I & I Editorial BoardFor many years, we’ve marveled at the fact that Moody’s Analytics keeps paying Mark Zandi to be its chief economist. While he’s good at parroting Democratic talking points, anyone who followed his economic predictions over the past decades would be in the poorhouse.
Let’s take just one example: Inflation.
Presumably, this is something that economists should be able to understand and reliably forecast.
When Joe Biden was pushing his massive “Build Back Better” plan, even we non-economists knew it would spur inflation by pumping almost $2 trillion in borrowed money into an economy that had already recovered from the COVID lockdowns.
We noted in May 2021, for example, that “we may be on the verge of an inflation surge that could take down our financial markets and cut deeply into average Americans’ standard of living.”
But not Moody’s Analytics Chief Economist Mark Zandi. He got it completely wrong.
In December 2021, he was still claiming that Build Back Better would “not have a meaningful impact on inflation” and that it “likely will reduce the inflation that lower-income and even lower-middle-income households will face.”
It wasn’t until the next year that he – sort of – admitted he was wrong, saying it was “irksome” that “economists, including me, were … thinking that the high inflation would quickly recede,” and then blaming workers for staying at home during COVID, the war in Ukraine, and the Fed. Not mentioned once: Biden’s spending spree.
Now, because there’s a Republican in the White House, Zandi is wringing his hands about inflation, even as it comes in lower month after month than during the Biden years.
Zandi told CNBC this week that “I don’t get any sense that inflation is decelerating. It feels like it’s uncomfortably and persistently high.”
He is hardly the only Keynesian economist who can’t see straight when it comes to inflation.
In 2024, 13 Nobel Prize-winning economists – each of whom had said that Bidenomics would not fuel inflation – signed onto a statement warning that Trump “will reignite inflation with his fiscally irresponsible budgets.”
That led our friends at Unleash Prosperity to say that these economists “should send back their Nobels and Ph.D.s, and admit that when it comes to the real world, they have no idea what they are talking about.”
But Zandi has been consistently and wildly wrong about far more than inflation. In 2016, for example, he predicted that a Trump presidency would cause the economy to spiral into a recession with “a lot of lost jobs, higher unemployment, higher interest rates, lower stock prices.”
In November 2020, we noted other Zandi failures about Trump’s first term, including the rapid recovery from the COVID lockdowns under Trump:
Zandi predicted that in Trump’s first term, the unemployment rate would be 5.7% in 2019, and climbing. Actual result: Unemployment was 3.5% at the end of 2019, and falling.
He said there’d be 146 million jobs in 2019. Actual result: 152 million.
Zandi said the economy would eke out just 2.8% real GDP growth from 2016 through 2019. Actual number: 7.7%.
He said the S&P 500 would drop 18% in Trump’s first three years. It climbed 40%.
It’s worth noting that Zandi’s latest forecast is already way off when it comes to jobs. In his September 2020 report, he said the unemployment rate for this year would be 9.1%, falling only to 8.3% for 2021.
The unemployment rate is already down to 6.9%.
We’re not surprised that the mainstream media keep turning to liberal economists like Zandi for talking points on the economy, because they know that these “experts” will reliably bash Republicans and cheerlead for Democrats.
But what does it say about Moody’s Analytics that it keeps paying Zandi to be wrong all the time?
— Written by the I&I Editorial Board
Unleash Prosperity
I&I writes: “In 2024, 13 Nobel Prize-winning economists – each of whom had said that Bidenomics would not fuel inflation – signed onto a statement warning that Trump “will reignite inflation with his fiscally irresponsible budgets.”
I believe, also, 50 intelligence “experts” thought Trump was guilty of Russian Collusion.
Most medical “experts” said the COVID “vax” was harmless and effective. Moreover the doctor “experts and school “experts” saw nothing wrong with Zoom education, mask wearing or social distancing.
The “experts” of the FBI never told us that Hunter’s laptop was real; as a matter of fact they denied it. (One of the few “non-expert” voices in the wilderness was the NYPost’s Miranda Devine).
What do all these “experts” have in common: Trump-derangement-syndrome, they despised Trump so much that political Democratic talking points took the place of analytical objectivity.
Wonders of wonders and as additional evidence as to their true-blue conclusions all this “expert” commentary had the political bias of Biden’s Administration.
Conclusion: When you see newspaper fodder that all the “experts” agree look at the conclusion with suspicion and treat it like a red traffic light.
Luckily for economists, they are never held accountable for their many wrong calls. How this pseudoscience continues to exist is beyond me. Every Adam Smith quoting, federally funded and tenured college economics professor who argues for “free trade” and “competition” should be fired on the spot.
The big three. Krugman, Zandi and Dean Baker have been as wrong as two left shoes.
These so called experts are blinded by their ideology. They have made fools of themselves.
Thomas Sowell says those who make forecasts are rarely held accountable for them, and that “the left” often emphasizes desirable outcomes over the “complex stories” of economic reality.
In a sane world, Dr. Sowell would be recognized as the greatest living and most honest, brilliant economist in our lifetime.