Unexpectedly, the price of a gallon of gasoline is now below $4 at most US stations, one of the indicators leading economist Paul Krugman to claim that official inflation data will soon show a decline in prices. Falling wholesale prices are another, as are food prices. In a billet on the subject, Krugman notably explores the political repercussions of this phenomenon. What will Republicans say “when” official data shows an ebb in inflation?
Before getting to the heart of the matter, Krugman notes that Republicans already seem to be struggling to recognize the reality of the continued decline in gasoline prices at the pump for more than 50 days in the United States. As proof, he gives this tweet published Thursday by Mehmet Oz, Republican candidate for the senatorial election of Pennsylvania:
Hey @POTUS – your messaging doesn’t change the fact that inflation is worsening, gas prices are rising, and Americans across the country are spending more than ever to buy basics like groceries. Stop avoiding the issue, and DO something about it.
— Dr. Mehmet Oz (@DrOz) August 4, 2022
And he adds: “When – I’m pretty sure that’s a ‘when’, not an ‘if’ – the official data also shows a sharp drop in inflation, I think we’ll see denial supplemented by theories. conspiracy: claims that the Biden administration is rigging numbers or otherwise manipulating commodity markets. »
This denial is easily understood. Inflation is the Republicans’ main battleground as the midterm elections approach. Can they afford to rejoice in lower prices at gas stations or supermarkets?
We will of course see if Krugman’s prediction will come true. He is not infallible, as he recently admitted confessing to have been wrong to assert that Joe Biden’s $1.9 trillion economic stimulus plan would not have an inflationary effect.
PS: And how does Krugman explain the drop in prices today? “Biden administration policy — releasing oil from the strategic reserve, calling on gas stations to pass on wholesale price cuts, efforts to untangle supply chains — may have contributed to this. But the main story is probably a global economic slowdown: US probably not in recession, but Europe probably is, China still hampered by its zero-COVID policy, etc. “, he wrote in his post.
(Screenshot photo)