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Politics : View from the Center and Left

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To: bentway who wrote (178392)	1/1/2012 10:19:16 AM
From: Steve Lokness	Read Replies (1) of 543068

How in the world do you see krugmans piece NOT urging a housing bubble? ...............Krugmans right call here would have been to say ..." Greenspan should be very careful here to NOT create a housing bubble. By pushing interest rates unnaturally low, Greenspan has the potential to create another bubble and all the downside and pain that will bring." ....He didn't say that he said the opposite. "it [fed] needs soaring household spending". In other words krugman is urging an already heavily indebted public to go spend a lot. soaring!! The only way they can do this is through more long term debt. That "soaring" that Krugman wanted AND GOT led to an over indebted banking system and public. Krugman here is trying to rewrite history, trying to suggest that his words didn't mean what he said. To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble.

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