FHA; Is May 6, 2013 the Day of Reckoning for the New Housing Bubble?

FHA; Is May 6, 2013 the Day of Reckoning for the New Housing Bubble?

I posted this at Patrick.net. This sums up in a nutshell my view about neoclassical versus Keynesian economics. A plague on both their houses would be in order!


It isn't about Keynes versus Neoclassical economists. Krugman has been both. As a neoclassical economist he said that we should have a housing bubble in 2002. His neoclassical model says lending does not cause risk to society. Boy was he wrong! Neoclassical's wanted supply side funding that lead to the housing speculation.
Now Krugman is a Keynesian. Keynes only works where you have bank regulation like Glass-Steagall, limiting speculation in futures markets. We don't have that now. So the money would go to drive up prices of goods we buy. That won't help main street.
So, a plague on both economics houses. They are both wrong under the wrong circumstances.

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