Some HITS from Dr. Krugman

A couple of items from Dr. Krugman's blog -- follow link to original
-----------------------------------------------------------------------

Bubble Memories

Hahahaheehee! The Fed transcripts from 2006 show a lot of laughter and an incredible amount of complacency, with people mainly worried about inflation rather than the coming recession.

Brad DeLong digs up a contemporaneous column of mine in which I knew better; here’s more from Mark Thoma.

In truth, I did not foresee the scale of the catastrophe; I was thinking mainly of the direct impact of a housing bust on investment spending, with only a nod to possible effects on consumer demand, and no sense at all of how fragile the financial system was. But I was a lot closer to understanding the real risks than, apparently, anyone at the Fed.

Two puzzling things: first, the housing bubble was the clearest thing I’ve ever seen in my professional life. How could they ignore even the possibility of a severe bust?

Second, some of the same people you read in these transcripts dismissing risks to the real economy and worrying wrongly about inflation are still making policy pronouncements, in which they … dismiss risks to the real economy and worry wrongly about inflation.
---------------------

Untruths, Wholly Untrue, And Nothing But Untruths

I was deeply radicalized by the 2000 election. At first I couldn’t believe that then-candidate George W. Bush was saying so many clearly, provably false things; then I couldn’t believe that nobody in the news media was willing to point out the lies. (At the time, the Times actually told me that I couldn’t use the l-word either). That was when I formulated my “views differ on shape of planet” motto.

Now, however, Mitt Romney seems determined to rehabilitate Bush’s reputation, by running a campaign so dishonest that it makes Bush look like a model of truth-telling.

I mean, is there anything at all in Romney’s stump speech that’s true? It’s all based on attacking Obama for apologizing for America, which he didn’t, on making deep cuts in defense, which he also didn’t, and on being a radical redistributionist who wants equality of outcomes, which he isn’t. When the issue turns to jobs, Romney makes false assertions both about Obama’s record and about his own. I can’t find a single true assertion anywhere.

And he keeps finding new frontiers of falsehood. The good people at CBPP find him asserting, with regard to programs aiding low-income Americans, that

What unfortunately happens is with all the multiplicity of federal programs, you have massive overhead, with government bureaucrats in Washington administering all these programs, very little of the money that’s actually needed by those that really need help, those that can’t care for themselves, actually reaches them.

which is utterly, totally untrue. Administrative costs are actually quite small, and between 91 and 99 percent of spending, depending on the program, does in fact go to beneficiaries.

At this rate, Romney will soon start lying about his own name. Oh, wait.