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28 Nov, 6 tweets, 1 min read
So Republicans plan to run against inflation, while having zero ideas about how to bring it down 1/ nbcnews.com/politics/polit…
Noticeable that they're still blaming unemployment benefits for reducing labor supply — when this happens to be an experiment we've done, which failed 2/
Enhanced UI was cut off over the summer 3/
Labor force participation went nowhere 4/
Aside from that, they want to eliminate environmental protections, which aside from being a bad idea would take years to have any impact 5/
What's happening is complete faith in public ignorance. Alas, it might work 6/

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More from @paulkrugman

Paul Krugman Profile picture
23 Nov
As Arin says, Rattner committed chartcrime here. But there's a larger issue 1/
What the data actually show is that the US, which has done more fiscal stimulus than Europe, also has higher inflation. More careful people than Rattner have cited this as evidence that fiscal did it. But with only 2 data points, need to observe that other things are going on 2/
Europe came in to this with lower inflation than we did — ECB was less successful at achieving a 2% target. This baseline effect accounts for part of the difference 3/
Read 9 tweets
Paul Krugman Profile picture
18 Nov
Need to guard against wishful thinking, but there do seem to be straws in the wind suggesting that supply-chain issues are getting less serious. Here's the Baltic Dry Index of shipping costs 1/
Big retailers seem to be doing fine on inventory for the holidays 2/ cnn.com/2021/11/16/inv…
Given the way these things typically work, I wouldn't be surprised if we hit peak inflation panic just as actual inflation is fading away 3/
Read 4 tweets
Paul Krugman Profile picture
18 Nov
Some further thoughts on inflation and what to do next. Inflation has of course come in much higher than Team Transitory predicted — the Fed was predicting only 2.4% PCE growth as late as March. So the inflation worriers have in a way been vindicated, but ... 1/
The details of what's happened are very different from what they predicted early this year. 2/
Olivier Blanchard offered an admirably clear exposition: stimulus would lead to a huge surge in demand above capacity 3/ piie.com/blogs/realtime…
Read 15 tweets
Paul Krugman Profile picture
14 Nov
Trying to clarify my own thoughts on inflation. I got inflation wrong; I didn't see the current surge coming. But why? I didn't think the fiscal stimulus early this year would boost demand as much as Summers et al predicted ... and, in fact, so far it hasn't 1/
Real final demand (excluding inventories) is up 2.6% over the past two years. That's well short of normal growth in potential output 2/
What's happened, however, is that we've faced supply constraints, both supply-chain issues in meeting huge demand for durable goods and withdrawal of workers from the labor force, i.e. Great Resignation 3/
Read 5 tweets
Paul Krugman Profile picture
6 Nov
Question: Why was "infrastructure week" a joke under Trump, who could have gotten the votes at any time, only to become reality now despite razor-thin Dem majority? It wasn't just incompetence, although that too 1/
I think two factors. 1st, the McConnell wing of the GOP doesn't want a successful spending program, even under an R president, because that might help legitimize an increased govt role in general. That is, they opposed infra not bc it might fail but bc it might succeed 2/
2nd, Trump team was addicted to crony capitalism. They couldn't do a clean bill; it had to offer privatized stuff that would mean big bucks for their friends 3/ nytimes.com/2016/11/21/opi…
Read 4 tweets
Paul Krugman Profile picture
5 Nov
A week of terrible political news for Democrats has also been a week of good news on the economy and Covid. But will the objectively good news move public sentiment? A few thoughts 1/
The employment report was almost all good news, confirming surveys suggesting that the third-quarter air pocket was behind us. Labor force participation still low, but overall recovery very much on track 2/
Aside from Delta receding, good news on the effectiveness of vaccine mandates. NYC at 91 percent compliance, not facing the crunch widely predicted 2/ nytimes.com/2021/11/01/nyr…
Read 8 tweets

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