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While it is true that Keynesianism do not advocate deficit spending at all times, it is also true that Krugman is a one trick pony.
In every single recession, and every single slowdown, Krugman has advocated more spending. He advocated more spending in 2002, and said we should replace the NASDAQ bubble with a property bubble. He got what he wanted.
You are misreading the 2002 piece. Read it again. It wasn’t a piece on policy advocacy, it was just economic analysis. What he said was that the only way the Fed could get traction would be if it could inflate a housing bubble. And that’s just what happened.
Why would Krugman use such a childish example? Seems like something a myopic philistine would do.
Whether it was childish or not is in the eye of the beholder. As a professor, one often will use simplistic examples to get the point across. In addition, he was a guest on a TV show and was making a joke with an economic point -- the point is that we can't get the government to put enough money in stimulus to build things but if we were under invasion money would be no obstacle.
You are misreading the 2002 piece. Read it again. It wasn’t a piece on policy advocacy, it was just economic analysis. What he said was that the only way the Fed could get traction would be if it could inflate a housing bubble. And that’s just what happened.
No, you are just making excuses to defend your hero. Lets take a look at the quote again.
Quote:
A few months ago the vast majority of business economists mocked concerns about a ''double dip,'' a second leg to the downturn. But there were a few dogged iconoclasts out there, most notably Stephen Roach at Morgan Stanley. As I've repeatedly said in this column, the arguments of the double-dippers made a lot of sense. And their story now looks more plausible than ever.
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. [Emphasis added.]
These quotes clearly show that Krugman was worried about a double dip. He said a double dip is plausible. To prevent a double dip, he wants to increase consumer spending.
Paul Krugman advocated more spending in 2002, because he is a one trick pony.
No, you are just making excuses to defend your hero. Lets take a look at the quote again.
These quotes clearly show that Krugman was worried about a double dip. He said a double dip is plausible. To prevent a double dip, he wants to increase consumer spending.
Paul Krugman advocated more spending in 2002, because he is a one trick pony.
Of course Krugman lies about it. He wants to keep his legitimacy.
However, read his quote. There is no doubt. He first said there are fears of a double dip recession and he believe the fears are correct.
He then says, to combat the double dip recession we need soaring household spending. There is no doubt. Krugman just didn't know that there would be a massive housing bubble in 5 years time, and thought it was a smart joke to say we should replace the NASDAQ bubble with a housing bubble.
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Think!
