186 Comments

I am so glad you left the NYT and are free to express your opinions now!

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Margaret - What you said!

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He was free at the Times too.

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Anybody else getting the vibe of Russia in the early 90s? Instead of Yeltsin "Legless in Limerick," we have an increasingly addled premier whom a collection of oligarchs confidently expect that they will be able to manipulate. The question is, who walks away with Gazprom and who ends up falling out of a window? Remember also that lots of Russian middle class got their savings wiped out by the looting of the chaotic Yeltsin era.

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I've been thinking exactly this for the past few months. It's nice to see I'm not alone.

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I would go back further in time. Trump is trying to use rudimentary tools like Lenin did when devising his Novaya Ekonomicheskaya Politika (NEP). The difference is that Russia at that time was at the bottom of their bloody civil war with collapsing economy. While it's pretty tough to imagine a better economy ours in the US is in, today.

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I'm reminded of a story about Fidel Castro and Che Guevara

A late night meeting of the Cuban leadership towards the end of 1959. Fidel Castro looks around the room and asks for “a good economist” to become the president of the National Bank of Cuba. Half asleep, Ernesto “Che” Guevara raises his hand.

A few years later, when the bank is having a run and Castro asks Guevara his plans- "You said you were a good economist”, to which Guevara replied:

“Oh, I thought you asked for a good communist!”

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I've been saying this for months. We will see both declining GDP and inflation, starting sometime in 2025. It won't be as severe or protracted as 1990s Russia, but that's the general model. Putin's revenge.

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This is the risk exactly. In the last few months I've reduced my families exposure to US equities from around 70% to 26%. There's going to be a lot of retail investors left holding the bag.

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Smart move. I purchased a laptop in anticipation of the tariffs before prices go up.

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I think, and this is just supposition, that Trump imagines himself to be both Putin and McKinley. He certainly has a belief that the nation lies in ruins and he has Putin's love of open corruption though so far he has stopped short of secret murder. But he also does seem to be deeply in love with things McKinley championed including territorial expansion, tariffs and the gold standard. Whether those things come to pass is an open question but I expect him to play the latter in public while Vance and Musk play the former in private.

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In terms of Cheeto "stopp[ing] short of secret murder," my take is that he just hasn't had the chance. If he did, and thought he could get away with it (presidential immunity, hurray!), I could see it happening faster than we might think. Because he doesn't have any internal voice to tell him that murdering someone might be, you know, "wrong."

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Yes, that is why I added the qualifier "so far". His lawyers argued unambiguously before the high court that murdering political opponents was allowed and the justices said *yes*. All else is on the table now.

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Have you ever checked out Gazprom’s HQ on Google Maps satellite? Looks like the Avengers’ HQ! And Putin has run Gazprom into the ground with his asinine invasion of Ukraine.

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It would be interesting to try to figure out what Donald's actual plans are. I suspect that he has some even if he does not want to make them public.

For example, for the Secretary of Defense -- his job will be to fight the culture war at the DOD and do whatever Donald says to do.

For tariffs, what Donald actually wants is to threaten high tariffs but with the proviso that corporations which contribute to Donald-related causes, will be exempted from said tariffs.

It is safe to say that any plans will be immediate and transactional and be to the benefit of Donald and/or close associates.

Thanks again to Professor Krugman for his good comments. I enjoy reading them more on this site than I did when he as at the NYT.

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I agree. His Tariff Protection racketeering is the likely agenda.

Even now, he’s busily collecting multimillion dollar donations for his Government Regulation Protection racket and the corporations are hightailing it to Mar-A-Lago with their checkbooks. He expects to have half a billion $$$ by April.

“Nice little corporation you’ve got here; it would be a shame if it got regulated and tariffed into bankruptcy…”

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Donald probably learned some things from Putin. They say that if you have a successful business in Russia, you get a partner. Someone with the right connections comes in and becomes your partner if you want to avoid "regulation" "taxes" "tariffs" and so forth. Donald will probably go all through government and develop "opportunities" for all businesses that deal with the government from defense contractors, medical suppliers, transportation contractors, Big Pharma, and so on.

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It’s a helluva thing. Economic analysis has morphed into abnormal psychology, and economists are reduced to studying randomness. In truth though, it is not the randomness of one diseased brain, but the randomness of a sick society. Where is Erich Fromm when you are him? Still dead.

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Putin taught him well.

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Leave us not forget that tiktok is about to vanish thanks to Zuckermusk et al's bribe-based economic plans, leaving them no choice but to copy it and make bank.

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Perhaps, although one plan being mulled is to sell it to Musk:

https://substack.com/@sinocism/note/c-86044545

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Another angle on the muscling-in.

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"corporations which contribute to Donald-related causes" - small correction - "corporations contribute to Donald's personal bank account" - that is where his preferred target is - where he can see the total rising day to day & get at the money directly any time he feels like it !

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I always feel more intelligent than I am after reading your posts. Definitely welcome and needed.

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Dw, we all suffer from a little Dunning-Kruger syndrome after reading a Krugman wonk.

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Dunning-Kruger is what TFFG and his minions have-they believe they are much more competent than they are.

What you're thinking of is perhaps "Impostor Syndrome"?

Or perhaps "L'Espirit de l'escalier"- "Darn! I wish I'd said that!"

https://donmcminn.com/wp-content/uploads/2022/03/401_lespirit.jpg

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It makes perfect sense that people who don't believe in government have no plans.

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They have a concept of a plan!

To be revealed...in a few weeks!

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Crazy stuff can be entertaining in talk radio, cable TV pundits and podcasts but this will affect actual people’s lives.

As bad as his economics are it’s his plans for the “muscle” departments that truly frighten me.

The USA had a nice run but it seems we have become too unserious to keep it going. We’re entertaining ourselves and our nation to death.

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I think the unseriousness started in the 60s and it's just finally manifesting in everyone giving up on the institutions.

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You’re right. It was a bad sign when California elevated a B movie actor to its governor’s office.

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Ronald Reagan was one of the worst American politicians IMO and I think he's personally responsible for turning California into what it is today. I think the easiest way to find people on the "Right" who aren't thinking carefully is to watch what they say about him.

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Reagan is responsible for many of the bad things, like “freeing” people from mental care facilities who had no abiity to care for themselves and ended up on the streets. Reagan did not facilitate the good things that make California the world’s fourth largest economy.

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Having grown up around conservatives and hearing how great he was it was really surprising when I read about what he *actually did* both as governor and president. He was much better at PR than anything else.

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He embodied the worst antigovernment tenets endemic in western movies.

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Professor Krugman: you described the Council of Economic Advisers appointee, Stephen Miran and his publication, “A User’s Guide to Restructuring the Global Trading System,” in such a way that i think it sounds more like a recipe for economic policy whiplash. and like physical whiplash, i suspect economic policy whiplash sounds damned painful.

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I think one of the real problems is that Trump knows little (being generous there), and he believes in nothing but his own self-interest. He’ll spew out the “policies” espoused by whomever best flatters him at any particular time, and that will shift over and over and over again. We’re in for a ride.

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And will shift as his dementia leaves him increasingly paranoid and even less coherent

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Another great piece, but…are we sure it’s not just fucking stupidity coupled with complete selfishness?

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Just to add another detail -- any tariff inflation that comes will be long-lasting. It will initially cause major disruption of relative prices, mostly in the goods category. Those will be gradually resolved as service prices, mostly sticky, adjust. We saw this process in the case of the post-Covid supply-chain disruptions. Tariff effects will be much the same. See here for some charts: http://tiny.cc/Tariffs

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Ed,

Very well done. Thanks for writing that up. Well worth the click. The stakes are very high.

Tim

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I'm just curious as I haven't seen the data but Trump did enact tariffs during his first term. Is there some analysis of those tariffs that support your claim?

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More on Bonds please.

The 10 and 20 year Treasuries have a direct correlation to the election. If Tax cuts become permanent we are looking at very high rates.

More on Bonds please.

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The ABCDEs of the five crises we're facing right now:

Authoritarian rule by tech billionaires driven by TESCREALism.

BRICS competition and de-dollarization (this will lead to war).

Climate change catastrophes.

Dismantling and reallocation of "the people's" assets; e.g. USPS, Social Security, etc.

Economic crash worse than 2008.

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Plans are irrelevant. He’ll do what he wants, call it genius, and his drooling braindead fans will lap it up while the rest of us check out (or increasingly agree) because Exhausted.

Evidence? The LA fires. All libs’ fault—and most libs seem to agree. So much better to have Official Scapegoats—and soon some profitable, entertaining camps to concentrate them in!—than to take on the systemic power of Big Oil. Trump is too busy fellating them for money; all he has to do is destroy a few Cali Democrats’ careers and the majority will applaud, grateful that their pleasure-flying murder of their children’s future can be buried even deeper.

He’ll keep on winning. Because we want him to.

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By “we” I presume you mean the majority of white voters.

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Trump's followers are a fickle crowd that will likely suddenly turn on him when their lives become even more difficult. Who will they turn to for leadership when that happens?

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I'd like to think so but I'm not so sure. I have a friend whose family business was destroyed by Trump's tariffs and she's still a loyal fan.

He sings the right tune and he's got a great supporting media system.

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As long as the deportations happen I'll consider him having fulfilled his promises although I'm really on the edge of what could be considered a "Trump follower." I didn't vote for him in 2016 and don't think he's going to actually solve most of our problems.

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Could you explain why you’re on the edge of being a Trump follower? What is it about his policies or persona that attracted you, especially compared to Democrat policies?

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Eggs! Eggs are too expensive. Aaaand…we’re back!

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I read all your responses and am glad you covered the issues so well. It'll save me writing a response. Thank you.

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1dEdited

I like Richard Stalman's phrasing: Trump is a "wrecker" (the word soviets used to talk about people who disrupted the communist mode of socialization.) I believe the state has been turned against the American people and Trump seems likely to disrupt that. Outside that I think deportations absolutely have to happen if we want any real future for the country and its people.

I don't think Trump will go far enough with the deportations and his interventionist rhetoric really bothers me. Last time his appointments where horrible so I think his ability to disrupt the state is limited as well. People say he'll be more careful this time but I'm not holding my breath. I didn't vote for him in 2016 because I was certain he'd be a war monger and I really hate that we're spending so much effort and good will policing people who have nothing to do with us.

I would have voted for Sanders in 2016 if he had won the primary. The rest of the democrats (and most of the Republicans too) have policies that, from my perspective, seem to be somewhere between insane and actively malicious.

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Thanks for the quick response. A couple of things I’m really curious about.

1. How has the state been turned on the American people? Do you have specific examples?

2. “Deportations absolutely have to happen”. Why do you think so? The obvious negatives are the fact it’s hugely inflationary because they do jobs that Americans won’t. It will be enormously expensive to deport them. They pay almost $100 billion into social security that will need to be replaced. They create businesses and provide impetus to our economy to help replace the slowing birth rate so we don’t end up like Japan.

3. You say Democrats have policies that are “somewhere between insane and actively malicious”. Can you explain what these policies are, and contrast them to alternate GOP policies?

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1dEdited

1)

We have effectively been in a cold civil war for the past two+ decades. We have wartime deficits, wartime labor participation among women, wartime death rates among young men. The people and military just aren't shooting at eachother. I think a good specific example is the H1-B visa program which prioritizes foreign workers above Americans. Another one is the complete abdication of defense of the border.

2)

Firstly, social security is going away regardless. The question is when not if. That was a horrible idea. Taking everything else with it is completely insane.

As to the economic contributions: I don't think they're actually helping. The thing we're most short of in the US is social cohesion. Bringing in foreign people with completely different ideas of how socialization works is *exacerbating* this, not helping it. We have nearly a third of working age men unemployed, there are plenty of people here. Yes deportations are strictly inflationary but I think they would still improve the lives of actual Americans because it would move the labor market equilibria in their favor. Regardless if you replace the population you haven't really improved the lives of the incumbent population, you've simply redefined the problem. That's almost the exact opposite of what people (other than investors) want.

Also what's wrong with Japan? It's not a great place to invest but nearly everyone says it's a very nice place to live. Fundamentally that's what Trump voters want: a nice place to live, investments be damned.

3)

Mass migration, miltary intervention (both parties have been campaigning for this, MAGA seems to be the first major movement in a while that's provided an alternative), the gender stuff, DEI (yes even in it's most strict interpretation that's a horrible idea for everyone.) I can keep going if you'd like more.

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So much to unpack here, as they say. I can't address all these "points", but will take the low hanging fruit. I'm sure people smarter than me will be only too ready to address the others. All my points are mostly economic, not talking about the morality of forcibly separating families or leaving old people destitute by the side of the road.

1) You claim wartime deficits as an example of the state being turned on the American people. Firstly, I'm assuming you mean by wartime you're talking about the equivalent of wartime? If so, how would you categorize a once in a century pandemic? Did you see the Economic indicators when nobody was working? Would a severe recession or depression have been preferable? And did you know that the GOP are responsible for most of that deficit with their patented "deficit must be reduced with Dems are in power so they can't spend, but when we're in power tax cuts for all our donors" policies? Are you saying you're upset that women are increasingly participating in our economy?

2) "Social Security is going regardless". You do realize that's an opinion, not a fact? Do you know that older people are a huge part of the particpatory vote, and won't quietly let that happen? What is your/GOP plan to handle millions of destitute old people? It sounds like you're making a non monetary argument against immigration. Do you know the history of the US? That these were arguments made against Irish, Italians and now current immigrants. Do you realize there are numerous studies that show both the economic and social benefits of immigration? Do you realize that in places like Florida that have worked virulently against migrants, your assertion that young american males will take those jobs has been proven false? Do you know that Americans in general haven't been proven eager to take up double digit working hours for less than minimum wage?

3) Do you know your preference against mass migration flies in the face of every reputable study regarding avoiding economic stagnation due to the birth rate reduction? What exactly is "the gender stuff" and how does trying to protect a tiny minority impact you and other americans so much? Why is DEI such a horrible idea? Do you not want to make this country hire equitably for the best candidate and not just whose in the "good ole boy" network or went to the right frat? What is your/GOP solution to Putin's invasion of the Ukraine if not to help our allies?

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What a surprise, the so called Trump adjacent guy turned into a full throated Trump guy down to fleeing when confronted with questions he simply cannot answer in a reasonable fashion. I find the best way to confront Trumpers when they spew obvious easily disproven nonsense is to keep asking obvious questions regarding their nonsense that they can't answer. I mean, everyone can see the overwhelming stench of white male identity politics here, but its good to have it out in the open and expose these people for what they are.

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So the slogan is "Talk big and . . . what stick?" ;-)

Just for the record, because his writing was so delightful, and although he didn't give it a name, I think Lincoln's 'Team of Rivals' was first written about in Gore Vidal's Lincoln. At least that was where I first encountered it.

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I loved that book!

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The best way to predict the future is to know history. People never change or learn . From his last time in office , I expect chaos and bad policies that in the short term only benefit Trump and his rich allies. Long after they get regular folk will get those rich people too. I am preparing for a manure show in the economy. If I had not talk to MAGA people in grocery stores , I would of thought no one was dumb enough to believe Trump could snap his fingers and the price of food would drop. He might get that done , by causing a massive recession and deflation.

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The price of eggs is just an excuse to vote for people who will do all they can to preserve the systemic political, economic, and legal advantages of white Americans and expand the oppression of the rest of America.

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