Krugman has the habit of turning everything into a “political fray” between the GOP and the Dems. So he presents a version of this figure:
Those inflation spikes were, of course, blips mainly driven by the price of gasoline — as was the recent acceleration of inflation. Did I mention that headline prices fell last month, and that most measures of core inflation are falling again? And as long as a Republican was in the White House, everyone was willing to accept their blipishness.
But with a Democrat in the WH, any uptick in prices is a harbinger of hyperinflation.
That´s too convenient for Krugman´s prejudices! A more likely interpretation is that the monetary policy of the Greenspan Fed, for whatever reason, was conducive to keeping NGDP evolving close to trend despite the “oil shock”. The same cannot be said for the Bernanke Fed. Just check the FOMC Statements from the fourth quarter of 2007 to September 2008, still under the Bush presidency. The rise in headline inflation was all that “mattered”. The consequence of all the “inflation worry” was a steep drop in NGDP (for the first time since 1938).
The figures below are illustrative. (Note, for example, that the “size” of the oil shock was about the same in the last couple of years of Greenspan´s tenure as they were in 2007-08 under Bernanke´s command of the Fed):