All posts tagged "paul krugman"

'They won't do that': Nobel Prize winner says GOP set to resist Trump on economic policy

The GOP will resist Donald Trump's call for a new economic policy on credit card use, a Nobel Prize winner has claimed.

Paul Krugman believes that, while the Republican Party is keen to appease the president, it would be a struggle to shift support to Trump's recent economic policy announcement. Trump called for a "one year cap on Credit Card Interest Rates at 10%" by January 20, and though the deadline is just a week away, it seems very unlikely this will pass into law.

Trump wrote on Truth Social, "Please be informed that we will no longer let the American Public be 'ripped off' by Credit Card Companies." He reiterated his support for the credit card cap earlier this week aboard Air Force One, telling supporters that credit card companies would be "in violation of the law" if they did not comply.

But economist Krugman has urged the GOP to resist bending to Trump's demands. Writing in his Substack, the Nobel Prize winner suggested Trump had an uphill battle on his hands to win support on this measure.

He wrote, "Now, facing likely electoral defeat in November, Trump has suddenly announced that he is imposing a credit card interest rate cap."

"Yet unlike Nixon, Trump isn’t working with Congress to pass legislation that is, in effect, a price control. In fact, he has shown no interest in doing anything substantive. Whatever Trump may imagine, posts on Truth Social do not have the force of law."

"Nor is there any realistic prospect that he can get Republicans in Congress to support the legislation he would need to turn his pronouncements into reality. They will do almost anything for Trump, but they won’t do that."

Further trouble could be caused by the Democratic Party too, Krugman suggested, with "unsolicited advice" offered by the economist.

"He shouldn’t get any help unless he is prepared to offer something substantive he can actually deliver," Krugman wrote. "And it’s obvious what that 'something substantive' is: End the effort to kill the Consumer Financial Protection Bureau, restore its funding, and let it get back to doing its job."

"This would immediately help Americans with credit card debt, and many other struggling American families as well. No legislation would be required, since the CFPB was established by law — law Trump has been trying to defy. If Trump really wants to cap credit card interest rates, he should reach across the aisle and get legislation passed with Democratic support."

'He will not be in power forever': Nobel Prize winner gives stark 'warning to Republicans'

A Nobel Prize winner has suggested the military should stop indulging Donald Trump's "sick fantasies" of power.

Paul Krugman urged those in power to "stand down and refuse" to follow the orders of the president and his administration. The economist warned both the military and Republican Party they would be remembered as "cowards and hypocrites" if they did not take Trump to task on recent ICE incidents.

The Immigration and Customs Enforcement teams have been heavily criticised in recent days following the death of Renee Nicole Good, who was shot and killed by ICE agents. An unrelated shooting in Portland by Border Patrol left two in hospital.

Krugman, writing in his Substack, shared, "So here’s a warning to the US military: if you continue to indulge the sick fantasies of this man, he will drag this country into more and deeper international morasses to feed his need for glory."

"Do what Admiral Alvin Holsey, an honorable man, did – stand down and refuse an illegal order. Here’s a warning to the Republicans: if you continue to allow this man to perpetrate war against his own people with impunity through the actions of ICE, you will be remembered as cowards and hypocrites."

"Here’s a warning to all his other enablers: if you do not do something to stop this madman, you will go down in history as traitors to this country." The Nobel Prize winner had a stern warning for those "directly perpetrating" the president's actions, too.

He added, "And here’s a warning to those directly perpetrating Trump-directed atrocities: He will not be in power forever, and I expect and hope that you will be held accountable, personally, and prosecuted to the full extent of the law."

Krugman, like many other political commentators, has openly criticized the recent actions of ICE. He wrote, "A president who actually cared about the welfare of those he governs would have taken Good’s killing as an indication that his deportation tactics have veered wildly and tragically off course."

"He would have called for a halt of ICE actions and made sure there would be an objective and timely federal investigation into this national tragedy."

"But for Trump, ICE’s violent lawlessness is a feature, not a bug. Sending armed, masked, poorly trained, masked and out-of-control armed thugs into blue cities is, in effect, a war on Americans, just as January 6 was a war on American institutions. In effect, Trump would rather savage his own people than be held accountable for his actions."

'Protection money': Nobel Prize winner says Trump's new moves are 'enriching his clique'

Donald Trump has been accused of "enriching his clique" by a Nobel Prize winner who says recent administration actions are attempts at "glorifying" the president.

Paul Krugman suggested Trump is using Venezuela and Greenland as a chance to bolster not the country, but himself and his inner circle. Writing in his Substack, the award-winning economist claimed, "Add in the cost of munitions expended during the Maduro abduction, and the whole adventure has surely cost more than a billion dollars."

"Moreover, the meter keeps ticking: since Chavistas are still in power, Trump has to keep forces nearby in order to intimidate them to honor agreements. But Trump doesn’t care: The military expenses are the little people’s problem."

"The bottom line is that to understand what Trump is doing around the world you must disabuse yourself of the notion that any of it is about serving America. It’s all about glorifying himself and enriching his clique."

Krugman also noted Trump had been "remarkably transparent" about his "looting" of Venezuela and their oil. He added, "Trump has been remarkably transparent about his goals in Venezuela: It’s all about looting. That is, he wants to seize the country’s oil wealth on behalf of himself and his clique."

"Some people, notably María Corina Machado, leader of Venezuela’s opposition, have been surprised that Trump shows no interest in restoring democracy. But why would he? He’s unable to enrich himself personally in democracies like Canada and Denmark. But a repressive regime like Venezuela is willing to pay him protection money."

The economist has since questioned the value of the "millions of barrels" of oil Trump is proposing to bring into the United States, suggesting the value would hardly make a dent for the economy.

He wrote, "But suppose that this one-time gift of oil is real. Trump would have you believe that it’s a big deal — MILLIONS of barrels."

"But that amount of oil has a market value in the range of $2 billion, which is not a big number for the United States. In fact, it’s less than 0.01 percent of GDP. And in terms of US oil consumption, that’s about 2 days worth of oil."

'No basis in reality': Nobel Prize winner calls Trump's new deal 'unrealistic fantasy'

Donald Trump's hopes for the future of Venezuela have been ridiculed by a Nobel Prize winner who called the vision an "unrealistic fantasy".

Economist Paul Krugman dismissed Trump's projection for Venezuela following strikes on the country by the US and capturing of President Nicolás Maduro. Writing in his Substack, the Nobel Prize winner suggested the "lucrative prize" Trump is holding out for in Venezuela is not as easy to achieve as the president is making it out to be.

Krugman wrote, "In short, Trump’s belief that he has captured a lucrative prize in Venezuela’s oil fields would be an unrealistic fantasy even if he really were in control of a nation that is, in practice, still controlled by the same thugs who controlled it before Maduro was abducted."

Further claims made by Trump have "no basis in reality", according to the economist, who warned a promise made to oil executives over financial reimbursement cannot be fulfilled.

Krugman wrote, "On Monday Trump suggested that he might reimburse oil companies for investment in the nation he claims — with no basis in reality — to control, reimbursing them for their outlays there."

"That is, we’ve gone in a matter of days from big talk about huge money-making opportunities to a proposal to, in effect, subsidize oil-industry investments in Venezuela at U.S. taxpayers’ expense."

The Nobel Prize winner went on to say Trump's thoughts on oil as a "precious asset" for the US is majorly out of date. He wrote, "At a deeper level, Trump’s apparent belief that oil in the ground is a precious asset is decades out of date. These days oil is cheap by historical standards."

"Oil prices are low mainly because of increased supply due to fracking, and the potential for more fracking is likely to keep them low for the foreseeable future.

"The breakeven price of fracked oil — the price at which it’s just profitable to drill a new well — is around $62 a barrel in the most important U.S. producing regions. While global oil prices fluctuate, they tend to return to that breakeven price after a few years:"

Nobel Prize winner warns MAGA faithful they will 'eat their own' over one major issue

A warning has been issued to MAGA supporters by a Nobel Prize winner who says followers will eventually "eat their own" over one issue.

Divisions are already starting to show within the "MAGAdom" as economist Paul Krugman called it, with even those in lofty political positions at risk of being pulled into the in-fighting. Nobel Prize winner Krugman suggested not even a strong political record will "protect" those from the splintered MAGA sentiment.

Writing in his Substack, Krugman predicted, "But I would also serve a warning to MAGAdom: Movements centered on bigotry eventually eat their own. Don’t imagine that your political record will protect you."

"Consider how JD Vance, while spouting Christian nationalism, has to defend his Yale-educated Indian-American wife from racist, anti-Hindu attacks. Vivek Ramaswamy, the Trump-endorsed Republican senatorial candidate for Ohio, is now pleading for an end to the bigotry and hate directed at him by other Republicans."

"And now we have Ben Shapiro, of Jewish descent and a long-time MAGA stalwart, calling out Tucker Carlson for platforming the antisemitic and anti-Indian Nick Fuentes. Because who could have seen the movement’s antisemitic turn coming — other than anyone who knew anything about history?"

Krugman has since dubbed this infighting "Immigrant Derangement Syndrome", and he says it comes from the top down, rather than from unrest in the public.

He explained, "IDS isn’t even popular among the broad public. Granted, Biden created an opening for immigrant hostility by failing to adequately secure the border during 2021-2024."

"Trump’s immigration policy has grown increasingly unpopular as Americans see its brutality in action. According to AP-NORC, by December only 38 percent of Americans had a favorable view of Trump’s handling of immigration, down from 49 percent in March, while 60 percent disapproved."

"Immigrant Derangement Syndrome is therefore a top-down phenomenon, not a broad popular movement. It reflects the perverse obsessions of MAGAdom, with racism a key component. If you are an immigrant with brown or black skin, you’re a target regardless of how exemplary your behavior – as the growing attacks against Indian-Americans show."

'Rebellion' in GOP could be mounting as Nobel Prize winner points out potential big split

A GOP rebellion could be brewing against Donald Trump, according to a Nobel Prize winner.

Paul Krugman believes there could be a push against Trump in the new year, with some non-MAGA Republicans facing off against "extreme corruption and bigotry" in the party. Writing in a post to his Substack, the award-winning economist believes there could be an "implosion" in the works for the MAGA faithful very soon.

"I don’t know what form their defection would take," Krugman wrote. "Would it involve a serious effort to wrest control of the G.O.P. back from extremists? Would it involve elected Republicans cooperating with Democrats?"

"Would it mean leaving the G.O.P. altogether?" the prize-winning economist continued. "America hasn’t seen a new major political party emerge since, well, the rise of the Republican Party in the 1850s, but this doesn’t mean it can never happen again. All I can say is that it’s unwise to assume that non-MAGA Republicans will remain docile indefinitely in the face of ever more extreme corruption and bigotry at the top of their party. And their rebellion can’t come soon enough."

"For the time being, election victories by Democrats are our only hope of saving American democracy," he added. "But in the longer run, we need two decent, sane political parties."

The possible rebellion could come over the renaming of The Heritage Foundation, which Krugman says had crossed lines that may challenge moderates in the Republican Party.

"It turns out that even at a fundamentally corrupt institution like Heritage there are lines you can’t cross," Krugman wrote. Suddenly, Heritage is experiencing a mass exodus of staff. In the latest wave of departures, more than a dozen staffers left to join an organization led by former Vice President Mike Pence."

"Heritage is, essentially, losing everyone who is even marginally competent or has any kind of reputation to protect. My guess is that there have long been many people at Heritage who were privately disgusted at what the organization had become. I never said they were stupid. But they lacked the courage to leave until they saw their colleagues jumping ship. Then there was a mass rush for the exit."

Nobel Prize winner frets that Trump's sent economy into chaos: 'Nobody knows what's next'

A Nobel Prize winner has suggested "nobody knows what's next" for the economy under Donald Trump's administration.

The president has struggled to tackle the cost-of-living crisis, prompting Paul Krugman to point out that the economy under Trump is hard to pin down. Writing in his Substack newsletter, the award-winning economist claimed the Trump tariff policy had made businesses across the country "reluctant to make commitments" for fear the economy could massively change again.

He wrote, "The key point about Trump’s tariffs and to some extent his other policies is that they keep changing, and nobody knows what will come next."

"This uncertainty makes businesses reluctant to make commitments, including the commitment involved in hiring new workers: If you hire workers based on current tariffs, what happens if the Supreme Court rules those tariffs illegal, or the Trump administration picks a different country or countries as enemies?"

Krugman went on to say Trump is "largely, though indirectly, responsible" for a K-shaped economy. Krugman explained the "K-shaped economy" is one where "incomes and wealth are rising only for those at the top".

The economist added, "So the K-shaped economy is a real but relatively recent development. Why is it happening? The proximate cause of the K-shaped economy is a weak job market."

"As I’ve written repeatedly, the U.S. economy has not (yet) experienced mass layoffs. Employers have, however, become very reluctant to hire new workers." A Gallup poll citing how Americans felt about the job market showed fewer people were finding it easier to find a job.

Krugman added, "Gallup’s result, consistent with other surveys like the Conference Board, shows that Americans are very pessimistic about the job market."

"Trump may claim that we are economically “the hottest country in the world,” but the truth is that we last had a hot labor market back in 2023-4. At this point, by contrast, we have a 'frozen' job market in which workers who aren’t already employed are having a very hard time finding new jobs, a sharp contrast with the Biden years during which workers said it was very easy to find a new job."

Nobel Prize-winning economist issues stark prediction about the future under Trump

The MAGA faithful are steering the US towards a "nihilistic" tone after accepting Donald Trump's recent statements, a Nobel Prize winner has warned.

Award-winning economist Paul Krugman suggested the approval which some had for Trump's statement on the death of film director Rob Reiner is a sign of a vicious turn in the US. Writing in his Substack, Krugman says he was both shocked but not surprised to see Trump's comment on the death of Reiner and his wife, Michele Singer Reiner.

Krugman wrote, "It wasn’t news to me that the president of the United States is a vicious shmuck." What did surprise Krugman, though, is how quickly the president's statement was accepted by his most ardent supporters. Trump has gone beyond what was expected of him when it comes to hateful rhetoric, Krugman claimed.

He wrote, "Now, Trump is purposely breaking norms and engaging in open expressions of hate and bigotry. And among a set of people, this serves as a signal that it’s now socially acceptable to do the same – look, for example, at the extremely racist and Nazi-praising chats among young Republican activists leaked to Politico."

"While these young MAGA-landers were outed and chastised, it’s clear that within MAGA-world emulating Trump’s hate-filled rhetoric is considered a way of signaling that you are loyal to the movement. And it’s also clear that if Trumpism persists, we are facing a future in which such behavior is no longer publicly unacceptable."

"Because Trump’s remarks about the murder of the Reiners weren’t just his personal venting. They were a symptom and a symbol of his systematic destruction of our norms, our humanism, just as he tried to destroy the norms of American democracy on January 6, 2021. It’s a profoundly nihilistic vision for America."

The Truth Social post Trump made shortly after Reiner's death was roundly criticized by political commentators. Mona Charen suggested the post from the president, which claimed Reiner and his wife had a "mind crippling disease known as TRUMP DERANGEMENT SYNDROME" was a sign of how he used violence.

Charen wrote, "So powerful is his thirst for political violence that he not only fails to recoil from it when it breaks out; he fantasizes that it’s taking place even when it isn’t."

"There’s zero reason to believe Reiner’s murder had anything to do with his political opposition to Trump. But the president says this is true for the same reason he says many false things are true: because he wants it to be true."

Trump's 'radical' policies are 'straining the MAGA faithful': Nobel Prize winner

Donald Trump's "radical" plan for the economy is alienating even his most faithful supporters, a Nobel Prize winner has claimed.

Paul Krugman explained the president's wilder choices for the economy, including a series of massive tariffs and bonuses for air traffic controllers who worked through the government shutdown are beginning to worry MAGA followers. Writing in his Substack newsletter, Krugman explained how Trump had inherited an economy that was in much better shape before he took office.

The Nobel Prize winner wrote, "Trump inherited when he took office was in much better shape than today’s economy, with lower unemployment combined with faster job growth, and inflation trending down."

Though Trump has claimed the economic woes of the last year are a problem from the Biden administration, patience is running out with the president.

Krugman continued, "Trump’s radical policy changes – huge (illegal) tariffs, mass deportations, big tax cuts (for the rich), benefit cuts (for the poor and middle class), mass layoffs of federal workers, disinvesting in huge green energy projects and aid to farmers — have been clearly damaging to everything besides crypto and AI. It strains credulity – even for the Trump faithful – to claim that we are still in Joe Biden’s economy."

The difficulty comes in a third point made by Krugman, who says Trump has not outright said the economy is still terrible and cannot say so as it would reflect badly on him.

He explained, "How can Trump blame Biden for a troubled economy when he won’t admit that we have a troubled economy? It’s more than credible that the source of the public’s falling economic confidence is the two Trump 'gaps' — the difference between what he promised and what he has delivered, and the gap between what he says is happening and what everyone can see with their own eyes."

Krugman went on to suggest Trump will try and "gaslight" Americans into believing the economy has been fixed. He wrote, "Trump is going to make a prime-time address to the nation tonight. The details of his speech haven’t been announced, but it’s a good guess that he intends to gaslight Americans yet again, claiming that things are going well. They aren’t."

Nobel Prize-winning economist drops grim warning for Trump about 'broader recession'

Donald Trump's tariff policy has been ridiculed by a Nobel Prize winner who says the administration is "depressing the economy".

Trump introduced tariffs earlier this year, hiking prices on importing and exporting goods across the world. American economist Paul Krugman believes the boom in "AI-related investment" has boosted the economy, but this achievement has been burst by the "unpredictably" worsening tariffs.

Writing in his Substack, Krugman explained, "We could say that the US economy in 2025 was schizoid. On the one hand Donald Trump abruptly reversed 90 years of U.S. trade policy, breaking all our international agreements, and pushed tariffs to levels not seen since the 1930s."

"Worse, the tariffs keep changing unpredictably. This uncertainty is clearly bad for business and is depressing the economy. On the other hand, there has simultaneously been a huge boom in AI-related investment, which is boosting the economy."

The potential for an AI bubble bursting is at the forefront of economist's minds as they watch to see stocks fall and rise in line with excitement surrounding artificial intelligence.

Krugman added, "During most of that month [November], these stocks were falling, as concerns that AI is a bubble increased. But on Monday the Mag7 index surged, erasing a large fraction of the losses. Why?"

"Analyst chatter about supposed causes of stock market swings should always be taken with many grains of salt. But it’s clear that this surge was catalyzed by remarks by Fed officials which the market interpreted as making a cut in the Fed Funds rate next month more likely."

Whether there is a bubble bursting moment to come or not, Krugman has warned the president's choices are not the right man to lead the charge into the potential economic downturn.

Krugman wrote, "So as doubts about AI creep in, I’m hearing growing chatter to the effect that the Fed can and should save the industry. But the lesson from the last big tech bubble is that it can’t. In fact, I have doubts about whether the Fed can head off a broader recession if the tech boom collapses — but that’s a topic for a future post."

"For now, my point is that if you’re worried about an AI bubble, don’t expect Jerome Powell or his Trump-appointed successor — rumors are not encouraging — to come to the rescue. They can’t."