In Paul Krugman’s Upper West Side Bubble, All Is Well
After Richard Nixon’s landslide victory over leftist George McGovern in 1972, New York Times movie critic Pauline Kael supposedly said: “How could Nixon have won? Nobody I know voted for him.”
This weekend, current New York Times columnist Paul Krugman outdid Kael in the utterly-clueless-liberal-bubble department.
On CNN Sunday, Krugman said that the big problem with the economy today is that media are unfairly writing negative stories about it. “I think that what’s happening now is that there’s been a kind of a negativity bias in coverage,” he said.
Then Krugman went full Kael, telling CNN’s Brian Stelter, “if you ask people, ‘How are you doing?’ they are pretty — they’re pretty upbeat … if you ask people, ‘How’s your financial situation?’ it’s pretty favorable.”
Really? What people?
The folks who attend dinner parties with Krugman in New York’s Upper West Side, for whom inflation is a petty annoyance, if they notice it at all? Are those the people Krugman’s been talking to?
If he talked to families struggling to make ends meet, or find baby formula, or pay their rent, he’d get a far different response than “pretty upbeat.” Because out here in the real world, they’ve watched things go from bad to worse.
If Krugman can’t bring himself to talk to the unwashed masses, at least he could look at recent poll data.
The IBD/TIPP Economic Optimism Index is currently at 38.5 – anything under 50 signals pessimism. It’s been in negative territory for 11 months (which was just shortly after Biden signed his $2 trillion “American Rescue Plan” into law).
TIPP’s Financial Stress Index, meanwhile, has climbed from 61 in Biden’s first full month in office to 69.3. (A reading over 50 equals more financial stress.) Since TIPP started this index, it’s been this high only twice before: during the 2007-2008 financial crisis, and the first month of the COVID lockdowns.
Other TIPP polls have found that fewer than one in five say their wages have kept pace with inflation while more than one in five say they are skipping meals or using food banks to deal with higher food costs. And several polls show that a majority of the public believes we are in a recession right now.
Meanwhile, the NFIB’s Small Business Optimism index has been falling for the past year, and the Conference Board’s Leading Economic Index has declined for the past two months.
What exactly is “pretty favorable” about any of this?
The public’s gloom has nothing to do with how the press is covering the economy. We’d be willing to bet, in fact, that an analysis would show the media’s reporting on the economy been more positive than warranted (to protect Biden), just as it is always more negative than warranted when a Republican is in the White House.
The only thing that Krugman and other leftists can point to as evidence that the economy is just hunky dory is the unemployment number, which has held at 3.6% for the past four months.
But as we pointed out in this space recently, this is a deception. The unemployment rate is that low only because more than 4 million people have dropped out of the labor market since January 2020. If they were still looking for work – and thus counted as unemployed – the unemployment rate today would be 5.5%.
What’s more, despite all of Krugman’s bragging about job creation, we still haven’t regained all the jobs lost during the COVID economic lockdowns. So, in reality, there have been zero new jobs created under Biden.
Even this mediocre jobs picture is darkening, with weekly initial unemployment claims trending upward since April. Newsweek reports that at least one economist, Peter Schiff, is predicting “mass layoffs” as companies come to grips with the recession.
He recently tweeted that “The Dems claim that we’re not in a recession because unemployment is still low. But weekly jobless claims continue to rise and mass layoffs are coming. In the meantime, even though most workers still have their jobs, they’ve all suffered huge pay cuts as a result of inflation.”
We wonder how Krugman and his cronies in the leftist bubble will try to explain that away.
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