Everyone wins!

Krugman was stating the obvious. To get growth, someone has to be willing to spend. Businesses were not spending because the consumer was not buying. The government was spending like a drunken sailor, but on activities that have no economic multipliers, so it was not really helping the economy. That leaves the consumer. And they weren’t spending because the Nasdaq bubble had burst and the stock market was sucking. There are ways to get people to spend that do not involve creating bubbles (like spending on infrastructure), but they are not in the power of the Fed to accomplish.

Unfortunately for Murphy, he is unable to read to read a very simple post. As Krugman said about that post (again, it’s linked in Murphy’s piece), ” It wasn’t a piece of policy advocacy, it was just economic analysis.”

Johnny, you keep on making it evident that you have nothing but noise to contribute. And I do not have the time for this.

So, why are you trashing McBride?

(slightly edited by siteowner for veracity)

http://consultingbyrpm.com/blog/2012/05/at-this-point-paul-krugman-is-just-playing-with-us-about-housing.html

McBride lists a number of reasons for believing that things are turning around.
– In 1997, he was worried about the formation of a stock bubble. That did in fact burst in 2000, leading to a mild recession in 2001.
– The Bush Administration, not having any real policy to get the economy growing, collaborated with Alan Greenspan to inflate a housing bubble.
– Thus, from 2001-2009, the situation substantially deteriorated. The personal debt accumulation you complain about, as well as the federal debt you complain about started rising during this period. Clinton lowered the federal debt burden, and slowed the rise in personal debt.
– Under Obama, personal debt has fallen, and the deficit burden (see Fig. 2) is coming down from the horrific level that it rose to under Bush.
– Bill is encouraged that housing, which has been the engine for the economy, is stabilizing. This means construction jobs.
– Bill is also encouraged that jobs, which reached their bottom in 2009, have steadily risen for three years. The US jobs crisis has not been anywhere near as bad as other financial crises.
– Bill called the housing bottom and has been consistently correct. He knows his economics and is willing to put his real name and professional reputation on his predictions.

And you are….?

All social change takes much longer than it should. It took fifty years from Bismarck to Social Security.

Hope Obamacare makes it affordable again for you, but understand why you’d be skeptical.