You remember the columnist I most disrespect. Here is another great take on his work from a blogger - JustOneMinute: Happy Anniversary To Paul Krugman: "a head start on preparations for the second anniversary of Paul Krugman's bold interest forecast. Roll the tape from March 11, 2003, please; his lead:
With war looming, it's time to be prepared. So last week I switched to a fixed-rate mortgage. It means higher monthly payments, but I'm terrified about what will happen to interest rates once financial markets wake up to the implications of skyrocketing budget deficits.
Well. Per the Federal Reserve, I see that mortgage rates were 5.67% on March 7, and 5.61% on March 14, 2003.
Today, despite the war, financial markets continue to slumber - as of March 3, 2005, the Federal Reserve tells me that fixed rate mortgages were at 5.79%. Robert Samuelson puzzled over this a few days back.
Perhaps the Earnest Prof is a bit stronger when forecasting equities? Let's check his stock market call of June 20, 2003; with the S&P 500 closing at 994.7 on June 19, 2003, Krugman wrote this:
The big rise in the stock market is definitely telling us something. Bulls think it says the economy is about to take off. But I think it's a sign that America is still blowing bubbles that a three-year bear market and the biggest corporate scandals in history haven't cured investors of irrational exuberance yet.
Or, to put it another way: it's hard to find any real news to justify the market's leap. Instead, investors seem to be buying stocks because they are rising which is pretty much the definition of a bubble.
As of this writing on March 4, 2005, the S&P is at 1221, up 11 on a good jobs report.
Hmm, did I mention jobs? That calls for a link to Mickey's 'Krugman Gotcha Contest' from the fall of 2003. I appear with a late entry, citing Krugman's Bold Assertion, from July 25,"...
and goes on and on citing Krugman's failed prodictions.