Friday, June 19, 2009
Being Tough But Fair With My Buddy Krugman
During my three-year stint as a professor, I strove to be "tough but fair." (I think I got that description from the drill instructor from Full Metal Jacket, which in retrospect may not have been the ideal model.)
Anyway, since I have been waterboarding Krugman's articles recently, I feel compelled to pass this one along from August 2005. Whatever else we may think of him, we must admit that Krugman "called" the housing bubble before many commentators (including me).
At this point I really don't know what to think. My inclination is to say that Krugman called for any measures to boost spending, and then realized to his horror that they had unintended consequences, or that he had created a monster. After all, it sure seems as if Krugman advocated a Goldilocks stimulus plan, in which Greenspan cut interest rates just enough to fill the "output gap," but then jacked them up at precisely the right time to avoid an unsustainable boom.
But since I don't subscribe to Keynesian theory, maybe I'm misreading him.
Final note: I learned of this 2005 article from, you guessed it, Bob Roddis. For those who may be discouraged because I apparently post everything Roddis emails me, whereas I have been ignoring you: Don't fret. I mention about 10% of what BR sends me. Sometimes I wonder if he is actually a computer program.
Anyway, since I have been waterboarding Krugman's articles recently, I feel compelled to pass this one along from August 2005. Whatever else we may think of him, we must admit that Krugman "called" the housing bubble before many commentators (including me).
At this point I really don't know what to think. My inclination is to say that Krugman called for any measures to boost spending, and then realized to his horror that they had unintended consequences, or that he had created a monster. After all, it sure seems as if Krugman advocated a Goldilocks stimulus plan, in which Greenspan cut interest rates just enough to fill the "output gap," but then jacked them up at precisely the right time to avoid an unsustainable boom.
But since I don't subscribe to Keynesian theory, maybe I'm misreading him.
Final note: I learned of this 2005 article from, you guessed it, Bob Roddis. For those who may be discouraged because I apparently post everything Roddis emails me, whereas I have been ignoring you: Don't fret. I mention about 10% of what BR sends me. Sometimes I wonder if he is actually a computer program.
Comments:
Bob,
I think there are a few things going on with Krugman.
As I have mentioned at my blog, it is obvious by his comments that he is a data hound and watches the data very closely. That's why he is remarkably accurate in many of his forecasts.
At the same time, I don't believe he understands business cycle theory, which results in his off the wall recommendations on how to fix the economy.
Finally, I also believe that he has agendas that on occasion prevent him from taking correct positions.
I think there are a few things going on with Krugman.
As I have mentioned at my blog, it is obvious by his comments that he is a data hound and watches the data very closely. That's why he is remarkably accurate in many of his forecasts.
At the same time, I don't believe he understands business cycle theory, which results in his off the wall recommendations on how to fix the economy.
Finally, I also believe that he has agendas that on occasion prevent him from taking correct positions.
Krugman is no genuis.
I was writing about the housing bubble in 2004 -- putting it in a Austrian context.
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I was writing about the housing bubble in 2004 -- putting it in a Austrian context.
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