Krugman weighs in on the side of the rule of law in the mortgage crisis
How Keynesian Archduke Krugman Recommended A Housing Bubble As A Solution To All Of America's Post Tech Bubble ProblemsSubmitted by Tyler Durden on 09/08/2010 00:20 -0500
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.
There’s a saying in Spanish: Por la boca muere el pez. “The fish dies by the mouth”. Nobel economics laureate Paul Krugman has a recent op-ed piece in the New York Times which goes an awful long way to showing that he is a complete and utter imbecile—or the worst sort of cheap huckster imaginable.
An Open Challenge to Paul Krugman: Were America’s Founding Fathers Wrong for Advocating Death for QE Measures?Submitted by smartknowledgeu on 08/11/2010 01:07 -0500
If monetary debasement can truly create economic recovery, why did our Founding Fathers establish, in the US Coinage Act of 1792, that any persons discovered to be deliberately debasing US money "shall be guilty of felony and shall be punished by death"?
In his op-ed dated June 30, Paul Krugman declares Iceland as a "post-crisis miracle". That is totally screaming for a rebuff considering even Greece vowed not to be the next Iceland.
OECD Secretary-General: Austerity Versus Stimulus - A "False Dilemma"... And The Krugman Bloomberg InterviewSubmitted by Tyler Durden on 07/07/2010 12:20 -0500
The Secretary-General of the OECD Angel Gurria shares some surprisingly candid observations on the suddenly overpopular debate over austerity versus perpetual stimulus, saying it does not have to be one or the other, a choice he calls a "false dilemma" but instead you need one and the other, to be able to achieve any form of economic recovery. "Today's numbers are absolutely unsustainable, not only are they going to spook the market, they are simply not financeable. Whether the market is spooked or not it is almost secondary, you just can not hold it up for too long because you won't be able to finance these deficits, and they are creating a confidence crisis also." We hope that part about the market being "held up" is merely a Freudian slip, because we know that nobody does that - after all the market finds its natural level of supply and demand, and any purported "holding up" would involve central bank intervention... and we all know that's pure conspiracy theory. As to the solution: "Spain and Greece and Portugal are countries which have to start an earlier process of adjustment. It's not going to happen overnight. There has to be a clear path of where they are going. When you are cutting budgets, you have to cut those things that would not affect growth like education, research and development, the things that will move the economies in the years to come." On how to convince Germans to stop saving and start spending: "No reason why one should do that, and there is no possibility of success. Germans are reacting to a situation that was unsustainable. Medium and long-term there is no way that the speed and accumulation of debt can be sustained." And yes, "short term growth" will inevitably be impacted. Gurria can only hope the markets would cut these countries some slack when growth comes in far below expected... Which it won't.
Goldman Sees "Disturbing Signs" If Government Does Not Bow Down To Krugman, Reflate Monetary And Fiscal BubblesSubmitted by Tyler Durden on 07/06/2010 19:09 -0500
Last week, Goldman, in a piece unambiguously titled The Second Half Slowdown has Begun, made it all too clear that unless the US government were to succumb to yet another, and another, and another round of drunken sailor spending, the gratuitous ability of its sellside analyst to place crap companies on Conviction Buy lists may suddenly become mysteriously impaired as reality seeps through the gaps, thereby infuriating CEOs of worthless and overlevered widget makers, who know all too well their corporate earnings are about to be taxed through the nose by the Obama crack economic team, as their stock is about to plunge. Today, just in case the threat may have been missed by the cheap seats the first time around, here comes Jan Hatzius with the ominously titled "Disturbing Signs" which reads like Paul Krugman's induction essay into the Useless Economists' Society.
BN 11:58 *KRUGMAN: U.S SHOULD USE `EVERYTHING WE CAN' TO BOOST GDP, JOBS
BN 11:58 *NOBEL LAUREATE KRUGMAN COMMENTS IN BLOOMBERG TV INTERVIEW
BN 11:58 *KRUGMAN SAYS FED SHOULD HAVE 3%-4% INFLATION TARGET LONG TERM
BN 11:58 *KRUGMAN SAYS U.S. GOVERNMENT NEEDS TO `GO OUT AND HIRE PEOPLE'
BN 11:58 *KRUGMAN SAYS SECOND MAJOR STIMULUS PLAN PROBABY WON'T HAPPEN
BN 11:58 *KRUGMAN SAYS U.S. ECONOMY MAY BE FACING A `VERY LONG SIEGE'
BN 11:58 *PRINCETON'S KRUGMAN: `MARKETS HAVE BEEN FAIRLY CALM SO FAR'
BN 11:58 *KRUGMAN SAYS FEDERAL RESERVE SHOULD DO MORE QUANTITATIVE EASING
BN 11:58 *KRUGMAN: `WE NEED TO GET MORE STIMULUS INTO THE REAL ECONOMY'
Niall Ferguson: If The Obama Administration Listens To Paul Krugman It Would Lead To An Imminent Debt CrisisSubmitted by Tyler Durden on 07/06/2010 11:16 -0500
In an interview with Bloomberg TV's Erik Shatzker, Niall Ferguson picks up where Reinhart and Rogoff leave off. The historian discusses the bond vigilantes, "Bond vigilantes are a bit like the people short selling investment banks a couple of years ago. You start with Bear Stearns and Lehman Brothers, you don't get to Goldman Sachs until quite late in the game. In a way the sovereign debtors of the western world are pretty much in that position today. And we are working down the list, starting with Greece, moving on to Spain and Portugal, the UK dodged the bullet by implementing some preemptive measures. Sooner or later the bond vigilantes will get to the US, I don't think it will be this year, but in the absence of any political will to address this problem, this is simply an inevitability." As to why it is inevitable, Ferguson observes the case of the UK which was the only one to manage to grow its way out of massive debt load: "Britain after 1815 had two big advantages, it had the only the industrial revolution at that point that was going on in the word and had the world's biggest empire. I don't see anyone in that happy position today." The outlook: "Is it going to be inflation or is it going to be default. Right now there is no sign of inflation. We have monetary contraction at an alarming rate, and zero inflation in terms of core CPI, so the option of inflating this debt away doesn't seem to be there right now. What you are left with is therefore default. And I think it is a fair bet that US will default at least on the unfunded liabilities of Social Security and Medicare at some point in the foreseeable future. What the Greeks discovered you are fine until you are not fine with the bond market and if you have a non-credible fiscal strategy of borrowing a $1 tillion a year for the rest of time, never ever again running a balanced budget, at some point the markets are going to get spooked, and I think that point is nearer than Paul Krugman believes. Nothing would spook the markets more than for Paul Krugman's advice to be accepted by the Obama administration. That might well be the trigger."
Paul Krugman, obviously in total distress over the G20 deficit cut pact, sees a 3rd depression coming to America. Meanwhile, Dr. Doom--Nouriel Roubini--sees a slowdown rather than a double-dip recession in the U.S., and Harvard University professor Niall Ferguson agrees.
Ridiculed By Americans Everywhere, Krugman Now Threatens, Gives Unsolicited Advice To Germany, Pisses Entire Nation OffSubmitted by Tyler Durden on 06/23/2010 18:37 -0500
These days it's hard being a religious fanatic, also known as a Keynesian. It is even harder when you are Paul Krugman (sadly, the cornerstone of NYT's entire paywall strategy), and everyone in your own country is already sick and tired of, and openly ignores your constant appeals to drown the world in new and record amounts of debt, thus ignoring your appeals with impunity. So what do you do when nobody takes you seriously for thousands of miles around? Why you go even further - to the core of Europe in fact... where you proceed to threaten, badger, insult and give your unsolicited advice to anyone that listens. That "unlucky soul" in this case happens to be Germany daily Handeslbatt, which ran an interview with the "economist" in which Krugman stick not a foot, but an entire SS-20 nuclear warhead armed ICBM, in his mouth. And since Krugman is unaware, preaching the benefits of record deficit spending in Germany, ever since that little experiment in hyperinflation known as the Weimar Republic, tends to generate adverse reactions. Which is precisely what happened in this case. Luckily, now Krugman is a persona non grata in at least one country. Unfortunately, it is not the one in which his trite platitudes and melancholic remembrances of the golden days of Greenspan's credit bubble are still published on a daily basis.
Yes, I'm talking about a cameo by the Nobel Prize winner, famed economist and New York Times columnist, Paul Krugman and Sean P. Diddty in an upcoming summer comedy with enough sex and drugs to kill a small commune--"Get Him To The Greek."
I applaud and welcome Paul Krugman's clarification ...
I ran this bit on The Daily Capitalist last year, same time, and got nothing but grief. What do you think?
Paul Krugman now wants to start the economic equivalent of World War III. The man is dangerous.