To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. There's no sarcasm there and when an economist of Krugman's notoriety addresses a subject such as the total collapse of the Clinton engineered stock market bubble, sarcasm isn't called for.
what you blithely ignore:
It wasn't one quote. Krugman never saw a rate cut he didn't like.
Go ahead and address the other 7 corroborating quotes fro Krugman…ALL in 2001. His own words bit him in his lying ass.
"Meanwhile, economic policy should encourage other spending to offset the temporary slump in business investment. Low interest rates, which promote spending on housing and other durable goods, are the main answer."
or
But housing, which is highly sensitive to interest rates, could help lead a recovery…. But there has been a peculiar disconnect between Fed policy and the financial variables that affect housing and trade. Housing demand depends on long-term rather than short-term interest rates — and though the Fed has cut short rates from 6.5 to 3.75 percent since the beginning of the year, the 10-year rate is slightly higher than it was on Jan. 1…. Sooner or later, of course, investors will realize that 2001 isn’t 1998. When they do, mortgage rates and the dollar will come way down, and the conditions for a recovery led by housing and exports will be in place.
or
Well, as far as the arithmetic goes, yes, it is possible. Will the Fed cut interest rates enough? Will long-term rates fall enough to get the consumer, get the housing sector there in time? We don’t know” |
