(I made this post in the weekend news section before I saw this diary, which is obviously where the comment belongs.)

More from Krugman's post:

   So you might be tempted to say that monetary policy has consistently been too loose. After all, haven't low interest rates been encouraging repeated bubbles?

    But as Larry emphasizes, there's a big problem with the claim that monetary policy has been too loose: where's the inflation? Where has the overheated economy been visible?

    So how can you reconcile repeated bubbles with an economy showing no sign of inflationary pressures? Summers's answer is that we may be an economy that needs bubbles just to achieve something near full employment - that in the absence of bubbles the economy has a negative natural rate of interest. And this hasn't just been true since the 2008 financial crisis; it has arguably been true, although perhaps with increasing severity, since the 1980s.

OF COURSE all the growth since Reagan can be associated with bubbles. When wages are suppressed in all but the financial sector almost all discretionary income ends up in the hands of the already well off. Wealth holders seek profitable employment for their wealth and find it in a series of asset bubbles. And this is largely invisible to 'Mainstream Economics' as it wants to 'look through the veil of money' and take a Net Money View, which treats all debts and credits between private domestic sector agents as merely debts owed between agents INSIDE the economy which should be netted out. Nothing to see there. Move on folks. It is unseemly for you to stare at the wealth of the rich. They stole their money fair and square - right before your eyes. You couldn't see it because of the economics they had spent so much of their wealth teaching you - if you did not remain a confused, ignorant wretch.

"It is not necessary to have hope in order to persevere."