Exactly. Not sure how this bit of "gotcha" suddenly popped up in so many places, but it's missing the point. If you read the article, Krugman isn't saying that a housing bubble is a good idea at all. What he's saying, in essence, is that the only way to avoid a recession (again, this was in 2002) was for Greenspan and the Fed to kick off a housing bubble to sustain consumer spending. And, by implication, that that was unlikely to work.

As it happened, he was wrong about that. We did experience a housing bubble (although one driven more by irresponsible bank behavior than by interest rates), and it did keep consumer spending high for the next 4-5 years. And, now that it's popped, we're experiencing the recession that Krugman predicted. He was just off by a few years, and missed one proximate cause.

imo it's only analysis when it's wrong.

I'm not a mises guy; I'm just trying to bring more awareness that economists at large aren't much different from criminal profilers and tarot card readers.

http://www.newyorker.com/reporting/2007/11/12/071112fa_fact_...

http://www.reason.com/news/show/134059.html