CNN reports that top economists predict the Democrats’ healthcare and climate plans will bring down inflation. This is untrue; yet, we must trust elite economists without inquiry.
This claim to legitimacy was popularized by Obama’s illogical and incorrect statements about the economy at the time.
Inflation Reduction Act
Hundreds of economists, including three Nobel laureates, disputed Obama’s stimulus assessment.
They were generally disregarded by the mainstream, just as experts who say the “Inflation Reduction Act” will accomplish nothing or aggravate inflation will be now.
Mark Zandi @ Moody's
Even Biden’s Favorite Economist Says Inflation Reduction Act Won’t Reduce Inflation https://t.co/kedTNRVY4h
— Cara TXZEAL (@Cara_TXZEAL) August 4, 2022
It’s easy to find Democrats, economists or not, who say we should “invest” more in progressive causes.
Former Obama candidate Betsey Stevenson, who believes inflation is “a justification not to spend,” wants to pass $760 billion in budget deficits.
Does anyone think Jack Lew or Robert Rubin analyzed the statistics before signing the memo? Joseph Stiglitz, promoter of “progressive economics,” supports every Democrat’s expenditures.
One can only assume these leftists would welcome high inflation to fight the “climate crisis” or fund dependence programs.
Mark Zandi of Moody’s Analytics is another signatory. He’s the go-to guru for sluggish TV producers and media. If the analyst hasn’t endorsed a big Democratic spending package, it hasn’t been found. Zandi always prescribes more ringing.
The Inflation Reduction Act seems likely to cross the legislative finish line. My analysis of its economic impact will be out tomorrow. In preview, while much smaller in scale & scope than the original Build Back Better agenda, it will have a material beneficial economic impact. pic.twitter.com/Uiy6vXW8SS
— Mark Zandi (@Markzandi) August 1, 2022
Zandi sees “dollar devaluation as the way to prosperity,” as John Tammey noted years ago.
His adherence to “multipliers,” the idea that every $1 in government expenditures generates more than $1.50 in economic growth, is sacrosanct, no matter how frequently it fails.
Zandi’s erroneous estimates date back to the 2007-08 downturn and housing crisis.
Zandi’s “Expert” Analysis
Zandi informed CNN in September 2008 that the government’s actions would sow the seeds for a fast rebound.
The Obama recovery was the slowest in US history. Zandi said Obamacare slowed healthcare costs in 2014, despite doubling individual premiums.
In a 2016 study titled “The Macroeconomic Consequences of Mr. Trump’s Economic Policies,” Zandi projected a “long recession,” unemployment, and a “near halt” in economic growth.
Zandi claimed the economy, supported by “deficit-financed tax reductions” and “deficit-financed public spending hikes,” was “sticking to script.”
Trump already pledged tax cuts in 2015. Everyone knew the government’s budget would rise from 2016 to 2018. Zandi had the “template,” but was off.
Zandi misjudged inflation. It is “irksome,” he now says, trying to find shelter in a crowd, “how incorrect the Fed, the Biden presidency, and analysts, including myself, were in expecting rising inflation would swiftly fade.” It hasn’t.
His statements are always definite. Zandi felt confident in telling DNC spokesperson Greg Sargent that complaints about increasing prices were “likely wrong” and “overdone.”
Though partisanship has corroded economics, it’s still helpful in understanding the creation, use, and distribution of products and services.
Predicting the future with thousands of uncertain and undefinable factors, including human behavior, is difficult. By playing 50-50 chances, a random Joe might make as good or better economic forecasts than Zandi.
Why should we care what Zandi says about another large spending package if he was incorrect on inflation, the mortgage crisis, the Obama rebound, the Trump economy, and heaven knows what else?
This article appeared in The Political Globe and has been published here with permission.