http://www.nytimes.com/2005/08/29/opinion/29krugman.html?_r=1&oref=sloginPaul Krugman said:These days Mr. Greenspan expresses concern about the financial risks created by "the prevalence of interest-only loans and the introduction of more-exotic forms of adjustable-rate mortgages." But last year he encouraged families to take on those very risks, touting the advantages of adjustable-rate mortgages and declaring that "American consumers might benefit if lenders provided greater mortgage product alternatives to the traditional fixed-rate mortgage."
If Mr. Greenspan had said two years ago what he's saying now, people might have borrowed less and bought more wisely. But he didn't, and now it's too late. There are signs that the housing market either has peaked already or soon will. And it will be up to Mr. Greenspan's successor to manage the bubble's aftermath.
How bad will that aftermath be? The U.S. economy is currently suffering from twin imbalances. On one side, domestic spending is swollen by the housing bubble, which has led both to a huge surge in construction and to high consumer spending, as people extract equity from their homes. On the other side, we have a huge trade deficit, which we cover by selling bonds to foreigners. As I like to say, these days Americans make a living by selling each other houses, paid for with money borrowed from China.
One way or another, the economy will eventually eliminate both imbalances.
Wow, I didn't know that either.Neither was I - I was pretty surprised when I read the news.
Here's the award page: http://nobelprize.org/nobel_prizes/economics/laureates/2008/
I think anyone with half a brain and a lick of common sense would have said the same thing then.And an interesting quote from back in 2005:
I was thinking about this the other day while reflecting on someone else who should win a Nobel for his humanitarian work.
Krugman's blog on NYTimes - http://krugman.blogs.nytimes.com/STOCKHOLM, Sweden - Paul Krugman, the Princeton University scholar, New York Times columnist and unabashed liberal, won the Nobel prize in economics Monday for his analysis of how economies of scale can affect international trade patterns.
Krugman has been a harsh critic of the Bush administration and the Republican Party in The New York Times, where he writes a regular column and has a blog called "Conscience of a Liberal."
He has also taken the Bush administration to task over the current financial meltdown, blaming its pursuit of deregulation and unencumbered fiscal policies for the financial crisis that has threatened the global economy with recession.
Perhaps better known as a columnist than an economist to the public, Krugman has also come out forcefully against John McCain during the economic meltdown, saying the Republican presidential candidate is "more frightening now than he was a few weeks ago." Krugman (pronounced KROOG-man) also has derided the Republicans as becoming "the party of stupid."
Tore Ellingsen, a member of the prize committee, acknowledged that Krugman was an "opinion maker" but added that he was honored on the merits of his economic research, not his political commentary.
"We disregard everything except for the scientific merits," Ellingsen told The Associated Press.
The 55-year-old American economist was the lone winner of the 10 million kronor ($1.4 million) award and the latest in a string of American researchers to be honored. It was only the second time since 2000 that a single laureate won the prize, which is typically shared by two or three researchers.
Is this the Olbermann Krugman interview ??? It strarts out typical Olberman then Krugman comes in.The BEST Krugman moment came when he was talking with Keith Olbermann on his show and said "All your decision are belong to me." when referring to the first $700B bailout plan that had Paulson make all the moves.
I was in tears. It was the best moment of Countdown ever, and it was sadly lost to the abyss because I couldn't figure out how to rip it from www.msnbc.com onto Youtube.
For those who don't understand, Google "All your base are belong to us." It's an obvious variation on this ancient meme. That man is awesome to say that on mainstream TV as a professor.
Scientific background on the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2008This year’s Laureate is awarded the Prize for his research on international trade and economic geography.
By having shown the effects of economies of scale on trade patterns and on the location of economic activity, his ideas have given rise to an extensive reorientation of the research on these issues.
International Trade and Economic Geography
How are we affected by globalization? What are the effects of free trade? Why do increasing numbers of people fl ock to large cities, while rural areas become depopulated?
These questions cannot be answered without a theoretical foundation. For a long time, the analysis of foreign trade had been based on a well-established theory which explained why some countries export certain goods and import others. After World War II, however, it became increasingly obvious that important trade patterns did not quite correspond with that theory. In 1979, the US economist Paul Krugman proposed a new model which provided a better explanation for the observed patterns.
In later research, Krugman has shown that the model he initially developed for international trade could also be used to clarify key issues in economic geography. In the context of both foreign trade and economic geography, the objective is to explain what goods are produced where. Theories of economic geography also attempt to specify the forces whereby labor and capital become located in certain places and not others.
http://www.pbs.org/newshour/bb/business/july-dec08/nobelkrugman_10-13.html [Broken]Krugman's early interests
JIM LEHRER: When and why did you decide to become an economist in the first place?
PAUL KRUGMAN: Oh, that's a little embarrassing. I was -- I don't know how many of your viewers watch science fiction, read science fiction, but this very old series by Isaac Asimov, the "Foundation" novels, in which the social scientists who understand the true dynamics save civilization.
And that's what I wanted to be. And it doesn't exist, but economics is as close as you can get. So when I was a teenager, I really got into it.
I’m not sending Paul Krugman Champagne.
He won the Nobel prize in economics this week, and while I’m sure that’s delightful for him, it has raised the bar to an impossible height for his fellow columnists at The Times. We used to strive for Pulitzers, or simply regional awards, or even just try to top each other on the paper’s most e-mailed list.
Now we’re supposed to compete for Nobels?
It’s a total disaster. Any minute, Krugman might swagger into the office wearing that big old 24-karat-gold-plated medal around his neck like a World Wrestling championship belt, talking about how beautiful Sweden is.
So I must aim higher. Much higher.
A Nobel in economics is out. I didn’t take economics in college because all the classes started at 8 a.m. Physics, chemistry and medicine are out. Literature? They’ve given up giving it to Americans. So it’s going to have to be the Nobel Peace Prize.
. . . .
Pass that pipe Paul....What we need right now is more government spending — but when Mr. McCain was asked in one of the debates how he would deal with the economic crisis, he answered: “Well, the first thing we have to do is get spending under control.”
If Barack Obama becomes president, he won’t have the same knee-jerk opposition to spending. But he will face a chorus of inside-the-Beltway types telling him that he has to be responsible, that the big deficits the government will run next year if it does the right thing are unacceptable.
He should ignore that chorus. The responsible thing, right now, is to give the economy the help it needs. Now is not the time to worry about the deficit.
Are you suggesting the gov't should cut overall spending during a recession? Do you really think that will help lift the economy? Better target the spending by all means, but reducing the deficit at the expense of domestic growth seems a little recessionary to me. As an individual do you think it would be good practice for you to only borrow money when you already have a lot and only pay it off when you are broke??Mad man Krugman's column today:
Pass that pipe Paul.
I disagree with Krugman and agree with McCain. It's time to wean the public from the dependency on government spending - for entitlements/subsidies....What we need right now is more government spending — but when Mr. McCain was asked in one of the debates how he would deal with the economic crisis, he answered: “Well, the first thing we have to do is get spending under control.”
I wouldn't be so flippant about a Krugman published academic work. His columns are open season; they apparently come under criticism by professional economists of varying viewpoints because he strays from any recognizable economics framework and he's earned a reputation for loose facts in his columns.* I'd expect that criticism to become noticeably louder soon as he's not a just a columnist in the popular press any more, he represents his peers now.And your credentials would be...?
http://www.nytimes.com/2005/05/22/weekinreview/22okrent.html?_r=1&oref=slogin2. Op-Ed columnist Paul Krugman has the disturbing habit of shaping, slicing and selectively citing numbers in a fashion that pleases his acolytes but leaves him open to substantive assaults....
I argue that a)the US has plenty of spending in place at the moment, the real problem is freeing credit, b) certain types spending doesn't do much stimulation - defense for instance could take some whacks, and c) no, above a certain amount ($ 1/2 trillion seems like a good top end) one doesn't borrow any more as it does more harm than good - gov. starts competing with the market for the money it wants to spend to stimulate the market in the first place.Are you suggesting the gov't should cut overall spending during a recession? Do you really think that will help lift the economy? Better target the spending by all means, but reducing the deficit at the expense of domestic growth seems a little recessionary to me. As an individual do you think it would be good practice for you to only borrow money when you already have a lot and only pay it off when you are broke?...
So your point is that you know when he's right and when he's wrong?I wouldn't be so flippant about a Krugman published academic work. His columns are open season; they apparently come under criticism by professional economists of varying viewpoints because he strays from any recognizable economics framework and he's earned a reputation for loose facts in his columns.* I'd expect that criticism to become noticeably louder soon as he's not a just a columnist in the popular press any more, he represents his peers now.
It seems to me that you are the one with a flippant attitude towards people far more accomplished than you.Pass that pipe Paul.
Yes, to be clear, it was me that was being flippant about his column, not about the quality of his academic economics work which is certainly not my field. And no, I don't need any 'credentials' to be flippant about a political columnist that has reputation with his own paper's ombudsman for being loose with his figures in his columns, and in 2003 claimed that deficit spending would soon send the US 'off the cliff'.So your point is that you know when he's right and when he's wrong?
It seems to me that you are the one with a flippant attitude towards people far more accomplished than you.
The question was: What are your credentials?