The Paul Krugman Midterms Autopsy: Hits and Misses

Were the 2022 midterm elections a victory for Bidenomics? Keynesian economist Paul Krugman thinks that the American people are willing to give President Joe Biden's economic doctrine another chance because conditions are a lot better than what the public thinks. So, how did the Nobel laureate break down this year's red ripple? Here is a summary: Democrats are good, and Republicans are bad.

Paul Krugman - Two Cheers for the Biden Economy

Krugman started his column by pointing out that Democrats exceeded typical midterm results for the ruling party. Biden's Democrats did not emulate the 64-seat decimation in 2010 or the GOP's loss of 42 House seats in 2018. Krugman dismissed the talking point that it was all about abortion, purporting that the future of democracy was just as important as inflation for voters, according to exit polls.

"And maybe the economy wasn’t as much of a drag on Democrats as expected. Some of us have been arguing for a while that economic performance under President Biden has been better than much of what you see in the news media would suggest," he opined.

Here is where Paul Krugman's column copies Biden's misleading comments.

First, yes, it is true: "The job market has actually been terrific," although numbers beneath the surface suggest that it might not be as strong as many contend. In addition to the divergence between the household and establishment surveys expanding since the summer, the labor force participation rate has failed to mirror the 50-year low unemployment level, meaning that it has not surged. Moreover, more than seven million people are working more than two jobs, and nearly four million individuals are underemployed.

Second, his dismissal of Americans' purchasing power erosion is comparable to last year's contention that inflation only hurts the rich. Krugman opined that wages have risen but failed to mention that real hourly and weekly earnings (inflation-adjusted) were down 2.8% and 4%, respectively, in October.

He also spoke from his ivory tower by thinking economists who pointed out the positive economic data knew better than ordinary Americans who "weren't feeling" all the wonderful things of Bidenomics. Krugman even alluded to the wide array of surveys, from the 14-year low University of Michigan's Consumer Sentiment Index (CSI) or the Conference Board's consumer survey showing inflation is eviscerating any semblance of confidence. These figures were not enough to convince him that the state of the US economy is sluggish.

The economist, who thinks a space-alien invasion would stimulate the global economy, asserted that consumer spending had not matched the economic pessimism. But even this statement fails to hold water: retail sales have been on a downward trend since January, personal spending peaked at the start of 2022 at 3%, and a wide range of purchasing managers' indexes (PMIs) show client orders have been slumping. Plus, although Keynesians are uninterested in this tidbit, Americans are saving far less as they try to keep up with the cost-of-living crisis.

Americans Are Brainwashed?

Days before the midterm election, MSNBC host Joy-Ann Reid stated in earnest that Americans did not know what inflation meant until Republicans “taught” them the term this year:

"I have actually never heard a person who isn't an economist or works on CNBC [use the word inflation]. The only people I ever hear use the word inflation are journalists and economists… So, it is interesting that Republicans are doing something that they don't normally do, right? Which is not use the common tongue, not use just common English to sort of use their campaigns like they do with crime. But what they’ve done is they've taught people the word 'inflation.' Most people would have never used that word ever in their lives are using it now because they’ve been taught it."

Does she know that there has been history before 2021? Apparently not. But Krugman also ostensibly shares this belief, writing in his New York Times blog post that "Americans told pollsters that the economy is terrible, because that’s what they’ve been hearing from the media, but voted based on their personal experience, which is much more mixed." It is safe to say that most Americans do not need a cable news network or politicians to tell them that a gallon of gasoline is $4 and that grocery prices have spiked to unfathomable levels.

Krugman is Right About Something

Surprisingly, the disciple of John Maynard Keynes was right about something: Voters did not have much faith in Republicans to curb rampant price inflation. "Rising prices bother Americans, a lot, but it’s possible that many of them have seen through the emptiness of G.O.P. rhetoric and realized that Republicans don’t have an inflation plan," he averred.

The Republican Party put together some vague plans about America becoming energy independent and forcing the US government to live within its means. But how could the GOP force President Biden to suddenly favor fossil fuels? Why would voters trust the Republicans to be fiscally conservative when their track record has been the exact opposite? Rep. Kevin McCarthy (R-CA) and his crew failed to deliver a concrete message other than Guy with Dementia is Bad. This, according to Krugman, afforded Biden some time to prove his economic program works.

Of course, Paul Krugman had to end his column in the worst way possible: "Biden’s economy hasn’t been that bad..." The US just got out of a recession, the odds of an economic downturn are nearly 100% in 2023, a majority of Americans are living paycheck to paycheck, inflation is still running wild, and real wage growth has been negative for all of the president’s first term so far. Sorry, what have been the good parts of the Biden economy again?