Inflation isn’t so bad? Don’t buy it

Opinion by E.J. Antoni, The Heritage Foundation

“The war on inflation is over,” economist Paul Krugman, a New York Times columnist, wrote recently on X/Twitter. “We won, at very little cost.”

That must come as a shock to the many Americans who are demonstrably poorer because of the rampant inflation of the last couple years. The latest consumer price index (CPI) data shows that prices have risen more than 17% on average since President Joe Biden took office and are on pace to double in less than 12 years. The typical American family has effectively lost $7,300 in annual income under Biden.

But you’d never know that by listening to Krugman. The quintessential economic cheerleader for the Biden administration, he never lets facts get in the way of his ideology.

In the first place, inflation is not down for the count—not by a long shot. Prices are up an average of 3.7% in the last year, which means they’re rising more than two and a half times as fast as they did when Biden took office. Inflation is nearly twice the Federal Reserve’s 2% target.

Worse, with blowout federal deficits continuing as far as the eye can see, there’s little hope of inflation returning to its low trend that existed before Biden took office.

But Krugman digs himself deeper when he explains his reasoning, or lack thereof, for his fallacious claim that inflation is beaten. To arrive at an inflation rate of 2% and declare victory, he removed all costs for shelter, food, energy and used cars from the CPI. That amounts to eliminating 58% of the index.

In other words, Krugman simply decided not to count those things whose prices were rising the fastest.

This bizarre new inflation metric is not just pointless but deceptive. It does not reflect a single person’s buying habits. The CPI is supposed to approximate the combination of goods and services that the average American buys. The Frankenstein’s monster created by Krugman does exactly the opposite—it represents literally no one by eliminating things necessary for survival.

What Krugman is implicitly saying is that if you’re homeless, starving and freezing to death, then everything else is relatively affordable. After all, who needs to eat, or live somewhere, or stay warm, or to drive? Don’t the American people know that if they just ignore the rising prices all around them, there’s no inflation?

This is a perfect example of the old saying, “if you torture the data long enough, they will confess to anything.” And in that vein, surely Krugman can do better than bringing inflation down to 2%. For instance, if he were to remove even more items from the CPI, inflation could come down even further.

Indeed, if all the components of the CPI are removed and no price increases are counted, then inflation becomes zero.

Sarcasm aside, the fact that a Nobel laureate like Krugman would promote such wanton propaganda is appalling. Alfred Nobel, the famous chemist and namesake of the Nobel prize, must be rolling over in his grave watching a winner of his eponymous prestigious award try to hoodwink the American people.

Furthermore, Krugman’s attempt to defend Biden’s atrocious economic record is really damning with faint praise. Even after removing more than half of the CPI, including the fastest growing components, there’s still 2% inflation. In other words, virtually no prices anywhere have come down for consumers. Prices are relentlessly marching higher.

A few weeks ago, Krugman said the economy was achieving a “soft landing,” meaning inflation was coming down and there would be no recession. He even called the economic data “surreally good.” That’s an understandable assessment when your standard operating procedure is to simply ignore any numbers that are politically inconvenient and torture the data until it tells you what you want to hear.

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The average American doesn’t have that luxury. Weaselly words and numerical sleight of hand won’t help pay for the record prices Krugman is so desperately trying to hide. The American people know better because they’re living through the very reality Krugman denies.

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Comments (1)

  • Really, who can say they are better off today than they were 3 years ago. I’m not talking about all the people that came across our southern border.

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