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Paul Krugman@pkrugman.bsky.social |
28344 followers 78 following 381 posts
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Paul Krugman
@pkrugman.bsky.social
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Way back in 2021 White House economists argued that the inflation surge resembled the spike after WWII and could be ended without major pain. They were right! www.whitehouse.gov/cea/written-...
2 replies 69 reposts 275 likes
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Paul Krugman
@pkrugman.bsky.social
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Wages rose 3.3 percent in 2019, 3.9 over the past year. Job growth slowing. The Fed is supposed to get ahead of the curve. Time to cut.
2 replies 30 reposts 150 likes
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Paul Krugman
@pkrugman.bsky.social
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Jason Furman, 2022 (singled out only because he was admirably explicit): if unemployment stays low, inflation “will still be about 4% at the end of 2025.” www.hks.harvard.edu/centers/mrcb...
1 replies 33 reposts 157 likes
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Paul Krugman
@pkrugman.bsky.social
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It looks as if a number of current UK Cabinet members will lose their seats. But don’t cry for them: George Osborne, who bears as much responsibility as anyone for Britain’s debacle, is making lots of money in the City www.theguardian.com/politics/202...
2 replies 9 reposts 84 likes
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Paul Krugman
@pkrugman.bsky.social
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Kind of appropriate that Britain booted out the Conservatives on the 4th of July which is, of course, the day Vicksburg surrendered to U.S. Grant. I guess some other stuff also happened on this date
6 replies 17 reposts 203 likes
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Paul Krugman
@pkrugman.bsky.social
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Labour’s campaign was extremely cautious, and given past defeats I understand why. But now the UK center-left has a huge majority in a system with many fewer choke points than in the U.S. Let’s hope they’re ready to govern like the dominant party they now are
13 replies 40 reposts 348 likes
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Paul Krugman
@pkrugman.bsky.social
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Not a perfect comparison, and I’ve deliberately omitted the period when pandemic composition effects distorted the numbers. But 14 years of Conservative rule have been associated with stagnant real wages and severe deterioration of public services. This was a well-earned rout
3 replies 36 reposts 156 likes
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Paul Krugman
@pkrugman.bsky.social
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Finally, for those concerned inflation might get entrenched in expectations, the Atlanta Fed’s measure of business expectations is also within spitting distance of 2 percent. Hard to see anything here that justifies concerns about “sticky” inflation or a difficult “last mile” 3/
1 replies 8 reposts 63 likes
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Paul Krugman
@pkrugman.bsky.social
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Underlying inflation is also low. I like the New York Fed’s measure, in large part because it’s an algorithm that doesn’t involve judgement calls and hence possible motivated reasoning. It’s within spitting distance of the 2 percent target 2/
2 replies 8 reposts 72 likes
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Paul Krugman
@pkrugman.bsky.social
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I haven’t been paying as much attention as usual to inflation indicators. But we’ve been getting a string of good news. One source of inflation pessimism was the high ratio of job openings to unemployed workers. That issue has now gone away, with unemployment still very low 1/
8 replies 36 reposts 119 likes
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Paul Krugman
@pkrugman.bsky.social
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In other news, inflation looks beaten. The blip a few months ago looks like start-of-year price resets, and what’s left is lagged housing costs
18 replies 76 reposts 369 likes
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Paul Krugman
@pkrugman.bsky.social
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I really hated writing this www.nytimes.com/live/2024/06...
20 replies 2 reposts 32 likes
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Paul Krugman
@pkrugman.bsky.social
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I’m in Warsaw talking about the future of the European economy, so I’m late to this party. But I’ll have a blog post up soon very reluctantly making the case for Biden — the best president of my adult life — to step aside in favor of Harris.
66 replies 10 reposts 77 likes
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Paul Krugman
@pkrugman.bsky.social
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Not about the debate: I write in The Guardian about the legacy of austerity www.theguardian.com/politics/ng-...
2 replies 35 reposts 101 likes
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Paul Krugman
@pkrugman.bsky.social
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What people say versus what they do, part 10,000
14 replies 29 reposts 180 likes
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Paul Krugman
@pkrugman.bsky.social
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Illuminating report on the state of American workers: eig.org/american-wor...
My response essay here: eig.org/wp-content/u...
2 replies 8 reposts 33 likes
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Paul Krugman
@pkrugman.bsky.social
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It seems certain that Trump will try to make crime an issue in the debate, even though Biden has ended the Trump crime wave — homicides in 2024 will be far lower than 2020, and probably below 2019. But anyway, I was struck by this by Maria Bartiromo 1/
18 replies 37 reposts 196 likes
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Paul Krugman
@pkrugman.bsky.social
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As someone who walks around NYC all the time, and also tracks the crime #s, I know how ridiculous this is. But it’s not just me. Weekend foot traffic in Midtown, where Fox has its offices, is higher than prepandemic; strangely, people don’t seem too terrified to go out 2/
6 replies 23 reposts 186 likes
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Paul Krugman
@pkrugman.bsky.social
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It seems certain that Trump will try to make crime an issue in the debate, even though Biden has ended the Trump crime wave — homicides in 2024 will be far lower than 2020, and probably below 2019. But anyway, I was struck by this by Maria Bartiromo 1/
18 replies 37 reposts 196 likes
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Paul Krugman
@pkrugman.bsky.social
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I’ve been in a meeting with a number of men (and a handful of women) in suits, and while there has been intelligent discussion, my main impression is that Very Serious People are irrationally complacent about the consequences — economic and political — if Trump wins.
71 replies 226 reposts 1279 likes
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Paul Krugman
@pkrugman.bsky.social
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Is there really a last mile in inflation? Using Cleveland Fed nowcasts, here’s the picture for core PCE; bear in mind that lagged shelter is still exaggerating the numbers. That bump early this year looks like an aberration.
3 replies 7 reposts 62 likes
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Paul Krugman
@pkrugman.bsky.social
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Do they really expect me to swallow that tripe? When it’s trippa alla Romana at Saltimbocca in Rome, yes
13 replies 6 reposts 210 likes
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Paul Krugman
@pkrugman.bsky.social
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Trump’s tariff proposal is bad, but the Republican National Committee response is really scary. www.nytimes.com/live/2024/06...
2 replies 11 reposts 65 likes
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Greg Sargent
@gregsargent.bsky.social
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On the pod, @pkrugman.bsky.social is terrific on how dangerous it is that voters are forgetting the horrors of Trump's last year in office.
"Everything that should have been a disqualifying personality flaw in 2020 has gotten far worse," Krugman says.
Listen:
newrepublic.com/article/1827...
3 replies 55 reposts 202 likes
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Paul Krugman
@pkrugman.bsky.social
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Extremely nerdy note: core inflation has been higher than headline. But this is NOT because volatile food and energy are driving disinflation. It’s because excluding food and energy raises the weight of shelter. Over the past year, headline ex-shelter is 2.1, core ex-shelter 1.9.
1 replies 7 reposts 92 likes
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Paul Krugman
@pkrugman.bsky.social
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I keep seeing a factoid to the effect that the euro area and the US economies were the same size in 2008, but America is now 44 percent bigger. Folks, that’s just the exchange rate. At purchasing power parity, nothing like that has happened
10 replies 191 reposts 528 likes
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Paul Krugman
@pkrugman.bsky.social
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The BLS has finally updated its estimates of the Harmonized Index of Consumer Prices, which excludes owners’ equivalent rent, a price nobody pays that is also a lagging indicator. Dude, where’s my inflation problem?
13 replies 64 reposts 211 likes
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Paul Krugman
@pkrugman.bsky.social
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National reporting is incomplete, but with almost half a year in for NYC, the Trump crime wave is clearly over
6 replies 68 reposts 324 likes
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Paul Krugman
@pkrugman.bsky.social
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The BLS has finally updated its estimates of the Harmonized Index of Consumer Prices, which excludes owners’ equivalent rent, a price nobody pays that is also a lagging indicator. Dude, where’s my inflation problem?
13 replies 64 reposts 211 likes
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Paul Krugman
@pkrugman.bsky.social
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So how is it that in the 19th century the federal government largely paid its way with tariffs? Because back then the government was much, much smaller. Believing that we can go back to those days is just ignorant 6/
3 replies 4 reposts 96 likes
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Paul Krugman
@pkrugman.bsky.social
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With an elasticity of 1, the estimate looks like this: t*14/(1+t) = 8 Work this through, and the tariff rate is 8/6 = 1.33, that is, 133 percent. With a higher elasticity, it would go higher, maybe to infinity 5/
1 replies 3 reposts 31 likes
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Paul Krugman
@pkrugman.bsky.social
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How high you have to go in the end depends on how much prices affect import demand — the elasticity. I assume an elasticity of 1, which is what you sometimes get for the medium run, although the long run is probably higher (which makes it worse) 4/
1 replies 2 reposts 28 likes
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Paul Krugman
@pkrugman.bsky.social
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Tariffs would raise the cost of imports to consumers, so we'd import less, which would mean you need a higher tariff rate. But this reduces imports further, meaning a still higher tariff, and so on 3/
2 replies 6 reposts 34 likes
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Paul Krugman
@pkrugman.bsky.social
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Imports are about 14 percent of US GDP. Federal income tax revenue (not including payroll taxes) is about 8 %. So you might think replacing it would require a tariff rate of 8/14 or around 57 percent. But ... 2/
1 replies 5 reposts 42 likes
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Paul Krugman
@pkrugman.bsky.social
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This was a bit cryptic, so a quick explanation 1/
5 replies 28 reposts 102 likes
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Paul Krugman
@pkrugman.bsky.social
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Trump has reportedly floated the idea of replacing income taxes with tariffs. I’ll have to write this up in detail, but my first-pass estimate is that this would require an *average* tariff rate of 133 percent.
55 replies 95 reposts 533 likes
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Paul Krugman
@pkrugman.bsky.social
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Remember all those 2022 predictions that getting inflation down would require years of very high unemployment? Here’s where we are now (using the Cleveland Fed nowcast for May)
20 replies 143 reposts 626 likes
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Paul Krugman
@pkrugman.bsky.social
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The possible next president, who among other things wants to strip the Federal Reserve of independence
9 replies 33 reposts 145 likes
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Paul Krugman
@pkrugman.bsky.social
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So core inflation ex shelter — which lags far behind market prices — was 0.0 mom and 1.9 yoy. Inflation has basically been defeated.
8 replies 51 reposts 174 likes
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Paul Krugman
@pkrugman.bsky.social
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Only the view that people have bought into a narrative about bad things happening to somebody else (not people they know) explains all four. We can talk about where that narrative comes from, but it fits all the facts in a way alternatives don’t 3/
3 replies 16 reposts 149 likes
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Paul Krugman
@pkrugman.bsky.social
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Many try to explain 1 by saying that things are really bad, eg bc of interest rates. But this doesn’t explain 2,3 or 4. Others say that people are angry about past inflation, while believing that they earned their offsetting wage increases. This could explain 2 but not 3 and 4 2/
3 replies 11 reposts 99 likes
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Paul Krugman
@pkrugman.bsky.social
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Here are what I consider the key points about negative views on the economy. 1. People are down on the economy 2. They’re fairly positive about their own finances 3. They’re relatively positive about their local/state economy 4. Views on the economy are extremely partisan 1/
9 replies 34 reposts 180 likes
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Paul Krugman
@pkrugman.bsky.social
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Still thinking about that survey in which 78 percent said that fast food has become an unaffordable luxury. Here are real sales at limited service restaurants: people seem to be buying an awful lot of something they can’t afford
29 replies 43 reposts 265 likes
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Paul Krugman
@pkrugman.bsky.social
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A number I’ve been watching: the NY Fed asks people whether they expect to be better or worse off a year from now. By this indicator, optimism is surging
10 replies 30 reposts 188 likes
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Paul Krugman
@pkrugman.bsky.social
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On the dangerous pettiness of plutocrats www.nytimes.com/2024/06/10/o...
3 replies 39 reposts 152 likes
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Paul Krugman
@pkrugman.bsky.social
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But, but, everyone says that fast food has become an unaffordable luxury
21 replies 21 reposts 159 likes
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Paul Krugman
@pkrugman.bsky.social
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Ten years ago many Very Serious People said that America could never return to full employment because our workers lacked the necessary skills
17 replies 89 reposts 427 likes
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Paul Krugman
@pkrugman.bsky.social
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On the ECB rate cut www.nytimes.com/live/2024/06...
2 replies 8 reposts 61 likes
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Paul Krugman
@pkrugman.bsky.social
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Greg Sargent is thinking along similar lines newrepublic.com/article/1821...
4 replies 13 reposts 124 likes
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Paul Krugman
@pkrugman.bsky.social
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If you aren’t deeply worried about this, you aren’t paying attention www.nytimes.com/2024/05/30/o...
24 replies 87 reposts 333 likes