“Hateful, blasphemous, prejudiced, vulgar, rude, or ignorant remarks are the music of a free society, and the relentless patter of idiots is how we know we’re in one.” -Dan Gilbert

So .. a year outside your stated time period Krugman quotes someone else saying a housing bubble is the way to go. Immediately after your cite, Krugman writes “Judging by Mr. Greenspan's remarkably cheerful recent testimony, he still thinks he can pull that off.”, and later that “Mr. Greenspan needs one [a recovery spurred by a burst of consumer spending] to avoid awkward questions about his own role in creating the stock market bubble.” Scarcely pro-bubble sentiment, that. Rather undermines Mr Williamson's complaint that Kruman didn't remind us that bubbles are bad things. As if that needed repeating ….

The whole complaint reminds me of The Onion. Only that's satire.

As a historical note, though, Krugman was wrong in that column. Precisely what he was skeptical about (Greenspan's optimism, resurgent business spending) was vindicated, and we didn't have the 'double-dip' recession about which he makes much stronger statements: “As I've repeatedly said in this column, the arguments of the double-dippers made a lot of sense. And their story now looks more plausible than ever.”

This column is mediocre punditry. Though not for the reasons you seem to subscribe to.

http://www.nytimes.com/2002/08/02/opinion/dubya...

Krugman: “To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble.”

It's incredible that the man who wrote that paragraph is still treated as a pundit who is worth listening to on macroeconomics. (As opposed to trade issues, for which he won the Nobel and actually does know quite a bit about).

Can you point to the Krugman columns that make this case? I'm looking at the history according to the unofficial archive. So far I've got “What do you get when you cross a godfather with a Federal Reserve chairman? Someone who makes you an offer you can't understand.” (01/21/2001), “With one exception, the economic data don't support [the administration's and the punditry's] gloomy views.” (02/21/2001) and “This slowdown may turn out to be nasty and brutish; but my guess is that it will also turn out to be short. ” (2/25/2001) in making an argument for a cautious approach to the 'mild' recession. He does argue (twice that I can find) that Greenspan should have cut rates faster, but not deeper, and mostly for psychological reasons.

In fact what's striking about Krugman's columns from this period is the thoroughgoing moneterist orthodoxy. “The big difference is that the Fed has a powerful conventional tool at its disposal; since U.S. interest rates remain well above zero, there is still room for substantial cuts.”(3/21/2001), “Not that I really think it's [tax cut or Lieberman's $300 rebate] necessary: if I had to choose, I'd take another percentage point off the Fed funds rate any day.” (3/28/2001) and his profound skepticism about the arguments being made by the Bush administration in support of their tax cuts.

He also states (5/21/2001) “For the big lesson of the late 1990's was that speculative bubbles spring eternal. The signs of irrational exuberance, not to mention sheer silliness, were there for all to see; yet the bubble expanded and then burst all the same. Surely there will be other bubbles, and other burstings, in the decades ahead.”

I don't see much gyration or alarmist over-reaction here, except when he's making very pointed complaints about the Bush Tax cuts.

Another hilarious example is Paul Krugman, who gyrates back and forth and overreacts to almost everything. In 2001, he was frantically calling on Greenspan to inflate a housing bubble in order to stamp out a recession that, we now know, was very mild, and probably should have been allowed to run its course without such an aggressive easy-money response from the Fed. But no one remembers this, and Krugman is still peddling his short-sighted alarmism in reaction to every bit of economic news.

In a nutshell the means whereby the author's arrived at their DOW 36000 prediction was riddled with basic math errors, ignorance of what various accounting terms actually meant, and hubris. Rather than taking expected earnings as EITHER historical earning yields on equities OR historical dividends plus expected growth, INSTEAD they added both of these values together, effectively doubling growth and therefore present value.

Bad punditry is bad less because it's predictions aren't born out (we're all wrong at times) but bad because it's just …. bad.

I'd still point your readers to this useful Cowen-Caplan exchange.

Even if we can't have a literal ideas future market, we can at least start with a betting norm. Make these pundits “put up or shut up.”

Do you need proof it would work? Well, people are still talking about the Simon-Ehrlich wager all these years later. The betting norm helps social learning.

The only other familiar alternative is to bring back dueling, but that has negative consequences.

If this is indicative, I have no reason to believe even in cases where shaming pundits is easy that it will have substantial effect.