Thomas E. Woods, Jr., is the New York Times bestselling author of 11 books, including The Politically Incorrect Guide to American History and Meltdown (on the financial crisis.) A senior fellow of the Ludwig von Mises Institute, Woods has appeared on MSNBC, CNBC, FOX News, FOX Business, C-SPAN, Bloomberg Television, and hundreds of radio programs... (Read More)
I am told that Paul Krugman denied on television last night that the Federal Reserve caused the housing bubble. There is such an embarrassment of riches on this topic that one scarcely knows where to begin.
But for some hard numbers, I recommend a few articles by Bob Murphy: “Greenspan’s Bogus Defense,” “Did the Fed, or Asian Saving, Cause the Housing Bubble?” and “Evidence that the Fed Caused the Housing Boom.”
Here’s my own brief discussion of Krugman, who in 2001 was cheering the Fed’s policy of low interest rates on the grounds that it would give artificial stimulus to housing. (Not a housing bubble, Krugman would no doubt hasten to assure us. Just the precise and perfect amount of stimulus.) I also link to Krugman’s notorious call for a housing bubble, which he later tried to explain away; I actually think the quotations in which he urges low interest rates in order to stimulate housing are even more damning, because it’s more difficult to claim they’re being misinterpreted.