Yes, but the question in my mind is he also crafty. Who would of thought that someone could manipulate stock prices to such an extreme. I'd love to see his family's stock transactions over the last week or so. Talk about insider trading!
And SCOTUS then interprets the Constitution to mean whatever they just did was constitutional. Oh, and then Roberts puts on a cat suit, gets on his hands and knees, and licks off the spit. Out of respect.
I’m reminded of the late Leona Helmsley, the Queen of Mean, who once said “only the little people pay taxes.” For the Trump criminal family it’s “only the little people heed the Constitution.”
Not yet, but Senator Schiff has asked for an investigation. Think tRump’s DOJ will help with that? He’s still denying he lost the previous election and wants to sues the law firm that represented Dominion. tRump is the probably the biggest crook to ever occupy the WH.
You people require no proof when it comes to trump/musk DOGE claiming to have found alleged fraud or corruption in any of the institutions they are destroying.
You people require no proof when trump claims that the economy was destroyed by President Biden when the fact is, the economy was excellent, the best of any other country.
You people will probably require no proof of any of the tariff deals made with any of the supposed 75 countries lining up to " kiss trumps ass."
We have a person sitting in the WH who is an election denier years after it’s been shown he LOST bigly in 2020. Then the Orange Idiot-In-Chief fired IGs whose very job it was to root out waste, fraud and mismanagement. I hope that the MAGA loyalists who voted him into office lose bigly. MAGA lawmakers are already targeting infrastructure projects in red states that received 85% of the funding. They are not very bright.
Jake, unlike MAGA, people who respect the laws and the Constitution wait until an investigation uncovers proof before we announce we have proof. Does that seem strange to you?
He’s just not that bright. He is mostly motivated by doing things that will get under the skin of those who mocked him in the past. He doesn’t care if he brings down the global financial system in the process.
Wondering whether Professor Krugman knows anything about this economist from American Compass, Oren Cass. Based on a few pieces I saw yesterday, Oren Cass was the strategist behind the worldwide tariffs and seemingly also the weird motivation to derive tariff rates based on trade deficits of only manufacturing goods.
Oren Cass has a BA in political economy and a JD. Back when this country had minimum standards, this wouldn’t make him an expert qualified to mess with trade policy anymore than it would make my cousin with a BS in physics qualified to run NASA.
I strongly agree with your conclusion here about the erosion of minimum standards. Just had a similar conversation with two recently elected local school board members about our state's former Governor eliminating virtually all qualification standards for teachers.
For anyone interested in better understanding what appears to be the economic and trade policy being forced on us and the world, I learned about the link with Oren Cass from a podcast (Pod Save America - April 8, 2025 episode -- "Just Another Orange Monday"; interview begins around the 1:01:00 timestamp). Also, now see that Vox has published an interview with Cass here: https://www.vox.com/politics/407602/oren-cass-tariffs-economy-interview
Karen - that's the big difference in Trump 2.0. Trump is still a dimwit, but he has surrounded himself with loyal-to-a-fault and mostly bright billionaires who will do and say whatever he wants. Never thought I'd say I'd miss Mike Pence or Jeff Sessions. I miss them both compared to JD Vance and Pam Bondi.
It's scary how mean these people are. Mean and corrupt.
Sad but true. I agree with you. He’s not smart enough to put together an inside trade, or a short.
It is unreal that a guy that stupid could be elected POTUS. But if you look at history, the Dems abandoning their base, the flow of money from the low/middle class upward, well then people tune in to guys like Trump.
He’s dumb, but he knows how to market a brand. I don’t blame the people who voted for him. Mostly I feel bad that the boomers, myself included, squandered the legacy the Greatest Generation gave us.
It's really annoying how liberals will never let go of the narrative "we lose because we didn't represent the working class!" when the working class is voting for a billionaire who moved to his oceanfront country club from his golden Manhattan skyscraper, and pursues every single possible policy to screw them over that he possibly can.
Like, I don't know guys, maybe the problem is propaganda, and if we can just stop hating ourselves for five friggin' seconds we can realize that, and start doing something about it?
The hypnotic--and physiologically addicting--grievance-based model of non-news as exemplified by FOX News and its' lesser imitators like Newsmax is the root of GOP power. It's what *created* the quasi-messianic image of Trump in the conservative mind. It's the cornerstone of conservative power, and must be brought down.
No need to apologize bbb. My belief is that the two type of Trump voters are the extremely wealthy and the extremely uninformed.
I get the wealthy. But there is no excuse, especially in this time, for voters to be uninformed. It's due mostly to laziness, and a willingness to let others, like Fox, do their thinking for them. They are at fault. Thanks for catching that.
Hey, the good news is yesterday's markets voted trillions because Trump was not a total Mad King and was merely incompetent, and willing to accept any advice at all. That was worth a lot, despite no "deals" had been made, China is still a cooking bully spat, and "just" the 10% tariff is a huge regressive tax.
Name one policy that the Republicans implemented that helped the abandoned Democratic base. Every Republican policy has a disproportionate benefit to the rich and is destructive to the abandoned base.
You never hear Democrats decrying the raising the minimum wage and eliminating healthcare benefits.
You got it bird free. That abandoned base won't stoop to pick lettuce or climb up on a roof to tear off and replace the shingles and if anyone thinks the base is going to line up for a factory job sewing or making shoes you be smokin sumptin stupid.
Yes, "we are losing because [thing that applies even more to the side that is winning]" is a transparently silly train of thought but it's been standard liberal SOP for 20+ years. It's wild.
The problem is that most of the information people get is anti-Democrat propaganda.
And the national Democratic Party hasn’t figured out a way to get out THEIR side of the story, or even that it’s necessary. Hence the losing “Trump is a devil, we’re better” message of the 2024 campaign.
You don't seem to understand that these people don't view him as a 'Republican' in the sense you mean. Once you understand this, you'll understand why they considered him an alternative to both Republicans and Democrats. They may be wrong (they're not) that he's not truly a Republican, but it makes little difference. He has been able to set himself apart from the party and yet take over its brand as his own.
So, you see, there is no need to name 'one policy' from the Republicans in order to understand for yourself why they vote for him and other MAGA Republicans. They believed the anti-Republican (AND anti-Democratic) tariffs and trade policy are going to usher in a new era of working class prosperity. It is too bad the Democrats aren't coming up with their own focused plan of how to build that working class prosperity, but all we hear from them (including Krugman) is "manufacturing jobs aren't coming back", and that's the end of the discussion for them. So, given all this information together, I agree with Joe H: I think they were wrong to vote for Trump, but I understand it. Totally.
It's not the end of the discussion. Democrats (like Krugman) talk all the time about strengthening worker bargaining power through unionization, pro-worker legislation (bans on noncompetes, enforcement of antitrust, minimum wage hikes, etc.). They're not willing to lie and declare that a golden age of manufacturing is coming back because... that would be a blatant lie. But Trump is a moron, and he thinks his voters are morons, too. It's one of the only things he's not wrong about.
"It's not the end of the discussion. Democrats (like Krugman) talk all the time about strengthening worker bargaining power through unionization, pro-worker legislation (bans on noncompetes, enforcement of antitrust, minimum wage hikes, etc.)."
Yes, and frankly the Democrats are so much better on their messaging on these kinds of issues than they were 20 years ago that I'm kind of wondering what the hell it would take for their critics on the left to notice.
Does anybody think a Democratic President in the '20s would treat Occupy Wall Street with the same outright disdain Obama did?
"Democrats are moving too far right" is "crime is always going up" for the left. Just something that everybody will always believe is true no matter what the facts are or what evidence they're presented with.
Yes. You sound totally inspiring with your talk of noncompetes and minimum wage hikes. I'm not convinced such things would restore the working class middle class we once had, so I am completely unsurprised the 'moron' Trump voters are unconvinced and want a better paln. Do you have anything else?
Dems didn’t abandon their base, their base abandoned themselves in 1980 by voting overwhelmingly for union busting, trickle up Ronnie Reagan. After attempting to appeal to New Deal Democrats in 1984 and getting shellacked, then losing again in 1988, Dems tracked rightward to actually win an election for the first time in 12 years. It’s long past time for Boomers and Xers to own up to their mistakes in choosing flashy spokesmen for the Robber Barons 2.0.
I'm very interested in your and others' understanding of the motivations of die-hard GOP voters who continue to vote against their own economic interests.
In the case of my own family, they aligned with Reagan over his supposed evangelical religious conviction and his commitment to taking away benefits from "those undeserving welfare queens." ...Talk about hypocrisy ....
Since then, they have been increasingly sucked into the GOP-evangelical fear mongering about Dems. Heck, my brother recently commented about how the Dems are trying to outlaw Christianity. WHAT?? I think the lot never voted for a single Dem anywhere, ever, since evangelical leaders got 'in bed' with (or took over?) the GOP. (Note, in their case, they are not anti-abortion)
I'm guessing they may be reasonably representative of the GOP and orange man's hard-core evangelical base? Others see similar (of different) progressions within their own circles?
Not to be overly reductive, but the underlying cause was racism. You'll find a lot of information about this surrounding Bob Jones University v United States (1983). Not just the case itself, buf the personalities surrounding the long-running conflict.
This all stems from federal attempts on the 70's and 80's to fight segregation in private schools.
Why would you not blame the people that voted for him? His ignorance and dishonesty are so obvious and in-your-face that you have to be a moron or a terrible person to support him. Sure, other bad actors (like Joe Biden and his team) helped us get here, but without them, there'd be no Trump presidency.
"Why would you not blame the people that voted for him? His ignorance and dishonesty are so obvious and in-your-face that you have to be a moron or a terrible person to support him."
Eh, I'll push back on this. One man's "moron" is another's "person who never hears anything true."
Here's how I see it. You get sorted in a cultural bucket, right? Maybe I would have been a right winger if I was born to Southern parents, or evangelical parents; I was born to secular Catholic teachers in Connecticut. That's not something smart I did, it's just some stuff that happened.
So, they end up in their bucket, with the trucks and the rodeos and stuff, and we end up in ours with the gays and movie stars. And a person can end up strongly identifying with one of these groups over the other without ever having a "political" thought run through their head at all.
So, once you're in your bucket, you like your bucket. The people in your bucket trust Fox News. They get filled up with lies, and more than that, have the truth withheld. If you got all your information from Fox News, you would probably vote for Trump too. And the entire right-wing media ecosystem, all the way down to the socials, is basically a cascade from Fox News...
Now you might say, shouldn't people question the information they're given, and seek out other sources? Try to get independent confirmation of things, and not rely on their own cognitive biases to sort out any ambiguities?
I mean, yeah, sure. Probably. But the thing is, nobody does that because they think it makes them a good citizen. We do it because we like it, and we think it's fun. Nobody for whom following the news feels like homework follows the news. Nobody! So they just get the background vibes from their community. And those vibes are Fox News.
Ultimately, the process described above does not make somebody a "moron" or a "terrible person." Although being a moron or terrible person can certainly make following the script a lot easier.
The shame of squandering is redeemable and removing it is incumbent on boomers. As an historical note the boom started in May of 1946. Trump was born in June of '46 but has become 45 and 47. Put that in your astrology pipe and smoke it.
We like to think he is not bright. Yet that facts are he attracted over 70 million people to vote for him and has been elected as president to the most powerful Country - twice.
Maybe we are not that bright to see that his tariffs are not about the economy. He is cutting everywhere except the miliary who stands to be funded to $3 trillion. He weakens countries world wide and then threatens invasion. USA, Russian and China divide on the continents...seems he would love a WW III which he has threatened many time just to make really worthwhile.
Yes, it is way too easy to underestimate his ability to wield his arrogance and masterful ability to appeal to those he needs to extract something from. It is also too easy to forget that the likelihood of him being a Russian asset/agent means that a lot of his strategic thinking is likely influenced, if not wholly driven, by Putin. They did have a two hour private conversation in recent weeks. Why that is not discussed and explored more could be explained simply by Trump‘s ability to brush it all off by uttering the word “Russia” three times like an incantation akin to “we are not the droids you are looking for.”
Daniel, The private two hour conversation is disconcerting. Apparently, Netanyahu visited with Orban on his way to meet with Trump this last week. What were the private conversations on both ends of that trip about.
Too bad there isn't a CIA around to track what is going on. My worst fear is that Trump will want to accelerate his Manifest Destiny plan before the mid Terms. I hope I am wrong. And happy to convinced that I am.
Yeah Daniel I am not into conspiracy theories. Even so, there is something very strange about Trump's relationship with Putin. As you note - a two hour call with no reporting as to content.
It's been like this ever since, and likely before, Trump first became president in 2016. It doesn't help that Trump 2.0 has surrounded himself with equally dim-witted sycophants.
And note that Russia had no tariffs leveled against it. I would give about even odds he’s a Russian agent, or blackmailed by them ( maybe the same thing?)
The man has a grifter's cunning. He's got charm and absolutely no scruples. He believes his lies which makes him effective. He landed here at the right time when social media amplifies fear and anger and lies.
He's not smart. If he was smart he wouldn't be so careless.
Vance is the one to watch out for. He's hanging back in the curtains most of the time around this tariff stuff, hoping the poo poo doesn't smear him too badly.
There is a cabal of white Christian nationalists, white supremacists, and fascists funded by ultra-rich Oligarchs and organized by the Federalist Society. They are the real brains behind what Musk refers to as today's Revolution, they are probably finding out now that it is difficult to control someone as irrational and sociopathic as trump.
That is exactly where we’re headed and anyone who disagrees is naive. His supporters fall into 2 camps: greedy who count on his manipulation of markets and regulations to make them wealthier and the poorly educated because they eat his trash up like candy. Don’t forget the GOP has a long history of being anti-public education.
We’re ruined. Anyone who disagrees isn’t paying attention.
I think what is left of the brain mass under the golden rug is riddled with huge holes from all the STD's he's contracted over many years of sexually abusing women...he's bragged he never used condoms. So he is dumb and not very bright..
And he's also looking for bribes from the countries/industries affected by this mess...I would love to know how many have crossed his tiny palm with silver, but I guess we won't find out till the reporters/aides write their books lol
The stock market "rally" was predictable. A lot of savvy investors bought the dip and scooped up truly undervalued equities caused by panic selling. Following the herd, a lot of day traders will now jump on "the rally," drive up stock prices again and create overvalued equities. You can count on Trump to do something stupid and erratic again. At that point, the chicken littles will drive another panic. There may be some insider trading by Trump and company. But the reaction of the herd will still drive the stock market and crash the economy thanks to Trump's ego-driven policies.
Yes, that’s how markets work. But I would just throw in that it’s not clear at all that the markets have yet to price in the possibility of the dollar being rejected as the global reserve currency. It’s also very unclear if Congress has (or will have) the resolve needed to reclaim its Constitutionally-imposed authority over setting tariffs. That would be a step toward calming global concerns. And Congressional action is dependent largely on the strength of these protests, so each of us has a role here. 🙏
It seems like some of you are assuming this “dump and pump” wasn’t the goal in the first place. I would not be surprised if that wasn’t part of the plan….
I don’t know, looks to me like everything he has said and done since 2015 makes perfect sense if you just run it through the lens of what an aspiring dictator (who is interested only in consolidating as much power as possible to himself) would do.
Yeah, I was going to say that too. It's always dangerous to assume there must be a hidden game plan with Trump, but in this case, I'm pretty comfortable saying that at least PART of the point is simple stock manipulation.
I agree about the families trades. But I think all of his actions are based entirely on ignorance, prejudice, and hubris. Eventually, he discovers that his actions were stupid and misguided (or, more probably, he believes misrepresented by the liberal media) and he panics and reverses field. That is exactly what happened yesterday with his tariff rollback.
Oh, another thing about the topic behavior is for anyone else this would be illegal. The SEC would/should be all over it. But am I wrong in saying the Supreme Court pre absolved any possible sin? Shooting someone is hardly the worst case consequence of that decision. Ya know the hiring of US military assassins…
Is our (and the Supreme Court’s) lack of imagination on full display here? Just how much of the US economy could end up in his control by such manipulation of the markets? I mean ownership here. Ya know, what stock represents.
Not disrupting the economy, owning it. Now just who is the stupid, erratic and weak ones.
Mr. Krugman do you read these comments? Am I just being naive?
The immunity is for conduct relating to his official duties, which would not include insider trading. On the other hand, if Trump told is press secretary, “We are suspending some of the tariffs, but don’t announce that until I’ve confirmed that my purchases of call options have all been executed,” that would likely be sufficiently related to his official duties that the testimony of the press secretary would not be admissible in an insider trading prosecution.
I respectfully disagree. Just who do you think is the arbiter is for official duties when the orange turd uses nuclear top secret documents to wall paper his bathroom.
Yes it will be very interesting to see who made money from the dip, should be quite the Trumpian cast of characters. And one wonders could the remaining tariffs become the new infrastructure day for this regime?
Is insider trading illegal in the US? If so what mechanisms are in place to investigate and prosecute? And more importantly, are there any agencies brave enough to ?
Yes it is illegal. But the Supreme Court gave the orange turd immunity from prosecution for official acts. The problem is the only person who can decide official acts is, uh, the President. Besides his minions aren’t going to investigate someone for doing what they themselves are doing. So, there’s that.
scump is both stupid and uneducated. That this debacle became an opp for insider trading is just a bonus -- and it's something that others saw and suggested to him.
He just galumphs around, making a lot of noise bc he thinks that makes him seem like the dominant male. For ex., that stupid handshake thing he does, wherein he yanks the other person toward him and off-balance. He's just an idiotic 14yo bully, without a clue and without any rational plans. To repeat: If something accrues to the good (for him/his hangers-on) bc of one of his actions, that's just an accident -- that's the result of someone less-dumb seeing an opportunity for exploitation.
Actually, penguin eggs were commercially available until sometime in the 1960s. They reportedly have a slight greenish tinge and a salty, fishy taste. Interestingly, penguin egg whites remain transparent even after being cooked. They are about the size of duck eggs, and more rounded than chicken eggs. The shells are thick and strong. Too much irrelevant information?
Stunning phenomenon, isn't it? Paul's admission that he was lost on following some of the explanations laid out as to what was happening were for me the mark of understanding. To paraphrase Howard Lutnick; It's always the people who have a loud and simple explanation for everything that are the real fraudsters.
“Trump is Stupid, Erratic and Weak” and to that I would add “Criminal”. It’s just too tempting, being a man of such low moral character, for him to manipulate the markets, when he knows he can, in order to make a buck. Who cares about the havoc caused to billions of livelihoods in the world, as long as there’s a buck to be swindled.
However, I would like to raise a concern that I believe is especially relevant in light of the broader macroeconomic context. The United States will need to refinance tens of trillions of dollars in public debt over the next year. In this context, Trump’s decision to scale back the initially announced tariffs may not only signal a retreat, but also reflect a fundamental necessity. Maintaining an aggressive protectionist could discourage foreign capital inflows—the very inflows needed to refinance U.S. debt at reasonable rates. It's not possible to refinance massive public debt at low interest rates while simultaneously pushing away the capital that finances it.
From this perspective, I believe we may soon witness a further rollback—or even a complete reversal—of these tariff measures, because they are structurally incompatible with America’s ongoing need to attract foreign investment, especially into its Treasury market.
What we are seeing resembles a form of reverse financial repression. However, this model is fundamentally unsustainable. The data clearly show that exporters in Europe and across the globe who sell to the U.S. do not convert the dollars they receive into their local currencies. Instead, they reinvest those dollars directly in the American economy, particularly in U.S. financial assets.
These non-converted dollars—accumulated through U.S. imports—are essential for the refinancing of U.S. debt. Blocking or discouraging their inflow through aggressive trade barriers and protectionism risks cutting off a critical funding channel. This is why this version of financial repression—repressing capital inflows instead of controlling domestic outflows—cannot work over the long term. In a global financial system that still revolves around the dollar, the U.S. cannot afford to isolate itself without jeopardizing both its financial stability and global credibility.
That surely seems consistent with what I've read here, regarding the flow of foreign investment into the U.S. offsetting the trade deficit, but ... this is a causal story, while that was an accounting identity.
If we reduce our trade deficit, we increase our domestic financing needs, for a given amount of annual Federal budget deficit that must be financed. All else equal.
Absolutely—if the U.S. wants to reduce its trade deficit and still finance its fiscal deficit without foreign capital, the solution is obvious: Americans will simply have to embrace a new era of financial asceticism. Picture it—120% savings rate, zero consumption, no Starbucks, no Netflix, no avocado toast. Just pure, unadulterated patriotism in the form of Treasury bond purchases. A nation of minimalists, all living off-grid but maxing out their T-bill subscriptions. Problem solved!
Another school of thought is the 90 day pause gives MAGA a greater window to pass its tax reduction package with a better CBO score than it would have with the original plan. The tax reduction package should still get a poor fiscal impact score, but it should be a little less awful.
You’re right that some might see the 90-day pause as a maneuver to improve the CBO score for the TCJA extensions—but it’s important to emphasize that a suspension is not a cancellation. The tariffs are still on the table. What’s more, it’s very likely that Trump will use this pause to negotiate new deals, because at the end of the day, the U.S. needs free trade—not just strategically, but financially.
Regarding the TCJA, making it permanent would carry serious long-term fiscal costs. According to the Tax Foundation, projections show that the debt-to-GDP ratio would rise from a baseline of 184% in 2060 to 212% under conventional assumptions, or 205% under dynamic scoring. That’s a substantial increase, especially for a country that relies heavily on debt financing.
In this scenario, the U.S. needs free capital mobility more than ever to ensure strong demand for its bonds. If capital inflows dry up, the bond market could quickly become unstable. Rising debt with weakening capital support is a recipe for volatility, not fiscal strength.
1) Foreigners hold about 23% of U.S. government debt, though the percentage is rising, meaning that they are purchasing a larger percentage of new debt. What I cannot find, and you don’t present, is an indication of how much a reduction in foreign investment would increase interest rates.
2) You write that tariffs “could” reduce capital inflows, which is a pretty weak claim. My guess is that tariffs, by themselves, won’t reduce capital inflows. Instead, they will reduce trade volume in both directions. Exports would be reduced either by other countries imposing tariffs on U.S. exports, or by an increase in the value of the dollar.
The perception of increased investment risk due to Trump’s insanity could reduce capital inflows, but cancelling tariffs after announcing them doesn’t address that.
3) Trump is rapidly torching U.S. global credibility, so he doesn’t care about that. Hopefully he cares about U.S. financial stability, but it’s not clear that that is threatened. It seems to me the biggest risk is a recession, which will result in lower, not higher, interest rates.
You’re absolutely right to point out that tariffs do not directly reduce capital inflows, but rather affect trade volumes. However, the key issue lies in the peculiar structure of the U.S. trade-investment nexus. The United States remains unique in offering such a high rate of return on investment that many exporting countries—such as those in Europe, where I live—do not repatriate the dollars earned from exports. Instead, they reinvest them directly in U.S. financial markets. This mechanism is highlighted clearly in the Letta Report, a major recent European policy document.
So, even if tariffs don’t target capital flows per se, they weaken the very trade relationships that generate the surplus dollars needed for reinvestment. If tariffs reduce U.S. imports, there will simply be fewer dollars landing in exporters’ hands. And with fewer dollars, the ability and willingness of foreign agents to reinvest in the U.S. economy is naturally constrained.
In this sense, tariffs may not directly repress capital inflows, but they undermine the foundation on which those inflows are built—namely, trade-generated dollar accumulation. Exporting agents facing sudden drops in demand or excess inventory are likely to enter a phase of adjustment or even temporary contraction, which in turn impairs their ability to reinvest in the U.S. It’s an indirect but very real effect.
Professor Krugman: no one seems to know how the penguins are doing in the wake of this latest trump economic tantrum, not even my fellow ornithologists. i guess they don't have a spokesbird?
I love that due to time zone shenanigans the columns usually arrive just in time for my lunch break ;-). I can tell that Germany was not in the list of the 75 countries that allegedly wants to negotiate, because we still do not have a proper government. At least coalition talks have now finished, and we already know that the incoming government will be at least weak (particularly the chancellor hopeful), and that some of the proposed ministers are quite stupid (probably not erratic, though, since essentially they promised that nothing will change except for more deportations to appease the extreme right, because that always works). Given that without this quite large country in the middle of the continent, any kind of coordinated European response to basically anything will be impossible, I think this should get a bit more international screen time (so I am doing my part by mentioning it in comments, sorry if it not super pertinent to the actual topic of the post).
Your new Chancellor is prioritising strategic independence from the US and I think he is absolutely correct. Trump is unity medicine for Europe - one of the few silver linings of his otherwise disastrous regime.
What the chancellor hopeful Merz wants to do is a lot less important than what he will be able to do, and frankly, how long he will last. He campaigned as the anti-Merkel who would release Germany from left wing evil (windmills, foreigners, trans rights etc), and would impose strict austerity, but largely due to his misconceived tactics his party fell short of already modest projections. He then had to adopt a key goal from the Green party (suspending the debt brake for defense and infrastructure) after having called them leftist whackos just a week earlier, which upset basically everybody, albeit for different reasons. He is now kept in power (or rather has a chance to even get into power, it is not a done thing yet) mostly by his social democratic coalition partner, half of his party is calling for a minority government (not feasible long term with 28% of the vote) the extreme right wing (pro Trump, pro Putin) AfD has surged ahead in polls and he will have to pull of sort sort of miracle in the next 18 months because we have eight state elections in 2026 (and while the Bundesrat does not affect foreign policy, governing with waning support from the states will not be easier. Should I even mention that the name floated for the minister of the interior is a Christian nationalist who failed in a previous government at basic legislation and as late as January this year expressed admiration for Trump because governing by executive order "gets things done" ). Even as a leftist I wish Friedrich Merz good luck, because frustratingly he is the best we have to offer. I am just worried that our best is not very good at all.
Are there any signs the recent Trump trade war is causing AfD supporters to start thinking about the economic consequences of Trumpist politics? Erdogan, Orban, Liz Truss and Trump have given the rest of the world concrete economic data on populism and it hasn’t been positive for the average person.
No. The poll in which they pulled ahead of Merz' party was published yesterday (results of the weekly Ipsos "Sonntagsfrage" poll, which asks their panel "If federal elections were to be held next Sunday, who would you vote for"). AfD might have started as a big tent coalition of anti-Europeans (which included Nazis, but also mere Eurosceptics or people who just felt the EU did not do a very good job), but by now have pushed out all remotely rational or moderate voices (and it was the party base who did the pushing, not the top). What's left is a mix of angry Easterners who feel betrayed by the West (which I feel is unfair; they chose to live under capitalist rule. I was born here. If anybody has a right to be angry, it's me) and people who are convinced that foreigners are the root of all problems and Germany would be better off alone (often the same people). This is just not a mindset that is amenable to prolonged contact with reality. Also "populism" is not really the point, because populism typically means "we will make things better for you", and the main reason to vote for them is to make things worse for others. And having a realistic change to break a political system from a minority position might just feel very empowering, especially since democracy often exhausts itself in rather uninspiring compromise (I am all for compromise, and even I was perplexed by what the coalition partners consider top priority).
not technically insider trading because that involves using non-public information for private profit. Trump announced to everyone that they should buy, some hours before he announced the tariff suspension that lifted the markets.
As someone else said lately, not illegal but completely unethical.
OTOH only he knew that he was going to do that or when - though it was widely suspected (as were the Trump insiders' market purchases as the prices went down...)
What got my attention last week in the rose garden was that he was all smiles. While the rest of us were nervous he went to play golf and fund raise all weekend. Yesterday he said people were getting a little “yippy” but he still looked happy. I think his body language shows that he’s doing fine!
Two thoughts here, hope Krugman will comment on this at some point today.
1) Aren't people alarmed that DOGE is scheduled to walk into FDIC today? The timing of that is very disturbing.
2) Isn't there a very strong possibility this was insider trading? As the Crypto criminals like to call it, "ragging"?
Trump was blatantly celebrating the amount of money made by his buddies in the Oval Office late yesterday. GOP members of the House Appropriations Committee had a nice cigar smoke infused whiskey hour, plainly celebrating right next door as Mike Johnson negotiated with the more recalcitrant hard right House members about the disastrous budget.
Insider trading? Absolutely! There was a spike in buying 20 minutes before the pause was announced. I am not able to post the graph here but it will be everywhere soon.
Is Donald ignorant and arrogance? Yes, and not just about economics and trade. He knows and cares nothing about basic civics (or how government and the courts work).
Is Donald a liar? Yes, most politicians dodge and shade the truth or don't follow through on promises. But Donald is in a whole other world. He lies on a gigantic scale.
Is Donald a psychopathic narcissist? Yes
But we have known all of these things for ten to fifteen years. The American electorate picked Donald in 2016 and then in 2024 went back for more. Donald is a disaster waiting to happen. But so is the American electorate. Honesty, integrity, fairness, knowledge, merit, ability, and so forth mean nothing to the average American voter.
See why I am depressed about the future of America.
Twenty odd years ago when I was still just beginning to learn about politics, I ran into a statistic that's stayed with me ever since: 40% of Americans believe in creationism. Not "I believe in evolution but I also believe in God," not "I believe in evolution but it's directed by God," just straight-up "I don't believe in evolution." (According to a Gallup poll from a few years back, that hasn't changed).
I remember seeing that number and thinking that it was going to utterly wreck the country some day. I mean, this is the kind of statistic you stereotypically expect to see in a failing third world nation, somewhere between "much of the population also believes you can cure AIDS by having sex with a virgin" and "militias are rounding up people with glasses because intellectuals are dangerous and treasonous." You can't have a country where a full two-fifths of the population rejects that kind of elementary science and still expect it to remain a functioning developed nation over the long term. And sure enough, it isn't.
Donald is like the school yard bully who has to demonstrate every day or so how "tough" he is. That is what much of these tariffs and executive orders are. A chance for Donald to be the center of attention and show his power at the stroke of a pen. We are seeing The Apprentice Presidency.
I think you have to designate Trump as “dishonest” as well as stupid and weak. There’s no way that upwards spike would have happened if he hadn’t signalled his intent. Apparently a small but significant number of crony billionaires have made a killing. The problem for the US is that Trump is playing Monopoly (and cheating) while Xi is playing Go. Trump’s manual is The Art of the Deal, but wiser heads are guided by The Art of War.
So what is the individual American patriot to do? When Trump threatened Canada, I bought Canadian products. When he threatened Greenland and Denmark, I bought Danish stuff. Now that he is threatening everyone (except Russia), how do I respond? I did sell stocks and bought CDs. I don't think even Trump can figure out a way to screw them up, unless he abolishes the FDIC.
Seems to me that the driving factor behind his behavior is “because I can.” His ego gets off on roiling the markets and seeing everyone running, screaming his name. Next up: His casinos will start selling futures based on his next #tantrump.
This is why I said immediately after the end of his first term that the narrative the media was desperately pushing that "we've seen the last of Donald Trump" was complete nonsense. His four years in the White House were the one time in his life that absolutely everybody in the world, no matter how rich or powerful, had to sit up and pay attention to him and treat him like he was important. The chances that he walked away from that were absolutely nil, and the chances of his party turning against him were equally nil - if it didn't happen on the night of 1/6, it wasn't going to happen. Barring his death or a medical problem so severe it left him literally incapable of moving or talking, he was going to be the nominee in 2024.
Don't be surprised to find China invading Taiwan as an outcome of this, or, at least, moving up their timetable to take over the island. It is a matter of balancing weaknesses, and Tr has shown ours.
Yes, but the question in my mind is he also crafty. Who would of thought that someone could manipulate stock prices to such an extreme. I'd love to see his family's stock transactions over the last week or so. Talk about insider trading!
I was thinking the same thing Michael. Trump posted yesterday morning it is a good day to buy stocks, followed by DJT.
Yes those are his initials, but also the ticker for one of his companies.
Insider trading, indeed. Bigly.
There isn't any law that he and his family obey. They ignore the constitution.
They don’t just ignore the constitution. They spit on it.
And SCOTUS then interprets the Constitution to mean whatever they just did was constitutional. Oh, and then Roberts puts on a cat suit, gets on his hands and knees, and licks off the spit. Out of respect.
Oh, you got that!
I’m reminded of the late Leona Helmsley, the Queen of Mean, who once said “only the little people pay taxes.” For the Trump criminal family it’s “only the little people heed the Constitution.”
Not yet, but Senator Schiff has asked for an investigation. Think tRump’s DOJ will help with that? He’s still denying he lost the previous election and wants to sues the law firm that represented Dominion. tRump is the probably the biggest crook to ever occupy the WH.
You said probably?
The biggest crook to occupy the public domain.
That's rich!
You people require no proof when it comes to trump/musk DOGE claiming to have found alleged fraud or corruption in any of the institutions they are destroying.
You people require no proof when trump claims that the economy was destroyed by President Biden when the fact is, the economy was excellent, the best of any other country.
You people will probably require no proof of any of the tariff deals made with any of the supposed 75 countries lining up to " kiss trumps ass."
It is never too late to seek the truth.
You should have started much sooner!
Whose you people?
We have a person sitting in the WH who is an election denier years after it’s been shown he LOST bigly in 2020. Then the Orange Idiot-In-Chief fired IGs whose very job it was to root out waste, fraud and mismanagement. I hope that the MAGA loyalists who voted him into office lose bigly. MAGA lawmakers are already targeting infrastructure projects in red states that received 85% of the funding. They are not very bright.
Jake, unlike MAGA, people who respect the laws and the Constitution wait until an investigation uncovers proof before we announce we have proof. Does that seem strange to you?
He’s just not that bright. He is mostly motivated by doing things that will get under the skin of those who mocked him in the past. He doesn’t care if he brings down the global financial system in the process.
I agree. He’s not that bright, but he is devious. And, he’s surrounded by people “smarter” than he is.
Wondering whether Professor Krugman knows anything about this economist from American Compass, Oren Cass. Based on a few pieces I saw yesterday, Oren Cass was the strategist behind the worldwide tariffs and seemingly also the weird motivation to derive tariff rates based on trade deficits of only manufacturing goods.
Oren Cass has a BA in political economy and a JD. Back when this country had minimum standards, this wouldn’t make him an expert qualified to mess with trade policy anymore than it would make my cousin with a BS in physics qualified to run NASA.
Your cousin would be a standout among tRump's current appointees. He probably has a brain that works well.
Thank you, Lee.
I strongly agree with your conclusion here about the erosion of minimum standards. Just had a similar conversation with two recently elected local school board members about our state's former Governor eliminating virtually all qualification standards for teachers.
For anyone interested in better understanding what appears to be the economic and trade policy being forced on us and the world, I learned about the link with Oren Cass from a podcast (Pod Save America - April 8, 2025 episode -- "Just Another Orange Monday"; interview begins around the 1:01:00 timestamp). Also, now see that Vox has published an interview with Cass here: https://www.vox.com/politics/407602/oren-cass-tariffs-economy-interview
Ross douthard is pimping for oren at nyt
I just asked Professor Krugman if he’d respond to Cass’s arguments in the interview he did with Walter Isaakson on Amanpour & Friends yesterday: https://pbs.us3.list-manage.com/track/click?u=f70659e53b00de91ba3bb8419&id=d4ae7273fe&e=8783347f59
Thank you!
Karen - that's the big difference in Trump 2.0. Trump is still a dimwit, but he has surrounded himself with loyal-to-a-fault and mostly bright billionaires who will do and say whatever he wants. Never thought I'd say I'd miss Mike Pence or Jeff Sessions. I miss them both compared to JD Vance and Pam Bondi.
It's scary how mean these people are. Mean and corrupt.
Sad but true. I agree with you. He’s not smart enough to put together an inside trade, or a short.
It is unreal that a guy that stupid could be elected POTUS. But if you look at history, the Dems abandoning their base, the flow of money from the low/middle class upward, well then people tune in to guys like Trump.
He’s dumb, but he knows how to market a brand. I don’t blame the people who voted for him. Mostly I feel bad that the boomers, myself included, squandered the legacy the Greatest Generation gave us.
As someone observed Trump is a poor man's idea of how a rich person lives.
He's an inheritor/landlord aka nobility.
Sorry, but I do blame those who voted for Trump. Do not let those people who have foisted an unhinged, geriatric scammer on the world.
It's really annoying how liberals will never let go of the narrative "we lose because we didn't represent the working class!" when the working class is voting for a billionaire who moved to his oceanfront country club from his golden Manhattan skyscraper, and pursues every single possible policy to screw them over that he possibly can.
Like, I don't know guys, maybe the problem is propaganda, and if we can just stop hating ourselves for five friggin' seconds we can realize that, and start doing something about it?
This.
The hypnotic--and physiologically addicting--grievance-based model of non-news as exemplified by FOX News and its' lesser imitators like Newsmax is the root of GOP power. It's what *created* the quasi-messianic image of Trump in the conservative mind. It's the cornerstone of conservative power, and must be brought down.
Sometimes I sulk in the corner too, but then the bell rings.
No need to apologize bbb. My belief is that the two type of Trump voters are the extremely wealthy and the extremely uninformed.
I get the wealthy. But there is no excuse, especially in this time, for voters to be uninformed. It's due mostly to laziness, and a willingness to let others, like Fox, do their thinking for them. They are at fault. Thanks for catching that.
Hey, the good news is yesterday's markets voted trillions because Trump was not a total Mad King and was merely incompetent, and willing to accept any advice at all. That was worth a lot, despite no "deals" had been made, China is still a cooking bully spat, and "just" the 10% tariff is a huge regressive tax.
Name one policy that the Republicans implemented that helped the abandoned Democratic base. Every Republican policy has a disproportionate benefit to the rich and is destructive to the abandoned base.
You never hear Democrats decrying the raising the minimum wage and eliminating healthcare benefits.
You got it bird free. That abandoned base won't stoop to pick lettuce or climb up on a roof to tear off and replace the shingles and if anyone thinks the base is going to line up for a factory job sewing or making shoes you be smokin sumptin stupid.
Yes, "we are losing because [thing that applies even more to the side that is winning]" is a transparently silly train of thought but it's been standard liberal SOP for 20+ years. It's wild.
The problem is that most of the information people get is anti-Democrat propaganda.
Anti-Democrat and anti-government information
And the national Democratic Party hasn’t figured out a way to get out THEIR side of the story, or even that it’s necessary. Hence the losing “Trump is a devil, we’re better” message of the 2024 campaign.
You don't seem to understand that these people don't view him as a 'Republican' in the sense you mean. Once you understand this, you'll understand why they considered him an alternative to both Republicans and Democrats. They may be wrong (they're not) that he's not truly a Republican, but it makes little difference. He has been able to set himself apart from the party and yet take over its brand as his own.
So, you see, there is no need to name 'one policy' from the Republicans in order to understand for yourself why they vote for him and other MAGA Republicans. They believed the anti-Republican (AND anti-Democratic) tariffs and trade policy are going to usher in a new era of working class prosperity. It is too bad the Democrats aren't coming up with their own focused plan of how to build that working class prosperity, but all we hear from them (including Krugman) is "manufacturing jobs aren't coming back", and that's the end of the discussion for them. So, given all this information together, I agree with Joe H: I think they were wrong to vote for Trump, but I understand it. Totally.
It's not the end of the discussion. Democrats (like Krugman) talk all the time about strengthening worker bargaining power through unionization, pro-worker legislation (bans on noncompetes, enforcement of antitrust, minimum wage hikes, etc.). They're not willing to lie and declare that a golden age of manufacturing is coming back because... that would be a blatant lie. But Trump is a moron, and he thinks his voters are morons, too. It's one of the only things he's not wrong about.
"It's not the end of the discussion. Democrats (like Krugman) talk all the time about strengthening worker bargaining power through unionization, pro-worker legislation (bans on noncompetes, enforcement of antitrust, minimum wage hikes, etc.)."
Yes, and frankly the Democrats are so much better on their messaging on these kinds of issues than they were 20 years ago that I'm kind of wondering what the hell it would take for their critics on the left to notice.
Does anybody think a Democratic President in the '20s would treat Occupy Wall Street with the same outright disdain Obama did?
"Democrats are moving too far right" is "crime is always going up" for the left. Just something that everybody will always believe is true no matter what the facts are or what evidence they're presented with.
Yes. You sound totally inspiring with your talk of noncompetes and minimum wage hikes. I'm not convinced such things would restore the working class middle class we once had, so I am completely unsurprised the 'moron' Trump voters are unconvinced and want a better paln. Do you have anything else?
Dems didn’t abandon their base, their base abandoned themselves in 1980 by voting overwhelmingly for union busting, trickle up Ronnie Reagan. After attempting to appeal to New Deal Democrats in 1984 and getting shellacked, then losing again in 1988, Dems tracked rightward to actually win an election for the first time in 12 years. It’s long past time for Boomers and Xers to own up to their mistakes in choosing flashy spokesmen for the Robber Barons 2.0.
I'm very interested in your and others' understanding of the motivations of die-hard GOP voters who continue to vote against their own economic interests.
In the case of my own family, they aligned with Reagan over his supposed evangelical religious conviction and his commitment to taking away benefits from "those undeserving welfare queens." ...Talk about hypocrisy ....
Since then, they have been increasingly sucked into the GOP-evangelical fear mongering about Dems. Heck, my brother recently commented about how the Dems are trying to outlaw Christianity. WHAT?? I think the lot never voted for a single Dem anywhere, ever, since evangelical leaders got 'in bed' with (or took over?) the GOP. (Note, in their case, they are not anti-abortion)
I'm guessing they may be reasonably representative of the GOP and orange man's hard-core evangelical base? Others see similar (of different) progressions within their own circles?
Not to be overly reductive, but the underlying cause was racism. You'll find a lot of information about this surrounding Bob Jones University v United States (1983). Not just the case itself, buf the personalities surrounding the long-running conflict.
This all stems from federal attempts on the 70's and 80's to fight segregation in private schools.
Why would you not blame the people that voted for him? His ignorance and dishonesty are so obvious and in-your-face that you have to be a moron or a terrible person to support him. Sure, other bad actors (like Joe Biden and his team) helped us get here, but without them, there'd be no Trump presidency.
"Why would you not blame the people that voted for him? His ignorance and dishonesty are so obvious and in-your-face that you have to be a moron or a terrible person to support him."
Eh, I'll push back on this. One man's "moron" is another's "person who never hears anything true."
Here's how I see it. You get sorted in a cultural bucket, right? Maybe I would have been a right winger if I was born to Southern parents, or evangelical parents; I was born to secular Catholic teachers in Connecticut. That's not something smart I did, it's just some stuff that happened.
So, they end up in their bucket, with the trucks and the rodeos and stuff, and we end up in ours with the gays and movie stars. And a person can end up strongly identifying with one of these groups over the other without ever having a "political" thought run through their head at all.
So, once you're in your bucket, you like your bucket. The people in your bucket trust Fox News. They get filled up with lies, and more than that, have the truth withheld. If you got all your information from Fox News, you would probably vote for Trump too. And the entire right-wing media ecosystem, all the way down to the socials, is basically a cascade from Fox News...
Now you might say, shouldn't people question the information they're given, and seek out other sources? Try to get independent confirmation of things, and not rely on their own cognitive biases to sort out any ambiguities?
I mean, yeah, sure. Probably. But the thing is, nobody does that because they think it makes them a good citizen. We do it because we like it, and we think it's fun. Nobody for whom following the news feels like homework follows the news. Nobody! So they just get the background vibes from their community. And those vibes are Fox News.
Ultimately, the process described above does not make somebody a "moron" or a "terrible person." Although being a moron or terrible person can certainly make following the script a lot easier.
Because blaming doesn’t solve problems or create solidarity among a large enough group. It just makes us feel superior.
The shame of squandering is redeemable and removing it is incumbent on boomers. As an historical note the boom started in May of 1946. Trump was born in June of '46 but has become 45 and 47. Put that in your astrology pipe and smoke it.
He isn't likely able to short, but insider trading doesn't take much brain power. He's not smart, but he is cunning and profit motivated.
there’s no reason his companies couldn’t do insider trading. And I’m sure they did, along with his inner circle of broligarchs.
He's not bright, but he is cunning, and profit motivated.
We like to think he is not bright. Yet that facts are he attracted over 70 million people to vote for him and has been elected as president to the most powerful Country - twice.
Maybe we are not that bright to see that his tariffs are not about the economy. He is cutting everywhere except the miliary who stands to be funded to $3 trillion. He weakens countries world wide and then threatens invasion. USA, Russian and China divide on the continents...seems he would love a WW III which he has threatened many time just to make really worthwhile.
Yes, it is way too easy to underestimate his ability to wield his arrogance and masterful ability to appeal to those he needs to extract something from. It is also too easy to forget that the likelihood of him being a Russian asset/agent means that a lot of his strategic thinking is likely influenced, if not wholly driven, by Putin. They did have a two hour private conversation in recent weeks. Why that is not discussed and explored more could be explained simply by Trump‘s ability to brush it all off by uttering the word “Russia” three times like an incantation akin to “we are not the droids you are looking for.”
Daniel, The private two hour conversation is disconcerting. Apparently, Netanyahu visited with Orban on his way to meet with Trump this last week. What were the private conversations on both ends of that trip about.
Too bad there isn't a CIA around to track what is going on. My worst fear is that Trump will want to accelerate his Manifest Destiny plan before the mid Terms. I hope I am wrong. And happy to convinced that I am.
Yeah Daniel I am not into conspiracy theories. Even so, there is something very strange about Trump's relationship with Putin. As you note - a two hour call with no reporting as to content.
It's been like this ever since, and likely before, Trump first became president in 2016. It doesn't help that Trump 2.0 has surrounded himself with equally dim-witted sycophants.
Something is off.
And note that Russia had no tariffs leveled against it. I would give about even odds he’s a Russian agent, or blackmailed by them ( maybe the same thing?)
The man has a grifter's cunning. He's got charm and absolutely no scruples. He believes his lies which makes him effective. He landed here at the right time when social media amplifies fear and anger and lies.
He's not smart. If he was smart he wouldn't be so careless.
Vance is the one to watch out for. He's hanging back in the curtains most of the time around this tariff stuff, hoping the poo poo doesn't smear him too badly.
There is a cabal of white Christian nationalists, white supremacists, and fascists funded by ultra-rich Oligarchs and organized by the Federalist Society. They are the real brains behind what Musk refers to as today's Revolution, they are probably finding out now that it is difficult to control someone as irrational and sociopathic as trump.
Misunderestimating is bad strategery. That book of Adolf's speeches on the nightstand continues to pay off for him.
So terrifying .;
You got it. Time to screw courage to the sticking place.
Sounds like the divide in Orwell'a 1984
That is exactly where we’re headed and anyone who disagrees is naive. His supporters fall into 2 camps: greedy who count on his manipulation of markets and regulations to make them wealthier and the poorly educated because they eat his trash up like candy. Don’t forget the GOP has a long history of being anti-public education.
We’re ruined. Anyone who disagrees isn’t paying attention.
I think what is left of the brain mass under the golden rug is riddled with huge holes from all the STD's he's contracted over many years of sexually abusing women...he's bragged he never used condoms. So he is dumb and not very bright..
And he's also looking for bribes from the countries/industries affected by this mess...I would love to know how many have crossed his tiny palm with silver, but I guess we won't find out till the reporters/aides write their books lol
Nope, the extortion is all hidden in the Meme coins from him & Melania. Perfect money-laundering.
Any way to get attention and feel powerful. Time to take all that power away. Not kidding.
I am 100% with you. I’m sure Kushner is managing Trump’s portfolio, and like so many before them; they never let a manufactured crisis go to waste…:)
But instead of taking advantage of a crisis, he is manipulating constant crises in order to take advantage.
The stock market "rally" was predictable. A lot of savvy investors bought the dip and scooped up truly undervalued equities caused by panic selling. Following the herd, a lot of day traders will now jump on "the rally," drive up stock prices again and create overvalued equities. You can count on Trump to do something stupid and erratic again. At that point, the chicken littles will drive another panic. There may be some insider trading by Trump and company. But the reaction of the herd will still drive the stock market and crash the economy thanks to Trump's ego-driven policies.
Well said Raul. Yesterday’s rally isn’t the final stop on Trump’s madhouse ride.
Yes, that’s how markets work. But I would just throw in that it’s not clear at all that the markets have yet to price in the possibility of the dollar being rejected as the global reserve currency. It’s also very unclear if Congress has (or will have) the resolve needed to reclaim its Constitutionally-imposed authority over setting tariffs. That would be a step toward calming global concerns. And Congressional action is dependent largely on the strength of these protests, so each of us has a role here. 🙏
It seems like some of you are assuming this “dump and pump” wasn’t the goal in the first place. I would not be surprised if that wasn’t part of the plan….
I dunno. I think that’s giving him too much credit. I think it’s all pogo stick.
I don’t know which would be worse — if he really is this dumb or if he isn’t.
Dumb is worse, it’s less predictable. He is dumb and profoundly ignorant. A true danger to us all. Without a doubt the best president since Nero.
I don’t know, looks to me like everything he has said and done since 2015 makes perfect sense if you just run it through the lens of what an aspiring dictator (who is interested only in consolidating as much power as possible to himself) would do.
I totally agree - he not stupid, he is cunning and we're the suckers. See Robert Reich today, I think he got it right.
Trump only simulates madness
The rest of us pay the price
ROBERT REICH
APR 9
Yeah, I was going to say that too. It's always dangerous to assume there must be a hidden game plan with Trump, but in this case, I'm pretty comfortable saying that at least PART of the point is simple stock manipulation.
Will anyone investigate who bought shortly before the rally? Probably not.
I agree about the families trades. But I think all of his actions are based entirely on ignorance, prejudice, and hubris. Eventually, he discovers that his actions were stupid and misguided (or, more probably, he believes misrepresented by the liberal media) and he panics and reverses field. That is exactly what happened yesterday with his tariff rollback.
No doubt the Trump family went short the market and did very well.
He also just trained people to buy stock at his command.
Oh, another thing about the topic behavior is for anyone else this would be illegal. The SEC would/should be all over it. But am I wrong in saying the Supreme Court pre absolved any possible sin? Shooting someone is hardly the worst case consequence of that decision. Ya know the hiring of US military assassins…
Is our (and the Supreme Court’s) lack of imagination on full display here? Just how much of the US economy could end up in his control by such manipulation of the markets? I mean ownership here. Ya know, what stock represents.
Not disrupting the economy, owning it. Now just who is the stupid, erratic and weak ones.
Mr. Krugman do you read these comments? Am I just being naive?
The immunity is for conduct relating to his official duties, which would not include insider trading. On the other hand, if Trump told is press secretary, “We are suspending some of the tariffs, but don’t announce that until I’ve confirmed that my purchases of call options have all been executed,” that would likely be sufficiently related to his official duties that the testimony of the press secretary would not be admissible in an insider trading prosecution.
I respectfully disagree. Just who do you think is the arbiter is for official duties when the orange turd uses nuclear top secret documents to wall paper his bathroom.
Yes it will be very interesting to see who made money from the dip, should be quite the Trumpian cast of characters. And one wonders could the remaining tariffs become the new infrastructure day for this regime?
Is insider trading illegal in the US? If so what mechanisms are in place to investigate and prosecute? And more importantly, are there any agencies brave enough to ?
Yes it is illegal. But the Supreme Court gave the orange turd immunity from prosecution for official acts. The problem is the only person who can decide official acts is, uh, the President. Besides his minions aren’t going to investigate someone for doing what they themselves are doing. So, there’s that.
scump is both stupid and uneducated. That this debacle became an opp for insider trading is just a bonus -- and it's something that others saw and suggested to him.
He just galumphs around, making a lot of noise bc he thinks that makes him seem like the dominant male. For ex., that stupid handshake thing he does, wherein he yanks the other person toward him and off-balance. He's just an idiotic 14yo bully, without a clue and without any rational plans. To repeat: If something accrues to the good (for him/his hangers-on) bc of one of his actions, that's just an accident -- that's the result of someone less-dumb seeing an opportunity for exploitation.
It’s amazing how a stupid and uneducated man became President. Twice. Unless…🧐
An excellent post that explains the clear and present danger we are still in. Thank you.
How long before Trump decides to invade the Heard and McDonald Islands? I wouldn’t put it past him.
Just what I was thinking: an opportunity to flex our military muscles without risk of defeat. MAGA would love it.
With that talented team of only the best people, the penguins are the likely winners.
They would, wouldn’t they?
I wonder how much penguin eggs are selling for...
Actually, penguin eggs were commercially available until sometime in the 1960s. They reportedly have a slight greenish tinge and a salty, fishy taste. Interestingly, penguin egg whites remain transparent even after being cooked. They are about the size of duck eggs, and more rounded than chicken eggs. The shells are thick and strong. Too much irrelevant information?
Fascinating:-)
Thankyou for sharing
And they look like this.
It worked for Margaret Thatcher in the Falklands, and Trumpism is all about recycling old ideas.
That’s just cruel! What did those penguins ever do to be flung into notoriety! 🐧🐧🐧
Looking forward to Pete Hegseth telling the world about his invasion plans on Signal.
Those islands are essential to our national security.
Nor would I. Well said.
"The whole problem with the world is that fools and fanatics are always so certain of themselves, and wiser people so full of doubts."
Bertrand Russell
...and so it’s always gone.
Stunning phenomenon, isn't it? Paul's admission that he was lost on following some of the explanations laid out as to what was happening were for me the mark of understanding. To paraphrase Howard Lutnick; It's always the people who have a loud and simple explanation for everything that are the real fraudsters.
As the saying goes, for every problem, there is a cheap, simple, wrong solution.
It was HL Mencken who said :
“ To every complex question there is a simple answer- and it’s clever, neat , and wrong “
Yes, just ask Howard's 94 year old mother in law. Whatta lutnick.
Erasmus said almost the same thing. I'll try to find the quote.
HL Mencken
“Trump is Stupid, Erratic and Weak” and to that I would add “Criminal”. It’s just too tempting, being a man of such low moral character, for him to manipulate the markets, when he knows he can, in order to make a buck. Who cares about the havoc caused to billions of livelihoods in the world, as long as there’s a buck to be swindled.
However, I would like to raise a concern that I believe is especially relevant in light of the broader macroeconomic context. The United States will need to refinance tens of trillions of dollars in public debt over the next year. In this context, Trump’s decision to scale back the initially announced tariffs may not only signal a retreat, but also reflect a fundamental necessity. Maintaining an aggressive protectionist could discourage foreign capital inflows—the very inflows needed to refinance U.S. debt at reasonable rates. It's not possible to refinance massive public debt at low interest rates while simultaneously pushing away the capital that finances it.
From this perspective, I believe we may soon witness a further rollback—or even a complete reversal—of these tariff measures, because they are structurally incompatible with America’s ongoing need to attract foreign investment, especially into its Treasury market.
What we are seeing resembles a form of reverse financial repression. However, this model is fundamentally unsustainable. The data clearly show that exporters in Europe and across the globe who sell to the U.S. do not convert the dollars they receive into their local currencies. Instead, they reinvest those dollars directly in the American economy, particularly in U.S. financial assets.
These non-converted dollars—accumulated through U.S. imports—are essential for the refinancing of U.S. debt. Blocking or discouraging their inflow through aggressive trade barriers and protectionism risks cutting off a critical funding channel. This is why this version of financial repression—repressing capital inflows instead of controlling domestic outflows—cannot work over the long term. In a global financial system that still revolves around the dollar, the U.S. cannot afford to isolate itself without jeopardizing both its financial stability and global credibility.
This was an eye-opener, for me.
That surely seems consistent with what I've read here, regarding the flow of foreign investment into the U.S. offsetting the trade deficit, but ... this is a causal story, while that was an accounting identity.
If we reduce our trade deficit, we increase our domestic financing needs, for a given amount of annual Federal budget deficit that must be financed. All else equal.
Absolutely—if the U.S. wants to reduce its trade deficit and still finance its fiscal deficit without foreign capital, the solution is obvious: Americans will simply have to embrace a new era of financial asceticism. Picture it—120% savings rate, zero consumption, no Starbucks, no Netflix, no avocado toast. Just pure, unadulterated patriotism in the form of Treasury bond purchases. A nation of minimalists, all living off-grid but maxing out their T-bill subscriptions. Problem solved!
I love this post. LOL
Another school of thought is the 90 day pause gives MAGA a greater window to pass its tax reduction package with a better CBO score than it would have with the original plan. The tax reduction package should still get a poor fiscal impact score, but it should be a little less awful.
You’re right that some might see the 90-day pause as a maneuver to improve the CBO score for the TCJA extensions—but it’s important to emphasize that a suspension is not a cancellation. The tariffs are still on the table. What’s more, it’s very likely that Trump will use this pause to negotiate new deals, because at the end of the day, the U.S. needs free trade—not just strategically, but financially.
Regarding the TCJA, making it permanent would carry serious long-term fiscal costs. According to the Tax Foundation, projections show that the debt-to-GDP ratio would rise from a baseline of 184% in 2060 to 212% under conventional assumptions, or 205% under dynamic scoring. That’s a substantial increase, especially for a country that relies heavily on debt financing.
In this scenario, the U.S. needs free capital mobility more than ever to ensure strong demand for its bonds. If capital inflows dry up, the bond market could quickly become unstable. Rising debt with weakening capital support is a recipe for volatility, not fiscal strength.
Bravo Luigi!
1) Foreigners hold about 23% of U.S. government debt, though the percentage is rising, meaning that they are purchasing a larger percentage of new debt. What I cannot find, and you don’t present, is an indication of how much a reduction in foreign investment would increase interest rates.
2) You write that tariffs “could” reduce capital inflows, which is a pretty weak claim. My guess is that tariffs, by themselves, won’t reduce capital inflows. Instead, they will reduce trade volume in both directions. Exports would be reduced either by other countries imposing tariffs on U.S. exports, or by an increase in the value of the dollar.
The perception of increased investment risk due to Trump’s insanity could reduce capital inflows, but cancelling tariffs after announcing them doesn’t address that.
3) Trump is rapidly torching U.S. global credibility, so he doesn’t care about that. Hopefully he cares about U.S. financial stability, but it’s not clear that that is threatened. It seems to me the biggest risk is a recession, which will result in lower, not higher, interest rates.
You’re absolutely right to point out that tariffs do not directly reduce capital inflows, but rather affect trade volumes. However, the key issue lies in the peculiar structure of the U.S. trade-investment nexus. The United States remains unique in offering such a high rate of return on investment that many exporting countries—such as those in Europe, where I live—do not repatriate the dollars earned from exports. Instead, they reinvest them directly in U.S. financial markets. This mechanism is highlighted clearly in the Letta Report, a major recent European policy document.
So, even if tariffs don’t target capital flows per se, they weaken the very trade relationships that generate the surplus dollars needed for reinvestment. If tariffs reduce U.S. imports, there will simply be fewer dollars landing in exporters’ hands. And with fewer dollars, the ability and willingness of foreign agents to reinvest in the U.S. economy is naturally constrained.
In this sense, tariffs may not directly repress capital inflows, but they undermine the foundation on which those inflows are built—namely, trade-generated dollar accumulation. Exporting agents facing sudden drops in demand or excess inventory are likely to enter a phase of adjustment or even temporary contraction, which in turn impairs their ability to reinvest in the U.S. It’s an indirect but very real effect.
Wasn’t this the theme of the film
“ Rollover “ ?
Professor Krugman: no one seems to know how the penguins are doing in the wake of this latest trump economic tantrum, not even my fellow ornithologists. i guess they don't have a spokesbird?
no, they're just a bunch of fancy suits with bird brains...
hmph. some of the most intelligent people i know are birds.
I wonder if the penguins were among those 70 countries calling 47 saying « please, sir, we want to negotiate. »
I love that due to time zone shenanigans the columns usually arrive just in time for my lunch break ;-). I can tell that Germany was not in the list of the 75 countries that allegedly wants to negotiate, because we still do not have a proper government. At least coalition talks have now finished, and we already know that the incoming government will be at least weak (particularly the chancellor hopeful), and that some of the proposed ministers are quite stupid (probably not erratic, though, since essentially they promised that nothing will change except for more deportations to appease the extreme right, because that always works). Given that without this quite large country in the middle of the continent, any kind of coordinated European response to basically anything will be impossible, I think this should get a bit more international screen time (so I am doing my part by mentioning it in comments, sorry if it not super pertinent to the actual topic of the post).
Your new Chancellor is prioritising strategic independence from the US and I think he is absolutely correct. Trump is unity medicine for Europe - one of the few silver linings of his otherwise disastrous regime.
What the chancellor hopeful Merz wants to do is a lot less important than what he will be able to do, and frankly, how long he will last. He campaigned as the anti-Merkel who would release Germany from left wing evil (windmills, foreigners, trans rights etc), and would impose strict austerity, but largely due to his misconceived tactics his party fell short of already modest projections. He then had to adopt a key goal from the Green party (suspending the debt brake for defense and infrastructure) after having called them leftist whackos just a week earlier, which upset basically everybody, albeit for different reasons. He is now kept in power (or rather has a chance to even get into power, it is not a done thing yet) mostly by his social democratic coalition partner, half of his party is calling for a minority government (not feasible long term with 28% of the vote) the extreme right wing (pro Trump, pro Putin) AfD has surged ahead in polls and he will have to pull of sort sort of miracle in the next 18 months because we have eight state elections in 2026 (and while the Bundesrat does not affect foreign policy, governing with waning support from the states will not be easier. Should I even mention that the name floated for the minister of the interior is a Christian nationalist who failed in a previous government at basic legislation and as late as January this year expressed admiration for Trump because governing by executive order "gets things done" ). Even as a leftist I wish Friedrich Merz good luck, because frustratingly he is the best we have to offer. I am just worried that our best is not very good at all.
Are there any signs the recent Trump trade war is causing AfD supporters to start thinking about the economic consequences of Trumpist politics? Erdogan, Orban, Liz Truss and Trump have given the rest of the world concrete economic data on populism and it hasn’t been positive for the average person.
No. The poll in which they pulled ahead of Merz' party was published yesterday (results of the weekly Ipsos "Sonntagsfrage" poll, which asks their panel "If federal elections were to be held next Sunday, who would you vote for"). AfD might have started as a big tent coalition of anti-Europeans (which included Nazis, but also mere Eurosceptics or people who just felt the EU did not do a very good job), but by now have pushed out all remotely rational or moderate voices (and it was the party base who did the pushing, not the top). What's left is a mix of angry Easterners who feel betrayed by the West (which I feel is unfair; they chose to live under capitalist rule. I was born here. If anybody has a right to be angry, it's me) and people who are convinced that foreigners are the root of all problems and Germany would be better off alone (often the same people). This is just not a mindset that is amenable to prolonged contact with reality. Also "populism" is not really the point, because populism typically means "we will make things better for you", and the main reason to vote for them is to make things worse for others. And having a realistic change to break a political system from a minority position might just feel very empowering, especially since democracy often exhausts itself in rather uninspiring compromise (I am all for compromise, and even I was perplexed by what the coalition partners consider top priority).
Always good to hear from you Eike.
Do you think this is an example of insider trading?
It is obvious and blatant insider trading.
not technically insider trading because that involves using non-public information for private profit. Trump announced to everyone that they should buy, some hours before he announced the tariff suspension that lifted the markets.
As someone else said lately, not illegal but completely unethical.
OTOH only he knew that he was going to do that or when - though it was widely suspected (as were the Trump insiders' market purchases as the prices went down...)
market manipulation
What got my attention last week in the rose garden was that he was all smiles. While the rest of us were nervous he went to play golf and fund raise all weekend. Yesterday he said people were getting a little “yippy” but he still looked happy. I think his body language shows that he’s doing fine!
Some Trump’s spokesperson told in the news that Trump will himself negotiate those 75 deals in 90 days.
He is more capable than Mao was and North-Korea’s Kims are.
Why would anyone negotiate with someone who categorically lies and breaks agreements every time he farts?
Doesn't matter if trump negotiates and signs (acknowledge the physical and mental limits to that). He doesn't follow his own agreements.
Two thoughts here, hope Krugman will comment on this at some point today.
1) Aren't people alarmed that DOGE is scheduled to walk into FDIC today? The timing of that is very disturbing.
2) Isn't there a very strong possibility this was insider trading? As the Crypto criminals like to call it, "ragging"?
Trump was blatantly celebrating the amount of money made by his buddies in the Oval Office late yesterday. GOP members of the House Appropriations Committee had a nice cigar smoke infused whiskey hour, plainly celebrating right next door as Mike Johnson negotiated with the more recalcitrant hard right House members about the disastrous budget.
Insider trading? Absolutely! There was a spike in buying 20 minutes before the pause was announced. I am not able to post the graph here but it will be everywhere soon.
Has t-Rump replaced the members
of the Securities and Exchange Commission yet ?
BOOM!
Is Donald ignorant and arrogance? Yes, and not just about economics and trade. He knows and cares nothing about basic civics (or how government and the courts work).
Is Donald a liar? Yes, most politicians dodge and shade the truth or don't follow through on promises. But Donald is in a whole other world. He lies on a gigantic scale.
Is Donald a psychopathic narcissist? Yes
But we have known all of these things for ten to fifteen years. The American electorate picked Donald in 2016 and then in 2024 went back for more. Donald is a disaster waiting to happen. But so is the American electorate. Honesty, integrity, fairness, knowledge, merit, ability, and so forth mean nothing to the average American voter.
See why I am depressed about the future of America.
Twenty odd years ago when I was still just beginning to learn about politics, I ran into a statistic that's stayed with me ever since: 40% of Americans believe in creationism. Not "I believe in evolution but I also believe in God," not "I believe in evolution but it's directed by God," just straight-up "I don't believe in evolution." (According to a Gallup poll from a few years back, that hasn't changed).
I remember seeing that number and thinking that it was going to utterly wreck the country some day. I mean, this is the kind of statistic you stereotypically expect to see in a failing third world nation, somewhere between "much of the population also believes you can cure AIDS by having sex with a virgin" and "militias are rounding up people with glasses because intellectuals are dangerous and treasonous." You can't have a country where a full two-fifths of the population rejects that kind of elementary science and still expect it to remain a functioning developed nation over the long term. And sure enough, it isn't.
Donald is like the school yard bully who has to demonstrate every day or so how "tough" he is. That is what much of these tariffs and executive orders are. A chance for Donald to be the center of attention and show his power at the stroke of a pen. We are seeing The Apprentice Presidency.
If only he were an "apprentice"! He sure needs to learn some stuff.
I think you have to designate Trump as “dishonest” as well as stupid and weak. There’s no way that upwards spike would have happened if he hadn’t signalled his intent. Apparently a small but significant number of crony billionaires have made a killing. The problem for the US is that Trump is playing Monopoly (and cheating) while Xi is playing Go. Trump’s manual is The Art of the Deal, but wiser heads are guided by The Art of War.
Trump’s family = Insider Trading!
So what is the individual American patriot to do? When Trump threatened Canada, I bought Canadian products. When he threatened Greenland and Denmark, I bought Danish stuff. Now that he is threatening everyone (except Russia), how do I respond? I did sell stocks and bought CDs. I don't think even Trump can figure out a way to screw them up, unless he abolishes the FDIC.
Do what I do. Buy ammunition.
Maybe fund the opposition? (not necessarily the other party)
Thank you, thank you, thank you. Trump always gets himself out of messes like he did yesterday. We're NOT out of it.
Seems to me that the driving factor behind his behavior is “because I can.” His ego gets off on roiling the markets and seeing everyone running, screaming his name. Next up: His casinos will start selling futures based on his next #tantrump.
That too.
This is why I said immediately after the end of his first term that the narrative the media was desperately pushing that "we've seen the last of Donald Trump" was complete nonsense. His four years in the White House were the one time in his life that absolutely everybody in the world, no matter how rich or powerful, had to sit up and pay attention to him and treat him like he was important. The chances that he walked away from that were absolutely nil, and the chances of his party turning against him were equally nil - if it didn't happen on the night of 1/6, it wasn't going to happen. Barring his death or a medical problem so severe it left him literally incapable of moving or talking, he was going to be the nominee in 2024.
Don't be surprised to find China invading Taiwan as an outcome of this, or, at least, moving up their timetable to take over the island. It is a matter of balancing weaknesses, and Tr has shown ours.
I am afraid your dire war/ China will prove correct.