We noted in May 2021, for example, that “we may be on the verge of an inflation surge that could take down our financial markets and cut deeply into average Americans’ standard of living.”
But not Moody’s Analytics Chief Economist Mark Zandi. He got it completely wrong.
In December 2021, he was still claiming that Build Back Better would “not have a meaningful impact on inflation” and that it “likely will reduce the inflation that lower-income and even lower-middle-income households will face.”
It wasn’t until the next year that he – sort of – admitted he was wrong, saying it was “irksome” that “economists, including me, were … thinking that the high inflation would quickly recede,” and then blaming workers for staying at home during COVID, the war in Ukraine, and the Fed. Not mentioned once: Biden’s spending spree.
Now, because there’s a Republican in the White House, Zandi is wringing his hands about inflation, even as it comes in lower month after month than during the Biden years.
Zandi told CNBC this week that “I don’t get any sense that inflation is decelerating. It feels like it’s uncomfortably and persistently high.”
He is hardly the only Keynesian economist who can’t see straight when it comes to inflation.
In 2024, 13 Nobel Prize-winning economists – each of whom had said that Bidenomics would not fuel inflation – signed onto a statement warning that Trump “will reignite inflation with his fiscally irresponsible budgets.”
That led our friends at Unleash Prosperity to say that these economists “should send back their Nobels and Ph.D.s, and admit that when it comes to the real world, they have no idea what they are talking about.”
But Zandi has been consistently and wildly wrong about far more than inflation. In 2016, for example, he predicted that a Trump presidency would cause the economy to spiral into a recession with “a lot of lost jobs, higher unemployment, higher interest rates, lower stock prices.”
In November 2020, we noted other Zandi failures about Trump’s first term, including the rapid recovery from the COVID lockdowns under Trump:
Zandi predicted that in Trump’s first term, the unemployment rate would be 5.7% in 2019, and climbing. Actual result: Unemployment was 3.5% at the end of 2019, and falling.
He said there’d be 146 million jobs in 2019. Actual result: 152 million.
Zandi said the economy would eke out just 2.8% real GDP growth from 2016 through 2019. Actual number: 7.7%.
He said the S&P 500 would drop 18% in Trump’s first three years. It climbed 40%.
It’s worth noting that Zandi’s latest forecast is already way off when it comes to jobs. In his September 2020 report, he said the unemployment rate for this year would be 9.1%, falling only to 8.3% for 2021.
The unemployment rate is already down to 6.9%.
We’re not surprised that the mainstream media keep turning to liberal economists like Zandi for talking points on the economy, because they know that these “experts” will reliably bash Republicans and cheerlead for Democrats.
But what does it say about Moody’s Analytics that it keeps paying Zandi to be wrong all the time?
— Written by the I&I Editorial Board
I & I Editorial Board
The Issues and Insights Editorial Board has decades of experience in journalism, commentary and public policy.
