Just two days ago Steven Rattner published an article in the New York Times describing the mood among big-business leaders, which I would summarize as smug complacency. Donald Trump, they appeared to believe, was basically their guy, someone who would cut their taxes and remove those pesky environmental and financial regulations. He might be saying some crazy things about trade wars, appointing strange people to top policy positions and threatening our allies, but no need to take that stuff seriously.
Are they still feeling smug? Or are they starting to realize that Trump’s ignorance, irresponsibility and whiny belligerence weren’t an act?
Trump has just imposed tariffs on Canada and Mexico that are substantially more extreme and damaging — to our own economy as well as theirs — than anything he suggested during the campaign. By explicitly linking his tariffs to an attack on Canada’s sovereignty — repeatedly referring to Canada’s leader as “Governor Trudeau” is both childish and deeply offensive — he has guaranteed that there will be large-scale retaliation.
I mean, it takes real effort to make Canadians fiercely anti-American, but Trump is pulling it off. And don’t imagine that Mexico, which the U.S. actually has invaded in the past, has failed to notice Trump administration threats of military action. You can expect large-scale retaliation from Mexico too.
Automobile production, which is deeply integrated across our northern and southern borders — there really isn’t a U.S. auto industry, there’s a North American industry operating in all three countries — will be especially hard hit. I almost choked when Trump declared last night that “we are going to have growth in the auto industry like nobody has ever seen.” Well, I guess we’ve never seen a large downturn in auto production outside a major recession, which is not to say that we won’t get a recession too.
One thing that really struck me from Rattner’s piece — something I’ve heard from other sources — is that big businessmen think Elon Musk is doing a good job. I guess this is one of those cases where power and privilege make you blind to things that are obvious to everyone else.
What those of us not cocooned in our corner offices see is that Musk let a bunch of Dunning-Kruger kids — too incompetent to realize that they’re incompetent — loose on federal agencies, where they began firing workers without trying to understand what these workers do or why it might be important. These firings have been followed in several cases by desperate attempts to rehire the lost workers, who turn out to have been doing things like, um, securing the nation’s nuclear weapons.
Now, Musk’s DOGE claims that it has already saved taxpayers tens of billions of dollars, but it has provided no evidence to back those claims. Instead, last month it released what it called a “wall of receipts,” purportedly documenting some of the claimed savings. That document, however, turned out to be riddled with huge errors, including misreading an $8 million contract as $8 billion and counting the same canceled contract three times. Last week it released a revised, much smaller “wall” — but that version also turns out to be full of major errors, and DOGE has already retracted 5 of its 7 biggest claims about cost savings.
Imagine how a private business would react if it hired a supposed efficiency expert who quickly fired crucial employees while making grandiose claims about the money he’s saving, but kept releasing progress reports that were full of ludicrous errors. You wouldn’t keep him on; you’d have security escort him out of the building and immediately change all the locks.
But Trump went out of his way to praise Musk, who is still wreaking havoc that goes beyond the immediate impact of the layoffs. Think about what his actions must be doing to the morale of those federal workers who remain.
Sooner or later, and probably sooner rather than later, important things are going to break. It could be the U.S. Forest Service, where large job cuts have largely stalled the precautionary work normally undertaken before fire season gets fully underway, and could leave the service short-handed when it comes to fighting fires when they come. It could be air traffic control, where Musk appears set to hand over contracts to renew the system’s technology to … himself.
If forced to guess, however, I’d predict that the first big crack in federal services will come in Social Security. The Dunning-Kruger kids’ ignorance about how the federal government works appears to have been especially acute when it comes to the Social Security Administration. Their inability to understand SSA databases seems to have led to Musk’s false claim that tens of millions of dead people are receiving retirement checks. This claim has been thoroughly debunked, yet Musk is still making it, and Trump repeated it last night.
Musk has also called Social Security a Ponzi scheme, betraying deep ignorance about how the program works; I’ll probably do a primer on all that in a few days.
Most immediately, the key point is that the SSA was already understaffed before DOGE came marching in, and is now facing significant further job cuts. There is now a real concern that the agency will begin missing payments to some seniors for the first time in its history — which will be devastating for the many Americans who depend on Social Security for most of their income. Seniors wondering what happened to their payments might try to visit the local Social Security office — except DOGE is closing many of those offices. And good luck getting the overstretched agency on the phone.
I don’t know who first came up with this metaphor, but it seems to me that America is now trapped in a burning Tesla. If you don’t know this, the doors on Musk’s cars are designed to open electronically; if they have manual releases at all, they’re difficult to get at and use. As a result, there have been multiple instances of people burning alive inside Teslas when the engines catch fire.
Well, large parts of the U.S. economy and government appear to be on the verge of self-immolation. And given the combination of arrogance and ignorance shared by Musk and Trump, it’s hard to see how we get out.
MUSICAL CODA
Dear Prof Krugman,
I agree with your analysis, but please let’s all stop pretending that the richest men are the smartest entrepreneurs; many of them are simply the most psychopath enablers of people who think that we all have to suffer meaninglessly in order not to disturb them.
This is Project 2025: The Heritage Foundation, Putin and KGB at their finest.
US and World citizens deserve much more better.
And they deserve it now.
It is very hard for me to think this is not deliberate. Putin chose wisely. An agent of chaos tied to him by blackmail who is not just impulsive, but low information and incredibly stubborn when confronted with reality. In other words stupid. I like Fran Lebowitz' take: "Everyone says he is crazy - which maybe he is -but the scarier thing about him is that he is stupid. You do not know anyone as stupid as Donald tRump. You just don't."