As an unabashed supporter of Democratic Party policies, Paul Krugman has made some enemies in conservative camps. So the right-wing blogosphere was gleeful to discover a 2002 column in which Krugman actually urged the Federal Reserve Bank to “create a housing bubble to replace the Nasdaq bubble.” As near as I can tell, the first to point this out was someone named Patrick who commented on a Reason blog.
Since then, Mark Thornton at the Ludwig Von Mises Institute has uncovered many other examples of Krugman saying things in 2001-2004 that promoted a Fed-led housing boom. “Krugman did cause the housing bubble,” Thornton concludes.
