Thanks to Dean Baker Proof Paul Krugman Did Not Call for a Housing Bubble in 2002.

Paul Krugman, who I don't agree with on lots of stuff, like taking sides against Amazon with publishers who want to keep ebook prices too high, didn't call for a housing bubble. Krugman originally wrote in 2002:

To fight this recession the Fed needs…soaring household spending to offset moribund business investment. [So] Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble.

But a few weeks later, he wrote this warning about the housing bubble. Truth is, he was being satirical or almost fatalistic in believing that all Greenspan had left was to turn the stock bubble into the housing bubble. But in the newer article he said this:

4. We may have a stock bubble, but we don't have a real estate bubble.
I've now had to strike the first three items off my list, and I'm getting worried about the fourth.
More and more people are using the B-word about the housing market. A recent analysis by Dean Baker, of the Center for Economic Policy Research, makes a particularly compelling case for a housing bubble. House prices have run well ahead of rents, suggesting that people are now buying houses for speculation rather than merely for shelter. And the explanations one hears for those high prices sound more and more like the rationalizations one heard for Nasdaq 5,000.
If we do have a housing bubble, and it bursts, we'll be looking a lot too Japanese for comfort.

That does not read like a guy who wanted a housing bubble. We have to let Krugman off the hook on this one. Thanks to Dean Baker for sending me this article:{%221%22%3A%22RI%3A5%22} 


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