The brilliance of Nobel laureate Paul Krugman

Talk about confirmation bias based on a selective quote from a long article.

The first two comment  responses to Megan McArdle's blog post:

melwrc: Wow indeed. Krugman knew what the hell he was talking about long before it was apparent. He must be really embarrassed to have said in 2002 that the goal was to create a housing bubble to replace the stock bubble. And clearly he was proposing it as a permanent solution. Oh, what's that? A couple years later he wrote an article called Running Out of Bubbles that followed up on the 2002 article?

"As Mr. McCulley predicted, interest rate cuts led to soaring home prices, which led in turn not just to a construction boom but to high consumer spending, because homeowners used mortgage refinancing to go deeper into debt. All of this created jobs to make up for those lost when the stock bubble burst.

"Now the question is what can replace the housing bubble.

"Nobody thought the economy could rely forever on home buying and refinancing. But the hope was that by the time the housing boom petered out, it would no longer be needed."

I'm sure you can find plenty of predictions/recommendations of any 2-days a week economic writer that turn out wrong, but you chose a really bad one here to make an example of Krugman. The 2002 article was explaining what the Fed was doing at the time. And he was dead on.

Blutarski: You've lost me, Megan. I just read the column. Krugman predicted exactly what Greenspan would do, and made it perfectly clear that it would be disastrous. Greenspan did what Krugman predicted, and lo, it was just as disastrous as Krugman said it would be. Am I missing something?

[emphasis and minor formatting mine.]

Ironman on March 2 wrote this:

[The Dow] is poised to open below 7,000 today and few think we've seen the hard bottom quite yet.    The Democratic Party had an opportunity to bring in a fresh legislative team to deal with this problem and we had an obligation to the public to force this to happen. The results are rather obvious. I won't belabor the deficiencies in Obama and Geithner's decisions to date; but if there was an opportunity to change market confidence; this opportunity was lost.

The Dow is now at 8500. And, oddly enough, no one is talking any more about how the stock market is the ultimate measure of Obama's performance.

The simple fact is that Ironman sees Krugman as a lefty and therefore he dislikes him, so when he sees someone else dredging up a portion of an old column and attacking him for it, he is happy to repeat the drivel on this site - context and relevance be damned.

  But we aren't Ivy League eggheads and we weren't asked.

Paul Krugman? Yeah, he isn't  Ironman, or Ann Coulter.

The next right is...character assassination.

Hitler said, "kill the Jews."

Coming next week, an article by Ironman about how user Malevolence wants to "kill all the Jews." Really, he said it in one of his posts!

Pathetic. This is what the opposition to the Democrats has to offer as a path forward to a two-plus party system. One party rule it is, I guess. Dumping $#!+ on your opposition and then calling them dirty isn't the answer.

Ironman!

dude, your surgical deduction of that paragraph was awesome!

Always read the source article, not just the feigned outrage over an excerpt.

At no point in it is Krugman advocating the creation of a housing bubble. He is saying that's the Fed's only option to avoid a double-dip in the recession.

This diary would be better titled "The prescience of Nobel laureate Paul Krugman"