Big Opportunity to take down Paul Krugman!

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theoakman

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Guys, we kind of addressed this in this thread here but I don't think enough people noticed it or even took the time to care.

http://www.ronpaulforums.com/showthread.php?t=196004

I want everyone on this board to read this.

Paul Krugman has easily been the biggest voice for stimulus and big government the past year. The fact that he got the "Nobel" only made his voice stronger. Lew Rockwell was sent the quote, which I'm sure you all read about blowing up a housing bubble back in 2002. If you haven't seen it, read it here!

To fight this recession the Fed needs…soaring household spending to offset moribund business investment. [So] Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble.”
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http://www.lewrockwell.com/blog/lewrw/archives/027541.html

Within the past 2 days, this single quote has gone viral and has been picked up by nearly 100 blogs. The problem is, the quote isn't good enough. It's been so widespread that Krugman was forced to address it today in his blog.

http://krugman.blogs.nytimes.com/2009/06/17/and-i-was-on-the-grassy-knoll-too/#comments

He has dismissed this criticism by saying

Guys, read it again. It wasn’t a piece of policy advocacy, it was just economic analysis.
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Now, apparently someone forwarded the original comment to Lew and within the past 2 days, every blog has picked it up. The point is, it only took one person to set off a wave of criticism. The problem is, the quote isn't strong enough...and allows Krugman to dodge the criticism, as he has tried in his blog by simply writing it off as if he didn't say to do it. On the other thread in this forum, within 20 minutes, I put together a string of quotes showing how he clearly did advocate such policies throughout the entire year of 2001!

As of now, Krugman has literally set himself up for a knockout punch with his most recent blog post denying advocating such policies. We have never had such an easy opportunity to show that Paul Krugman is not only a liar and a dishonest person but an awful economist to boot! I spent a good 3 hours yesterday sending these quotes to every blog or economist that I thought would listen. Lets face it, I'm only a schmuck on a message board and only a handful of people will read what I write. I'm begging everyone on this forum to send this collection of Krugman quotes out to every blog or message board you have where it's relevant. I'm only one person.

If we can get this set of quotes out into the public through blogs, it will be incredibly humiliating to Krugman and may ultimately force his ridiculous opinions to be discredited. I've never seen an opportunity like this before. I'm posting the quotes, with links and references in the next message of this thread. Please, send them out to all the Economics blogs or writers you can see. Take 5 minutes out of your life to make this happen. If it gets published by the right people who have an audience, it will go viral just like the last quote did.

It has already been picked up by 2 sources! One on mises.org

http://blog.mises.org/archives/010153.asp

http://scarecrowforpresident.blogspot.com/2009/06/collection-of-krugman-quotes.html
 
German Interview, undated

http://www.pkarchive.org/global/welt.html

“During phases of weak growth there are always those who say that lower interest rates will not help. They overlook the fact that low interest rates act through several channels. For instance, more housing is built, which expands the building sector. You must ask the opposite question: why in the world shouldn't you lower interest rates?”
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May 2, 2001

http://www.pkarchive.org/column/5201.html

I've always favored the let-bygones-be-bygones view over the crime-and-punishment view. That is, I've always believed that a speculative bubble need not lead to a recession, as long as interest rates are cut quickly enough to stimulate alternative investments. But I had to face the fact that speculative bubbles usually are followed by recessions. My excuse has been that this was because the policy makers moved too slowly — that central banks were typically too slow to cut interest rates in the face of a burst bubble, giving the downturn time to build up a lot of momentum. That was why I, like many others, was frustrated at the smallish cut at the last Federal Open Market Committee meeting: I was pretty sure that Alan Greenspan had the tools to prevent a disastrous recession, but worried that he might be getting behind the curve.
However, let's give credit where credit is due: Mr. Greenspan has cut rates since then. And while some of us may have been urging him to move even faster, the Fed's four interest-rate cuts since the slowdown became apparent represent an unusually aggressive response by historical standards. It's still not clear that Mr. Greenspan has caught up with the curve — let's have at least one more rate cut, please — but the interest-rate cuts do, cross your fingers, seem to be having an effect.
If we succeed in avoiding recession, this will mark a big win for let- bygones-be-bygones, and a big loss for crime-and-punishment. And that will be very good news not just for this business cycle, but for business cycles to come.
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July 18, 2001

http://www.pkarchive.org/economy/ML071801.html

“KRUGMAN: I think frankly it's got to be -- business investment is not going to be the driving force in this recovery. It has to come from things like housing, things that have not been (UNINTELLIGIBLE).

DOBBS: We see, Paul, housing at near record levels, we see automobile purchases near record levels. The consumer is still very much in this economy. Can he or she -- or I should say he and she, can they bring back this economy?

KRUGMAN: Well, as far as the arithmetic goes, yes, it is possible. Will the Fed cut interest rates enough? Will long-term rates fall enough to get the consumer, get the housing sector there in time? We don't know.”
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August 8th 2001

http://www.pkarchive.org/economy/ML082201.html

“KRUGMAN: I'm a little depressed. You know, inventories, probably that's over, the inventory slump. But you look at the things that could drive a recovery, business investment, nothing happening. Housing, long-term rates haven't fallen enough to produce a boom there. The trade balance is going to get worst before it gets better because the dollar is still very strong. It's not a happy picture.”
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August 14, 2001

http://www.pkarchive.org/column/81401.html
http://www.nytimes.com/2001/08/14/opinion/reckonings-delusions-of-prosperity.html

“Consumers, who already have low savings and high debt, probably can't contribute much. But housing, which is highly sensitive to interest rates, could help lead a recovery…. But there has been a peculiar disconnect between Fed policy and the financial variables that affect housing and trade. Housing demand depends on long-term rather than short-term interest rates — and though the Fed has cut short rates from 6.5 to 3.75 percent since the beginning of the year, the 10-year rate is slightly higher than it was on Jan. 1…. Sooner or later, of course, investors will realize that 2001 isn't 1998. When they do, mortgage rates and the dollar will come way down, and the conditions for a recovery led by housing and exports will be in place.”
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October 7, 2001
http://www.pkarchive.org/economy/ML071801.html

“Post-terror nerves aside, what mainly ails the U.S. economy is too much of a good thing. During the bubble years businesses overspent on capital equipment; the resulting overhang of excess capacity is a drag on investment, and hence a drag on the economy as a whole.
In time this overhang will be worked off. Meanwhile, economic policy should encourage other spending to offset the temporary slump in business investment. Low interest rates, which promote spending on housing and other durable goods, are the main answer. But it seems inevitable that there will also be a fiscal stimulus package.”
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Dec 28, 2001

http://www.pkarchive.org/column/122801.html

“The good news about the U.S. economy is that it fell into recession, but it didn't fall off a cliff. Most of the credit probably goes to the dogged optimism of American consumers, but the Fed's dramatic interest rate cuts helped keep housing strong even as business investment plunged.”
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There was this one that I posted earlier:

http://www.democracynow.org/2007/10/17/the_conscience_of_a_liberal_new

PAUL KRUGMAN: Actually, I hadn’t heard that one. He’s saying that we did a lot to try and stop the bubble. Boy, well into this, he kept on denying that there was a bubble. And even when—you know, there’s the famous remark about froth: there might be a little bit of froth in the market. This is the point when it was clear—to me, at least—that we had a full-blown, you know, out-of-control bubble.

So, no, I don’t blame him for the low interest rates. I think that was—the low interest rates were necessary. We had, as we say among my economist friends, a near-Japan experience in the US. We almost slid into a point where—a tailspin that you couldn’t get out of. So the low interest rates were appropriate.

What was not right was the failure of the Fed to do any regulatory oversight. As we know, the late Ned Gramlich, member of the Federal Reserve Board, was warning, you know, plaintively, we’ve got a problem here in the subprime market. And Greenspan wouldn’t listen. And more broadly, there was just this kind of runaway, as he says, securitization, fancy financial engineering that was clearly out of control, and no one was paying attention.
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HOLLYWOOD said:
Yeah, the clown's cover has been blown.

Time to send the Nobel committee a collage of Krugman Fiscal failures.

PS: NYT/Krugman didn't post my comments. I must of struck a nerve? ;)
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Krugman's editors regularly censor the blog.
 
Put me on your list for next time something like this pops up. 500+ daily readers.

I'll try to incorporate this into an anti-stimulus post this weekend.

Best,
 
Last edited:
I should also note, my quote posted was made in 2007. Which even further validates that he supported the bubble hindsight, that he now claims he didn't actively endorse.
 
Last edited:
Brian Defferding said:
I should also note, my quote posted was made in 2004. When the media started talking about the bubble more. And Krugman still advocated low interest rates.
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A lot of the guys that posted those quotes have added additional tidbits if you notify them. Don't hesitate to contact them.
 
Brian Defferding said:
Will do.
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Saw your post on one of the articles Brian. Good job. I may try to search for more quotes tomorrow if I have time. I've spoken to some people at Mises.org and it's possible that I might put together a piece for them or another blog. Hell, given the opportunity, I may just purposely not sleep for a few days to put it together because I've never seen an opportunity to expose Krugman like this.

If you guys find any other good quotes, be sure to post them here. If I use any of them, I'll make sure to credit you. Still hoping it catches more fire.
 
"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."

-Krug

There's proof that the Fed created the housing bubble.
 
Here's an even better one. This is different that Krugman's original quote on the need for a housing bubble, and it's dated 10/30/2006.

"Paul Krugman: As Paul McCulley of PIMCO remarked when the tech boom crashed, Greenspan needed to create a housing bubble to replace the technology bubble. So within limits he may have done the right thing. But by late 2004 he should have seen the danger signs and warned against what was happening; such a warning could have taken the place of rising interest rates. He didn’t, and he left a terrible mess for Ben Bernanke."

Translation: A housing bubble is alright and Greenspan did the right thing, but he just let it blow up too big. More evidence that Krugman supported the creation of a housing bubble to offset the tech crash.
 
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