Krugman DID Identify the Housing Bubble in 2005

OK after browsing through his archives circa 2005, I must retract my earlier criticism of Paul Krugman. For sure, Krugman did identify the housing bubble before many other analysts (including me), and so he's not bluffing when he says nowadays that he called it. Also, people who comment at his site should be a little more nuanced instead of saying things like, "None of you Keynesian wizards saw this coming, so why should we listen to you now? Only Peter Schiff and the Austrians predicted the crash."

Last apology: I also was suspicious in the previous post that Krugman didn't point to any of his own articles (for proof that he had called the bubble), but instead linked to a 2005 article which in turn referred to Krugman's 2001 articles--when those articles came 95% close to recommending that Greenspan create a housing bubble!! In retrospect, I think Krugman probably did that to show, "Hey, I know I was calling this back in 2005, and here are people attacking me for saying so--therefore I clearly was making loud noises about the bubble!" (Also, it's possible there is a typo in that article critical of Krugman; I could never find his article that they were talking about.)...

So yes, Krugman did identify that there was a housing bubble in progress in 2005, but it was akin to a doctor thinking a cancer patient was reacting very severely to aggressive chemotherapy. The Fed-induced housing bubble wasn't poison, as far as Krugman was concerned, just medicine that was having unfortunate negative consequences. His recommendation wasn't for the government to stop tinkering and fueling new booms, but rather to search for something else to inflate.
Read the rest... Bob Murphy from his blog (scroll down)

-flynn