When President Trump was elected president, Paul Krugman warned readers of the New York Times to brace themselves for a "global recession." Now, he admits the economy is "strong."
Krugman's latest comments came just before another jobs report that smashed expectations, with 225,000 workers added to payrolls in an already strong labor market. Unemployment, which ticked up slightly — was still at 3.6%.
It was not supposed to work out this way as far as the Nobel Prize winning economist predicted back in 2016.
Right after Trump was elected, the New York Times asked its opinion writers to weigh in on what it meant.
"If the question is when markets will recover, a first-pass answer is never," Krugman predicted.
Since the day Trump was inaugurated, the Dow Jones Industrial Average has gone up about 9,500 points, or nearly 50%.
In November 2016, Krugman also wrote that "we are very probably looking at a global recession, with no end in sight."
In reality, the United States has the strongest job market in half a century.
While criticizing corporate tax cuts for creating lopsided gains and reduced health insurance rates, Krugman acknowledges, "Still, it is indeed a strong economy."
Krugman then uses this as a jumping-off point to argue that the reason the economy is doing so well is that under Trump, Republicans decided to abandon fiscal restraint and allow $1 trillion deficits. Had Republicans not sabotaged efforts to deficit spend more during the Obama administration (when the federal debt nearly doubled), then the economy would have had a much more robust recovery sooner.
Now, I've been a critic of Republican deficit hypocrisy in the Trump era (including in Krugman's own newspaper), but that still doesn't explain why his economic predictions were so off.
Trump ran as a populist, not as a deficit hawk. He promised big tax cuts, increased military spending, a massive boost to infrastructure, and opposed entitlement reform. It was obvious that deficits would be rising under the policies he was proposing. So if Krugman was so confident in his thesis on the importance of deficit spending, he should have predicted that the economy would boom under Trump. Instead, he predicted a never-ending global recession and irreparable damage to financial markets.
2020-02-07 14:23:00Z
https://www.washingtonexaminer.com/opinion/paul-krugman-who-predicted-global-recession-under-trump-admits-economy-is-strong
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