I am amused

[andrewducker]

From

(Just to make it obvious, for those not reading the comments, he's taking the piss.)

Comments

[call-waiting.livejournal.com]

So... he's saying we need more bubbles.

Sam will be pleased, he loves bubbles.

[andrewducker]

He said _in 2002_ that we needed another bubble.

And we got one.

And now, of course, we're happy!

[call-waiting.livejournal.com]

Indeed. What we need, clearly, is more bubbles, each one smaller than the total bubble-ness we had before, but minimising the impact if one should collapse.

Also, ideally, they would be filled with air and skinned with water, detergent and sugar.

- pop! -

[blearyboy.livejournal.com]

The credit crunch was caused by Keynesians? Sigh. To paraphrase a movie, "The greatest trick Milton Friedman ever pulled was convincing the world he didn't exist".

[andrewducker]

The credit crunch was caused by the collapse of a property bubble caused by the dropping of interest rates to prop up the economy after the dotcom bubble. The initial bubble was caused by people being fucking idiots and buying shares in things they knew nothing about. I don't think anyone comes out of the last 15 years very well :->

[blearyboy.livejournal.com]

The fact that a Keynesian said "property bubble" in 2002 doesn't make it Keynes-fail. And it depends what you mean by property bubble: if you're taking about the one in the USA then it's really a lack of regulation that caused the more severe aspects of the crash. Lack of regulation != typical Keynesianism.

I read a Paul Krugman book once. He's the Michael Moore of economics: I agree with everything he says, but I still think he's still a gobby idiot.

[andrewducker]

I should point out at this point that my knowledge of Keynsianism isn't anywhere near good enough to discuss this at a reasonable level, and that I don't have time to go and skim the Wikipedia article, as I'm off to the cinema. I shall thus accept your judgement.

For now, you win!

[blearyboy.livejournal.com]

Go me! Victory party at mine. There will be cake.

[ninebelow.livejournal.com]

He's saying that if it wants to avoid recession in 2002 the Fed will have to replace one bubble with another. What's that got to do with a) Keynesianism and b) the current economic situation?

[andrewducker]

Paul Krugman is one of the prime movers of the new Keynsians, I believe.

And the current economic situation exists because we inflated a property bubble and it burst. Approximately $7trillion "vanished" when the housing bubble burst - the fallout from that is what we're currently dealing with.

[andrewducker]

Of course, I hadn't realised that Krugman was joking at the time, which makes more sense!

[andrewhickey.livejournal.com]

http://econlog.econlib.org/archives/2009/06/defending_what.html

Krugman was making a sick joke. Essentially he was saying that the only way to get out of the last recession quickly would be to inflate another bubble, because the economy was in such a bad state. He wasn't saying anyone should actually *do* it...

[andrewducker]

Cheers, that makes sense!

[matgb]

Shame that that's exactly what Brown did do in the UK, and the bank of England warned him it would need fixing and he ignored it...

[lpetrazickis.livejournal.com]

The way I read it, he's making a sarcastic jab against Greenspan there. If he were for it, he wouldn't have called it a bubble.

[interactiveleaf.livejournal.com]

He was quoting someone else, sarcastically. That quote pisses me off because it's taken so far out of context that it's just crossed the line into "flat out lie".

[palmer1984.livejournal.com]

Please edit the post to make clear that Krugman was making a joke!

[andrewducker]

Done!

[darkoshi]

Ah, I didn't realize that "taking the piss" meant making a joke. I thought it was like taking the blame.