‘The war on inflation is over,” wrote Paul (Nobel Prize-Winning-Economist) Krugman last week in a post on X. “We won, at very little cost.” The only thing missing was a giant “Mission Accomplished” banner.
But like the unfinished Iraq war that George W. Bush bragged about from the deck of the USS Abraham Lincoln, the inflation battle is far from over. Krugman’s reputation as an economist, on the other hand, should be put in a body bag and shipped to Sweden, along with his Nobel Prize money.
Krugman was mocked for his claim about inflation, and for good reason. To show how we’d allegedly won the war, he had to strip out food, energy, shelter, and used cars. In other words – most of the stuff that people spend money on day to day.
When you do that, the remaining basket of goods went up by just 2.8% year-over-year this September, down from a 6.7% hike the year before.
To be fair to Krugman, this is an index the Bureau of Labor Statistics does track. But Krugman was still being dishonest because he conveniently left out the fact that in the 20 years before Biden, this measure of inflation averaged just 1.6%.
Of course, Krugman could have gone further. He could have counted only those categories that have seen price drops in the past year. The cost of “utility (piped) gas service,” for example, was down almost 20% year-over-year in September. Airfares dropped 13%. Egg prices fell 14.5%.
Heck, he could have used that to warn about deflation dangers ahead.
Of course, even with these recent drops, the cost for “utility (piped) gas service” is still 21% higher than it was when Biden took office and “rescued” the economy. Airfares are up 25%. Eggs are 21% more expensive.
What’s more, there are signs that inflation is accelerating. The overall rate has been climbing again after falling to 3% in June.
For Krugman to say that we won the war on inflation “at little cost” is also an insult to families struggling to make ends meet while paying 20% more for groceries, 53% more for gasoline, 26% more for electricity, 25% more for used cars, 32% more for auto insurance, etc., etc., than when Biden was inaugurated, according to our polling partner TIPP.
No one should be surprised at Krugman’s latest embarrassment. He has been consistently and wildly wrong about inflation for years. Throughout 2021, he told readers that inflation was nothing to worry about. He started early, reassuring the public in January of that year that “the Fed can easily contain any pickup in inflation.”
He extended his losing streak in 2022, such as when he said in April of that year that “inflation will probably fall significantly over the next few months.” It went up the next two months, reaching a peak of 9.1% in June, and was still above 6% by January of this year. It didn’t reach 3% until this June and then started climbing again.
Why has Krugman been so wrong? Simple. He loathes Republicans.
Krugman’s blind hatred of Republicans led him to make a multitude of dumb predictions about the economy under President Donald Trump. He kicked off his campaign right after Trump’s November 2016 election, declaring then that “we are very probably looking at a global recession, with no end in sight.”
What followed was four years of the-sky-is-falling alarms, such as “Why Was Trumponomics a Flop?” and “From Trump Boom to Trump Gloom” and “Here Comes the Trump Slump.” (All those appeared before the wrongheaded COVID lockdowns knocked the legs out from what was, in fact, a strong economic boom under Trump.)
In the past three years, Krugman has continued to gaslight the public, but in the opposite direction, insisting despite all evidence to the contrary that everything is peachy.
Just a few weeks ago, Krugman declared that “the big economic question of the moment is: What went right? How did Goldilocks come to the U.S. economy?”
Then the IBD/TIPP Economic Optimism Index plunged to 36.3 – a 12-year low, while its Financial Stress Index, which was in the low 30s under Trump, is 68.7 today and climbing.
“The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel” says that laureates are chosen for having made “outstanding contributions in economics.”
Krugman might have done solid economic work at one point in his career. But today he’s nothing more than a partisan pugilist who is tarnishing the Nobel name.
The prize committee should demand its $1.4 million in prize money back.
— Written by the I&I Editorial Board