Bubble? What bubble?

8 Meaningful Quotes from Paul Krugman #8

In 2005, the right, and far too many on the left, denied the existence of a housing bubble. I'm sure a great deal of this was wishful thinking. They didn't want it to be true. Perhaps, if the people in charge had been paying attention to Krugman, a soft landing would have been possible. Instead we have an economic meltdown.

That Hissing a Sound, a column published by Krugman in August of 2005 was scarily accurate. Unfortunately. When your government prizes ideology over facts, it's hard to deal with a crisis.

(T)he U.S. economy has become deeply dependent on the housing bubble. The economic recovery since 2001 has been disappointing in many ways, but it wouldn't have happened at all without soaring spending on residential construction, plus a surge in consumer spending largely based on mortgage refinancing. Did I mention that the personal savings rate has fallen to zero?

Now we're starting to hear a hissing sound, as the air begins to leak out of the bubble. And everyone ... should be worried.