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Paul Krugman Is Right About the Economy, and the Polls Are Wrong
Posted on 4/16/24 at 9:35 am
Posted on 4/16/24 at 9:35 am
here's a real side splitter
Paul Krugman Is Right About the Economy, and the Polls Are Wrong
One of the most uncomfortable arguments to make in America is that the people are wrong. It’s especially uncomfortable when the subject is something you experience in a more comfortable, privileged way than most people. And so when liberal economic elites insist the economy, which opinion polls consistently find the public considers terrible, is actually very good, it makes liberal economic elites come off badly.
,
Paul Krugman is one of those dreaded liberal elitists who believes the economy is actually good. So (at a much lower level of confidence and frequency) am I. We have developed a number of explanations for why people believe an economy that The Wall Street Journal recently called “the envy of the world” is so awful.
,
The most generous of these accounts is that people consider higher wages something they earned and higher inflation something that happened to them. But all the explanations involve conceding some level of basic irrationality on the part of the public. And the attempts to make sense of public assessments of the economy seem deeply unconvincing.
,
Biden’s low economic ratings are “not hard to grasp,” argues Robert Kuttner in the left-wing American Prospect, “None of the recent improvements have altered the basic situation of most Americans, in which reliable careers are scarce, college requires the burden of debt, health coverage is more expensive and less reliable, and housing is unaffordable.” The solution, Kuttner argues, is for Biden to implement “radical” economic reforms along the lines of those promised by Bernie Sanders in 2016.
,
Kuttner’s hypothesis fails to explain why Americans were thrilled by economic conditions as recently as 2019, when the same basic features of the economy remained in place. Indeed, it fails to explain why Americans have ever considered the economy to be healthy, given that Bernie-style social democracy has, famously, never been tried in the United States.,
Michael Powell, writing in the Atlantic, flays liberals in general, and Paul Krugman in particular, along lines similar to Kuttner’s:
,
The modern Democratic Party, and liberalism itself, is to a substantial extent a bastion of college-educated, upper-middle-class professionals, people for whom Biden-era inflation is unpleasant but rarely calamitous. Poor, working-class, and lower-middle-class people experience a different reality. They carry the searing memories of the Great Recession and its foreclosure crisis, when millions of American households lost their home. A large number of these Americans worked in person during the dolorous early days of the pandemic, and saw its toll up close. And since 2019, they’ve weathered 20 percent inflation and now rising interest rates—which means they’ve lost more than a fifth of their purchasing power. Tell these Americans that the economy is humming, that median wage growth has nudged ahead of the core inflation rate, and that everything’s grand, and you’re likely to see a roll of the eyes.
,
Powell makes several claims here, all of them deeply flawed.
,
He argues the working class considers the economy terrible because of “searing memories” of the Great Recession and then the pandemic. Yet, like Kuttner, he fails to explain why these same voters considered Trump’s economy to be so splendid. Memories of the Great Recession and its aftermath were fresher under Trump than they are now. And the worst and deadliest period of the pandemic actually occurred under Trump, which makes the current nostalgia for Trump’s economy all the more incompatible with Powell’s hypothesis.
It is true, as he writes, that prices have risen 20 percent since 2019. But that doesn’t mean people have “lost more than a fifth of their purchasing power.” Purchasing power is a function of the relationship between what things cost and how much you have to spend. Wages have been rising faster than inflation since last year, and the average American is better off than before the pandemic.
,
What’s more, contrary to Powell’s argument that the working class has suffered under Biden’s inflationary economy, wages have grown much faster at the bottom than at the top.
,
Powell reasons that public opinion is essentially dispositive. If the people feel the economy is bad, then it’s bad, regardless of what economists like Krugman tell them. “Working- and middle-class Americans,” he argues, “are wiser to trust their feelings and checking accounts than to rely on liberal economists.”
LINK
Paul Krugman Is Right About the Economy, and the Polls Are Wrong
One of the most uncomfortable arguments to make in America is that the people are wrong. It’s especially uncomfortable when the subject is something you experience in a more comfortable, privileged way than most people. And so when liberal economic elites insist the economy, which opinion polls consistently find the public considers terrible, is actually very good, it makes liberal economic elites come off badly.
,
Paul Krugman is one of those dreaded liberal elitists who believes the economy is actually good. So (at a much lower level of confidence and frequency) am I. We have developed a number of explanations for why people believe an economy that The Wall Street Journal recently called “the envy of the world” is so awful.
,
The most generous of these accounts is that people consider higher wages something they earned and higher inflation something that happened to them. But all the explanations involve conceding some level of basic irrationality on the part of the public. And the attempts to make sense of public assessments of the economy seem deeply unconvincing.
,
Biden’s low economic ratings are “not hard to grasp,” argues Robert Kuttner in the left-wing American Prospect, “None of the recent improvements have altered the basic situation of most Americans, in which reliable careers are scarce, college requires the burden of debt, health coverage is more expensive and less reliable, and housing is unaffordable.” The solution, Kuttner argues, is for Biden to implement “radical” economic reforms along the lines of those promised by Bernie Sanders in 2016.
,
Kuttner’s hypothesis fails to explain why Americans were thrilled by economic conditions as recently as 2019, when the same basic features of the economy remained in place. Indeed, it fails to explain why Americans have ever considered the economy to be healthy, given that Bernie-style social democracy has, famously, never been tried in the United States.,
Michael Powell, writing in the Atlantic, flays liberals in general, and Paul Krugman in particular, along lines similar to Kuttner’s:
,
The modern Democratic Party, and liberalism itself, is to a substantial extent a bastion of college-educated, upper-middle-class professionals, people for whom Biden-era inflation is unpleasant but rarely calamitous. Poor, working-class, and lower-middle-class people experience a different reality. They carry the searing memories of the Great Recession and its foreclosure crisis, when millions of American households lost their home. A large number of these Americans worked in person during the dolorous early days of the pandemic, and saw its toll up close. And since 2019, they’ve weathered 20 percent inflation and now rising interest rates—which means they’ve lost more than a fifth of their purchasing power. Tell these Americans that the economy is humming, that median wage growth has nudged ahead of the core inflation rate, and that everything’s grand, and you’re likely to see a roll of the eyes.
,
Powell makes several claims here, all of them deeply flawed.
,
He argues the working class considers the economy terrible because of “searing memories” of the Great Recession and then the pandemic. Yet, like Kuttner, he fails to explain why these same voters considered Trump’s economy to be so splendid. Memories of the Great Recession and its aftermath were fresher under Trump than they are now. And the worst and deadliest period of the pandemic actually occurred under Trump, which makes the current nostalgia for Trump’s economy all the more incompatible with Powell’s hypothesis.
It is true, as he writes, that prices have risen 20 percent since 2019. But that doesn’t mean people have “lost more than a fifth of their purchasing power.” Purchasing power is a function of the relationship between what things cost and how much you have to spend. Wages have been rising faster than inflation since last year, and the average American is better off than before the pandemic.
,
What’s more, contrary to Powell’s argument that the working class has suffered under Biden’s inflationary economy, wages have grown much faster at the bottom than at the top.
,
Powell reasons that public opinion is essentially dispositive. If the people feel the economy is bad, then it’s bad, regardless of what economists like Krugman tell them. “Working- and middle-class Americans,” he argues, “are wiser to trust their feelings and checking accounts than to rely on liberal economists.”
LINK
Posted on 4/16/24 at 9:36 am to djmed
quote:
Powell reasons that public opinion is essentially dispositive. If the people feel the economy is bad,
Theyre tallking about GDP growth and employment only.
Nothing mentioned at the debt used to make it happen. Our economy is fricking broken.
Posted on 4/16/24 at 9:42 am to djmed
Krugman doesn't believe the economy is good. Nobody does.
Posted on 4/16/24 at 10:19 am to RogerTheShrubber
quote:
Theyre tallking about GDP growth and employment only.
No, they are also talking about inflation but they are saying (essentially) "real inflation is actually barely noticeable."
That, of course, is horseshite. Real inflation is larger than they are calculating because they've changed enough determinants to remove volatility that what's reported as CPI is lower than what the consumer is feeling at the checkout line.
OER, for instance, skews the Shelter category further into reflecting rent rather than a balance between real estate price and rent. Food was moved from a set basket of goods to thousands of items with no weighting for propensity of buying.
Going with 1980 CPI calculations, inflation topped what Volker had to deal with and is very likely still 2-3 full points higher than what's being reported.
If that's true, then the "real wages" argument is false and the discrepancy between where real wages are claimed to be and where they likely are is why consumers feel they are continuing to fall behind (because they are).
Posted on 4/16/24 at 10:22 am to djmed
Krugman is on the short list of candidates for dumbest Nobel Prize winner, ever.
I mean, Robert Reich is Adam Smith compared to Krugman.
I mean, Robert Reich is Adam Smith compared to Krugman.
Posted on 4/16/24 at 10:23 am to hogcard1964
quote:
Krugman doesn't believe the economy is good. Nobody does.
Krugman is reliably wrong in his public predictions. He should have gotten something right by accident if it weren’t intentional.
Posted on 4/16/24 at 10:42 am to hogcard1964
Krugman’s a clown. They all choose to ignore the huge inflationary bump after Covid (fueled by unnecessary stimulus), and the fact that once those prices went up they aren’t coming back down.
Posted on 4/16/24 at 11:04 am to djmed
quote:
Paul Krugman is one of those dreaded liberal elitists
quote:
So am I.
Posted on 4/16/24 at 11:29 am to djmed
These shite heads apparently can’t understand that the things people need the most are food/energy/housing. When dumbass joe Biden attacks energy production day one in office that he set off this spiral of high energy prices which in turn affects food prices etc. The masses can’t appreciate the stock market being up when the cost of breakfast lunch and supper are through the roof along with filling up the car to get to work.
Posted on 4/16/24 at 11:31 am to djmed
Paul was on the ENRON Board, and approved of their accounting practices.
Posted on 4/16/24 at 12:09 pm to djmed
“Don’t believe your own eyes and natural human intuition”
Democrats love telling people how stupid they are don’t they?
Democrats love telling people how stupid they are don’t they?
Posted on 4/16/24 at 12:13 pm to RogerTheShrubber
quote:
Nothing mentioned at the debt used to make it happen. Our economy is fricking broken.
The majority doesn't understand that.
They only will when it crashes on our heads.
Posted on 4/16/24 at 12:17 pm to djmed
Amazing how many “award winners” in their field are complete idiots
Posted on 4/16/24 at 12:20 pm to djmed
Biden apologists are bragging about higher wages and claiming they are outstripping inflation. What they fail to understand is that you can only spend after tax income. Plus excluding fuel and groceries from inflation statistics is misleading. People understand that after they buy necessities there is less discretionary income to spend.
People know their personal finances much better than ivory tower liberal economists.
People know their personal finances much better than ivory tower liberal economists.
Posted on 4/16/24 at 12:28 pm to djmed
I talk to middle class people in south Louisiana every day, and they are under enormous financial pressure. It's difficult for me to sell or them to buy in an inflationary environment, especially when people can see that our political and chattering class are only interested in gaslighting us. I expect our concern about our purchase power and diminishing quality of life to eventually turn to real fury. A black swan event would get us there; and lead to problems for The Ruling Class that tells us the shite sandwich we are collectively eating, is actually gourmet fare. Guys like this think they are immune from what they are creating. I wouldn't bet the house on it.
Posted on 4/16/24 at 12:32 pm to OccamsStubble
quote:
Paul was on the ENRON Board, and approved of their accounting practices.
I have a low opinion of Krugman, but you are off base here. As a Board Member all you can do is make sure the latest accepted accounting practices are being followed according to reputable auditors. If the auditors are wrong, or the current practices are inadequate, that’s not the fault of the Board Member.
Posted on 4/16/24 at 1:42 pm to djmed
Anything Paul Krugman says should be listened to.
And then base your decisions on the exact opposite.
He is one of the worst economists on the planet. He is what Kurt Eichenwald is to journalism.
And then base your decisions on the exact opposite.
He is one of the worst economists on the planet. He is what Kurt Eichenwald is to journalism.
Posted on 4/16/24 at 1:55 pm to djmed
Krugman makes a living by writing for the NPR-Atlantic-New Yorker types that think their education makes them so much better than everybody else. I can't stand him and I hope he gets hit by a truck.
Posted on 4/16/24 at 2:05 pm to hogcard1964
He doesn't want to find more kiddie porn on his computer.
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