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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region Forums2005: "there is little reason to fear a catastrophic collapse in home prices"
This 2005 masterpiece of RW thought is worth dragging from the closet. (The smug style while being so very wrong reminds us that mockery does not equal rebuttal)
That Hissing Sound Is Krugman
Posted on August 8, 2005 by John Hinderaker
It must be depressing to be Paul Krugman. No matter how well the economy performs, Krugmans bitter vendetta against the Bush administration requires him to hunt for the black lining in a sky full of silvery clouds. With the economy now booming, what can Krugman possibly have to complain about? In todays column, titled That Hissing Sound, Krugman says there is a housing bubble, and its about to burst:
Well, if we believed anything Krugman writes, wed be worried all the time...
"Meanwhile, the U.S. economy has become deeply dependent on the housing bubble. The economic recovery since 2001 has been disappointing in many ways, but it wouldnt have happened at all without soaring spending on residential construction, plus a surge in consumer spending largely based on mortgage refinancing. Did I mention that the personal savings rate has fallen to zero? Now were starting to hear a hissing sound, as the air begins to leak out of the bubble. And everyone not just those who own Zoned Zone real estate should be worried."
...there is little reason to fear a catastrophic collapse in home prices. Krugman will have to come up with something much better, I think, to cause many others to share his pessimism.
http://www.powerlineblog.com/archives/2005/08/011131.php
http://www.nytimes.com/2005/08/08/opinion/08krugman.html
ChairmanAgnostic
(28,017 posts)Systematic Chaos
(8,601 posts)I think we need about 1,000 DUers to rub that blog entry in his worthless face.
izquierdista
(11,689 posts)Now if Anonymous could redirect his entire blog site to this one gem of his wit, that might take the hot air out of his balloon.
surfdog
(624 posts)He's the first idiot I've ever heard claim that a depression could involve positive GDP and positive job numbers
What a bitter bitter man
dawg
(10,610 posts)As for positive GDP in a depression, see 1934-1937:
PA Democrat
(13,225 posts)like Krugman did.
http://crooksandliars.com/john-amato/new-study-says-paul-krugman-top-prognos
The top prognosticators led by New York Times columnist Paul Krugman scored above five points and were labeled Good, while those scoring between zero and five were Bad. Anyone scoring less than zero (which was possible because prognosticators lost points for inaccurate predictions) were put into The Ugly category. Syndicated columnist Cal Thomas came up short and scored the lowest of the 26...read on
barbtries
(28,702 posts)never heard of him. wonder if he's ever written a mea culpa.
muriel_volestrangler
(101,154 posts)see http://en.wikipedia.org/wiki/Power_Line . Back in 2005, it was being held up by the RW as the future of comment.
barbtries
(28,702 posts)full of crap apparently.
jtuck004
(15,882 posts)Per the Bernanke, in the same year.
He doesn't depend on a blog, though, because we are STILL paying him $180K a year or thereabouts for that wisdom.
SixthSense
(829 posts)same month and year too, and same BS
here it is:
http://www.mrc.org/bmi/commentary/2005/Commentary_The_Media_Say_the_Economy_Is_Horrible_So_It_Must_Be_True.html
almost as if they were reading off the same list of orders, no?
tyne
(1,248 posts)Rachel and Ed.
cthulu2016
(10,960 posts)which is widely read.
http://krugman.blogs.nytimes.com/?8dpc
FarLeftFist
(6,161 posts)that the bubble popped within 18 months of Hinderaker's article, making him look even dumber.
cyglet
(529 posts)"Housing prices will never go down" (the more moderate version of this statement).
That's all I heard from people at the time...and my logic said "no way, the prices aren't even tied to peoples' incomes."
That's without the massive mortgage fraud.
dkf
(37,305 posts)I don't know why people bought at bubble prices. Crazy.
CoffeeCat
(24,411 posts)...didn't suspect that their housing values would deflate and the housing market would implode. It was nearly
unheard of--to suggest that your housing value would not increase--or at least stay the same.
The vast majority counted on housing values improving--as they always had.
It didn't help that Republicans and their mouthpieces on right-wing radio and on Fox News were all
touting never-ending prosperity--and verbally sucker punching anyone who dared to suggest that
the Bush prosperity wasn't real.
dkf
(37,305 posts)This was especially evident to me when I started seeing advertisements for pick a payment loans. I thought the world was going crazy to be using those.
CoffeeCat
(24,411 posts)...and I felt totally alone. I felt as if I knew that there was a bomb headed toward our country--and
that I was the only one who knew about it. As I'm sure you remember--there was hardly ANYONE
who was discussing this. The prevalent attitude was--Happy Days Are Here Again and we were all
supposed to go shopping and spend our money.
I remember six years ago, when we were shopping for a home. We drove around, looking at the signs
in front of the 400,000k houses "Get in this house for $900 a month!". That alarmed me and my husband
and I discussed how this was not sustainable. Also, the banker who tried to sell us our mortgage tried
to convince me to roll my 50k student loan into the mortgage. That would have extrapolated my student
loan out to another 30 years. That was her answer to my concern about wanting to buy less house because
we were paying $1,000 monthly in student loan. She wanted me to be irresponsible, I guess. Also, the
woman who finally did our financing could not believe that we wanted a conventional, fixed-rate mortgage.
She treated us like we were ignorant fools for not getting an ARM or an interest-only loan or as she said, "taking
advantage of these modern finance opportunities" that would drastically lower our monthly payment.
When we insisted on the conventional, fixed--she was literally flustered. She had no idea how to process a loan
like that and had to search for paperwork. I'm not kidding. From the bankers, to the realtors to the mortgage
brokers--they were professionals whom we trusted and they were selling this garbage.
I felt the broker's office as white as a sheet. I knew then--in 2005, that the entire thing would come crashing down.
I didn't even get how bad it was. My main concern was how people were spending with credit cards and also
using their homes as ATMs. I felt that this behavior wasn't sustainable and that the cards would soon be maxxed, which
would drastically decrease consumer spending and cause aggregate demand for everything to decrease. The
housing situation seemed to be just one more thing to be concerned about.
Now we know--it was a huge bubble. I saw it--somewhat. You definitely saw it. I get irritated when people act
as if the bankers are just silly idiots who accidentally destroyed the housing market. They knew damn well that
all of those mortgages and the financing--were bunk and would not pass the test of time. They NEEDED those
mortgages to create bundles of mortgage-backed securities that were sold on the secondary markets--and made
them trillions. Those mortgages were their golden ticket. It was all orchestrated and they obviously worked
it out with our politicians--that bailouts would happen.
I wonder what they're planning now?
ieoeja
(9,748 posts)My (now ex-)wife and I gave each other a weird look before I replied, "I can afford $0 and up!"
The real estate agent found our least-expensive-house-that-suits-us attitude disturbing. FYI: we (now I) ended up buying a $107,000 home in 1991. And like you we took out the 30 year fixed which I refinanced down a couple of times as interest rates decreased and will be paying off in a month or two.
CoffeeCat
(24,411 posts)...belittled and scoffed at anyone who DARED to suggest that the prosperous Bush years were a farce.
Does anyone remember the 2006 debate between Art Laffer (Reagan's supply-side economic advisor) and Peter
Schiff. Schiff is a Republican and he tried to tell Laffer than the whole thing was going to come crashing
down! Laffer treated Schiff like he was crazy and couldn't stop laughing at him. Laffer even bet Schiff
a penny that the housing market and the economy wouldn't crash.
If anything--this pre-crash Republican consternation demonstrates that they allowed the banks to fill
their bubble--because it benefitted them in many ways. It made Bush look good--because it falsely
propped up the economy and created false prosperity. It also helped Bush's and the Republican's
major bank/Wall Street donors--because they were making trillions off of those mortgages. We all
now know that they were packaging those mortgages into derivatives and selling this on the secondary
market.
Loads of politicians, bankers, corporate mucky mucks and other assorted criminals--made SO MUCH money
off of this chicanery.
Anyone who dared to spill the truth---was mocked.
Can you say sociopaths?
dkf
(37,305 posts)The Japanese started buying houses, driving around our communities and offering to pay cash for houses that weren't even on the market. A friend of mine had her house bought up so I saw this first hand.
And then in the 90's all my friends who had bought homes were underwater. A number of them discussed walking away with their bankers. I remember being incredulous at the thought that this could be done with minimal impact on credit ratings or so they were told.
Yup been there, done that.