“Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble.”
True, he was quoting. But he was quoting somewhat approvingly.
Approvingly?! The point of the article was that the 2001 recession was atypical because it was caused by an out of control speculative bubble… In this context Krugman’s comment about inflating another bubble in order to get out of the current bubble induced downturn reads more like sarcasm than anything else.
I read it as Krugman saying we can’t let the economy deflate — that would suck so massively that it’s worth considering doing anything to get consumer spending going. Escape the liquidity trap! I added the somewhat to approvingly, because he’s obviously not to keen on the option. But he really does seem to be saying the Fed’s got to do this or the U.S. is in the shitter.
Yeah I don’t see that in the article. It seems like he’s setting up a trade-off between the economy going back into recession and inflating another bubble. He implies that a housing bubble would be good for Bush and Greenspan, but I don’t get much of a sense of how desirable this would be for the US economy. There’s no mention of liquidity traps, deflation, or Japan in this article so I’m not sure where you’re getting that from.
Maybe the problem here is that we’re employing an overly structuralist approach to the text. Perhaps we need to employ a more post-structuralist approach, where the text in fact has a plurality of meanings and reverse meanings that are created by the reader. Since Krugman wrote the text, he is ultimately responsible for these meanings. Prepare the tar and feathers.
P.S. Did I just write that? Maybe I’m going insane, or even worse… becoming Deirdre McCloskey.
P.P.S. I’ve posted this response both in your comment section and on my blog and do hereby propose this as a model for future exchanges.
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