We’re joking with that headline, of course. No one knows what the economy will do tomorrow, because none can guess what stupid things government will do next. Yet New York Times economics pundit Paul Krugman, who has made a handsome living for decades being wrong, recently predicted economic times may get better, a lot better, under Joe Biden.
Is he right? In the past, the impeccably progressive Krugman’s ideological blinders have prevented him from seeing reality even in his specialty, economics. That’s especially true when it comes to any policy or idea emanating from Republicans, for whom he has a special animus.
Truth is, Krugman has been consistently wrong in most of his predictions, especially about major economic trends. And his errors really ratcheted up after Donald Trump won the presidency in 2016. He Krugman predicted nothing but gloom and doom.
Days after the stunning defeat of Krugman’s favorite Hillary Clinton, the Nobel Prize winner predicted Trump’s win would lead to a global recession “with no end in sight.” That was obviously wrong. He continued to make faulty predictions in 2017 and 2018, guided more by political vitriol and bile than by his own economic training. The more he hated, the worse his forecasts.
But the boom year of 2019, before the pandemic, really told the tale. That year, the economy was clearly roaring, with unemployment sliding to near-record lows for all Americans. Minorities, in particular African-Americans and Hispanics, saw their unemployment rates hit all-time lows, while incomes for those on the bottom rungs of the economic ladder and the middle class grew fastest of all.
The stock market soared as new technologies created innovative products and services, taxes were cut, and excessive regulations were slashed. Economically, it was the best year of the 21st century.
And yet, as columnist David Harsanyi pointed out well before the pandemic, Krugman’s economic prognostications all during this extraordinary year were consistently glum, and wrong.
As a reminder, here are just a few listed by Harsanyi:
- Feb. 11: Paul Krugman expects a global recession this year, warns “we don’t have an effective response.”
- Aug. 1: “Why Was Trumponomics a Flop?”
- Aug. 15: “From Trump Boom to Trump Gloom”
- Sept. 5: “Trumpism Is Bad for Business”
- Oct. 3: “Here Comes the Trump Slump”
- Oct. 24: “The Day the Trump Boom Died”
Oh, and Krugman even predicted that Trump’s impeachment would be “good for the economy.”
The irony is not that Krugman is now optimistic; you just have to look at who’s in the White House and who controls Congress to determine how he feels about the economy. Trump in office: Global Depression. Biden (maybe) in office: Sustained boom. Ditto, Republicans vs. Democrats in Congress.
No, the true irony is that in attacking Trump and the Republicans, Krugman all but admits that the Trump economy was so fundamentally sound before the pandemic that it should bounce back quickly after we’re all vaccinated.
He cites as reasons the explosion of new technologies and the economy’s underlying strength, at least before the 2020 pandemic and the Democrats’ foolish COVID-19 lockdowns kicked the economy’s legs out from under it.
“The private sector doesn’t seem to have been particularly overextended before the pandemic,” Krugman explained. “And while we shouldn’t minimize the hardships faced by millions of families, on average Americans have been saving like crazy, and will emerge from the pandemic with stronger balance sheets than they had before.”
The private sector isn’t “overextended” because business was good. And Americans were “saving like crazy” because they had more money in their pockets than ever before.
The fact is, technology was booming in large part because the stock market likes low taxes and fewer regulations, economy-stimulating conditions created by Trump. His policies helped boost employment, wages and family incomes to new highs.
Are we too harsh on Krugman? Actually, we hope he’s right. We’d like to see Americans return to prosperity, as they did under Trump.
Unfortunately, Biden wants an absurdly expensive New Green Deal, plans to open U.S. borders, supports socialized medicine (a “public option”), advocates “free” college tuition and debt forgiveness, seeks a job-killing $15 an hour national minimum wage, and dreams of jacking taxes sharply higher and re-regulating the economy.
These are not growth policies. They are policies that if enacted will lead, inevitably, to stagnation, not to Krugman’s delusional “boom.”
If Biden takes office as the next president, he’d have a much better chance of having a “Biden Boom” if he did nothing but secretly called the financially and economically savvy Trump every morning and asked him what to do. Fat chance.
— Written by the I&I Editorial Board