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In Paul Krugman’s Upper West Side Bubble, All Is Well

After Richard Nixon’s landslide victory over leftist George McGovern in 1972, New York Times movie critic Pauline Kael supposedly said: “How could Nixon have won? Nobody I know voted for him.”

This weekend, current New York Times columnist Paul Krugman outdid Kael in the utterly-clueless-liberal-bubble department.

On CNN Sunday, Krugman said that the big problem with the economy today is that media are unfairly writing negative stories about it. “I think that what’s happening now is that there’s been a kind of a negativity bias in coverage,” he said.

Then Krugman went full Kael, telling CNN’s Brian Stelter, “if you ask people, ‘How are you doing?’ they are pretty — they’re pretty upbeat … if you ask people, ‘How’s your financial situation?’ it’s pretty favorable.”

Really? What people?

The folks who attend dinner parties with Krugman in New York’s Upper West Side, for whom inflation is a petty annoyance, if they notice it at all? Are those the people Krugman’s been talking to?

If he talked to families struggling to make ends meet, or find baby formula, or pay their rent, he’d get a far different response than “pretty upbeat.” Because out here in the real world, they’ve watched things go from bad to worse.

If Krugman can’t bring himself to talk to the unwashed masses, at least he could look at recent poll data.


See Also: Hold On To Your Wallets — ‘Wrong Way’ Krugman Says Inflation Will Soon Ease


The IBD/TIPP Economic Optimism Index is currently at 38.5 – anything under 50 signals pessimism. It’s been in negative territory for 11 months (which was just shortly after Biden signed his $2 trillion “American Rescue Plan” into law).

TIPP’s Financial Stress Index, meanwhile, has climbed from 61 in Biden’s first full month in office to 69.3. (A reading over 50 equals more financial stress.) Since TIPP started this index, it’s been this high only twice before: during the 2007-2008 financial crisis, and the first month of the COVID lockdowns.

Other TIPP polls have found that fewer than one in five say their wages have kept pace with inflation while more than one in five say they are skipping meals or using food banks to deal with higher food costs. And several polls show that a majority of the public believes we are in a recession right now.

Meanwhile, the NFIB’s Small Business Optimism index has been falling for the past year, and the Conference Board’s Leading Economic Index has declined for the past two months.

What exactly is “pretty favorable” about any of this?

The public’s gloom has nothing to do with how the press is covering the economy. We’d be willing to bet, in fact, that an analysis would show the media’s reporting on the economy been more positive than warranted (to protect Biden), just as it is always more negative than warranted when a Republican is in the White House.

The only thing that Krugman and other leftists can point to as evidence that the economy is just hunky dory is the unemployment number, which has held at 3.6% for the past four months.

But as we pointed out in this space recently, this is a deception. The unemployment rate is that low only because more than 4 million people have dropped out of the labor market since January 2020. If they were still looking for work – and thus counted as unemployed – the unemployment rate today would be 5.5%.

What’s more, despite all of Krugman’s bragging about job creation, we still haven’t regained all the jobs lost during the COVID economic lockdowns. So, in reality, there have been zero new jobs created under Biden.

Even this mediocre jobs picture is darkening, with weekly initial unemployment claims trending upward since April. Newsweek reports that at least one economist, Peter Schiff, is predicting “mass layoffs” as companies come to grips with the recession.

He recently tweeted that “The Dems claim that we’re not in a recession because unemployment is still low. But weekly jobless claims continue to rise and mass layoffs are coming. In the meantime, even though most workers still have their jobs, they’ve all suffered huge pay cuts as a result of inflation.”

We wonder how Krugman and his cronies in the leftist bubble will try to explain that away.

— Written by the I&I Editorial Board

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The Issues and Insights Editorial Board has decades of experience in journalism, commentary and public policy.

17 comments

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  • Krugman wrote some interesting economics columns, before becoming a shrill propagandist. On the recent TV video clip, Krugman seemed like a vacant ghost, not all there mentally. NYC is a crime-infested mess with lockdowns, so Krugman is no doubt sensibly not straying too far from home. Nonetheless, you would expect a wider world view and a bit more common sense from someone of his stature. Maybe medications and disease are affecting him.

    Job numbers will likely follow GDP numbers down, like a lagging indicator. A bit of cause and effect, weakening GDP leading to fewer jobs. With the Fed making conditions more unfavorable to investment, the danger is that GDP and jobs could spiral down in parallel out of control because of bad Fed timing. Instead of raising interest rates when the economy was stronger and could better withstand it, Yellen and the Fed clung to the Big Lie, the false “transitory inflation” narrative, and did nothing. Then when the economy weakened, the Fed became GDP deniers and took steps to further sink a declining economy. Timing is important in economics, and the Fed is behind the curve, doing the wrong things at the wrong times. We really need better mechanisms for setting interest rates, something rooted in reality like bills of trade, not a gang arbitrarily pulling interest rate numbers out of thin air.

  • Surely this is quintessentially the reason why America is so divided ? Each group exists in a smug bubble, of “their truth”.It was seized on and exploited by this aspirant authoritarian regime, to further entrench division. As potent now as it was to Phillip II to destroy the Jewish nation.

    • Paul Krugman has no idea how many people are suffering because of the inflation. People can’t afford to put food on the table. This recession is just an inconvenience to Krugman.

  • Paul “Enron” Krugman has been wrong so long, it’s hard to recall the last time he got anything right.

  • “We wonder how Krugman and his cronies in the leftist bubble will try to explain that away.”

    The usual excuses from the UK Labour Party when they get hammered are “we aren’t far enough to the Left” or “the electorate is too stupid to appreciate how brilliant we are”.

  • Something to think about: Richard W. Rahn commentary in Washington Times (excerpt below):

    https://www.washingtontimes.com/news/2022/aug/1/entire-biden-economic-team-needs-to-be-replaced/

    many of the better-known economists seem to have forgotten the fundamentals, which is causing them to say idiotic or “woke” things and, worse yet, convince political airheads…Why are economists “accorded such respect and influence given the fact that they claim knowledge over the unknowable, promote theories that are untestable, and make forecasts for which they are never held accountable? Isn’t that the definition of a witch doctor?”…The administration has just come up with a new massive spending bill that is supposed to reduce inflation, global warming and tax avoidance, among many other things. It also has huge tax increases in it. They are trying to sell this unholy glob under the false flag as an anti-inflation measure…In most professions, the incompetents are quickly weeded out — their planes don’t fly and their computers don’t work. In economics, incompetents with good PR skills can go on for years without ever being called to account. Unfortunately, we have also learned (all too late) that the government medical community also is loaded with con-people (e.g., Dr. Anthony Fauci and Dr. Deborah Birx).

    • If physics were economics, we’d still be arguing about why the apple didn’t go upwards or sideways when it broke off of the tree.

      There is one economic theory that is completely predictable: communism. Death and poverty everywhere it’s been tried.

  • I still remember Krugman said the Stock Market was going to tank if Trump were elected in 2016. Let’s just say someone withdrew all of their money from the Stock Market on Nov 1, 2016 (A few days before the election). The Dow Jones that day was 18,142. The Dow Jones today is 32,587. Just think how much wealth everyone would have lost if we listened to this renowned economist! LOL

  • For twenty years Krugman has told us to spend, spend, spend and that inflation was just a right wing bogeyman.
    Now that it’s here, he’s got to downplay it anyway he can.

  • The MSM always present Krugman as a “Nobel Laureate in Economics”. Of course, that Nobel Prize is awarded by Norwegian socialists to people who agree with Norwegian socialists.

  • It’s odd the fame and following Krugman has considering he has a record of being uniformly wrong on every economic prediction for the last several decades.

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