Well, Donald Trump has done it again!
He punched the suckers. The ‘chumps’ in this case were the ‘blue-chip’ academic and financial economists whose consensus forecast predicted high inflation and low economic growth this time last year. They were wrong on both counts.
As you’ve probably heard, GDP growth came in at a blistering 4.3% in the third quarter, after 3.5% in the second quarter. About 90% of professional economists were wrong: They all underestimated the strength of the Trump economy. QED: These weren’t random mistakes. These were “hate Trump” mistakes.
They also forecast inflation above 3% for 2025. Instead, it will likely be closer to 2.7%, with a downward trend toward the Federal Reserve’s 2% inflation target over the past two months.
US economy expected to grow faster in 2026 despite stagnant labor market: GOLDMAN SACHS
From the second quarter onwards, GDP growth has been almost twice as high as forecast.
To quote the inimitable Special Agent Maxwell Smart, “I missed it so much.”
This isn’t the first time the whiz kids have snubbed the Trump economy. These are the same Keynesian economists who warned at the start of Trump’s first term that we would experience a stock market crash. Instead, the market today is at record highs in all three major indices. Paul Krugman, who won a Nobel Prize for economics and wrote regularly for The New York Times for years, feared a second Great Depression if Trump’s policies took hold.
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Krugman and others all thought Trump’s tariffs would fuel runaway inflation. There is no doubt that the tariffs have caused a surge in prices for aluminum, coffee and beef – commodities that were hit by tariffs of up to 50%. But economic experts did not take into account the disinflationary effect of Trump’s pro-growth policies such as deregulation, tax cuts and pro-American energy policies. These forces have counteracted the impact of tariffs on prices overall.
You would think that academics and media would have learned from their repeated mistakes in underestimating Trump on the economy. Instead, they seem incapable of self-correction.
The latest forecast for economic growth for 2026 is a paltry 1.9%, even though the economy has grown 50% faster than the economy in recent quarters.
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This begs the question: why are they constantly wrong? They may be so affected by Trump Derangement Syndrome that they can no longer see or shoot straight. No one likes their theories and core beliefs to be proven wrong. It was John Maynard Keynes who once famously said: ‘When the facts change, I change my mind – what do you do, sir?’
This isn’t the first time the whiz kids have snubbed the Trump economy. These are the same Keynesian economists who warned at the start of Trump’s first term that we would experience a stock market crash. (AP Photo/Alex Brandon)
His disciples seem unable to change theirs.
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If these blue-chippers had any integrity, they would admit they don’t know what they are talking about and send back their Ivy League doctorates.
Big chance. Instead, these prophets of doom will continue to give the entire economics profession a black eye. No wonder it is known as ‘the bleak science’.
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