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by Paul Krugman
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- 3 days ago8 min
The Fire This Time
For all my interviews and more, subscribe on YouTube.TranscriptSome say the world will end in fire. Some say in ice. Robert Frost wrote that in 1920. With more than a century gone by, we have a verdict. It’s fire for the win. Hi, I’m Paul Krugman. I thought I’d talk today about a story that should be getting even more play than it is. I mean, there’s so much going on, but, you know, Europe is on fire. There are massive wildfires in France and Spain that have forced the evacuation of hundreds of thousands of people, are menacing Bordeaux and not too far from Madrid. This, of course, follows on the enormous Canadian wildfires that for a while gave Toronto the worst air quality on the planet and turned the skies orange and the air foul across a large part of the eastern United States. And that, in turn, followed on that deadly heat dome in Europe that killed thousands of people. Okay. It’s pretty awful. It’s also something that was predictable and predicted. If you go back — I’ve been looking at a 2012 report from the UN, their climate project, that very clearly forecast growing incidents of extreme weather, extreme heatwaves, storms, flooding, and by implication, at least, wildfires. This was clearly in the cards. In fact, the story that somehow has not become standard is that climate scientists pulled off something that was extraordinary in intellectual terms. They got the basic outlines of what was coming and in many ways even the numbers on what was coming right decades in advance. In any kind of rational world we would be hailing them as heroes and very much listening to them about what we should be doing now. Of course where we are is that climate scientists are reviled. Climate change is almost crowded out of the political discussion and there’s a fair bit of actual personal persecution of people like Michael Mann and so on who are being punished for the sin of being right. Okay, of course, it’s more than just that. Now, there are sort of multiple levels to the climate story. At one level, it’s, you know, there are powerful vested interests that don’t want you to take global warming seriously. Fossil fuel interests are dying as an industry, but they’re dying slowly and they’re doing their best to take us all with them. And they have enormous influence in this administration. That feeds into something else, which is very true of the people now running the federal government, which is they hate science. So this is across the board. There’s almost always some financial interest, but it’s not just follow the money. It’s just a real hatred of the whole scientific enterprise. And so in an obvious sense, the climate denial is of a piece with the determination of RFK Jr’s health department to find a link between vaccines and autism. There have been many studies saying, no, it’s not there, but that’s not the answer they want. And they just kind of hate the idea of scientists, they hate the idea of objective research of any kind. And so that feeds right into the climate denial.And then, actually, it’s even broader and deeper than that. I don’t think you can really understand what’s going on in this administration without saying that there’s a kind of hatred of the intellect, not just science, but really any kind of hard thinking. I mean, at some, not very deep level, it’s an obvious correlation between Trump saying that the reason that we had fires in Canada is because the Canadians didn’t rake their forests, — all, by the way, two million square miles of boreal forest in Canada. You know, there’s just this absurdity, this kind of evil absurdity of the whole situation. And Pete Hegseth, having presided over the humiliation of the U.S. military because we were not ready for 21st century warfare and the Iranians were. So he’s busy suffering casualties and of course trying to hide them, suffering enormous damage and complete failure of war aims in the face of drones and missiles and basically this new world in which the Ukrainians are showing the way. This is warfare, which still requires some people, still requires enormous personal courage. But the decisive arms of battle are machines, fairly advanced machines, although cheap compared with the expensive hardware we have. And so here you have Pete Hegseth, faced with all of that, and he thinks that what the U.S. military needs is more testosterone. And that’s not a metaphor. Literally, he wants to give testosterone shots. The truth is that even the ancient Spartans didn’t win battles just by flexing their biceps. Intellect was an important part of war, even in the 5th century B.C. But now, above all, consider the craziness of thinking that it’s all about brawn and muscles and good grooming. Oh my god. But this is all hatred of basically anything
- 5 days ago52 min
Talking Again With Gabriel Zucman
For all my interviews and more, subscribe on YouTube.In my writing about wealth concentration and oligarchy, I steal a lot from lean heavily on the truly work of Gabriel Zucman, who is a hugely important researcher (winner of the 2023 Clark Medal) who is also starting to play a major role in policy. I’ve talked to him before, but this seemed like a good time to bring him back.. . .TRANSCRIPT: Paul Krugman in Conversation with Gabriel Zucman(recorded 7/23/26)Paul Krugman: So, hi everyone. Paul Krugman here, bringing back Gabriel Zucman, probably the best guy for thinking about inequality, especially wealth issues. And since I’ve been writing about that and stealing a lot of Gabriel’s research, I thought we should talk again. So, hi Gabriel.Gabriel Zucman: Hi Paul, thanks for having me on.Krugman: Yeah. So, you have been writing—and now I’ve been, you know, cannibalizing it—a lot about wealth concentration. Why don’t you tell us about your reasons for focusing on wealth.Zucman: Basically, because there’s a fundamental tension in democratic societies between extreme wealth and the very possibility of a well-functioning democracy. And it’s not a new idea—don’t get me wrong. All the thinkers of democracy have written about this, all the way back to Aristotle, more than two thousand years ago.Krugman: Right.Zucman: But there was a period of time after World War II when many people thought that this issue belonged to the past. And it corresponded to a very particular moment in history when extreme wealth had largely disappeared after World War II, after the shocks of the first half of the twentieth century.But now, of course, it’s making a dramatic comeback. And so we are back to this discussion of: how do we deal with this tension? How do we organize the economy and our society to prevent the forms of capture of the political process, in particular, that are associated with extreme wealth?Krugman: Now, there’s a question. I mean, I’ve been on the inequality beat for an alarmingly long time—since you were a small child, actually. But in the early nineties, let’s say, it was all income rather than wealth. And a lot of it was top quintile, and maybe top one percent. And now you’re telling us that we need to focus on the wealth rather than the income of the top 0.0002 percent. Why that shift? Why wealth rather than income?Zucman: Well, it’s for two reasons. Number one is a macroeconomic reason, which is that wealth as a whole has been growing much faster than income. So if you look at the ratio of total household wealth to GDP in the US in 1980, it was around 200–250%, and today we are past 500%. This means that the total wealth of the country is equivalent to more than five years of annual production, five years of annual GDP. The second reason is that wealth itself has become much more concentrated, and the rise of wealth inequality, especially at the top of the distribution—at the very top—has been massive and has been even faster and stronger than the rise of income inequality.So we all know about the rise of the top one percent; the top one percent’s share of total income has increased from about ten percent of income in the US in 1980 to about 20% today. But at the top of the wealth distribution, the increase has been even much more dramatic than that.Krugman: At the risk of derailing it slightly, one thing that I myself have gone back and forth on—and certainly I get from comments on things I write—is a question comparing the wealth of the top 0.001%, or whatever: should we be comparing it to total wealth or to total income? And I know you’ve used wealth to GDP, and I have some thoughts, but you’ve done it both ways. Which do you use, and why would you use it? I don’t know which is right, but what are your thoughts?Zucman: I think both statistics are interesting and capture different aspects of reality. So if you’re interested in wealth inequality, in the concentration of wealth, the most meaningful statistic is to divide the wealth of the super-rich by total wealth in the economy. So, for instance, if you look at billionaires—roughly the top 0.1 percent of the population—they own about seven percent of total US wealth today. In 1980, they used to own about one percent of total US wealth. So it gives you a sense of the rise in wealth concentration. If you look at the super-top,
- 1 weeks ago14 min
Oligarchy and the Media
For all my interviews and more, subscribe on YouTube.TranscriptGood news. The second richest man in America might be prevented from taking over CNN. That's the good news. The bad news is, aside from thefact that he probably will manage to pull it off anyway, the bad news is that that would be only a small piece of the ongoing takeover of U.S. media by oligarchs. And in turn, the media takeover is just part of the extraordinary exercise of power by the extraordinarily wealthy small number of men who have been wreaking so much havoc with America as we know it. Hi, I'm Paul Krugman. Doing a video today, because I didn't feel like doing a usual chart-heavy, analytics-heavy post, but very much on a topic I have been writing about and will continue to write about, which is the rise of oligarchy in America. Now, I know some people balk at that. But we're not talking about some kind of hidden conspiracy. We're not talking about the Protocols of the Elders of PayPal. We are talking instead about stuff that's largely out in the open, though not fully understood, which is the way that an incredibly wealthy small group of men, mostly men, is able to commandeer a lot of the political life of a country that is still nominally a democracy. And that's a fundamental story for our time, maybe the fundamental story. How does that takeover work? Well, there is what I think of as the middle level, which is the place where it's most easily quantified, tends to get most of the attention, which is campaign finance. American campaigns are very money intensive and have become more money intensive because we've opened the floodgates with Citizens United. And a lot of that money comes from a very small number of incredibly wealthy people. According to the New York Times analysis, about 20% of all campaign contributions in 2024 came from 300 billionaires and their families. That's a pretty big impact. A country of more than 300 million people, and 300 billionaires are a fifth of campaign finance, and surely more strategic, more targeted than the average donor. So that's really a very, very large role just in that direct sense of who pays for campaigns. But that's not the only level. There is a lower level, lower in the sense of morally lower, I guess, which is just plain buying politicians, buying policies, paying for the policies you want with cash or crypto on the barrel. There has always been some of that in our system, but it was normally discreet, indirect, deniable, the revolving door. It was the case even more than 20 years ago that when the Bush administration pushed through a Medicare bill that was very favorable to pharmaceutical interests, that the then chairman of the House Ways and Means Committee, who basically engineered and steered the bill through Congress, then promptly retired and became the chief lobbyist for the pharma lobby. So this kind of thing has been going on for a very long time. But now it's just blatant, out in the open, and the sums are massive. We just have literally billions of dollars thrown at the president and his family. No doubt large sums to other government officials, large sums to at least some members of Congress. So just plain buying the policies you want — and it’s not just that a large share of wealth is held by a small number of people, but that those are the people who are best positioned to really deploy their wealth to corrupt the system. There's also something, I guess you can call it a higher level, which is what military strategists call shaping the information space, which occurs at a couple of levels. One of them is the promotion of ideas and ideology that serve the interests of the very wealthy. You see that on many issues. You certainly see it very much on economic policy. If you ask, why do people still go out there saying that tax cuts pay for themselves and that tax cuts on the rich are an enormously powerful tool for stimulating economic growth? That's been tested to destruction, and it just ain't so. But it's a zombie idea. It keeps shambling along, eating people's brains, even though it should be dead. And the reason is, well, there's a lot of money in it. If you Google something I've written on, more often than not, when I do that, the top sponsored post at the top of the search page is an attack on me sponsored by some right-wing organization. And if you ask who supports those right-wing organizations, well, guess who. And it’s equally or worse the case in climate science. Scientific journals have been pretty good at not publishing climate disinformation. But when they do publish things that are somehow skeptical, or usually not outright denial, but attempting to sow discord about climate change, what percentage of those studies have received financial backing from
- 1 weeks ago37 min
Lina Khan on AI and More
Lina Khan, who chaired the Federal Trade Commission under Joe Biden, is one of the smartest and most influential thinkers about antitrust in our high-tech era, and one who has blazed new paths in policymaking. I spoke with her at a Graduate Center event back in March, and caught up with her again earlier this week for another enlightening conversation.For all my interviews and more, subscribe on YouTube.. . .TRANSCRIPT: Paul Krugman in Conversation with Lina Khan(recorded 7/14/26)Paul Krugman: This week, I managed to get to talk to Lina Khan, who was the incredibly influential and smart head of the FTC in the previous administration—with the current administration doing everything it can to undo her work. She played an important role in the Mamdani transition team and has had a lot of smart thoughts about technology and policy right now. And I thought we could talk for a bit about this, well, it’s always a bizarre moment these days, but this is the bizarre moment we’re in. And so, hi.Lina Khan: Hi, great to be here.Krugman: I want to get into technology and AI, but I wanted to just start with something that just happened. One of your special causes, which is “Click to Cancel,” which you tried to get as a national policy, just went through in New York City. Can you talk a little bit about what was achieved here and why?Khan: I’d be happy to. So, last week, the Mamdani administration announced that they are moving forward with two consumer protection initiatives. One was the finalization of a “Click to Cancel” rule, which basically says that businesses have to make it as easy to cancel a subscription as it is to sign up for one.This rule is responding to the fact that we’ve seen a pretty significant pivot to service-based revenue, and more and more companies are relying on subscriptions as a regular business revenue line. And that has created an opportunity for firms to create a lot of friction when people are trying to unsubscribe. A lot of people can relate to situations where it’s very easy to sign up, or sometimes you’re enrolled without even your full knowledge or consent. But then once you try to cancel, companies can make you jump through all sorts of hoops. Maybe you signed up with one click online, but to cancel you have to phone somebody, except the hours are really restricted or there’s nobody there to pick up the phone. In some instances, you may actually have to go in person.When we were at the FTC, we got thousands upon thousands of complaints, and people shared how, even during the pandemic when they were looking to cancel their gym membership, some gyms required that they go in person even after they had left the state. So this has been a growing problem, and people lose real money from it. I mean, there are estimates that, in New York City alone, people could be collectively losing over $160 million a year. So this rule, which is going to go into effect in October, is an incredibly important step forward.The administration also announced that they’re going to be proposing a rule to tackle junk fees. These are the fees that oftentimes show up at the very end of a transaction, even though they were not reflected in the original advertised price. Sometimes they’re called convenience fees, service fees, or amenity fees. And these are non-discretionary; people have no choice but to see them included. Companies will, again, often not advertise them on the front end, which is both deceptive for consumers but also gives them an unfair competitive advantage, because honest businesses that are marketing the all-in price then lose business to those firms that instead do pricing where they market a lower price and then add all the additional fees at the end.So, I’m really thrilled that the Mamdani administration is moving forward on these two initiatives, especially because we have seen some very serious backsliding at the federal level, where consumer protection initiatives have either been abandoned entirely or powerful companies that have connections to the White House can basically pay their way out of legal accountability. And so it’s incredibly important to see cities and states fill in that gap.Krugman: I couldn’t actually quite figure this out, but there’s this other initiative from Mamdani: public interest technology. Are you involved with that?Khan: It is something we considered during the transition and wanted to set up the ad
- 2 weeks ago6 min
The Forever War Gets Scary
For all my interviews and more, subscribe on YouTube.TranscriptThe war with Iran has just reached a very scary phase, and I’m not talking about the bombs and the drones. Hi, Paul Krugman here, doing a brief podcast instead of a full post, because I actually spent the day with friends and doing other things, and this is a quicker alternative.If you’re following the news, you know that the sort-of ceasefire with Iran has been called off. Trump has reinstated the blockade. The Iranians are back to hitting things with their drones and missiles. The U.S. position has been wildly erratic. First, Trump said he was going to impose a 20% toll on all shipping, basically turning the Strait of Hormuz into a U.S. toll booth, which would have been wildly illegal and irresponsible, aside from being impossible. Now he says, no, he’s going to demand that countries invest in the United States, which is also actually wildly illegal. But in any case, it’s never going to happen.And yet, this is extremely scary. The reason to be afraid is not that I think the war is going to come to America. It’s not even that I think the United States is going to seriously try to occupy Iran. We don’t have the troops. We don’t have the missiles. Trump depleted a large share of our weaponry in the course of his failed war so far. So this is likely going to be punitive strikes, maybe some war crimes along the way, but that’s all.But what is really frightening here is that it does appear as if Trump has given up on trying to extract something that looks like victory. If we go back just a few days ago, it appeared that what was going to happen was that Trump was going to de facto pull out, give upon the project, take advantage of falling oil prices because the strait was sort of kind of open — and try to spin the story about this was truly, this was actually an American victory and the economy is great and look at the stock market. And, you know, just it was a little bit — more than a little bit —stupid and doomed. It was also kind of amazing because a serious attempt to end the conflict would have required facing up to reality, saying, OK, this war didn’t go well, but America remains great. Sorry about that.But that was apparently not something Trump emotionally could bring himself to do. He just cannot admit that this venture failed. He can never admit that anything failed. We’re going to be searching for the saboteurs of the reflecting pool for the remainder of his presidency.This is a change in strategy that is ominous because what is Trump’s plan for the midterm elections? Here the idea presumably was that there would be enough economic success and people would have sufficiently short memories that they would possibly give Trump credit for opening the Strait of Hormuz, but in any case have put the gas price shock and the whole disruption surrounding the war behind them. And be ready to start admitting that this is the golden age that Trump and company keep on claiming it is.Now that’s all off. Now it’s just we’re going to bomb Iran. No clear strategy there, but we’re not going to even pretend that things are okay. We’re going to blockade them, which actually has a little bit more leverage, but no hint that anything might be resolved in a way that would help Republican chances in the midterms. So what is going to happen?I don’t think it’s a coincidence that just as Trump essentially gives up, not gives up in the sense of abandoning his war, but gives up on trying to achieve anything he can even spin as a positive outcome, that we now have an announcement that this Thursday he’s going to have a primetime speech, which reports say is going to be about election fraud in 2020. Some reports hinting that he might try to declare the two Democratic senators from Georgia somehow illegitimate.Okay, that’s not going to actually work. And nobody’s going to be convinced by the claim that he actually won the 2020 election. But what is happening is that effectively he’s setting up the pretext, the groundwork for massive interference in the vote this November. That we’re basically seeing the stage set for some kind of attempt to block fair elections, maybe block elections entirely.I don’t know how this is going to play out. But we are really now at the point where it’s pretty clear that Trump and the people around him have given up on actually winning the election. They’ve decided instead that somecombination of propaganda, misinformation, disinformation, and possibly massive illegality is their way forward.And don’t say they wouldn’t do that. That has been famous last words every step of the way. The proposition that there were some things that even Trump and company would not do has been the best way to be wrong about everything, every step of the Trump
- 2 weeks ago54 min
Dennis Kelleher of Better Markets
For all my interviews and more, subscribe on YouTube.With everything else going on, the ongoing demolition of financial regulation and supervision, which is raising the risks of financial crisis, isn’t getting much attention. So I spoke with Dennis Kelliher, president of Better Markets, an independent think tank that is trying to sound the alarm.Full disclosure: my nephew works at Better Markets. But I would have wanted to talk to Kelleher regardless.. . .TRANSCRIPT: Paul Krugman in Conversation with Dennis Kelleher(recorded 7/10/26)Paul Krugman: Hi everyone. It seems hard to believe now, but the great financial crisis of 2008 and its aftermath are now in the distant past. I think, in fact, in November there will be some voters who weren’t born yet. But for some of us, it was a huge, defining event, and financial markets as a source of economic problems and instability hasn’t gone away. And I thought I would talk with Dennis Kelleher, who is the head of Better Markets, an independent think tank devoted to trying to make financial markets work better for the rest of us. And in the note, I’ll mention I do have a personal connection to Better Markets, but that’s not why I’m interviewing Mr. Kelleher. Dennis is a former Senate aide, and as you know, congressional staffers are one of the great sources of expertise in America. And we want to talk about financial markets, so hi.Dennis Kelleher: Hi. Thanks for having me, Paul. Good to see you.Krugman: Good to see you, too. I have a bunch of questions, but we can go wherever this goes. The first thing is, whenever I try to talk about financial market functioning, what comes up is that most financial assets are owned by a relatively small part of the population, even if you take 401(k)s into account. So why isn’t this just a fight among the investor class? Why should everyone care about this?Kelleher: Well, it’s a great question because there’s such a lack of information about financial markets, the financial system, and frankly, as you well know, the economy. You know, one of the great services that you and many of your colleagues have provided is basically translating what’s happening in the economy and financial markets to the average Main Street American, reader of the New York Times, and consumers of news. And the truth is that the financial markets and obviously the economy impact everybody, and you’re right.This November during the election, some of the people voting will not have actually had any awareness of the 2008 financial crash, which was the biggest crash in the United States since 1929, which caused the Great Depression. And even though they may not have been born at that time, the people who are voting in November are still living through the repercussions of the 2008 crash. We basically lost an entire generation of Americans, economically speaking, from that crash.It took ten years for the U-6, the broad unemployment rate, to return to pre-crash levels. It was 2017 before that happened. And indeed, the Fed did an interesting study, which people can quibble with the baseline, but they did a study in 2018 that showed at the end of 2016, 90% of Americans were poorer than they were in 2007 by 17 to 35 percent. So if you think about that, at the end of 2016, the best-off American in that ninety percent bucket was 17% poorer. Now you could say the baseline of 2007 was inflated, but by and large, 90% of Americans have been doing pretty poorly since the crash for a lot of reasons.And so in November, when those people go to vote, they might not know it but they are actually living through the continuing economic consequences, financial consequences, and actually political consequences. Because the rise of Trump and the dissatisfaction of voters, Americans, and actually voters in the UK and elsewhere—Martin Wolf from the Financial Times wrote a terrific book called The Crisis of Democratic Capitalism. It shows how if countries don’t deliver for the broad population, then democracy erodes and people look for easy answers, authoritarians, and strongmen. And we end up with Brexit, we end up with Trump.And so you’re right. People don’t remember the crash, but the crash is incredibly important to everybody in America. And the circumstances that we find ourselves in toda
- 2 weeks ago7 min
An Encouraging Encounter With Real Americans
For all my interviews and more, subscribe on YouTube.TranscriptToday i want to give you some encouraging news about the state of the heartland. Well, actually New Jersey, but you got a problem with that? But I did something kind of different yesterday — which has prevented me from producing a usual analytical Substack post — and it was actually a very uplifting experience.So hi, I’m Paul Krugman. What i did yesterday was participate in jury selection in Mercer County, New Jersey, where i am still a legal resident.That is something I’ve done before: back in 2020 I spent 16 weeks on a grand jury. It was done remotely, because it was the depths of Covid. It was a New Jersey grand jury, which is not high profile cases. It’s actually very ordinary cases in which the police want to bring someone to trial but 23 citizens must agree that they have provided sufficient evidence to bring the case to trial. You don’t have to judge guilt or innocence but you have to judge that there is sufficient evidence to warrant bringing charges. It was enlightening. I got to see a lot of the negative side of life, obviously, but it was just it was a pretty good experience on the whole.So I was summoned again this year. I wouldn’t have been able to do it, but I had to participate in the selection in order to explain to the judge, if necessary, why I could not be available during the period of this grand jury — a bunch of already agreed to conferences and talks in Europe.So it wasn’t going to be something I could do, but I did the right thing and went through the whole procedure of listening to the explanation, being pronounced present, and waiting to see the judge and explain the issue. Now, as it turned out, I didn’t even have to do that. By the time they had reached the people who had said they could not do it, including me and 77 other people, they already had filled the jury. So it ended up that it was time-consuming, okay, not a terrible thing, but it was a procedure that had to be done. And I did my citizenly duty and was released well into the afternoon.But what was interesting about it was that those of us who had said we couldn’t do it — 78 people in a Zoom room — had a long wait while the judge did whatever she needed to do with the rest. And after a little while some people unmuted themselves and we started having a conversation. This was by definition kind of a random sample of people — of course people who have felony convictions are not part of this, people are not us citizens are not part of it, and to be fair it’s Mercer County which includes Princeton although it also includes Trenton. Still, it’s on average an affluent, highly educated county so this was not exactly typical America but it wasn’t exactly the elite either: This wasn’t a virtual room full of Princeton professors.So conversation started. Obviously people are not fools so it wasn’t about politics, it wasn’t about current events, it started with people saying “anybody want to recommend some books that I should read?” and then turned to TV shows and movies and then somehow or other we got involved in a discussion of AI and applications and learning. Because there were several school teachers.Not everyone spoke up — most people didn’t — but everyone was listening, it seemed fairly attentively. And it was a great conversation! People were reasonable, they were either well informed or were happy to say “I don’t know about this.” There was actually some discussion about “how should I where should I go for news now that everything is so polarized” — nobody talked politics but they did talk about the fact that news is kind of hard to parse these days.The book recommendations, the TV and movie recommendations to the extent that I know them were pretty good. And the whole tone was, wow, it was civilized. I felt a little bit as if I was in the middle of a Norman Rockwell painting.By the way, yes, people did recognize me and a couple said you know I read your Substack and I talked a little bit but I made a deliberate effort to step back and not play the celebrity there.And that was good, because I got to listen to other people who were really level-headed, interesting, pretty well informed about a bunch of stuff. Oh, and just to say that this was New Jersey, so it was a very diverse group of people — a random selection of people from New Jersey, which meant that it was multi-racial and multi-ethnic. The clerk had some trouble with pronouncing everybody’s name, which was okay — I mean everybody was very forgiving of that.So it was very much America as I see it — a country of lots of people who look very different, who sound different (except a fair number of people did have New Jersey accents.)And it was just a far more hopeful scene
- 3 weeks ago2 min
The Pain in Spain is Mainly in Trump's Brain
For all my interviews and more, subscribe on YouTube.TranscriptYesterday, Donald Trump ordered Scott Bessent, the Secretary of theTreasury, to cut off all trade with Spain. Bessent said “Yes, sir.” Trump also said that this is because the Spaniards had stolen his strawberries. Okay, I made up that second part, but he did in fact order Bessent to cut off all trade. This is not going to happen.Presidents have a lot of discretionary authority on tariffs and trade, more than they should, but you do not have the right as president to impose tariffs on a country just because you don’t like their defense spending or you think that they haven’t been nice enough to you.So this would not fly even in the Trump administration. Even with a supine congress and a permissive Supreme Court this is not going to happen. Also Spain is part of the European Union. So this is like Europe declaring “we’re cutting off all trade with Florida”: they can’t do that. And also, there’s a lot of U.S. business with Spain. In fact, Spain is one of those countries with which we run a trade surplus. So U.S. business would be howling.So this is all a non-event, this is is not something that is real. Except that the President of the United States did say this. It was completely crazy, and that’s the story that we should be taking from this. It’s not really at this point about economics. It doesn’t even make sense to talk about Trump Administration policies, let alone ideology. What we have is President Sundowner. I mean, this this is completely insane stuff. In any kind of normally functioning political system, in any kind of normally functioning party environment we would have a massive bipartisan call across the aisle, across almost everybody except for a handful of members of congress who are themselves crazy, to say okay this guy is non compos mentis. We cannot leave the fate of the United States or the world in the hands of somebody who is completely irrational, who is making demands and believing himself to have powers that he does not. And of course, instead, not only does everybody pretend that he’s still a rational human being, but the Republican Party, the Trump administration, is full-on engaged in trying to build a personality cult.What this says to me is that the problem is a lot bigger than Trump. Something is fundamentally wrong with America, and at this point you don’t have to go through complicated justifications. You can just say something is wrong with a country and a system that lets this guy remain in a position of power.Have a good day. Get full access to Paul Krugman at paulkrugman.substack.com/subscribe
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