Paul Krugman: “According to Donald Trump, the U.S. economy is doing great. We’re enjoying a huge boom, there’s no inflation, and we’re all getting tax cuts. We have prosperity like nobody has ever seen before.”
“But it’s probably not news to you that reality doesn’t agree. Inflation was stubbornly elevated even before the Iran debacle, while growth has been sluggish. Jobs for entry-level workers are hard to find while mortgage and car loan rates are up. Gas-pump prices are above $4 on average and around 10 million Americans are projected to lose health insurance by 2028. Yet the one economic variable that stands out, that really is like nothing anyone has ever seen before, is consumer confidence: The long-running University of Michigan index of consumer sentiment just hit its lowest point ever recorded.”
“And that’s a puzzle. Obviously, I’m no defender either of Trump’s policies or of his lies. But while the U.S. economy isn’t nearly as good as he claims, it’s objectively not bad enough to justify the worst consumer sentiment in history — worse than during the stagflation at the end of the 1970s, worse than in the aftermath of the 2008 financial crisis.”
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