Just 10 days after Paul Krugman admitted he had been inexcusably wrong about inflation, the partisan Democratic pundit was already putting lipstick on the oinker that today’s U.S. economy has become.
Appearing on Brian Stelter’s Sunday show last weekend, the New York Times economist excoriated journalists who had the chutzpah to point out that, amid record-setting inflation and two quarters of economic contraction, all appearances are that we’re in a recession. They’re too negative, he said — not about the definition of a recession, but rather about the current state of the economy and how it affects us plebes.
“There’s been a kind of negativity bias in coverage,” he said. “The press should be giving people — people have their own personal experience. And if you ask people how are you doing, they’re pretty upbeat. If you ask people, ‘How is your financial situation?’ it’s pretty favorable. If you ask them, ‘How is the economy?’ ‘Oh, it’s terrible.’ That’s a media failing. Somehow, we’re failing to convey the realities of what’s going on to people.”
But by every objective metric, the economy is terrible right now for Main Street. As I detailed in June:
The same story is true of debt. And housing, the only market for which Biden has a real plan to boost supply, doesn’t explain the increase in personal debt. The Federal Reserve Bank of New York found that housing debt has risen from $10.39 trillion by the end of 2020 to $11.5 trillion this quarter. Nonhousing debt has risen from $4.17 trillion to $4.35 trillion in that time.
Furthermore, the public is increasingly relying on debt to make ends meet. Credit card debt increased by $46 billion in the second quarter of the year and 13% year-over-year, the largest spike in over two decades.
But let’s just take what Biden specifically mentioned. Do people really feel “favorable” about the state of their personal finances? On this front, Krugman is wrong again.
Back in April, Gallup reported that just 37% believe their financial fortunes are improving, the lowest share since 2009 with the exception of 2020. No longer do a majority of adults consider their personal financial situations “excellent” or “good,” thanks to an 11% drop overall, including a 14% drop among the middle class. A June survey by Bankrate found that the majority of the country feel that they don’t have enough in savings due to inflation, which tops just about every single poll of top issues worrying the country. A Harvard-Harris poll released this week shows that 67% believe the economy is on the “wrong track,” and 84% believe we are either already in a recession right now or headed into one within a year.
Perhaps Krugman and his patrician peers haven’t felt the squeeze of soaring prices and broken supply chains, but the rest of the public has. They are likely less incensed about the dictionary definition of a “recession” and more about a supposed expert class utterly unconcerned about the federal government inflating away their paychecks and the stability of their livelihoods.