If inflation falls, Republicans must…

Unexpectedly, the price of a gallon of gasoline is now below $4 at most US gas stations, one of the indicators that led economist Paul Krugman to claim that official inflation data would soon show prices falling. Falling wholesale prices are another reason, as are food prices. In a paper on the subject, Krugman specifically examines the political implications of this phenomenon. What will Republicans say “if” official data shows an ebb in inflation?

Before getting to the heart of the matter, Krugman notes that Republicans already appear to be struggling to acknowledge the reality of the more than 50-day drop in gasoline prices at the pump in the United States. As evidence, he cites this tweet posted Thursday by Pennsylvania Republican nominee Mehmet Oz:

And he adds: “If – I’m pretty sure that’s a ‘when’, not an ‘if’ – the official data also shows a sharp drop in inflation, I think we’re going to see theory-augmented denial .” Conspiracy: claims that the Biden administration is manipulating numbers or otherwise manipulating commodity markets. »

This rejection is easy to understand. Inflation is the Republicans’ main battleground as the midterm elections near. Can they afford to be happy about lower prices at petrol stations or supermarkets?

We will of course see if Krugman’s prediction comes true. He’s not infallible, as he recently acknowledged by admitting he was wrong in claiming that Joe Biden’s $1.9 trillion stimulus plan would not have an inflationary effect.

PS: And how does Krugman explain today’s price drop? “Biden administration policies — releasing oil from the strategic reserve, asking gas stations to pass on wholesale price cuts, efforts to unbundle supply chains — may have contributed. But the main story is probably a global economic slowdown: the US is probably not in a recession but Europe is probably, China is still hampered by its zero-COVID policy, etc.,” he wrote in his post.

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