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Well, Donald Trump has done it again!
He stumped the chumps. The "chumps" in this case were the "blue-chip" academic and financial economists whose consensus forecast this time last year predicted high inflation and low economic growth. They were wrong on both counts.
As you've probably heard, GDP growth for the third quarter came in at a red-hot 4.3%, following 3.5% for the second quarter. Some 90% of professional economists got it wrong — all underestimating the strength of the Trump economy. QED: These weren't random errors. These were "hate Trump" errors.
They also predicted inflation of above 3% for 2025. Instead, it's likely to come in closer to 2.7%, with the last two months trending down toward the Federal Reserve's inflation target of 2%.
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Starting in the second quarter, GDP growth has been nearly twice as high as predicted.
To quote the inimitable special agent Maxwell Smart, "Missed it by that much."
This isn't the first time the whiz kids have whiffed on the Trump economy. These are the same Keynesian economists who warned at the start of Trump's first term that we would see the stock market crash. Instead, the market today sits at a record highs across all three major indices. Paul Krugman, who won a Nobel Prize in economics and wrote regularly for The New York Times for years, famously feared a second Great Depression if Trump policies took hold.
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Krugman and others all thought Trump's tariffs would ignite runaway inflation. There's no doubt tariffs did cause a rise in aluminum, coffee and beef prices — commodities that were hit by tariffs as high as 50%. But the economic pundits failed to account for the disinflationary effect of pro-growth Trump policies like deregulation, tax cuts, and pro-American energy policies. Those forces counteracted the impact of tariffs on prices overall.
One would have thought that academics and media would have learned from their repeated mistakes of underestimating Trump on the economy. Instead, they seem incapable of self-correction.
The latest blue-chip forecast for economic growth for 2026 is a measly 1.9% even though the economy has been growing 50% faster than that in recent quarters.
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This raises the question: Why are they persistently wrong? It could be that they are so afflicted with Trump Derangement Syndrome that they can't see or shoot straight. No one likes their theories and core beliefs 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 whiffed on the Trump economy. These are the same Keynesian economists who warned at the start of Trump's first term that we would see the stock market crash. (AP Photo/Alex Brandon)
His disciples appear incapable of changing theirs.
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If these blue-chippers had any integrity, they'd admit that they don't know what they're talking about and send back their Ivy League PhDs.
Fat chance. Instead, these prophets of doom will continue to give the entire economics profession a black eye. No wonder it's known as "the dismal science."
CLICK HERE TO READ MORE FROM STEPHEN MOORE
A noted economist and expert on the intersection of law, economics and public policy formation, Steve Moore is the co-founder of Unleash Prosperity Now, an organization that promotes policies fostering economic growth and job creation.
