New York Times opinion columnist Paul Krugman sided with President Joe Biden’s assessment that July’s 8.5% Consumer Price Index rate means there is "zero inflation."
Krugman also expressed his confusion at conservative "outrage" over the Biden White House calling the inflation number "zero."
In his column, optimistically titled, "Finally, Some Good News on Inflation," the economist asserted: "This is not the end of inflation. It is not even the beginning of the end. But it is, perhaps, the end of the beginning." He evidenced that declaration with his claim that "the Bureau of Labor Statistics reported something we haven’t seen since the depths of the pandemic recession: a month without inflation."
As Krugman explained, "the average price of the goods and services consumers buy was no higher (actually slightly lower) in July than it was in June."
That the columnist called that dip in the inflation rate a "month without inflation," mirrors President Biden’s Wednesday claim that the July numbers indicate "zero" inflation; a claim that infuriated conservatives across the board, who saw it as spin to distract from the fact that the current inflation is only .2% less than the highest annual inflation rate in 40 years.
Krugman dismissed that as simple partisan outrage. But before he remarked on angry Republicans, the columnist insisted, "there is absolutely no reason to question the numbers. There were many advance indications that this report, and probably the next few reports, would show a sharp drop in inflation."
He is correct that there was a decent drop in inflation from June’s 9.1% CPI number to its 8.5% status. At any rate, the .6% decline encouraged the columnist, who wrote, "It’s not just falling gasoline prices; business surveys point to declining inflation and supply chain problems are easing. Zero was a somewhat lower number than most observers expected, but not wildly so."
Tearing into the GOP, Krugman wrote, "the enraged reaction of Republicans to the report came as something of a surprise, at least to me — not that it happened, but the form their outrage took." Describing their discontent at Biden claiming "zero" inflation as "flailing," he stated, "I expected them to accuse the Biden administration of cooking the books. Instead, most of the flailing seemed to involve a failure to understand the difference between monthly and annual numbers."
Though Krugman has in the past accused the Trump administration of "cooking the books" to make its economic policy look better. In 2020, the economist speculated that there was a "possibility" that Trump had "gotten to" the Bureau of Labor Statistics so the agency would report more favorably on jobs numbers.
"When President Biden declared, accurately, that we had zero inflation in July, many on the right accused him of lying, because prices in July 2022 were 8.5 percent higher than they were in July 2021. Do they really not understand the difference?" he asked.
Though he gave them a modest benefit of the doubt, adding, "To be fair, sloppy business reporting may have contributed to their confusion."
Ironically, despite his insistence of the "Big zero" on inflation, Krugman seemed to admit the truth there is still an "inflation problem." "Unfortunately, one month of zero inflation doesn’t mean that the inflation problem is solved," he claimed, adding, "Economists have long known that you get a much better read on underlying inflation if you strip out highly volatile prices — normally food and energy, but there are a variety of measures of core inflation, and all of them are still unacceptably high."
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Speaking of food prices, Fox Business reported that for July – the month of Biden and Krugman’s "zero" inflation, "food prices accelerated further, the Labor Department reported on Wednesday," surging to "13.1% over the last year."
Economists have called this "the most significant increase since March 1979."
Despite the economic downturn Americans besides Krugman are observing, the columnist continued his optimistic tone, claiming "that there doesn’t seem to be any entrenching" of inflation in the economy.
He also took another swipe at Republicans, saying they "go feral" over the reality that "Joe Biden has presided over a huge jobs boom." He then ascribed part of the Republican rage over Biden’s economic success and the drop in inflation to the fact that "Republicans had been counting on high inflation, and high gas prices in particular, to deliver big gains for their party in the midterm elections."
Though Krugman defiantly claimed, "Suddenly, however, the economic facts have a liberal bias: Gas prices are plunging, inflation is down, and real wages are up."
