Wrong again: Nobel economists put partisanship before common sense

OPINION:

You may have heard that last week, 24 Nobel economists wrote that Vice President Kamala Harris’ economic plan would be better for America than former President Donald Trump’s agenda. The hyper-political Joseph Stiglitz spearheaded the joint letter. Yes, this is the same Joseph Stiglitz who infamously flew to Caracas to endorse Venezuelan dictator Hugo Chavez’s economic policies in 2007.

The letter argues that the Trump economic plan would “lead to higher prices, larger deficits, and greater inequality.” It also warns of the risk of a worldwide recession if Mr. Trump wins. All that was missing was the prediction of dead puppies.

If these apocalyptic claims sound vaguely familiar, you have a good memory. This is exactly what many in this gang of leftist economists warned of in 2016. Here are a few examples:

Nobel laureate Paul Krugman fumed in The New York Times the morning after the 2016 election: “It really does now look like President Donald J. Trump, and markets are plunging. When might we expect them to recover? … So we are very probably looking at a global recession, with no end in sight.”

Larry Summers, who served as treasury secretary to President Bill Clinton and chief economist to President Barack Obama, warned that under Mr. Trump, “I would expect a protracted recession to begin within 18 months. The damage would be felt far beyond the United States.”

Many more of these end-of-the-world prophecies were laid out. They were all spectacularly wrong. The economy boomed under Mr. Trump, and so did the stock market.

Then, in 2021, many on this same list of Nobel economists signed a similar open letter assuring us that President Biden’s policies “won’t cause inflation.” Oops. Eighteen months later, the inflation rate surged to its highest level (9.1%) since Jimmy Carter’s days.

I, too, have skepticism on some of Mr. Trump’s positions. I’m not a fan of high tariffs or special interest tax carve-outs. But what is undeniable is that the 2016 economic agenda worked like a charm — as measured by the record-breaking $4,000 to $5,000 gain in real incomes for average families.

Conversely, incomes are down in real terms under the Biden-Harris administration. And someone tell these ivory-tower economists that inflation and income inequality went down, not up, under Mr. Trump.

It’s virtually impossible for anyone to bat 1.000 in their predictions, but what is remarkable is that when it comes to Mr. Trump and Mr. Biden, they have managed to record a perfect record with their crystal balls.

They have been wrong every time.

Their disregard for common sense may be because of Trump Derangement Syndrome. For example, they argue that Trump tariffs will cause inflation and then worry that Trump tax cuts will cause inflation.

Excuse me, professors, but tax cuts and tax increases can’t both cause inflation at the same time. And if supply-side tax cuts increase production and work, they lower prices — as happened under Ronald Reagan’s and Mr. Trump’s tax rate reductions.

As an economist who cares about our profession, I’d love these Nobels to admit they have been wrong and steer clear of politics. They should acknowledge that the real world is different from the diagrams they draw on the chalkboards — and then just shut up. Or better yet, move to the workers’ paradise of Venezuela.

• Stephen Moore is a senior fellow at The Heritage Foundation and co-author of the new book “The Trump Economic Miracle.”