Bursting Bubble Blues
By Paul Krugman
The New York Times
Here are the five stages of housing grief:TimeSelect subscribers read more here.
1. Housing bubble? What housing bubble? “A national severe price distortion [in housing] seems most unlikely in the United States.” (Alan Greenspan, October 2004)
2. “There’s a little froth in this market,” but “we don’t perceive that there is a national bubble.” (Alan Greenspan, May 2005)
3. Housing is slumping, but “despite what you hear from some of the Eeyores in the analytical community, a recession is not visible on the horizon.” (Richard Fisher, president of the Federal Reserve Bank of Dallas, August 2006)
4. Well, that was a lousy quarter, but “I feel good about the U.S. economy, I really do.” (Henry Paulson, the Treasury secretary, last Friday)
5. Insert expletive here.
We’ve now reached stage 4. Will we move on to stage 5?
Photo credit: Paul Krugman. (The New York Times)
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