As I was making my rounds this morning I found this fascinating quote from one of Paul Krugman’s columns back in August 2002:
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.
He must hate it when people follow his advice. I trust he’s not cursing Alan Greenspan now. Oh, dear. 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…
As Ralph Waldo Emerson said, a foolish consistency is the hobgoblin of little minds.
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Ouch! That one’s gotta sting!
As Homer Simpson would say, “D’oh!”
The only thing that’s surprising is surprise at Krugman’s inconsistency…….oh, stop this diplomatic crap. His blatant, blind and dishonest partisanship. He’s a hack.
I feel better now..
Note, too, that Krugman correctly (in my view) identifies the problem we faced in 2002: weak business spending. That’s why at the time I argued for policies to encourage business spending and opposed the “Bush tax cuts” because they encouraged something we had plenty of (consumer spending) and didn’t do nearly enough to bolster what was weak (business spending). And yet for Dr. Krugman that approach seems always to have been off the table. Why?
I don’t know, maybe you should send him this post, and ask….just for the LOLs if he actually has any kind of response.
It seems your little discovery is now making the rounds.
Heh. Nice catch.
Hey, were you skipped over for your Instalanche? http://pajamasmedia.com/instapundit/80222/
For reasons best known to Glenn he doesn’t seem to link to me any more.
I found the quote when I was searching for something different via Google. I then found it again over at Reason.com.
Once I’d found the first column I was certain I was on to something so I searched Dr. Krugman’s more recent stuff and, sure enough, he’d contradicted himself.
An Instalanche would have been nice but que sera, sera.