Paul Krugman Pummeled After Downplaying Staggering Inflation Increases

Franck Robichon/Pool Photo via AP

As we previously reported, gas prices are on the rise, but Jen Psaki was all about spinning how you weren’t really seeing what you thought you were seeing. You really haven’t seen a 60 cent rise in the average price since Joe Biden took office. Nope, not at all.

Unfortunately, it’s not just gas. Prices are rising across the board, as Fox reported — the highest yearly increase since 1992.

Overall, U.S. consumer prices in April were up about 3.1% compared with February 2020, the month before the pandemic shut down the economy. Data published Friday showed a separate measure of inflation surging 3.6% last month, and underlying inflation excluding volatile gas and food prices gaining 3.1%, its largest annual increase since 1992.

And that may be only the beginning. A survey from the University of Michigan on Friday showed consumers’ one-year inflation expectations shot up to 4.6% in May from 3.4% in April.

Prices are expected to keep rising for much of the summer, pushed up by, among other things, bottlenecks crimping supply of both materials and labor, and surging consumer demand.

While costs of flying and lodging are down, virtually all the other leisure-related prices that you might be concerned about over this weekend have shot up. According to Reuters, ground beef prices are up 7%; hotdogs are up 11%.

Now we have more bad news from Paul Krugman. We start with a basic operating principle that Krugman is virtually always wrong.

Krugman is arguing that we shouldn’t get upset about the rising prices.

So, just like Jen Psaki, Krugman is about downplaying what you see in front of your face. And watch him move the goalposts by talking about traditional standards like “core inflation” (the core personal consumer expenditures, “core PCE”) being “misleading” as a determinant.

Analyst Gordon Johnson pummeled Krugman, saying he was trying to deny the evidence we can all see and laying a few facts on him.

Not to mention the charts show when a lot of the prices started soaring — strange how you can trace a lot of them to starting to go up after the end of January. I wonder what was happening then?

Now, of course, if President Donald Trump were in office, Krugman would be screaming his head off about how we were heading for the dumpster because of this. But now, under Biden, “not a big deal” and “transitory blip.”

If we apply our basic principle about Krugman being wrong, then unfortunately that means we may need to start worrying.