Oct 13, 2008
Nobel Prize-Winner, Paul Krugman: An Economic Prophet
Paul Krugman, much-loved liberal blogger, economist at Princeton, columnist for The New York Times, author, and now, Nobel prize-winner for economics, clear-sightedly predicted our current market meltdown. Writing in mid-2005,
"The U.S. economy is currently suffering from twin imbalances. On one side, domestic spending is swollen by the housing bubble, which has led both to a huge surge in construction and to high consumer spending, as people extract equity from their homes. On the other side, we have a huge trade deficit, which we cover by selling bonds to foreigners. As I like to say, these days Americans make a living by selling each other houses, paid for with money borrowed from China.
One way or another, the economy will eventually eliminate both imbalances."
Congratulations to Dr. Krugman and would that we had all listened to him and acted on his warnings sooner.