Suppose you had spent the last five years actually believing what you read from the usual suspects the WSJ opinion pages, National Review, right-wing economists, etc.. Here s what would have happened:
In 2006 you would have believed that there was no housing bubble.
In 2007 you would have believed that the troubles of subprime couldn t possibly spread to the financial system as a whole.
In 2008 you would have believed that we weren t in a recession and that the failure of Lehman was unlikely to have bad consequences for the real economy.
In 2009 you would have believed that high inflation was just around the corner.
At the beginning of 2010 you would have believed that sky-high interest rates were just around the corner.
Now, we all make mistakes and get things wrong although it s striking how often the trolls on this blog feel the need to accuse yours truly of saying things I didn t. But after this string of errors, wouldn t you at least begin to suspect that the people you find congenial have a fundamentally wrong-headed view of how the world works?
From Who You Gonna Believe? - NYTimes.com
I’m amazed that Krugman has been right about almost everything almost all of the time and hasn’t gotten the respect he deserves. The forward to 2008’s The Return of Depression Economics is amazingly prescient.