Kerby Anderson
Most left-leaning economists cannot understand why American consumers are complaining when many economic indicators are positive. One of those individuals is Paul Krugman, a Nobel-prize-winning columnist for the New York Times.
He argued in a previous column that inflation was not a problem and used his recent trip to the grocery store to prove it. “Now, I go grocery shopping myself, and am occasionally startled by the total at the cash register—although that’s usually because I wasn’t factoring in the price of that bottle of scotch I picked up along with the meat and vegetables.” He did admit that he had “no idea” what he paid for the same groceries a few years ago.
Michael Powell, writing in The Atlantic, uses this story to illustrate the growing chasm between liberal economists and American consumers. Economists point to low unemployment and a cooling inflation rate (though the consumer price index was 3.5 percent higher in March than a year ago).
Meanwhile, consumers see higher prices just about everywhere they look. The consumer price index for food rose 25 percent from 2019 to 2023. Gas prices have gone up 50 percent in the past four years. Fuel-oil prices jumped by more than half in the same period. Home prices have gone up nearly 50 percent nationwide since the start of the pandemic.
Paul Krugman has an answer for Americans: “Maybe my message here sounds like Obi-Wan Kenobi in reverse: Look, don’t trust your feelings.” Michael Powell responds that Americans would be “wiser to trust their feelings and checking accounts than to rely on liberal economists riffing as Jedi masters.” That is why there is such a gap between liberal economists and American consumers.
This post originally appeared at https://pointofview.net/viewpoints/economists-and-consumers/?utm_source=rss&utm_medium=rss&utm_campaign=economists-and-consumers
