"People are acting as if they're in good shape financially. And yet, they say, wow, this is a disastrous economy. It must be a disaster for somebody. But not for me," he said. "No hint of a recession... inflation is not too far from the target of 2 percent and under 3 percent by most measures. And all of that just achieved painlessly."
PAUL KRUGMAN: The striking thing, if you look at it, it's not just, you know, the economic data have been surreally good. I mean, even optimists are just stunned by how quickly and how painlessly inflation has come down. You know, no hint of a recession, at least so far, never know, but so far, inflation is not too far from the target of 2 percent and under 3 percent by most measures. And all of that just achieved painlessly.
So, this is great. This is a Goldilocks economy. People say it's a terrible economy. But what's really odd is that people don't behave as if it's a terrible economy. You know, we can talk about surveys which -- in which people seem to be relatively happy with their own financial situation or we can just look at behavior.
People are out there with a lot of discretionary consumer spending, travel, hotels, restaurants, all of that is booming. So, people are acting as if they're in good shape financially. And yet, they say, wow, this is a disastrous economy. It must be a disaster for somebody. But not for me.
And you know, we don't really understand why this is happening. But, you know, and I can come up with multiple stories, but it is, I think, important to point out there's a really profound and peculiar disconnect going on.
CHRISTIANE AMANPOUR, CNN: I'm going to ask you what the impact of that might be. But first, I just want to, you know, reiterate your point by using a graph that is just published in "The Wall Street Journal," which is not necessarily a liberal progressive rag, is it? I mean, it's the -- you know, the bible of the financial would recall, mostly slightly conservatively tilting. And "The Wall Street Journal" graph is very interesting, with a breakdown by party of how voters rate the strength of the U.S. economy. And you can see after a dip where there was that, you know, 2020 hard time, or whatever it was, there's a dip there between 2022 and 2023. But now, it's going up amongst both Democrats and independents, steadily up, but not, it's flatlined. Really, it's just been flatlined amongst the Republican and those leaning Republican. So, do you think this is all about narrative and politics or is it really that certain parts of the population feel, you know, economically deprived rather than others?
KRUGMAN: OK. I don't think that there are people -- I mean, there are people who are hurting but they cannot to be the -- it's not what the polls are capturing. I mean, we've just seen a big jump in child poverty because some of the pandemic aid programs have been withdrawn. But that's not -- you know, and that's real suffering, but that's not what these numbers are capturing.
A very large part of it is partisanship. And it just -- it's actually from a modern perspective. It's astonishing to go back to economic surveys from the 1980s when we all seem to be living in the same country. When Republicans and Democrats had basically similar assessments of the economy.
These days, Republicans claim that the economy is -- you know, they're giving this economy a worse rating than the economy of 1980 when we had 7.5 percent unemployment and 14 percent inflation, right? It just doesn't make any sense.
And it's clear, there's a strong element of just tribalism partisanship. This is what people think they should say about the economy rather than an actual perception.
Now, you know, you can make some -- oh, sorry. And it's also the case that people -- the polling says that people, especially Republicans, say that inflation is rising when, in fact, it's falling. And you say, well, you know, but prices are up. Isn't that what matters? But back in the Reagan years, when prices continued to rise, there was never a deflation then, people did recognize that inflation was falling.
So, something has changed. I don't know exactly what it is, is it just partisanship? Is there just -- were people just so shock by the disruptions during the pandemic and the reemergence of inflation after a couple of decades when we really didn't think about it at all? That's a harder
question to answer.
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