“By 2005 or so, it will become clear that the Internet’s impact on the economy has been no greater than the fax machine’,” Paul Krugman, 1998

“Nobel Prize in Economics-winner Paul Krugman explains why the bipartisan Infrastructure Investment and Jobs Act and President Biden’s Build Back Better agenda “reduces the inflationary risks even further.” August 2021

Whew. Good thing spending all that money reduced the risk of inflation. I’d hate to live in a country where the price of gas and bread was up 60%.

Here’s the Nobel Prize winner, from an era when hating Bush was enough to get you a shiny award no matter what.

So what’s all this about? I don’t know whether people like Joe Manchin expressing anxiety about inflation are truly misinformed or are just trying to signal that they’re to the right of their colleagues.

If they’re sincerely worried about inflation, I’d urge them to have their staffs do the math. Anxiety about the inflationary impact of public investment just doesn’t make sense if you work through the numbers…

For the fact is that America desperately needs to invest in its future — both in hard assets like roads and bridges and in its people, especially its children. And there are no good economic reasons not to make those investments. Debt isn’t a problem given low interest rates; inflation wouldn’t be a problem given the economy’s ability to absorb higher government spending.

Not a problem. Okay, now Krugman admits it was maybe a little bit of a problem. He’s not apologizing. Obviously.

Even so, historical experience wouldn’t have led us to expect this much inflation from overheating. So something was wrong with my model of inflation — again, a model shared by many others, including those who were right to worry in early 2021. I know it sounds lame to say that Team Inflation was right for the wrong reasons, but it’s also arguably true.

I was right even though I was completely wrong. And the people who were warning that exactly this thing would happen are… still wrong.

For all his talk about models, Krugman’s arguments always came down to media talking points about how “investing in our people” would grow the economy. This was the same nonsense being peddled in Obama’s early years. 

Does Krugman know better? Does he know anything? Who knows. What the models tell us is that betting against Krugman is a good bet. Take his take in 2016.

The economic fallout of a Donald Trump presidency will probably be severe and widespread enough to plunge the world into recession, New York Times columnist Paul Krugman warned in a New York Times opinion piece published early Wednesday.

Calling Trump the “mother of all adverse effects,” the Nobel Prize-winning economist predicted that the GOP nominee’s administration could quickly undo the progress that the markets around the world have made in the eight years since the financial crisis.

Is there a limit to the number of times you can be wrong before they take away your Nobel Prize?