2005: "there is little reason to fear a catastrophic collapse in home prices" [View all]

[cthulu2016]

This 2005 masterpiece of RW thought is worth dragging from the closet. (The smug style while being so very wrong reminds us that mockery does not equal rebuttal)

That Hissing Sound Is Krugman
Posted on August 8, 2005 by John Hinderaker

It must be depressing to be Paul Krugman. No matter how well the economy performs, Krugman’s bitter vendetta against the Bush administration requires him to hunt for the black lining in a sky full of silvery clouds. With the economy now booming, what can Krugman possibly have to complain about? In today’s column, titled That Hissing Sound, Krugman says there is a housing bubble, and it’s about to burst:

"Meanwhile, the U.S. economy has become deeply dependent on the housing bubble. The economic recovery since 2001 has been disappointing in many ways, but it wouldn’t have happened at all without soaring spending on residential construction, plus a surge in consumer spending largely based on mortgage refinancing. Did I mention that the personal savings rate has fallen to zero? Now we’re starting to hear a hissing sound, as the air begins to leak out of the bubble. And everyone – not just those who own Zoned Zone real estate – should be worried."

Well, if we believed anything Krugman writes, we’d be worried all the time...

...there is little reason to fear a catastrophic collapse in home prices. Krugman will have to come up with something much better, I think, to cause many others to share his pessimism.


http://www.powerlineblog.com/archives/2005/08/011131.php

http://www.nytimes.com/2005/08/08/opinion/08krugman.html