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Paul Krugman vs. Reality: Analyzing Economic Perspectives

Paul Krugman vs. Reality: Analyzing Economic Perspectives

Paul Krugman's Economic Perspectives: A Review by Matt Taibbi

Written by Matt Taibbi for Racket News

Public Perception of the Economy

Last week, I penned an article titled “It’s Not Me, It’s You,” discussing the emerging genre of editorials that criticize voters for their seemingly misguided “Perception of the Economy.” These pieces often express frustration at the public's “stubbornly low” economic assessments, which result in poll numbers that leave experts “baffled” and waiting for the public to align with their “reality.” In my previous article, I neglected to mention Paul Krugman of the New York Times, a prominent figure in this “Perception of the Economy” discourse. Much like ancient scientists who believed the earth was the center of the universe, Krugman seems to think that everything revolves around Donald Trump, as evidenced in his recent article:

Krugman's Fear of Quack Economics

Krugman's concerns about "quack economics" stem from a Wall Street Journal report suggesting that Trump's advisers are secretly drafting proposals that could undermine the Federal Reserve's independence if Trump wins the upcoming election. The New York Times’ “Dealbook” page inferred that the ultimate goal is to give Trump more control over interest rates. The report claimed that Trump's aides discussed the possibility of requiring Federal Reserve officials to consult with the president before making changes to interest rates. Krugman, based on this single piece of information, paints a series of worst-case scenarios, culminating in the question: If things go awry, how would Trump respond? After all, he once suggested combating Covid by injecting disinfectant. Why wouldn't he resort to similarly magical thinking when dealing with, for instance, a sudden spike in inflation?

Krugman's Stance on Inflation

Interestingly, Krugman himself has been somewhat cavalier about inflation. Six months ago, he announced on Twitter, “The war on inflation is over. We won, at very little cost.” He supported this statement with a graph that excluded “shelter, food, and used cars” from the Consumer Price Index (CPI). This manipulation of data, which already has its quirks, allowed him to present a lower inflation rate than the actual CPI of 3.7%. His approach was widely criticized, even by mainstream media outlets. Despite the backlash, Krugman continued to argue that the inflation numbers were better than they appeared. He had to admit his error about inflation a year after he had downplayed the potential negative impact of a massive monetary rescue plan. His justification for the miscalculation? He believed that one-time checks to taxpayers would be saved rather than spent.

Partisan Bias in Economic Perceptions

In his recent article, Krugman also criticizes Trump's reported plans to expand tariffs, despite having supported Biden's continuation of Trump's tariff regime. His inconsistent stance on tariffs, depending on who is in office, highlights the partisan bias in his economic perspectives. Krugman's explanation for the public's negative attitudes about the economy is the "partisan divide in economic perceptions." He argues that Americans' views of the economy are determined more by political affiliation than actual economic conditions. However, this explanation seems to be a projection of his own partisan bias.

Final Thoughts

While it's one thing to be called uninformed or partisan, being called so by Paul Krugman almost feels like a compliment. Almost. Written by Tyler Durden on Thursday, May 2, 2024 - 18:55 What are your thoughts on this article? Do you agree with Matt Taibbi's critique of Paul Krugman's economic perspectives? Share this article with your friends and let us know your thoughts. Don't forget to sign up for the Daily Briefing, which is delivered every day at 6 pm.

Some articles will contain credit or partial credit to other authors even if we do not repost the article and are only inspired by the original content.

Some articles will contain credit or partial credit to other authors even if we do not repost the article and are only inspired by the original content.

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