Krugman on the Fed and "Clap Louder"

Krugman posts today about how in 2005 the Fed were not listening to any negative news relating to securitization.

I'm rather astonished by the sheer magnitude of the groupthink that must have been happening in policy-making circles during the go-go years.

I'm an IT guy by trade, so it's not my job to worry about economics/finance/public policy, but I am an interested observer. There seemed to be an awful lot of flashing lights and alerts out there for quite some time. There was also long time when you could both believe that Roubini was over-the-top yet still be very concerned about the future.

I'm sure that most Fed members were probably not visiting Calculated Risk every day, and I'm not even sure if the blog existed then. But way back in that same year, The Economist came right out and called "the biggest bubble in history", specifically in housing, but it also suggested that we had a Global bubble across all assets, IIRC. This is The Economist, so it's not that you had to be a Bush-hating fringe Lefty to read this.

This whole situation reminds me of the old saw: "Experience is the ability to recognize that you've made this same mistake before."