Love that Krugman, even if the foxnews crowd hates him. The guy has been right about the bubble, and he's right again here.
Here's just a few of his quotes - watch the full video, and get into the bunker, HP'ers...
"The run-up since 2000 is completely unprecedented in history"
"This time we've got a national bubble"
"Housing prices have got a long way to fall and the housing industry is going to go through a doubt"
"How big could this be... you're looking at a hit to the economy that is as big.. as the tech bust."
"This is scary"
"I don't have a hard time getting an unemployment rate that rises above 6%."
"It could be pretty bad"
"It's the housing boom that's behind everything (consumer spending, good economy) and I don't think the Bush Administration had anything to do with that"
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September 10, 2006
Great Paul Krugman video interview: "Housing cycle that we've NEVER seen. National bubble... housing prices have got a long way to fall"
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31 comments:
Krugman may well be right about the bubble but his whole agenda is not economics but rather to find a way to blame the Bush administration for everything he finds objectionable....to be truthful the bubbles origin can be ascribed to Greenspan's encouragement of nontraditional housing loans like option ARMs to
borrowers who had no idea what they were doing...and to builders who built houses that were too big and expensive.
Paarl
Keith:
Why don't you set up a debate between Krugman and Lereah. That would interesting to watch.
Paarl,
You're missing Krugman's point pal. He in fact said that the Bush admin had nothing to do with the bubble. The only reference he made about this current admin was in the deficit and taxes, so that when combined with the falling housing market, the result can be ugly.
Bush benefited from the real estate boom (high home prices without true demand) and Clinton benefited from the tech boom (high stock prices without turning profits). Same story, different monkey in the WH.
Krugman may be anit-bush - but in general his columns are written with witty intelligence. He is a champion of the average joe and I think he helps people see how screwed we really are be it in housing or health care.
"Universal health care, raising the minimum wage, and rolling back tax cuts are not going to fix our economic woes."
for the tens of millions of people who don't have health insurance, it would solve that problem. rolling back the tax cuts would help lessen the deficit.
I think this administration should stop using the memory of 9/11 to try and bring back the Republicans, as they are in dire need of support in the House and Congress, not to mention the public. They should worry about the degeneration of our own country. A housing collapse of mamouth proportions, healthcare out of control, the dissapearance of SS, global warming, alternate fuel sources, a split general public, need I go on? "Ask not what your country can do for you, ask what you can do for your country".....time to repay the favor.
The Repubs could never be so bad as to make the Demonicratic Party a possible alternative except for maybe some of the aging drugged out hippies living in a van who visit this site, or those religious bigots like Borkafatty, et al.
This is so much Bigger than the 'Tech' Bust!
Not nearly as many (not even close) were invested in Tech as they are in Housing and related sectors!
This is gonna be 'Big' and gonna hurt alot of people by way of trickle down, and some by their own doing!
Anonymous said...
The Repubs could never be so bad
WANNA BET!
Krugman must be reading these bubble blogs. He said bubblicious!
Yeah Foobeca, you probably were not listening to him when he made some recommendations in the video clip. He regularly writes of other recommendations in his scholarly stuff and his column in the NY times.
I think Krugman is being too conservative. One of the scariest statistics is from the Harvard Joint Center on Housing. The usual thinking--and I think this goes for Krugman--is that housing accounts for 6% of GDP. The Harvard Center, on the other hand, estimates that housing and directly related industries account for 23% of GDP.
A collapse of housing will collapse GDP. Also, the housing GDP component is the most important part of overall GDP. That is, other components of overall GDP have a stronger link to the housing component, than the housing component has to them.
So, I think his unemployment figure of 6% is a serious underestimation. Also, he points to a recession being some time in the future. Actually, we are in a serious recession now (and have been since May), and this will head into a depression by January (defined as drop in GDP of 10% or more).
Krugman is too establishment (he writes for the New York Times!). Also, other bears such as Nouriel Roubini. They still have a lot of propaganda floating around in their brains.
"Universal health care, raising the minimum wage, and rolling back tax cuts are not going to fix our economic woes."
They may not "fix" our economic problems overnight, but they will, given long-term. At the very least, they will delay the total disintegration (collapse) for a couple of decades, during which time we'd better think and act FAST.
And for the rest of you life there will be a hole in your head!
We are entering uncharted territory here folks!
I've heard of Hairy palms, but this is ridiculous!
Quit Voting-
Quit voting?
you vote or not, Diebold will vote on your behalf.
The difference was that in the tech bubble, only half of it was a bubble.
The other half was a result of true economic, scientific and engineering breakthroughs which flowed from the end of the Cold War.
We had the liberation of the Internet (yes, thanks in part to Al Gore) with the development of massive fiber optic technology, and of course the invention of the web browser and infrastructure.
That was not "fake growth", that was real.
We had the develpment of large distributed wireless communication (CDMA), the cheap and practical implementation of originally military technology.
That was real.
We sequenced the human genome and rapidly improved genomics and bioinformatics technology.
That was real.
Only the last 1.5 years was predominantly B.S., but still after it, we had Google coming from the ashes of the dot com bust with true funadmental new technology and brilliance.
The routers still worked, and the fiber was still there. Bad venture capitalists lost their money, as they should have. Perkins Kleiner Caufield (The original really good VC) is still there.
What did we get out of the stupid real estate "boom"?
Granite countertops.
Nothing remotely similar in productivity and capital was achieved. We didn't make efficient, higher technology houses, we made idiotic McMansions and cloned car-only sterile suburbs without any transit, life or character. We made the crystal meth of housing. Cheap, quickly consumed, a temporary high, and causes massive brain damage.
"What did we get out of the stupid real estate "boom"?
Granite countertops."
++++LMAO! If that isn't the truth! My sister has been boring me to death with her continuing saga of trying to buy granite countertops when everyone else is after them too. These countertops have become one of the biggest jokes of the housing bubble.
"Nothing remotely similar in productivity and capital was achieved. We didn't make efficient, higher technology houses, we made idiotic McMansions and cloned car-only sterile suburbs without any transit, life or character. We made the crystal meth of housing. Cheap, quickly consumed, a temporary high, and causes massive brain damage."
Wow, simply a great post, esp that last part.
Granite counter tops! Do those come in Havest Gold or Avocado Green? Whatever happened to lifelong refrigerators? Norge etc. Those were the good ol' days.
Shag carpet is back! It's called Frieze!
I hate to say it but a strong and secure nation should have no problems bouncing back from a 9-11. After all, it was 2-3K persons (out of a nation of 280M) and a few buildings (out of perhaps a 100K big towers from sea to sea). London survived a full blitzkrieg bombing and other countries fared far worse in their historical conflicts.
In contrast, we were simply caught asleep on the wheel. So, here's the obvious question to everyone, where's the rebound? Instead of rebounding, 9-11 just made us insecure, paranoid, and unable to mount a true economic miracle like in the early 60s, after the Cuban crisis, the 50s during the start of the arms races, or the WWII era.
"...9/11 made us insecure, paranoid and unable to mount a true economic miracle like in the early 60's..."
It is because our resources were not properly spent and directed to the right place.
:It is because our resources were not properly spent and directed to the right place.
Which brings back the whole issue of being a strong nation as oppose to a banana republic where juntas and their cronies abscond resources whenever a crisis occurs. I think we're now the latter form of govt which is why a few building blasts still haunt us today. In contrast, other then for the residents of Louisiana, Katrina's been forgotten.
Even Wall Street's moved on with a lot of their computing resources over in NJ, nowadays. The actual economic effect (and post-effect) of 9-11 is over but the society/govt is constantly pumping it up to keep people off balanced instead of steadfast in their belief that our security forces can do anything about local attacks.
"Universal health care, raising the minimum wage, and rolling back tax cuts are not going to fix our economic woes."
"They may not "fix" our economic problems overnight, but they will, given long-term. At the very least, they will delay the total disintegration (collapse) for a couple of decades, during which time we'd better think and act FAST."
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Since when does raising taxes and creating unemployment fix economic problems?
Please educate yourselves on economics before spouting off. A visit to www.mises.org would be a good start.
Please educate yourselves on economics before spouting off. A visit to www.mises.org would be a good start.
Someone educated in economics wouldn't visit a site full of nothing but facile libertarian/Randroid propaganda -- unless they want to laugh a lot or puke.
"Since when does raising taxes and creating unemployment fix economic problems?
Please educate yourselves on economics before spouting off. A visit to www.mises.org would be a good start.
Monday, September 11, 2006"
I went to that site, lots of words there. Any particular article that you think we might be interested in?
I think we should try that whole universal health care, higher minimum wage route. Bush's republican route has enlarged the class devide in a big way. The few rich are getting richer, while the middle class sinks further toward the poverty end of things. This is fact. No matter if you are a Dem or Rep this fact should dictate your thinking on this issue!
He had credibility until he said Bush han NOYHING to do with this bubble.
Part of the reason the middle class is shrinking because it CHOOSES to take on more debt than it can handle. People make that choice no matter how high their wages are; and that has to change.
I don't think becoming more socialistic (univ. health care / higher wages)will make us more competitive in the world. Learning econ will help people see why they sound nice but would be harmful.
But, websites tend to be slanted. Go to the library or buy a textbook. You could read up on how well France is doing with its system.
"I don't think becoming more socialistic (univ. health care / higher wages)will make us more competitive in the world."
The problem is that America is no longer the R&D dynamo like it was during the cold war with lab closings and widespread outsourcing. Also, the stereotypical brilliant eastern European physicists and chemists are no longer coming to America in droves to re-ignite the decaying industrial labs anytime soon. And the reason why I bring them up is that those are the preferred immigrants in this country because their families are quickly assimilated into the mainstream and they'd jumpstarted the modern age. Mexicans, in contrast, will never have a similar effect.
Finally, with R&D, manufacturing, and services all being done globally, the US will have to become a raw materials exporter to make any sort of income down the road (i.e. coal, shale oil, agro-products). Our multinational corps will not bring labs back here just to appease angry locals.
In the end, it'll have to be some sort of hybrid of a financial and commodities economy with perhaps an outsourcing angle on the health costs of the elderly (i.e. clinics in Central America).
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