Krugman on the US housing bubble

Paul Krugman from Princeton University predicts the biggest housing bust in history.

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  News & Politics

[gunterdak]

All of you people arguing about the merits and drawbacks of Keynesian economic policy are missing what is important about this video: at 0:57 he says "Bubbleicious."

[echoplex89]

The Austrians (Hayek,Mises,etc) blamed government for the Great Depression, the Socialists blamed Capitalism.

But Keynes came in to save the day.

[PONDERSOA]

The Community Reinvestment Act (CRA, Pub.L. 95–128, title VIII of the Housing and Community Development Act of 1977, 91 Stat. 1147, 12 U.S.C. § 2901 et seq.) is a United States federal law designed to encourage commercial banks and savings associations to help meet the needs of borrowers in all segments of their communities

[Rick Medeiros]

which goes to show you Economics doesn't drive his opinion. No matter how backwards keynesianism is.

[jeffmagic32]

of course, its the loose money monetary policies of the fed, encouraged by Krugman, that caused the housing bubble

[Payse Oaktree]

Notice how he is hedging his predictions? We 'could' go in a recession. It 'could' be bad. Compare this to Peter Schiff in August 2006: "We ARE going into a very bad recession in 2007 or 2008"

[andrewcalvarese]

@thumm99 the community reinvestment act that you speak of was signed by clinton.

[andrewcalvarese]

@jessemauris someone needs to read about the clinton-era community reinvestment act, repeal of glass-steagal, artificially low interest rates, the expansion of the fugazi markets in phoenix, florida and coastal california.

[astreocclu]

To be fair, krugman considers bush era republicans his enemy (even though they are keynesians too)

[eydaimon]

The government caused the bubble by not giving banks any risk to fail. Are you going to take bigger risks if you're not allowed to fail? Absolutely. Government is absolutely not without blame. FDIC is a culprit, and I'm just mentioning one.