Nobody in other countries is going to put up with his tantrum. We are rapidly becoming an international pariah. The days when people came from afar to vacation and study here are evaporating. We won't be an important market anymore because no business can plan with a madman in the WH. It is becoming unsafe for our own citizens... in 6 months, he is slaughtering the goose that laid the golden egg.
Multiple golden egg laying geese are being slaughtered. America’s universities were engines of innovation and huge attractors of foreign talent and foreign money. The religious and ideological jihad against universities combined with abusive visa policies has killed that goose.
Much of the trade deficit came flowing back to America in investments in bonds because of the world’s trust in our status as the world’s premiere stable democracy. That goose is now dead.
America was a popular tourist destination. Abusive border agents, ICE detention of tourists and the staggering unpopularity of Trump throughout the non-Russian world have killed that goose.
Immigrants have provided demographic growth that had helped America economically out-perform other countries with negative demographic growth. Immigrants provided cheap, dependable labor for many industries that would struggle without them. At the same time, immigrants paid taxes for services they often could not or simply did not use. That goose is dead.
Cities are the engines of GDP. Most of America’s wealth is produced in cities. By targeting cities with ICE raids, trying to withhold infrastructure and other money, and vilifying cities as crime-infested shitholes, Trump is trying to kill the most important goose of all.
I’m sure there are more dead or dying geese that I have overlooked…
You don't suppose he's constructively acting on behalf of Vladimir, do you? It's either something like that, or something more obvious: the Executive Branch has become a clown car. Literally. They have no idea of how they come across to the rest of the world or what history will record of them: that they were a gaggle of actual idiots. The pathology is a defect or corruption of ToM, theory of mind.
And all his minions and supporters are, just like him, happy to destroy civilization and the lives of everyone else on earth -- out of nothing more than spite. To them the world doesn't deserve to exist without them, and they see no reason to leave behind anything but smoldering ruins.
We're not going to escape this situation unless we find a way to outlaw the Lies for Power and Profit industry and it's fictions sold as facts. Rupert Murdoch and his GOP client are worms in America's brain and must be excised for our survival.
We must remove the maga politicians and pass a law prohibiting huge political donations by corporations. I believe that Citizens United helped get us into this mess and this is part of how we can get out of it.
Spite is just what the cynical give to the foolish to support their short-term get-richer quick attempts and build dynastic power. It is essential to wing-nut politics but not a principle. It requires a tactic of constant misdirection, and, although endemic and persistent it will be difficult to pursue as a strategy. Patience is not a strength here, but it does triumph over partiality. Democrats can learn to play rock/paper/scissors in the meantime
There is a real risk I think the US could start to resemble a second world society like Latin America. These nations are still relatively wealthy but with rampant inequality, corruption, violence and political instability. But maybe hitting rock bottom might lead to a turnaround.
A number of experts have been saying how easily Trump's policies could turn us into Mexico: Lots of poverty with a few middle class families and very few extremely wealthy oligarchs.
That's not a mere risk - it's their goal. Between Project 2025 and the "Dark Enlightenment" neo-reactionary crowd, we're already nearly a banana republic.
"We won't be an important market anymore because no business can plan with a madman in the WH."
After the Trump tsunami recedes, the value of the US market will still be high, if only because we are shared interstate commerce with 300 million consumers that all speak the same language, and we have abundant natural resources.
Other than that, the only model that looks plausible to me is the US becoming like the UK: a remnant of a vast global power. It's China's turn next.
trump has also become an international laughing stock. His supposed buddies, the Russians, put out widely viewed memes about the parade and the TACO tag was issued by the financial times.
All this pain and suffering, and to what purpose? The best best explanation is the only purpose is for the greater power and wealth and the great magnificence and greater deference of the dictator, Donald Trump.
An ageing and senile Trump remaining in office might be a better option than being replaced by someone who is equally evil but more competent. OTOH, the MAGA movement would likely collapse with infighting and the lack of a unifying leader when Trump keels over.
So we wind up with Vance as pres and Johnson as vice. I think Vance would probably be a bit of a wild card without Trump, and it would take Johnson out of the house. My bet is that things would improve a great deal.
No, he's flipped in the last few years. He was a "never Trump" at one time. Always keep in mind that he graduated near the top of his class at Yale. He's not a dummy, regardless of what you might think of Yale.
Not necessarily. I think Vance acts like he thinks Trump wants him to act. That's why I said he would be sort of a wild card - he would have to decide how HE wants to act. Without higher guidance.
True. He was cynically placed a banana peel away from being the top exec for when the legislative & judicial branches matter not a whit anymore by the tech oligarchy. An opportunistic phony raised, I'm assuming, non-practicing Protestant, married to a Hindu, now becoming Catholic to fit in with Leonard Leo's Society. Peter Thiel likes to remain behind the curtain and if he thinks he and his wealth will protect him from the anti-LGBTQ theocrats, he should have listened to the secret recordings of what was said about him by them (Politico? NYT?).
The line of succession doesn't simply step everyone in up one position. The Speaker doesn't automatically step up to VP. Vance would appoint someone, and Johnson has not shown the slightest aptitude for executive power, being a pathetic, lying weasel. Apologies to weasels...
Dr Krugman, it did my heart good to read your post for today and better to read "Tens of thousands of paid subscribers" at the bottom of your virtual page. Thank you for your humanity, your equanimity, and for educating us day-by-day.
Professor Krugman: you said: "Would Trump say “This won’t raise prices, because businesses will absorb the tax”? Of course not. So why imagine that foreign businesses will absorb the cost of tariffs, which are nothing but sales taxes on goods made abroad?"
this is the nut of the punishment being imposed upon americans today. how can any MAGA successfully argue against this?
and where is the media in all this? why are they STILL SILENT? why are americans supposed to rely upon foreign news sources to learn anything substantial or true about our own government leaders??
Now you know MAGA isn't interested in arguing anything, although they do like to bicker. If in their minds they "own the libs", they consider it a success. They need no logic, no rhyme or reason.
As for the lamestream media, they're owned by millionaires and billionaires who will do whatever it takes to maximize profitability. That means not getting into any battles with King Klown. Government leaders? Sold to the highest bidders.
Can you imagine what the media would have done if Biden or Obama called the Fed Chair "Too Late" or had interfered with the Fed to the extent Trump has interefered?...
Or ANYTHING he has done: blatant coercion, threatening, grifting, impeding justice, treason, usurping our democracy, lawlessness, the list is endless. Trump is a mobster.
The only reason we are in this pig's mickey is that "tariff" and "tax" are different words. If tariffs had been denominated "import taxes" ab initio, El Caudillo del Mar-y-Lago would never have fallen in love with them. If they were called "import taxes", nobody in the GOP would support them. It is a measure of the bottomless stupidity of Trump and his junta that the entire world economy has been jeopardized by this purely semantic distinction.
Oh I wouldn't be so sure of that. The GOP doesn't really have a problem with sales taxes - because they're regressive. They're okay with taxing the poor. They just don't want to tax their biggest donors.
Comrade O'Brien advises: The GOP maybe alright with "sales taxes" in principle, but none of them, especially not Trump, would make "sales taxes" the centerpiece of their economic program.
That's true, they would try to hide it - albeit in plain sight. You know, it'll show up in the party paper in the morning, then disappear in the evening when we switch from being at war with Eurasia to being at war with Eastasia. All written in Newspeak.
Wonk away Prof Krugman. I've become more impressed with Jerome Powell as time passes, standing firm in this miasma of chaos.
One thing I'm worried might further shock the economy ... or maybe a slow bleed is the 3000 a day deportation goal. What happens when fresh food is no longer available? I doubt those college grads we talked about yesterday will be all in for picking fruit and veggies.
And the soft dollar ... and now three major armed conflict in the world and our despot playing out a two week bluff that he may throw our collective hat in the ring? That gives me chills for those jobless college graduates.
Would THAT be enough to stir Congress into action? Doubtful. And the TACO will taco and these rest of the world already knows his game. Imagine being predictable in unpredictability!
After all the illegal deportations I thought all these tough-talking MAGAs would be ready to jump right in and pick all the fruit and veggies that will otherwise rot in the fields and man all the home/apartment and infrastructure construction sites. Their daily Trump kool-aid consumption leads to their noticeable brain rot.
We've noticed that the Big Taco chickened out on that bit. Or so he says. yesterday. Today? Who knows. stephen miller still hates everyone, though and wants them to pay for it. trump's a non-entity except that he's got some powers everyday folks don't have.
The phrase "two weeks" is the giveaway. It's his way of saying "ain't gonna happen" (unless something weird happens to change his "mind" back). He figures (correctly) that his supporters won't remember and the MSM will have moved on to cover his latest distraction.
Every morning I look forward to your post on econ-related topics. You are the place I hang my sanity hat.
I guess a little bit of me forgot 4 yrs ago when we 1st had to cope with the trump circus, how difficult it was. And this time it is on steroids having zero "sane" people in the cabinet and othe position in govt. It's a free fall.
I haven't a clue how this all will"end" but I will do everything in my power on God's green earth to turn the ship around. It won't be much but when I think of all the people on No Kings day, the sum of effort will be great. Thank you again Paul, we all appreciate you more than u know.:-)
Like you I read this column every morning and then Dean Baker’s. I highly recommend reading his columns, too. They are both great for substantive, fact-based and very relevant information. Lately he has been taking the media, especially the NYT — aka the “newspaper of record” — to the woodshed for lying about the size of the No Kings protests and for wildly exaggerating the decline of Iran’s economy. But the best one IMO was this:
“ Yes, the Media Lied About the Pre-Election Economy”
Honest and relevant information about our economy is necessary for our democracy to function but for years we haven’t gotten that which is why so many Americans still believe Republicans care about the debt and are better for our economy. I am convinced the reason Harris lost the election was the dishonestly negative portrayal of our economy under Biden by our mainstream “liberal” media. I’m not the only one:
The traditional core of the Republican Party is wealthy people who want to become more wealthy. The racists, evangelical Christians, gun nuts, and other MAGA-types are just constituencies that have been courted in order to win elections. I suspect that Treasury Secretary Scott Bessent is solidly part of the traditional core rather than anything else, mostly based on his disingenuous testimonies before Congress on matters he surely understands far better than he pretends.
Which makes me wonder: to what extent is the real intent of the tariffs, if rates on them ever get settled, moving the source of tax revenues from a relatively progressive income tax to a regressive sales tax in the form of tariffs?
It is very typical of red states, for example, to get most of their tax revenue from sales taxes rather than anything else.
And part of the beauty of tariffs, at least from the perspective of the traditional core of the Republican Party, is that domestic producers get to raise their prices to meet those of competing imports, the latter of which are subject to tariffs from which the former are exempt.
Thus, at least until they have to raise wages in line with tariff-caused inflation, they should have more profits.
So, more profits and lower taxes. And the only setback is that everyone -- including those who don't get to enjoy the extra profits and the lower taxes -- will have to pay higher prices for everything.
That’s the game in a nutshell—shift the tax burden to the people who spend most of their income on the basics & away from those who can use their $ to make $. To the extent the tariffs decrease the deficit, they will be portrayed to justify the tax cuts for the wealthy.
Use/share this spreadsheet as a resource to call/email/write members of Congress, the Cabinet and news organizations. Reach out to those in your own state, as well as those in others. Use your voice and make some “good trouble” ❤️🩹🤍💙
Probably the best PR stunt was taking the "Little Lobbyists" to the Capitol in their wheel chairs, etc. to shame the politicians on camera to not pass the worse Senate's version of the Big Awful Bill. That gets attention if it shows up on local news or people's social media feeds.
Being called "stupid" by Trump is a badge of honor. He could call you a "genius" and you are right there on par with Putin, Kim Yong Un, Erdogan and Xi Jinping. He could call you a "super genius" and your career is basically over.
Powell, and every other responsible and competent person left in the government, are simply in a holding pattern, waiting to step in after whatever catastrophe Trump causes, to try and reassemble the pieces. This is under the extremely optimistic assumption that the pieces can be reassembled. A more apt description may be that Powell, et al, will have to triage whatever parts of the government and economy are left after Trump's depredations, saving the ones that are not mortality wounded, or dead.
The question I keep asking: why are US business leaders silent? Apart from finance, tech and fossil who are cheering Trump on, much of US business is being badly hurt by his actions and yet they say nothing.
I remember Nixon’s efforts to ‘control’ the economy before the 1972 election (Arthur Burns impact) and his wage controls and letting gold go from $35 to market price. I also recall the sequel to the 1973 oil crisis. Eventually, we experienced a series of economic recessions and, eventually, stagflation.
Only with Fed’s Paul Volcker’s drastic measures—causing 10% unemployment and 20% interest rates—did we, in Carter’s last years and Reagan’s first two years, break the back of stagflation. A political downer for both presidents.
As Paul Krugman highlights, the situation under Trump is even more uncertain because of Trump’s bizarre on-again-off=again-on-again tariff blitzkrieg.
The Fed, businesses, and consumers have no clear basis to predict the economic impacts of Trump’s whimsical tariffs and other economic pronouncements.
My fear, having run a capital-intensive business in the 1970s, is that Trump’s economic volatility could produce stagflation in the US—high inflation and unemployment.
The major brake we have against Trump’s runaway tariffs is the Fed, which must keep its powder dry until the dust settles.
Nobody in other countries is going to put up with his tantrum. We are rapidly becoming an international pariah. The days when people came from afar to vacation and study here are evaporating. We won't be an important market anymore because no business can plan with a madman in the WH. It is becoming unsafe for our own citizens... in 6 months, he is slaughtering the goose that laid the golden egg.
Multiple golden egg laying geese are being slaughtered. America’s universities were engines of innovation and huge attractors of foreign talent and foreign money. The religious and ideological jihad against universities combined with abusive visa policies has killed that goose.
Much of the trade deficit came flowing back to America in investments in bonds because of the world’s trust in our status as the world’s premiere stable democracy. That goose is now dead.
America was a popular tourist destination. Abusive border agents, ICE detention of tourists and the staggering unpopularity of Trump throughout the non-Russian world have killed that goose.
Immigrants have provided demographic growth that had helped America economically out-perform other countries with negative demographic growth. Immigrants provided cheap, dependable labor for many industries that would struggle without them. At the same time, immigrants paid taxes for services they often could not or simply did not use. That goose is dead.
Cities are the engines of GDP. Most of America’s wealth is produced in cities. By targeting cities with ICE raids, trying to withhold infrastructure and other money, and vilifying cities as crime-infested shitholes, Trump is trying to kill the most important goose of all.
I’m sure there are more dead or dying geese that I have overlooked…
tRump is a berserker at the top of the American political pyramid. What he is doing is nothing less than treasonous.
Important that you named the geese. Once the flock it gone, how likely will we again spawn such goldmaking treasures?
You don't suppose he's constructively acting on behalf of Vladimir, do you? It's either something like that, or something more obvious: the Executive Branch has become a clown car. Literally. They have no idea of how they come across to the rest of the world or what history will record of them: that they were a gaggle of actual idiots. The pathology is a defect or corruption of ToM, theory of mind.
They don't care what anyone else thinks. It's basically their way or the highway.
In 10 years or so, the US will be just another mid-sized country among the herd of such, but isolated, without friends or allies.
And all his minions and supporters are, just like him, happy to destroy civilization and the lives of everyone else on earth -- out of nothing more than spite. To them the world doesn't deserve to exist without them, and they see no reason to leave behind anything but smoldering ruins.
We're not going to escape this situation unless we find a way to outlaw the Lies for Power and Profit industry and it's fictions sold as facts. Rupert Murdoch and his GOP client are worms in America's brain and must be excised for our survival.
We must remove the maga politicians and pass a law prohibiting huge political donations by corporations. I believe that Citizens United helped get us into this mess and this is part of how we can get out of it.
Spite is just what the cynical give to the foolish to support their short-term get-richer quick attempts and build dynastic power. It is essential to wing-nut politics but not a principle. It requires a tactic of constant misdirection, and, although endemic and persistent it will be difficult to pursue as a strategy. Patience is not a strength here, but it does triumph over partiality. Democrats can learn to play rock/paper/scissors in the meantime
There is a real risk I think the US could start to resemble a second world society like Latin America. These nations are still relatively wealthy but with rampant inequality, corruption, violence and political instability. But maybe hitting rock bottom might lead to a turnaround.
A number of experts have been saying how easily Trump's policies could turn us into Mexico: Lots of poverty with a few middle class families and very few extremely wealthy oligarchs.
That's the whole idea.
That's not a mere risk - it's their goal. Between Project 2025 and the "Dark Enlightenment" neo-reactionary crowd, we're already nearly a banana republic.
Not there yet, Winston, but well on the way, alas. We're not giving up, though.
It's a great reminder of the imperative that we continue to Rise! Resist! ✊✊✊
"We won't be an important market anymore because no business can plan with a madman in the WH."
After the Trump tsunami recedes, the value of the US market will still be high, if only because we are shared interstate commerce with 300 million consumers that all speak the same language, and we have abundant natural resources.
Other than that, the only model that looks plausible to me is the US becoming like the UK: a remnant of a vast global power. It's China's turn next.
trump has also become an international laughing stock. His supposed buddies, the Russians, put out widely viewed memes about the parade and the TACO tag was issued by the financial times.
A judge has just blocked Trump from stopping international students from enrolling in Harvard. But it still chills the atmosphere.
https://www.nytimes.com/2025/06/20/us/international-students-harvard-preliminary-injunction.html
Exactly. The damage is just starting.
All this pain and suffering, and to what purpose? The best best explanation is the only purpose is for the greater power and wealth and the great magnificence and greater deference of the dictator, Donald Trump.
Power and money. It is all he and they care about. And, they don’t care how much damage they do to achieve their ends.
Stephen, not “…becoming an international pariah…” - we already are one. 😢🤬
All too sadly true!
It has been 5 months if I may…
Lots of distractions today. My bad! Thanks!
My only hope for the future is that Trump dies in prison, penniless.
Along with every person who took an oath to support the constitution and HAVE NOT
I would accept a simple "home in bed" death for him. As long as it's near term. I don't want to be greedy.
And SOON!
An ageing and senile Trump remaining in office might be a better option than being replaced by someone who is equally evil but more competent. OTOH, the MAGA movement would likely collapse with infighting and the lack of a unifying leader when Trump keels over.
So we wind up with Vance as pres and Johnson as vice. I think Vance would probably be a bit of a wild card without Trump, and it would take Johnson out of the house. My bet is that things would improve a great deal.
Did you read Robert Reich today? If Vance takes over, that's like putting Thiel and Palantir in charge.
I don’t care for Vance at all.
Nor does any decent person. At least not what Vance has become. I wonder if he was always like this.
No, he's flipped in the last few years. He was a "never Trump" at one time. Always keep in mind that he graduated near the top of his class at Yale. He's not a dummy, regardless of what you might think of Yale.
Not necessarily. I think Vance acts like he thinks Trump wants him to act. That's why I said he would be sort of a wild card - he would have to decide how HE wants to act. Without higher guidance.
True. He was cynically placed a banana peel away from being the top exec for when the legislative & judicial branches matter not a whit anymore by the tech oligarchy. An opportunistic phony raised, I'm assuming, non-practicing Protestant, married to a Hindu, now becoming Catholic to fit in with Leonard Leo's Society. Peter Thiel likes to remain behind the curtain and if he thinks he and his wealth will protect him from the anti-LGBTQ theocrats, he should have listened to the secret recordings of what was said about him by them (Politico? NYT?).
The line of succession doesn't simply step everyone in up one position. The Speaker doesn't automatically step up to VP. Vance would appoint someone, and Johnson has not shown the slightest aptitude for executive power, being a pathetic, lying weasel. Apologies to weasels...
It's a thought experiment I wouldn't want to live through. We need to just extricate them all. By force if necessary.
Take heart, dear friends, for he already resides in a prison of insatiable greed, insecurity, and self-obsession.
Oh, and he abolished pennies?
Not really. I have a few thousand downstairs. If I separate out the wheat pennies, I could get a good hunk of change for those.
I think it was Mark Twain who said, "I have never wished any man ill, but there are some obituaries that I have read with considerable satisfaction."
Although I wouldn't object to a guillotine or gallows.
Like the ending of You?
No, you.
You know I'm referring to the Netflix show, right?
Nope. I rarely watch TV.
There's a netflix show? Why?
The Netflix show called You. It ends similarly to what Mr. Thornton wants to see happen to Trump.
If there were such thing as justice.
And surrounded by family.
Dr Krugman, it did my heart good to read your post for today and better to read "Tens of thousands of paid subscribers" at the bottom of your virtual page. Thank you for your humanity, your equanimity, and for educating us day-by-day.
Such a good line:
“when it comes to Trump, every accusation is actually a confession”
I think it's called "projection" in psychology.
More like a brag.
Professor Krugman: you said: "Would Trump say “This won’t raise prices, because businesses will absorb the tax”? Of course not. So why imagine that foreign businesses will absorb the cost of tariffs, which are nothing but sales taxes on goods made abroad?"
this is the nut of the punishment being imposed upon americans today. how can any MAGA successfully argue against this?
and where is the media in all this? why are they STILL SILENT? why are americans supposed to rely upon foreign news sources to learn anything substantial or true about our own government leaders??
Now you know MAGA isn't interested in arguing anything, although they do like to bicker. If in their minds they "own the libs", they consider it a success. They need no logic, no rhyme or reason.
As for the lamestream media, they're owned by millionaires and billionaires who will do whatever it takes to maximize profitability. That means not getting into any battles with King Klown. Government leaders? Sold to the highest bidders.
It’s not foreign businesses that are hit, it’s all businesses in the US that sell imported goods. The importing company pays the tariff.
Can you imagine what the media would have done if Biden or Obama called the Fed Chair "Too Late" or had interfered with the Fed to the extent Trump has interefered?...
Or ANYTHING he has done: blatant coercion, threatening, grifting, impeding justice, treason, usurping our democracy, lawlessness, the list is endless. Trump is a mobster.
Don't sugar coat it.
The coverage would have been nonstop until after the next election.
The only reason we are in this pig's mickey is that "tariff" and "tax" are different words. If tariffs had been denominated "import taxes" ab initio, El Caudillo del Mar-y-Lago would never have fallen in love with them. If they were called "import taxes", nobody in the GOP would support them. It is a measure of the bottomless stupidity of Trump and his junta that the entire world economy has been jeopardized by this purely semantic distinction.
Oh I wouldn't be so sure of that. The GOP doesn't really have a problem with sales taxes - because they're regressive. They're okay with taxing the poor. They just don't want to tax their biggest donors.
Comrade O'Brien advises: The GOP maybe alright with "sales taxes" in principle, but none of them, especially not Trump, would make "sales taxes" the centerpiece of their economic program.
That's true, they would try to hide it - albeit in plain sight. You know, it'll show up in the party paper in the morning, then disappear in the evening when we switch from being at war with Eurasia to being at war with Eastasia. All written in Newspeak.
Doubleplusungood verging crimethink.
Ok , that's getting creepy now.
Wonk away Prof Krugman. I've become more impressed with Jerome Powell as time passes, standing firm in this miasma of chaos.
One thing I'm worried might further shock the economy ... or maybe a slow bleed is the 3000 a day deportation goal. What happens when fresh food is no longer available? I doubt those college grads we talked about yesterday will be all in for picking fruit and veggies.
And the soft dollar ... and now three major armed conflict in the world and our despot playing out a two week bluff that he may throw our collective hat in the ring? That gives me chills for those jobless college graduates.
Would THAT be enough to stir Congress into action? Doubtful. And the TACO will taco and these rest of the world already knows his game. Imagine being predictable in unpredictability!
After all the illegal deportations I thought all these tough-talking MAGAs would be ready to jump right in and pick all the fruit and veggies that will otherwise rot in the fields and man all the home/apartment and infrastructure construction sites. Their daily Trump kool-aid consumption leads to their noticeable brain rot.
Cherries are going unpicked in central Washington state right now. One orchard has already lost over 100 thousand pounds of cherries.
The same is likely true in Traverse City, peaches in Romeo .. potatoes, apples ...
We've noticed that the Big Taco chickened out on that bit. Or so he says. yesterday. Today? Who knows. stephen miller still hates everyone, though and wants them to pay for it. trump's a non-entity except that he's got some powers everyday folks don't have.
He chickened out then reversed himself, was what was I read. It’s hard to keep track!
The phrase "two weeks" is the giveaway. It's his way of saying "ain't gonna happen" (unless something weird happens to change his "mind" back). He figures (correctly) that his supporters won't remember and the MSM will have moved on to cover his latest distraction.
Much fresh food sold in the US is grown elsewhere. It will be available, but at much higher prices than today.
That's true. A lot of our produce comes from Mexico.
Let's see -
1. Jerome Powell?
2. The 6X bankruptee who swallowed the silver spoon that was in his mouth at birth?
It's just so hard to choose?
Come, come, now. It was a golden spoon.
Given his lifelong history of brain dysfunction, my guess would be a lead spoon...
Every morning I look forward to your post on econ-related topics. You are the place I hang my sanity hat.
I guess a little bit of me forgot 4 yrs ago when we 1st had to cope with the trump circus, how difficult it was. And this time it is on steroids having zero "sane" people in the cabinet and othe position in govt. It's a free fall.
I haven't a clue how this all will"end" but I will do everything in my power on God's green earth to turn the ship around. It won't be much but when I think of all the people on No Kings day, the sum of effort will be great. Thank you again Paul, we all appreciate you more than u know.:-)
Like you I read this column every morning and then Dean Baker’s. I highly recommend reading his columns, too. They are both great for substantive, fact-based and very relevant information. Lately he has been taking the media, especially the NYT — aka the “newspaper of record” — to the woodshed for lying about the size of the No Kings protests and for wildly exaggerating the decline of Iran’s economy. But the best one IMO was this:
“ Yes, the Media Lied About the Pre-Election Economy”
https://deanbaker22.substack.com/p/yes-the-media-lied-about-the-pre?utm_source=%2Finbox%2Fsaved&utm_medium=reader2
Honest and relevant information about our economy is necessary for our democracy to function but for years we haven’t gotten that which is why so many Americans still believe Republicans care about the debt and are better for our economy. I am convinced the reason Harris lost the election was the dishonestly negative portrayal of our economy under Biden by our mainstream “liberal” media. I’m not the only one:
https://criticalread.substack.com/p/i-blame-the-media
The traditional core of the Republican Party is wealthy people who want to become more wealthy. The racists, evangelical Christians, gun nuts, and other MAGA-types are just constituencies that have been courted in order to win elections. I suspect that Treasury Secretary Scott Bessent is solidly part of the traditional core rather than anything else, mostly based on his disingenuous testimonies before Congress on matters he surely understands far better than he pretends.
Which makes me wonder: to what extent is the real intent of the tariffs, if rates on them ever get settled, moving the source of tax revenues from a relatively progressive income tax to a regressive sales tax in the form of tariffs?
It is very typical of red states, for example, to get most of their tax revenue from sales taxes rather than anything else.
And part of the beauty of tariffs, at least from the perspective of the traditional core of the Republican Party, is that domestic producers get to raise their prices to meet those of competing imports, the latter of which are subject to tariffs from which the former are exempt.
Thus, at least until they have to raise wages in line with tariff-caused inflation, they should have more profits.
So, more profits and lower taxes. And the only setback is that everyone -- including those who don't get to enjoy the extra profits and the lower taxes -- will have to pay higher prices for everything.
So much winning!
That’s the game in a nutshell—shift the tax burden to the people who spend most of their income on the basics & away from those who can use their $ to make $. To the extent the tariffs decrease the deficit, they will be portrayed to justify the tax cuts for the wealthy.
Thank you for all your work.
And my normal -
Call. Write. Email. Protest. Unrelentingly.
Use/share this spreadsheet as a resource to call/email/write members of Congress, the Cabinet and news organizations. Reach out to those in your own state, as well as those in others. Use your voice and make some “good trouble” ❤️🩹🤍💙
https://docs.google.com/spreadsheets/d/13lYafj0P-6owAJcH-5_xcpcRvMUZI7rkBPW-Ma9e7hw/edit?usp=drivesdk
Probably the best PR stunt was taking the "Little Lobbyists" to the Capitol in their wheel chairs, etc. to shame the politicians on camera to not pass the worse Senate's version of the Big Awful Bill. That gets attention if it shows up on local news or people's social media feeds.
That’s a good one!
Trump calling anyone “stupid” is a great example of the pot calling the kettle black.
Remember: every accusation is a confession.
Classic narcissism: Projection, belittling, gaslighting.
Being called "stupid" by Trump is a badge of honor. He could call you a "genius" and you are right there on par with Putin, Kim Yong Un, Erdogan and Xi Jinping. He could call you a "super genius" and your career is basically over.
Powell, and every other responsible and competent person left in the government, are simply in a holding pattern, waiting to step in after whatever catastrophe Trump causes, to try and reassemble the pieces. This is under the extremely optimistic assumption that the pieces can be reassembled. A more apt description may be that Powell, et al, will have to triage whatever parts of the government and economy are left after Trump's depredations, saving the ones that are not mortality wounded, or dead.
The question I keep asking: why are US business leaders silent? Apart from finance, tech and fossil who are cheering Trump on, much of US business is being badly hurt by his actions and yet they say nothing.
Guilty by association…
If they complain too loudly, Trump will retaliate, just like he did against Harvard, Amazon (briefly), and various law firms.
Apparently they’ve been complaining about tariffs all along. Plus some are complaining about their workers being deported.
Be good to hear from US readers. Im a Brit but well travelled in USA for work and holiday, and with family living/working there.
Plenty of likes … but no explanations!
I remember Nixon’s efforts to ‘control’ the economy before the 1972 election (Arthur Burns impact) and his wage controls and letting gold go from $35 to market price. I also recall the sequel to the 1973 oil crisis. Eventually, we experienced a series of economic recessions and, eventually, stagflation.
Only with Fed’s Paul Volcker’s drastic measures—causing 10% unemployment and 20% interest rates—did we, in Carter’s last years and Reagan’s first two years, break the back of stagflation. A political downer for both presidents.
As Paul Krugman highlights, the situation under Trump is even more uncertain because of Trump’s bizarre on-again-off=again-on-again tariff blitzkrieg.
The Fed, businesses, and consumers have no clear basis to predict the economic impacts of Trump’s whimsical tariffs and other economic pronouncements.
My fear, having run a capital-intensive business in the 1970s, is that Trump’s economic volatility could produce stagflation in the US—high inflation and unemployment.
The major brake we have against Trump’s runaway tariffs is the Fed, which must keep its powder dry until the dust settles.
Unemployment? Can’t they pick strawberries? 😜 /s
Those days were not good.