Next Bubble to Pop?
by Paul Jacob, Contributing Author: There was a great and wondrous moment, a decade and a half ago, when economist Paul Krugman, Nobel Laureate and New York Times’s unregistered shill for the Democratic Party, suggested that what the economy really needed was another housing bubble.
What he wrote, specifically, was this: “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.”
Krugman later reinterpreted that statement in a clever (if not convincingly honest) way. After the subprime loan industry collapsed in 2008, he attributed that bust to financial market malfeasance, not the Fed-inflated bubble we got . . . and that he had previously called for.
Now we are looking at several ready-to-burst bubbles:
The idea has been “to continually lower monthly payments,” says David Stockman, “so people can get behind the wheels of vehicles they can’t really afford.”*
Which bubble does Krugman favor? I don’t have the stomach to check.
But, be certain, as we play pop goes the bubble, he’ll play pop goes the weasel.
This is Common Sense. I’m Paul Jacob.
* Stockman seems to be echoing warnings made by Eric Peters, of Eric Peters Autos.
------------------
Paul Jacobs is author of Common Sense which provides daily commentary about the issues impacting America and about the citizens who are doing something about them. He is also President of the Liberty Initiative Fund (LIFe) as well as Citizens in Charge Foundation. Jacobs is a contributing author on the ARRA News Service.
Tags: Paul Jacob, Common Sense, Next Bubble, to Pop To share or post to your site, click on "Post Link". Please mention / link to the ARRA News Service and "Like" Facebook Page - Thanks!
What he wrote, specifically, was this: “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.”
Krugman later reinterpreted that statement in a clever (if not convincingly honest) way. After the subprime loan industry collapsed in 2008, he attributed that bust to financial market malfeasance, not the Fed-inflated bubble we got . . . and that he had previously called for.
Now we are looking at several ready-to-burst bubbles:
- The student loan debt problem seems scary.
- The sovereign debt problem is undoubtedly more dangerous and far larger, but is perhaps still able to take on more fake money — all the world’s 1s and 0s have to go somewhere!
- So the current bets seem to be on a huge auto loan industry bubble, about to pop.
The idea has been “to continually lower monthly payments,” says David Stockman, “so people can get behind the wheels of vehicles they can’t really afford.”*
Which bubble does Krugman favor? I don’t have the stomach to check.
But, be certain, as we play pop goes the bubble, he’ll play pop goes the weasel.
This is Common Sense. I’m Paul Jacob.
* Stockman seems to be echoing warnings made by Eric Peters, of Eric Peters Autos.
------------------
Paul Jacobs is author of Common Sense which provides daily commentary about the issues impacting America and about the citizens who are doing something about them. He is also President of the Liberty Initiative Fund (LIFe) as well as Citizens in Charge Foundation. Jacobs is a contributing author on the ARRA News Service.
Tags: Paul Jacob, Common Sense, Next Bubble, to Pop To share or post to your site, click on "Post Link". Please mention / link to the ARRA News Service and "Like" Facebook Page - Thanks!
0 Comments:
Post a Comment
<< Home