"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." http://www.nytimes.com/2002/08/02/opinion/dubya-s-double-dip...
Maybe It's because English is not my native language... But I fail to see how Krugman in this article said that policy-makers should go out and create a 2007 recession or put mildly - that he advocated the policy that happened round that time and resulted in following years. To me it seems more like he is describing the mechanics of situation, eg: If you want the car to go faster - step on the right pedal. This sentence doesn't imply that going faster is actually good or desired.
Also as little as I have read Krugman - he (to me at least) came across as very on-point about the issues. I nowhere see the "Hawk" that everyone tries to paint.
This is why I'm going on a "read all Krugman's columns since 2000" one of these days - since I really want to understand flaw not in his but in my logic - since I fail to see Krugman as someone who cheered the disaster we are in.
The Krugman detractors seem to be of the opinion that Krugman is clueless, not that he advocated a recession or cheered on the disaster.
In this article, Krugman says that consumers need to spend more and that a housing bubble is one way to increase consumer spending. Perhaps he was not advocating a housing bubble, but he clearly didn't see a housing bubble as the terrible thing that it turned out to be. If he thought the policy was bad, he wouldn't have offered it as a solution.
Specifically, he does not understand monetary economics on a fundamental level. He could be called a Keynsian, but this would be an insult to Mr. Keynes. (Who only advocated inflation as a short term measure, not as a way of life, and who warned against the results if it were not reversed.)
So, in short, both John Maynard Keynes, and the Austrian School of Economics would say Krugman is clueless about monetary policy.
I think he is not actually clueless. He is a silver tongued liar employed by the government to spread misinformation and make those who think that they are well educated buy into nonsense so that they support unlimited government spending.
IT would take a very long time to read all the krugman articles, and he doesn't write in a very straightforward manner anyway.
However, you can save a bunch of time, and get counter arguments to krugman along with citations of his articles relevant to the bailout at Mises's bailout reader: http://mises.org/daily/3128
Thank you a lot - I'm certainly willing to educate myself on the issue.
I'd just like to state that I'm in no way a Krugman supporter - It wouldn't make sense anyway - since I'm not living in the US and it would be utterly insane to support someone if you don't even understand the context he is operating in. But on the limited exposure I had to his work (columns mostly) - I wasn't able to see the nearly unanimous point that most of the people here seem to hold. Thank you again.
EDIT: I went through all the linked articles - and only one mentions Paul Krugman: http://mises.org/journals/scholar/Thornton13.pdf. I guess I will still have to go through whole Krugman portfolio to figure out who the idiot is here...
Well, thanks for the link. It took some extreme creative interpretation to get the intent and motivation of the writer. Whenever I read opinions like those stated by lzw I make an attempt to understand the social and economic situation the writer is coming from. Quite often one can then understand the forces that twist the logic.
JanezStupar above, pretty much points out that what I was mentioning. Intent is being read into Krugman's article that does not actually appear in the article, The commentators view seems be colored by previously held beliefs.
