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Orrex

(63,216 posts) Mon Jun 25, 2012, 02:43 PM Jun 2012

Need help with a refutation

It's a pic circulating on FB. I can't link to it at the moment (I'm at work), but it's a photo of Krugman with the following quote:

"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."--Paul Krugman, 2002

I don't give a shit what some anonymous asshole on Facebook thinks, but this is exactly the kind of soundbyte that my $25K-per-annum friends love to trot out in defense of tax cuts for the super-rich.

Can anyone provide context for that quote? Is it legit? Is it part of a larger point and selectively exerpted here to change its intent?

I'd research it myself, but I have only limited intertubes access at the office, so any info you can provide will be very helpful.

Thanks!

2 replies

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Need help with a refutation (Original Post) Orrex Jun 2012 OP

Here Is A Link To The Whole Column, Sir The Magistrate Jun 2012 #1

Thanks! Orrex Jun 2012 #2

The Magistrate

(95,248 posts)

1. Here Is A Link To The Whole Column, Sir

Reply to Orrex (Original post)

Mon Jun 25, 2012, 02:53 PM

Jun 2012

http://www.nytimes.com/2002/08/02/opinion/dubya-s-double-dip.html

Dubya's Double Dip?

If the story of the current U.S. economy were made into a movie, it would look something like ''55 Days at Peking.'' A ragtag group of ordinary people -- America's consumers -- is besieged by a rampaging horde, the forces of recession. To everyone's surprise, they have held their ground.

But they can't hold out forever. Will the rescue force -- resurgent business investment -- get there in time?

But predictions of an imminent recovery in business investment keep turning out to be premature. Most businesses are in no hurry to go on another spending spree. And those that might have started to invest again have been deterred by sliding stock prices, widening bond spreads and revelations about corporate scandal.

The basic point is that the recession of 2001 wasn't a typical postwar slump, brought on when an inflation-fighting Fed raises interest rates and easily ended by a snapback in housing and consumer spending when the Fed brings rates back down again. This was a prewar-style recession, a morning after brought on by irrational exuberance. 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.

Orrex

(63,216 posts)

2. Thanks!

Reply to The Magistrate (Reply #1)

Mon Jun 25, 2012, 11:42 PM

Jun 2012

Internet access is somewhat restricted at my office, which is fine with me, but occasionally I come upon an article or post that really makes me want to respond, but I'm hampered by my inability to get to the source material easily.

Thanks for the link!

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