I see that button but it lets me read one teaspoon at a time, hardly like running text which is the point of reading. And you can’t even select it all and paste it into a note or such so you can simply read it. It’s as if it was designed to _prevent_ understanding.
Real reason for Trump is not any of these. On,off tariffs allow him to manipulate the markets. He and crones invest right before his edits, and the market soars or falls by hundreds of billions. And they win every time, it's a fraud machine. i
Very good discussion, but very similar to what's been discussed before.
I think what makes people sit up is that the aggregate US trade deficit is approaching one trillion dollars, and that sounds astronomical even for an economy of 25-30 trillion dollars. I think people even understand that the dollars come back in re-investment in the US, but isn't a good deal of it actually being used to sustain fiscal deficits which are in turn caused by tax cuts combined with fairly skimpy public services?
So I think the discussion has to go beyond just the benefits of trade, and look at the overall health and resilience of government, business, households, and individuals under the current regime.
Well said. Conservatives tend to knee jerk reactions, and seldom think twice, look deeper. Most wage earners run a trade deficit with EVERYONE except their employer.
I’m wondering if it’s just me, or has anyone else noticed that a lot of the proposals of the “One Big Beautiful Bill” (OB3) sunset in January 2029? It seems to me that MAGA’s are setting up major talking points for the ‘28 elections. As an example: Vote MAGA or your tax cut will go away. Also can we quit calling them Republicans? They have no resemblance to that now defunct party.
Paul, as mentioned above, your WiFi was in and out causing frequent audio dropouts. If you have a laptop or desktop with camera you can use a direct Ethernet cable from your router and bypass WiFi. Your work is so crucial, we need to hear every word!
Moody's strips US of triple A credit rating & warns of rising debt, deficits & inflation, but hey the price of gas will likely go down...https://www.youtube.com/watch?v=Q7u87acNcSU #Resist
Paul, your audio keeps cutting out, worse in the prior video but still bad, Ryan's audio is fine. This is part of the reason people are wanting the transcript.
For me the most interesting part was reviewing the existence of a successful public policy that I would guess most people did not appreciate until now.
We can put Trump trade war together with events like the sacking of Rome.
The US housing market peaked in 2006. Declines accelerated in 2007 and then really got going in 2008.
The sub-prime mortgage market outside of the Too Big To Fail banks crashed in 2007.
US Fed and ECB started cutting rates in 2007 (something the US Fed will be reluctant to do this time round).
The S&P rose from 1400 to almost 1600 during 2007. It slid to 1250 a few times early in 2008, rallied from March to June but by July started heading lower. By 2009 it was 50% down from that 1400 average.
U Mich sentiment peaked in Jan 2007 and declined throughout the next 2 years.
Housing prices fell from 2007 through 2011.
Initial Jobless Claims were flat through 2007, rose a bit in H1 2008 and only broke substantially higher in August of 2008.
Non Farm Payrolls rose through 2007 and only started declining in May of 2008.
You can see all the graphs at this Bsky post (only because I can't post images on this substack)
The "soft" sentiment data was consistent with the decline in housing prices but the view on Wall St. (who via consolidation survived the 2007 crisis) was that this was survivable because (I remember distinctly) no substantial economic decline was clear in the hard or establishment data.
Housing was the growth driver in the post Tech bubble early 2000s. Consumers were living it and complaining about its absence.
Small business growth since Covid has been, inter alia, taking advantage of the extended global supply chain.
Sentiment data is telling us the same thing it was telling us in 2007/08. Indeed. It's yelling that things are worse than they were then (adding the caveat that this data is relative so absolute comparisons are dubious).
That we are entering this potential peril with Fed debt to GDP of 100% and, assuming Congress gets its way, much higher while the Fed will be hampered in easing, as it was in the 70s (for the same reason, change in the terms of trade) seems ominous to me.
Keep in mind CPI was elevated from 2005 peaking at 5.6% in July 2008. And Nonfarm Payrolls were weak for all of 2007 and the recession began in December 2007. So I would argue low income disposable income was degraded before the Housing Crisis.
Good point about inflation. Yes the Fed was dealing with what it thought was a containable business cycle.
Low income earners have been losing since 1983 with interludes under Clinton and Biden (Obama didn't help much outside of health care, which was a big thing).
Part of my point is that much of the establishment data has become less and less useful in finding these GDP declines until they happen.
And think about the sector that was the biggest economic bright spot in the 2000s—-home construction. Construction in general is a large percentage Latino and of that a large percentage is undocumented workers. So the one sector that should have been leading the wage growth wasn’t doing that in the 2000s. And the China Shock was undermining manufacturing jobs that generally offer solid wages. So we know the recovery from the mild 2001 Recession was a jobless recovery…and for the few years of solid job growth the best lower class jobs were being shipped to China and construction jobs were being taken by undocumented workers.
Btw, the graph of illegal immigration since 2019 looks very similar to the graph of construction job openings…and the record apartment and hotel rooms delivered happened in 2023/24.
We needed tariffs from 2002-2009. America would be much stronger had Trump somehow defeated Bush when Trump ran in 2000.
I would argue the inflation of 2005-2008 was a much worse episode than the recent bout with inflation. And so the IRA is about preventing elevated CPI that degraded lower wage disposable income that led to the Global Financial Meltdown. We have cheap energy thanks to fracking and the time to invest in renewables is when fossil fuel is cheap and when they are expensive it’s too late.
That’s because you “trusted the experts”!! The “experts” that were in charge that invaded Iraq and shipped jobs to China and oversaw the economy leading up to the GFC!! 😉
Please include transcripts with videos. Spending 30 minutes to watch five minutes of text isn’t worth it, thanks!
Literally a "transcript" button directly under the video...
Can’t see one in the app. Presumably have to use the browser to access a transcript.
I see that button but it lets me read one teaspoon at a time, hardly like running text which is the point of reading. And you can’t even select it all and paste it into a note or such so you can simply read it. It’s as if it was designed to _prevent_ understanding.
Real reason for Trump is not any of these. On,off tariffs allow him to manipulate the markets. He and crones invest right before his edits, and the market soars or falls by hundreds of billions. And they win every time, it's a fraud machine. i
Your audio cut out frequently, especially in the first part, at least while watching it live. There were many comments to that effect.
Otherwise, great video.
Loud and clear
Very good discussion, but very similar to what's been discussed before.
I think what makes people sit up is that the aggregate US trade deficit is approaching one trillion dollars, and that sounds astronomical even for an economy of 25-30 trillion dollars. I think people even understand that the dollars come back in re-investment in the US, but isn't a good deal of it actually being used to sustain fiscal deficits which are in turn caused by tax cuts combined with fairly skimpy public services?
So I think the discussion has to go beyond just the benefits of trade, and look at the overall health and resilience of government, business, households, and individuals under the current regime.
Well said. Conservatives tend to knee jerk reactions, and seldom think twice, look deeper. Most wage earners run a trade deficit with EVERYONE except their employer.
I’m wondering if it’s just me, or has anyone else noticed that a lot of the proposals of the “One Big Beautiful Bill” (OB3) sunset in January 2029? It seems to me that MAGA’s are setting up major talking points for the ‘28 elections. As an example: Vote MAGA or your tax cut will go away. Also can we quit calling them Republicans? They have no resemblance to that now defunct party.
This recording was cutting out a lot.
Yes!
Paul please use a headset or AirPods. Your laptop mic is not doing a good job of picking up your audio consistently.
Paul, as mentioned above, your WiFi was in and out causing frequent audio dropouts. If you have a laptop or desktop with camera you can use a direct Ethernet cable from your router and bypass WiFi. Your work is so crucial, we need to hear every word!
Moody's strips US of triple A credit rating & warns of rising debt, deficits & inflation, but hey the price of gas will likely go down...https://www.youtube.com/watch?v=Q7u87acNcSU #Resist
Terrible audio from Paul Krugman. Very frustrating! 😠
Paul, your audio keeps cutting out, worse in the prior video but still bad, Ryan's audio is fine. This is part of the reason people are wanting the transcript.
I wish we would also discuss higher ed and scientific research as one of our major exports.
I held on for the Sopranos end.
For me the most interesting part was reviewing the existence of a successful public policy that I would guess most people did not appreciate until now.
We can put Trump trade war together with events like the sacking of Rome.
let howard lutnik screw in tiny screws!
A question comes to mind.
Will the trade shock be as contractionary as the housing crash of 2007-2011?
I ask because I was refreshing my memory about the 2008 crisis, first on the major events and then at the FRED site.
(sequences of events source: https://www.cfr.org/timeline/us-financial-crisis )
The US housing market peaked in 2006. Declines accelerated in 2007 and then really got going in 2008.
The sub-prime mortgage market outside of the Too Big To Fail banks crashed in 2007.
US Fed and ECB started cutting rates in 2007 (something the US Fed will be reluctant to do this time round).
The S&P rose from 1400 to almost 1600 during 2007. It slid to 1250 a few times early in 2008, rallied from March to June but by July started heading lower. By 2009 it was 50% down from that 1400 average.
U Mich sentiment peaked in Jan 2007 and declined throughout the next 2 years.
Housing prices fell from 2007 through 2011.
Initial Jobless Claims were flat through 2007, rose a bit in H1 2008 and only broke substantially higher in August of 2008.
Non Farm Payrolls rose through 2007 and only started declining in May of 2008.
You can see all the graphs at this Bsky post (only because I can't post images on this substack)
https://bsky.app/profile/capemaydave.bsky.social/post/3lpcvftjui22v
The "soft" sentiment data was consistent with the decline in housing prices but the view on Wall St. (who via consolidation survived the 2007 crisis) was that this was survivable because (I remember distinctly) no substantial economic decline was clear in the hard or establishment data.
Housing was the growth driver in the post Tech bubble early 2000s. Consumers were living it and complaining about its absence.
Small business growth since Covid has been, inter alia, taking advantage of the extended global supply chain.
Sentiment data is telling us the same thing it was telling us in 2007/08. Indeed. It's yelling that things are worse than they were then (adding the caveat that this data is relative so absolute comparisons are dubious).
That we are entering this potential peril with Fed debt to GDP of 100% and, assuming Congress gets its way, much higher while the Fed will be hampered in easing, as it was in the 70s (for the same reason, change in the terms of trade) seems ominous to me.
Keep in mind CPI was elevated from 2005 peaking at 5.6% in July 2008. And Nonfarm Payrolls were weak for all of 2007 and the recession began in December 2007. So I would argue low income disposable income was degraded before the Housing Crisis.
Good point about inflation. Yes the Fed was dealing with what it thought was a containable business cycle.
Low income earners have been losing since 1983 with interludes under Clinton and Biden (Obama didn't help much outside of health care, which was a big thing).
Part of my point is that much of the establishment data has become less and less useful in finding these GDP declines until they happen.
And think about the sector that was the biggest economic bright spot in the 2000s—-home construction. Construction in general is a large percentage Latino and of that a large percentage is undocumented workers. So the one sector that should have been leading the wage growth wasn’t doing that in the 2000s. And the China Shock was undermining manufacturing jobs that generally offer solid wages. So we know the recovery from the mild 2001 Recession was a jobless recovery…and for the few years of solid job growth the best lower class jobs were being shipped to China and construction jobs were being taken by undocumented workers.
Btw, the graph of illegal immigration since 2019 looks very similar to the graph of construction job openings…and the record apartment and hotel rooms delivered happened in 2023/24.
We needed tariffs from 2002-2009. America would be much stronger had Trump somehow defeated Bush when Trump ran in 2000.
I would argue the inflation of 2005-2008 was a much worse episode than the recent bout with inflation. And so the IRA is about preventing elevated CPI that degraded lower wage disposable income that led to the Global Financial Meltdown. We have cheap energy thanks to fracking and the time to invest in renewables is when fossil fuel is cheap and when they are expensive it’s too late.
This reads like AI with faulty input.
That’s because you “trusted the experts”!! The “experts” that were in charge that invaded Iraq and shipped jobs to China and oversaw the economy leading up to the GFC!! 😉