2027
JLee2027's picture

Anyone who used the word "Dubya" to describe Bush in 2002, less than a year after 9/11, is an in the tank socialist, liar, and hater of America.

Wed, 09/08/2010 - 09:24 | Link to Comment John McCloy
John McCloy's picture

+1 You are right it is very indicative of emotional basis in his thinking which subverts his own opinion and decreases credibility. I may not be a fan of President Bush and his actions and I believe President Obama to be the epitome of a figure head much like that of Queen Elizabeth because his beliefs are very much opposed to that of the constitution but never will you see me address him as anything but the Presidet regardless of my personal feelings and the reason is the office must always be respected otherwise why are we here reinforcing our pro liberty/natural free market and constituionally approach to sound money and little governmental interference. Being a PHD Nobel Laureate from the " White Shoes" Ivy league club Krugman shouldb know better.

Wed, 09/08/2010 - 07:14 | Link to Comment Implicit simplicit
Implicit simplicit's picture

The elites fraternity has requested one more bubble so they can all get out with retirement intact, and leave the decimation for the ignorant masses.

Wed, 09/08/2010 - 07:34 | Link to Comment Chemba
Chemba's picture

This is stunning.  The retard, Keynesian clown Krugman recommended a housing bubble as policy.  It is in black & white, in the NYT.  And yet the MSM still holds this guy out with such esteem.

Wed, 09/08/2010 - 07:36 | Link to Comment curious1
curious1's picture

Why all the muthafuckers are Nobel Prizzze Winners these days - krugman, obama. I think Zandi is also in line for either nobel prizzze or some position at treasury / fed.

Talk about foresight....

Wed, 09/08/2010 - 09:57 | Link to Comment Judge Smales
Judge Smales's picture

Mmmmmm ... Nobel pizza.

Oh wait. I misread that.

Carry on.

Wed, 09/08/2010 - 07:50 | Link to Comment yabs
yabs's picture

please someone just shoot him

Wed, 09/08/2010 - 11:22 | Link to Comment Arseclown
Arseclown's picture

If somebody does, then they'll just wheel out some other useful idiot who will spout off completely incoherent drivel the way he does.  And then they'll give that moron the Nobel. 

Ivy league economics 101:  If you are in debt, spend your way out of it.  If something makes sense, do the opposite.

Wed, 09/08/2010 - 13:27 | Link to Comment RockyRacoon
RockyRacoon's picture

Right.  As is pointed out in the article:

How many more lunatics in charge of the insane asylum do we need before we finally say "enough" to their deranged ramblings and their illusions of reality...

There are leagues of them waiting in the wings to take the stage when Krugman exits.

Wed, 09/08/2010 - 07:54 | Link to Comment yabs
yabs's picture

I also remember one quote of his went somewhere along the lines of

how could all the other economists get is so wrong when it crashed

hahah

you mean how could you get it so wrong you big blubbering idiot

Wed, 09/08/2010 - 07:55 | Link to Comment SimpleSimon
SimpleSimon's picture

Beware of Nobel prize winners!!  Listening to them can be hazardous to your health!!

Wed, 09/08/2010 - 08:00 | Link to Comment Silversinner
Silversinner's picture

No comment only big smile on little goldbugs face today.

 

Wed, 09/08/2010 - 08:13 | Link to Comment SWRichmond
SWRichmond's picture

Is this more Eurozone buying on sovereign default fear?  At least the people in EZ aren't so sheeple-tastic as Americans.

Wed, 09/08/2010 - 08:04 | Link to Comment snowball777
snowball777's picture

Not to overly defend P-Krug, but it was McCulley's suggestion (a Keynesian in Bill G's hizzouse?!).

Krugman would've regulated derivates...no AIG.

Krugman wouldn't have dropped Glass-Steagall...no Lehman/Shitigroup/Bank of Lynching America.

Krugman wouldn't have started two wars on the petro industries say so.

 

Please tell us how dropping taxes and safety net spending will lead to anything but riots and civil war.

Or is that your agenda?

Wed, 09/08/2010 - 08:16 | Link to Comment economicmorphine
economicmorphine's picture

McCulley can almost be forgiven.  Raping the system to make a buck is firmly entrenched as a business strategy.  I'm not sure why Krugman keeps babbling.  I mean, fuck, he's got tenure, right?

Wed, 09/08/2010 - 08:06 | Link to Comment Cursive
Cursive's picture

Setting the record straight.  Thank God for Zero Hedge!

Wed, 09/08/2010 - 08:20 | Link to Comment Moonrajah
Moonrajah's picture

I think people should just drop the term 'Keynesian' since what is currently happening would make ole' John Maynard shriek like a seven year-old girlscout at the sight of Rocco Siffredi's means of production, so to speak.

Therefore I'm switching to the word 'Krugmanesque'. It fits, you know, just fits.

Wed, 09/08/2010 - 08:20 | Link to Comment yabs
yabs's picture

snowball

Krugman couldn't regulate his own arsehole

as for galss seagall I bet he doesn'tr even know what it is

he k nows fuck all about anything

Wed, 09/08/2010 - 08:35 | Link to Comment SpeakerFTD
SpeakerFTD's picture

Ever read "Confessions of an Economic Hitman?   If you haven't, everyone on here should, but if the book is to be believed, it is clear that government agencies (and their media agents) often purposefully created ridiculous economic forecasts, precisely because the money flows demanded by those rosy forecasts will enrich them.   They get paid, and the pain is left to the public.

Especially in light of his absurd Nobel prize, I have come to wonder if Krugman is nothing more than the best-bred show horse of the TPTB - a high-end whore disguised as an Ivy economist.

Wed, 09/08/2010 - 08:41 | Link to Comment I am more equal...
I am more equal than others's picture

Krugman is the Chamberlin of our times. 

Keynesian Politicians = Nazis

This holocaust will include everyone except the political class.

Yeah, some animals are more equals than others...

Wed, 09/08/2010 - 08:45 | Link to Comment MrTrader
MrTrader's picture

"Archduke" ! LOL ! Good laugh here. Krugman wearing a tiara would actually be a fun thing to observe...

Wed, 09/08/2010 - 08:47 | Link to Comment yabs
yabs's picture

speaker I have no doubt about that

noone can be this thick

Wed, 09/08/2010 - 08:51 | Link to Comment Variance Doc
Variance Doc's picture

Keep in mind that this permaclown was awarded the "Nobel Memorial Prize in Economic Sciences", which is not a REAL Nobel prize. http://en.wikipedia.org/wiki/Nobel_Prize

My observation is that the Nobel prize has become a joke in the scientific community.  There are far more meaningful prizes today.  Back in the day, you had truly remarkable people winning, such as Maria Sk?odowska-Curie, Pauling, Einstein, Feynman (my hero), etc.  Now, there is Barry, Al Gore, Kissinger.  What a joke.  Assholes...

Wed, 09/08/2010 - 09:40 | Link to Comment Jim B
Jim B's picture

In other words the Nobel prize has about the same credibility as Krughead, the Fed, and the dollar!

Wed, 09/08/2010 - 08:55 | Link to Comment yabs
yabs's picture

I think they should take the el out of the name to make it more fitting

Nob (el) prize

Wed, 09/08/2010 - 08:59 | Link to Comment yabs
yabs's picture

I think they should take the el out of the name to make it more fitting

Nob (el) prize

Wed, 09/08/2010 - 09:14 | Link to Comment Slim
Slim's picture

1) Using Keynesianism to stabalize the economy isn't what got us here - it was the gross misuse by the government who cannot put down the crack pipe once it has hold of it.  The idea is to support the economy in a downturn and then REDUCE (emphasis important) support once the economy expands again.  This in theory would lessen the extremes and turn a severe recession into a much more managable one for the population.

2) The major issue here is that every single time they do it they never REDUCE, they just don't stop.  Hence you get to the point today where you are basically checkmated.  Balance sheets are tapped, you can't push a string and if you reduce you make it worse.  The problem is not applying Keynesian stimulus but in not reducing after application - you run an engine at redline and eventually you blow.  This has built up over decades because no one wanted to take any pain and the government's constant catering to "the collectively entitled" or themselves and all others in government or union jobs not earning a comparable private market wage and benefits package (public sector is there to serve private not to yoke and bleed them).

 

As far as creating a housing bubble, this was a ripping stupid idea.  70% of GDP is consumer, they have no savings and you encourage them to continuously double down and overleverage while speculating on housing.  Just like blackjack, the longer you play the more likely it is your experience reverts to the mean.  Housing increases require incomes.

Wed, 09/08/2010 - 09:22 | Link to Comment Charley
Charley's picture

The New York Times should be required to run this post as a disclaimer beneath all of Krugman's columns...

Wed, 09/08/2010 - 10:06 | Link to Comment stpioc
stpioc's picture

So you guys go all the way back to 2002 to find one sentence, take that out of context, anand use it to do a hack job. Well done! Congrats.

Luckily, some more respectable websites keep better score:

http://pragcap.com/krugman-its-all-downhill-from-here

And you need a few urgent economy lessons, here they are, free of charge:

http://shareholdersunite.com/2010/07/04/keynesianism-zerohedge/

You have NEVER EVER put even a single rational data supported argument against Keynesianism. 

It's not hard to sum it up:

During good times, you run a primary surplus (lesson often forgotten) which provides a buffer for bad times, as markets do not always self-correct.

Or: "Austerity is self-defeating: when everyone tries to pay down debt at the same time, the result is depression and deflation, and debt problems grow even worse."

And guess who said that:

http://www.nytimes.com/2010/09/06/opinion/06krugman.html?_r=2&hp

 

 

 

 

 

Wed, 09/08/2010 - 10:17 | Link to Comment SpeakerFTD
SpeakerFTD's picture

During good times, you run a primary surplus (lesson often forgotten) which provides a buffer for bad times, as markets do not always self-correct.

The problem with Keynesianism, as described above, is the problem with most liberal ideas.   Assuming some all-seeing market oracle could even correctly differentiate between good and bad times and accurately save or spend as needed, the whole notion rests on the fantastic notion that a government will act on the basis of some rational economic impetus, when all history suggests that government acts politically. 

I will be much more open to liberal ideas if they did not involve the existence of a benevolent, selfless, altruistic, and omnipotent government.   There has never been such a thing in history.

Wed, 09/08/2010 - 10:48 | Link to Comment frank
frank's picture

nassim taleb claims the crisis has not yet begun and has expressed concern of the deficits and mounting debt. while interviewing taleb, a clueless reporter (are there any other types of reporters?) brought up krugman's opposition to "austerity" and taleb said

1--"paul krugman does not understand extreme events" and that
2--"his mathematics are archaic", and
3--"the costs will be monstrous if paul krugman is wrong, and odds are he will be wrong b/c these projections have never been right in the past."

everyone on this site knows that krugman is to economics what madoff was to investing. the problem is that academia, washington, the media all take what krugman says as bible, and hence the majority of the world does as well. unfortunately it will take an extreme meltdown for people to realize that social planning is the problem, and not the solution. krugman is dangerous.

at 5:15 in the below clip:

http://www.youtube.com/watch?v=4q2le0-R6qk

Wed, 09/08/2010 - 10:49 | Link to Comment Ahmeexnal
Ahmeexnal's picture

Do not blame the Nobel Prize winner. Blame the "illegal illiterate peasants" who have stolen jobs and billions of USD in social security from the hardworking american people.

*sarcasm off*

Wed, 09/08/2010 - 11:15 | Link to Comment Winston Smith 2009
Winston Smith 2009's picture

"the end of free market capitalism, and the inception of American-style crony capitalism"

I disagree with that part. The US has been a crony capitalist state for a very long time. It has been a wealthy banana republic, so wealthy in fact that massive skimming could occur with little notice from the natives. Then the really bad times set in and it became terribly obvious.

Wed, 09/08/2010 - 12:26 | Link to Comment Djirk
Djirk's picture

The housing bubble was only part of the final flameout caused by the over 30 years of debt accumulation. It really started with the Reagonomics supply side voodoo. It was not only the monetary policy, but the fiscal policy from a Republican controlled governments. 

Bush Jr. went all crazy by starting two wars while cutting taxes. Meanwhile the Fed crushed interest rates. Talk about overkill.

Problem with monetary and fiscal policy is they don't really care about prIce stability if prices are rising. Then they get all crazy to avoid ANY price decline or negative GDP.

Someone needs the balls to say that we spent the last three decades accumulating debt which fueled the economy. Now we need to deleverage and it is going to hurt. The "new" normal is really just a normal level and the past three decades were excessive.

Getting prices back to income levels is the best way to stimulate growth again. Let's get those write offs going...steady every quarter until the BS balance sheets are clean.

OK I can dream...no one has the balls to say this and people do not want to hear this.

 

 

 

 

 

 

 

 

Thu, 09/09/2010 - 00:47 | Link to Comment honestann
honestann's picture

Soon you will be literally correct.  At the moment, there are still a few folks with some minor exposure via mainstream media who have said what you say.  Most obvious are RonPaul, PeterSchiff, AndrewNapolitano (spelling), but also a few others with less exposure.  But soon the predators-that-be will eliminate their voices, and only the few folks who remain that are substantially sane, honest and diligent will perceive the truth.  Welcome to the NWO of pure lies, pure fiction, pure deception, pure authoritarianism, pure elitism and pure evil.

Wed, 09/08/2010 - 16:22 | Link to Comment PeterSchump
PeterSchump's picture

Don't you think Krugman really wants to "wipe out America from the face of the earth"?  I believe he does.  So there is nothing incredulous about what he advocates.  Remember, a Nobel Prize, in recent history, is only given to those who advcate and work towards the destruction of the Great Satan.  I'm surprised they didn't give one to Bush.

Thu, 09/09/2010 - 00:41 | Link to Comment honestann
honestann's picture

I agree.  Krugman is quite clear about his goals - to destroy everything related to honesty, liberty, ethics, justice and individualism --- and become part of the "ruling elite".  He is a "predator-that-be".

Wed, 09/08/2010 - 20:22 | Link to Comment brent1023
brent1023's picture

This column has attracted a rather grumpy crowd! Suggesting the Krugman should be shot or harmed in any way based on any interpretation of that column is irrational. You people have to get back onto your meds.

The housing bubble between 2000 and 2008 doubled the total residential mortgages from $7Trillion to $14T. No question that was a bubble.

If a doctor prescribes sleeping pills and the patient takes the whole bottle at one time, is the diagnosis wrong?

Krugman is a commentator who suggested that stimulating the housing industry (not the remortgage your home industry, not the CDO industry, not the CDS industry) might benefit the economy. I suspect that he thought that a short term stimulus might last a few months. I do not believe that Krugman was suggesting a doubling of housing mortgage debt.

If you believe that a commentator suggesting stimulus should be shot, what about a president who takes the country to war based on at best faulty intelligence or at worst faked intelligence?

Sun, 10/24/2010 - 01:43 | Link to Comment honestann
honestann's picture

To answer your question first; yes, Bush should be arrested, tried for treason, torture and crimes against humanity, and hung.  Ditto for Obama.  Ditto for most presidents after Kennedy, and many before Eisenhower.

The point the article makes about Krugman is correct: why should any media outlet keep paying a proven destructive moron to write mainstream media articles?  The obvious answer: because everything he writes assigns more and more egregious power to the predators-that-be.

This has become more than rampant.  Just about everyone who encourages extreme authoritarianism, concentration of power, and destruction of honest, liberty, ethics, justice and individualism is praised by the predators-that-be and their mainstream media apologists, and everyone who is pro-individual is trashed, denegrated, thwarted, and prevented from doing anything positive for anything good.  This policy has gotten so extreme and overwhelmingly practiced, just about any support for predators, and abuse of liberty-advocates is deemed reasonable by the predators-that-be.

What you don't seem to understand is, these criminals are guilty of the most egregious crimes known to mankind... but because the horribly-named "justice department" is controlled by the predators-that-be, none of the hyper-criminal predators are punished.  What you need to understand is this: IF they were appropriately punished, they would have been arrested, tried for various combinations of treason, torture, mass-murder, crimes against humanity, overthrow of government (from within).  What exactly IS the appropriate punishment for people guilty of these most egregious of all crimes?

Thu, 09/09/2010 - 00:24 | Link to Comment halvord
halvord's picture

I remember that column. 

And I just read it again. Gawd you people are dumb, including poster. He wasn't promoting it, he was saying that if you ran the economy you have to do it. It is possible to talk about something without advocating it, but that is the default in American culture.

Thu, 10/21/2010 - 17:56 | Link to Comment maddy10
maddy10's picture

Moron

Lets hope he is not advocating anything right now but just babbbling in his insanity!

some people never get it???

Tue, 09/28/2010 - 04:01 | Link to Comment Herry12
Thu, 02/24/2011 - 01:58 | Link to Comment shawnlee
shawnlee's picture

ight. As is pointed out in the article:

How many more lunatics in charge of the insane asylum do we need before we finally say "enough" to their deranged ramblings and their illusions of reality...

There are leagues of them waiting in the wings to take the stage when Krugman exits.

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