I disagree with one word in Paul K's piece - "if" there is economic turmoil. For sanity, think, "when" - it will happen. Perhaps not in the next 1,2,3 years. We don't know when. There's more "Black Swans" out there than ever, not only economic. From climate change, fossil fuels, energy, the corruption and criminality of trump and his R stooges, the thieves at Wells Fargo (remember them?) and the deep cultural issues we face, and so much more. These are not all caused by trump or any single regime, but the "business-as-usual" mindset and culture is destroying life and the natural world. Climate change alone will devastate life on the earth we depend upon for life. Trump thinks climate change is a hoax, appointed fossil fool goons to make things worse and accelerate the destruction. Harvey (Houston) cost $306 B and all good science and thoughtful economists tell us the climate disasters will cost us trillions, each year. Trump actions today will devastate the economy in the future. IPCC says we have 10 years to reduce our CO2 emissions significantly, and every year after until we hit ZERO. So trump economic policies (true for most Presidents) are not so much about a 4000 pt drop in the Dow in 30 days. It's about setting the stage for mind boggling economic collapse in 5-10 years. Do you see the cliff ahead? Slowing to 80 mph will do nothing. We need to stop and reverse direction now. Trump is the worst president at this immensely critical time. He's setting the stage.
84
Dr. K...Merry Christmas and thanks for your terrific analysis of the "real" world this year...May the force
be with you in 2019. Happy New Year.
35
One of the things that I'm thankful for in this miserable, dark, perverse time for this still-great nation, is Dr. Krugman's clear-eyed, insightful, eloquent analysis.
He and Jennifer Rubin of the Washington Post give me hope that there are still intelligent, honest, courageous men and women speaking truth to power.
67
Is Trump administration capable of any kind of crisis.
Puerto Rico Hurricane devastation was crisis.
Last California fire was a crisis.
What kind of Presidential engagement did you observe from trump other than You Puerto Ricans spend too much money what we gave you and You Californians are not raking enough....
This administrations first reaction to crisis is alienation. They are the spectators not umpires in the game. Like a roman gladiator(us) was eaten by lion watched by Roman protector (Trump administration). This is how they are engaging with the crisis.
34
Merry Christmas Paul.
Wishing us all a better New Year in the hope that we all may finally get the chance to turn a page on this miserable chapter of US History.
41
Trump gleefully destroys everything he touches, even breathes upon. He doesn't want to spare the markets proof of his mighty belligerence.
33
I don't think I've ever seen a human being, nonetheless one with an incredible level of power, in this country err so consistently in the realm of the perverse, by which I mean contrary, not necessarily but perhaps deviant.
President Trump is a fount of misinformation consisting of boasts, lies, zeitgeist junk, superstitions, babble and bile. What could go wrong?
41
Presidents is not merely different than the aircraft pilots, 99.9% everything goes routine and thigs go well , you reach your destination your flight experience doesn't even stuck in your memory.
Once in a while flights goes like this
Air France 447 , a perfectly modern airplane with all might cannot survive a simple device error because pilots cannot engage the reality of situation and what demands it ( in that case I do not blame 100% flight 447 pilots) so planes crashes in to the Atlantic.
In US flight 1549 , A catastrophic failure of aircraft engines lefts you in a hopelessly bleak desperate situation, The pilot at that moment needs everything he knows and experienced but also stay cool and calm and if possible see through. Then Pilot sail the plane next to the GW Bridges steel cable's and land on the Hudson river.
So take home message : Obama in 2008 economic crisis landed this plane on Hudson river. I hope Trump doesn't repeat what happened flight 447.
21
Economics is not an "I-Alone" endeavor. Trump was elected to bedevil and attack and cripple the Left and Center like the kamikaze who knows his side is losing the war, so what the heck? Trump's appointees have been kamikazes and he seems to see himself as the enemy for he keeps shooting himself in the foot when he should be maiming his thumbs so he wouldn't Tweet himself into the corner, which he is bent on doing. Trump has contempt for the military (he went to a military academy when he got into trouble going to regular school), and he loves humiliating his family and friends with his disloyalty and infidelities. He's a second father to Jared and will, as Jared's first father did, go to jail too. He steals from the poor and gives to the rich. Cheated the IRS of a billion dollars and all of this, stone cold sober. The last time the nation served such fundamentalist sobriety was during the decade just before the Great Depression and we know how that turned out. Trump says he's terrified of being another Hoover, but his really attracted to Hoover, for Hoover was, in part, elected by being pro-prohibition, which is only small part of what Trump has in common with him.
29
I'm not versed in economics, so my opinion doesn't matter very much. But I do know the chief function of the federal government as I understand it is Ways And Means- coming up with a budget deal every year, on time and agreeable "enough" to everyone in Congress on what to spend and how much to spend. Then the president signs it, and we have New Years Eve and Times Square
where everyone gets a big kiss and a reassuring hug. But no, not when the Republicans have to NOT agree to a budget to keep the government running. Or they won't agree to raise the debt ceiling and the U.S. credit rating (and the banking system we all rely on) suffers. It's the Economy, Stupid? Something like that. I do understand that I pay every penny I owe every year, while others, some enormously wealthy "others", try to evade paying their fair share. Then the geniuses in Washington try to help their wealthy donors to get away with these practices, but trip over their own two feet with these utterly useless shutdowns.
The 5 billion for the "Wall" is a downpayment for the 20 billion remainder they estimate the project will eventually cost. There are people crossing the border seeking work and people crossing the border seeking asylum from a life-or-death existence in Central America. If their claims are considered legitimate they might be granted temporary residence in the U.S. If not they will be deported. It's not hard to understand poor shoeless immigrants suffering. "The Whole World Is Watching".
25
Remember the New York Times article about the illegal immigrants working at the Trump property in New Jersey?
Nor do most people.
If that had been a Democrat, Republicans and Fox News would be on that for months and months.
It is amazing what Trump gets away with.
69
In 2016, just enough of the U.S. electorate decided it would be a worthwhile risk to elect a manifestly incompetent, corrupt and unbalanced man to be president.
I suppose they were curious as to what would happen. Unfortunately, all of us now get to find out.
32
When has the school yard bully socialized with anyone? He only loves other bullies. So far, he has demonstrated a talent for "pulling out".
14
If the Trump Presidency (wow, it's hard to write those two words together let alone say them aloud) has shown the country nothing else, it's that the ship of state will, for the most part, keep going in a general direction even if the captain of the ship is an incompetent boob who hasn't a clue as to how the ship works or how to effectively steer it.
And, unless the ship crashes into an economic or international crisis-type iceberg, the hope for the people on board - that would be us - is that we will survive this cruise, get rid of this captain, and replace him with a captain who knows what s/he is doing.
The most worrisome piece of this article by Dr. Krugman is all of the above. The best part of the piece? The "sanity clause." Merry Christmas.
21
And who will suffer the most when the wrong-wingers bring the economy to its knees? Not the Koch brothers.
23
Sanity clause forgiven; edifice complex likewise. Okay, I confess ....... I laughed.
I don't hold stocks and am uneducated in the ways of the stock market. But I question the measures by which the learned determine a "good economy". Umm ... why does the US, one of the most blessed in resources among all nations, rank only #17 in quality of life among them? Can we fairly call it a "good economy" if it is mined out of the quality of life of a nation's citizens? And now so many disastrous hurricanes and fires. Have the victims and their areas been properly cared for? And the Supreme Court just ruling Obamacare illegal. What does that mean for people's medical care? The fortunes of oil and gas companies are riding high while creating skyrocketing costs in disaster damage. And now Americans are in danger of losing social programs because of deficit due to tax cuts for the rich. In summary, is the US paying its bills in terms of responsibilities to the welfare of its people? If not, those who measure the "economy" are cheating. Meanwhile Trump has stacked the courts with judges who lean towards corporate wealth, and filled government offices with persons of conflict of interest deliberately chosen to sell out public assets to corporations. I wish that opinion writers would pleeease stop characterizing the state of affairs as "chaos", which is a euphemism. What is happening is malignant, and future disaster is stacking up daily.
31
All of the patriotic adults are gone from the Trump regime. Now the chaos really begins.
19
Great column. And nothing seems to change, which is really scary.
When people do no meaningful research into issues themselves.
Know essentially nothing about the problems we face.
Let others do their thinking for them.
And buy simplistic if not idiotic "solutions" to complex problems ..."solutions" that may sound good on the surface and make you feel good emotionally, but have no basis in reality or science ... you get repubs elected.
Krugman nails it to a large degree, and there simply is no rational, intelligent explanation for tump, his voters and his insane policies.
The rich get richer, our infrastructure crumbles, nothing for little people...all while the planet is polluted and destroyed. It all defies comprehension, but here we are.
Yes, the repub party should be buried with the trash, but how to do it with all the willful ignorance out there seems to be an eternal mystery. I keep hoping we figure it out.
24
Donald Trump's significant behavioral problems began in his childhood, leading to his parents sending him to a military school for correction, then giving him exorbitant amounts of money, the following diagnosis likely indicates his behavioral problems. Oppositional Defiant Disorder; Source- Mayo Clinic: The Diagnostic and Statistical Manual of Mental Disorders (DSM-5), published by the American Psychiatric Association, lists criteria for diagnosing ODD. [This is a disorder begins in childhood, and in some adults continues in adulthood]. Angry and irritable mood: • Often and easily loses temper • Is frequently touchy and easily annoyed by others • Is often angry and resentful Argumentative and defiant behavior: • Often argues with adults or people in authority • Often actively defies or refuses to comply with adults' requests or rules • Often deliberately annoys or upsets people • Often blames others for his or her mistakes or misbehavior Vindictiveness: • Is often spiteful or vindictive • Has shown spiteful or vindictive behavior at least twice in the past six months ODD can vary in severity: • Mild. Symptoms occur only in one setting, such as only at home, school, work or with peers. • Moderate. Some symptoms occur in at least two settings. • Severe. Some symptoms occur in three or more settings. For some children, symptoms may first be seen only at home, but with time extend to other settings, at school and with friends: [And then into adulthood].
26
I have no doubt that Mr.Bannon is celebrating the “success” of his ideas now: destruction and destabilization at any price. I think the ending this annoying chains presidency as soon as possible would be just the appropriate one to pay and would certainly be celebrated around the world and among the 401k dependent baby boomers here at home.
13
Like Trump said, "Only I can break it".
15
Mnuchin in Mexico.If Trump and Kudlow would join them, I’ll bet congress would be more than willing to build a wall....,around them!
14
if anyone is still a trump believer then his recent "dumbest thing ever said" episode while working the Santa Radar should be the final straw. How hard could it be to talk to a child without destroying the idea of Santa Claus? trump is incapable of even the simplest aspects of his job. Note to republicans in Congress: get on board the impeachment train. What company would hire trump, much less keep such an unqualified man on payroll?
32
Until we awake from the Trump nightmare, hope must reside with the Democratic majority soon to take office. Imagine if they might offer an alternative economic program - designed to appeal to the great majority of Americans –specifically including those left behind by our current extremely skewed economy that favors the wealthy few.
Such a positive alternative is lurking in the wings. The core idea was called The Second Income Plan by the late Louis Kelso, inventor of the Employee Stock Ownership Plan - ESOP used by 11,000 companies.
Second Incomes would reduce inequality and can be combined with the otherwise impractical Universal Basic Income.
There would be no net cost to the treasury!
See: SECOND INCOMES at aesopinstitute.org
Here is a path to ending any individual’s concern about the stock market that makes possible greater returns. 85-90% of an individual’s funds should be invested in Treasury Bills, the safest place to put money on this planet. The remaining funds can best be invested with modest amounts, as highly leveraged as possible, in a substantial number of high risk opportunities (ideally an Angel investment portfolio). This is the prescription for investors by Nassim Taleb in his book - THE BLACK SWAN: The Impact of the Highly Improbable. (See page 205)
This safe investment program could be included in The Second Income Plan, ending fear of stock market gyrations such as we are now seeing.
It can also be employed by anyone, right now. Imagine!
6
Please remember that Trump basically repeated DeGaulle “apres moi le deluge” and his wife’s jacket legend,
“I really don’t care do you?” when he retorted that the consequences of his actions will be someone else’s problem.
It is irresponsible of his supporters to continue to enable him in his mad progress of chaos and self-indulgence.
Those with integrity and self-respect are leaving.
8
Xmas day and the New York Times dedicates the paper to worries over the stock market. This typifies the shallow nature of America today, Money first, Money always. I've got mine so I don't care about you. Trump and his ilk are the physical manifestation of the gangrene that eats at our Democracy.
We the People can only succeed if we look beyond our own avarice and truly see how our fellow Humans struggle, then take the steps necessary to lift them up, no matter the cost.
19
Just spent Christmas Eve with a group where one member decided to "politic" the evening; declaring Trump was the best president "Since Ronald Reagan." Obama was "One of the worst" for giving welfare to "Illegals..."
When asked what made Trump the best- of course the only specific was to 'stop illegals from getting food stamps' and Making America Great Again. Never-mind-the-fact, that said person relied on Obamacare for High Blood Pressure and Diabetes medication and SSI benefits. Other family members were silently apoplectic, knowing they were first-generation Americans and beneficiaries of food stamps and welfare when their father died young.
All was lost on the MAGA noise-maker.
23
Thank you, Dr. Krugman, for providing a tiny bit of levity on this bright Christmas morning in southern France; I desperately needed it.
Along with edifice complex and “sorry, kids, there is no sanity clause,” allow me to add a few more descriptors of our Grifter-in-Chief, who is clearly a legend in his own mind and suffers from delusions of mediocrity. Let’s hope the elves revolt before the whole North Pole workshop burns to the ground.
Merry Christmas!
11
In The Freshman, Marlon Brando played the real-life mobster that Vito Corleone was based on. There's a scene where he's on the phone with his stockbroker, complaining that some of his stocks haven't performed as well as he would have liked. He threatens the broker, telling him he might meet the same fate as his predecessor.
Life imitates art. Now the president threatens the Fed chairman.
19
Dr. K I know you had a purposely narrow objective for the article. All right and proper - what I think you are saying is this:
"The economy hums along or doesn't day to day mostly on its own accord - a President generally has little to do with that at a micro level"
"The stock market hums along mostly controlled by vaporware and a President can only impact vaporware if his vaporware somehow is real or potentially real - Trump vaporware is becoming too real"
"A President can impact the long term health and vibrancy of the economy with macro level actions. LUCKILY Trump followed a worthy President who worked the macro level honestly and thoughtfully - often at political cost - to reverse significant crisis level negatives and create some durable positive trends. Trump seems INCREASINGLY incapable of similar performance given crisis - indeed he seems INCREASINGLY likely to create crisis - macro things like his tax-cuts already portend crisis down the road"
But here is what we MUST additionally recognize and heed: Trump is an existential danger to our economic, social, and physical health. His mad chaos is bad enough but his lack of focus/antipathy re: real problems/opportunities is stunningly dangerous to us.
Infrastructure, privacy, internet security, healthcare, global warming, healthier air/water/food, education, innovation, cleaner energy, etc. ... ??? Where's the beef?
And fostering social peace/cohesiveness/"brotherhood" - fugget about it!
Crisis now!!!!!
12
I think people should not be complacent during the holiday season while our disgraceful POTUS keeps doing serious harm to our country.
11
“Sanity clause.”
That made my day.
10
Paul,
"sanity clause" and "edifice complex". Nice. Do you think the Trump Tower Moscow will plague him for the rest of his administration and maybe, just maybe, be an Edifice Hex?
Merry Christmas!
7
I have an idea.
All you geniuses sit down together and work out a model for Prosperity without Growth.
You liberals say we need growth to support growing population; the other side says declining birthrates are reducing growth.
It can't be both, and if it's not both, it's neither.
The experts to consult are Richard Heinberg, Dennis Meadows and Tim Jackson.
Then we wouldn't have to panic every time a bunch of impulse addicts who have money to play with, get a tad uneasy.
1
Speaking of chaos, instead of shutting down the government and now demanding that American taxpayers pay for a border wall or else, why wasn't Trump negotiating this with Mexico as part of his "new" Nafta deal?
7
Got to give credit where it’s due: I believe the ‘sanity clause’ remark is from a 1930s Marx brothers movie, uttered by Chico in his faux Italian accent.
5
The curtain pulls back slowly exposing our Wiz is an ignorant ,erratic and corrupt blowhard as the "never Trump GOP camp" noted. Trump after all the exposure of his shady dealings for so many years is a tool for Putin and Jared is a tool for MSB all based on the Trump's family financial interests . Trump's base will tolerate him shooting someone on 5th avenue but most of the American people will not accept his chaotic behavior neither will our allies.
5
Bring it on. The worse the better, because the revolution is long overdue.
Trump is basically a more malignant, dumbed down version of every Republican President since Reagan. In this, the risk he represents is alarming, but only as a matter of degrees. As an example, think of the $6 trillion dollars and ocean of blood spilled onto the deserts of the Middle East by GWB’s unnecessary forever wars.
The core of the real problem is structural, where a fraction of the American population routinely holds the nation hostage to their horribly, stupidly ignorant reactionary beliefs. I am talking of course about both the structure of the Senate and the electoral college. But those are only two of the most glaring examples.
It will take a disaster of epic proportions to wake Americans to the need for change, and yes, blood may flow because the reactionaries, backed by the oligarchs will not go away quietly.
Oh, and one more thing. The US is the “indispensable nation” in most Americans minds, but to paraphrase DeGaulle, the graveyard of history is filled with indispensable nations long gone from the world’s stage. Failure is definitely an option
Once a democratic Britain vied with monarchical Spain to be the world’s indispensable nation. At that time Spain’s military was supported by lavish spending while the streets of Madrid were mud. Who won folks?
America has the choice: be Spain and end up a nothing has-been, or be like Britain. Right now you are tracking to the Spanish model
8
It is telling (tho' not surprising) that Millionaires were copasetic w/ Cadet I-1's despicable actions until he tanked the stock markets and reduced the size of their portfolios.
"…and then they came for my wallet…"
11
One need look no farther than Puerto Rico to know how this administration will act when the economy hits the fan.
10
I'm basing this only on anecdotal evidence, but I think there are quite a few people who knew Trump was an incompetent bufoon, but voted for him anyway, for two reasons:
One is simply party loyalty mixed with equating basically every act by every Democratic politician with "socialism".
But perhaps more important to more people is 25 years of the right mercilessly attacking Hillary Clinton. I just heard another Trump supporter say yesterday that her election would literally have meant "the end" of America. What could that possibly mean? Perhaps this notion that people don't want to admit to pollsters that they supported Trump worked both ways. Perhaps a lot of people didn't want to admit that they simply could NOT support Hillary.
4
Last night they had Chris Hayes special broadcast, titled The 2018 Memory Hole...
Just reminder of many stories we probably forgot by now, considering the deluge of it.
Highly recommend...great panel discussion.
https://www.youtube.com/watch?v=jUMi3flL8bo
2
You apologize for "sanity clause", but not for "edifice complex"?
1
Well, I don't know whether to be reassured or scared stiff.
2
Having watched the market for many, many years, and being told now that everything is economically "rosy", low unemployment, sound businesses, makes me think that the only reason the market is acting the crazy way it has been is a reflection of the crazy white house tweets.
Nothing matters, as long as it doesn't involve trump real estate.
2
The "gang that can't think straight"...in other words, America's First Crime Family.
3
It's the shooting war we may bumble into that I fear, a war with no allies.
6
Sorry to say, but I believe a recession is essential. Painful as it would be, it is the only way to be sure of being rid of this malignancy.
It's the economy, stupid.
Consequently, we need a severe cutback in consumer spending, and soon (because of economic lags).
And my last point really goes against the grain of America: because the wealthy evade/avoid taxes, I've come to the distressing conclusion that in order to preserve the social safety net, society must simply confiscate excess wealth, whatever we decide that to be.
7
Our laws, with good intentions but bad results in this case, make it almost impossible to remove a stupid, lying, brash, and arrogant man from playing with toys he shouldn't ever have had the opportunity to play with.
What about a completely different, more carrot-like, approach?
Pay Donald Trump to leave the government, including additional payments (if required) for Ivanka Trump and Jared Kushner. These three "leaders" view the presidency as a financial opportunity. Perhaps, for enough money, they will go of their own volition. The document negotiating their departure would also include holding them harmless from further prosecution. Think how much money and how many American lives we could save simply by giving Donald, way, a billion dollars, and giving Ivanka, say $500M and Jared $500M. Then they could declare victory and preen the their lives away where old dictators go to die (Monte Carlo?).
This would still be cheaper than the continuing investigation and we would get rid of them and their descendants.
4
The wheel follows the heel of the ox pulling the cart.
You have left many good people in your wake over your entire adult life.
As you sit fuming and alone in your palace tonight, your day of reckoning is just over the horizon.
You can't stop what's coming, Mr. President. It is coming after you.
8
Montreal Moe | Twixt Gog and Magog
It was almost 40 years ago when I first said the tag team of Ronald Wilson Reagan and Tip O'Neil would destroy America. With apologies to Oscar Wilde and Reading Gaol I knew it would be with a kiss.
This is the first time in almost 40 years that I am optimistic on Christmas Eve and will admit my optimism is not shared by most thinking Americans.
Reagan and O'Neil were the perfect tandem a stupid and confused CEO and a House Speaker who as the perfect politician who was always making nice. Trees do not create pollution and solar panels not fossil fuels were the future.
Donald Trump is the perfect President for a country too long in denial. Morning in America is long gone and the evening and the morning is the next day. It is time to get back to work after an all day binge and Donald Trump is the only cup of coffee that can do the trick. He is the bitterest and strongest cup of coffee at this morning's breakfast. He will open the sluices at both ends so America might eliminate all the conservative poisons from it body politics or America will really die. After too much time of short term gain for long term pain the short term pain will require heavy pain killers but the choice is life or death. Trump may taste, smell and look like the worst cup of coffee ever created but forty years of remaining in the pot makes this cup of coffee desperately needed a necessary morning purge.
4
The investment world is catching on to the idea that the federal government represents about 18% or a bit more of GDP, and the person running the whole shebang is acting more and more like he's demented, insane, or both. The illusion that there weren't too many things even a president could mess up is getting blown away as Trump's actions become more and more unpredictable, and unconstrained by any precedent, traditional or legal, towards what can be done, or what should be done, by a president. Trump constantly strains towards no restraints, no constraints on his power... and the investor class is finally catching on to the chaos than can result when a nut-case egomaniac, who leads from his "gut", and seems none-too-intelligent (but who doesn't care to admit it) is in charge. Trump is a loose mad bull in the 'china shop' -- and his lurching demented crashing about is starting to look like it will break things, many things, quite thoroughly. Investors are pulling back, waiting for someone to recreate the illusion of control and predictability from Washington. Here's my suggestion: don't look to Congress, unless and until the Senate turns over you aren't going to see any action from there. Maybe Mr. Mueller will save things -- but there's a scary path ahead that way as well, with Trump's mindset. Chaos could very easily descend into Constitutional crisis with Trump involved. Guess what the market will do in that case... the last three weeks are a picnic.
6
The stock market is having a Christmas rush on your money, and we get the loaf of fruitcake from the announcers.
2
Boy, do I see things differently. I do not think this shut down is a minor thing to all those losing pay. Yeah maybe they will be reimbursed, but with this administration I would not bet on it. You ever live paycheck to paycheck Mr. Krugman? It is plain scary.
The financial crisis of 2008 is a joke as far as the people responsible for it are concerned, no jail time, banks got bailed out while former home owners got zip help. Nice for the perps, bad for the victims.
I cannot believe from my lowly position in life that most people right away did not see what is coming. Alarm bells rang out loud and clear. We had a complete nut, a terrible conman entering the white house. Anyone who runs through 400 million dollars of his Dad's probably ill gotten gains and gets loads of money from the Russians as both his sons have said, cannot be trusted with running a country, let alone a country golf club.
I mean my stomach roiled when he spoke. My guts right way told me he did not mean a word he said. I had to stop listening to his blather.
I am an outsider and grew up in the lower middleclass, way out in the boondocks, but maybe us country people, except for the desperate ones who the Democratic party forgot for 40 odd years and voted for Trump, can see a con man who always loses more quickly. Alarms going off even louder now! And oh yes we are in a huge crisis. Merry Christmas to you too and Tiny Tim as well. Hope he does not need new crutches any time soon.
6
As a country we've been extremely fortunate that this administration hasn't had to deal with a legitimate crisis because they are completely and utterly unprepared. Sooner or later our luck is going to run out, and the folly of electing a con man will be laid bare for the world to see. 35% of voters will support Trump no matter what, as they never had high expectations for his performance in the first place - as long as he 'owns the libs.' ANYTHING he accomplishes is a bonus.
5
“President” TrUmp likes a Fight. A Millionaire at Age 8, He presumes Himself as the ordained Winner for Life, I guess. (If
Wealth is “winning”, he has achieved.) My contention continues to be that this man is a diagnosable Sociopathic Personality Disorder. He has chronically manifested the basic symptoms of that diagnosis. One of most amazing of those “ Symptoms” is hiis propensityfor free-floating Lying....always and freely for his
own Convenience. (Meanwhile, while Not in the NCIS Standard
of LeRoy Gibbs, Trumps readily claims he Need Never to
apologize, because he has never done anything Wrong. Now,
Into the “President’s” Life , is introduced another opponent Figure. This Man, Robert Mueller, is dedicated to Justice,
diligent in seeking Truth. Interesting...Trump contends that he has the Power to Redefine Truth in any and time purely to
His own Convenience. On this Eve of Christmas, the aged question still stands:”What is Truth?” I await a Man who shuns
notoriety and sham who will deliver his Presence to the “President”.
4
Even more worrisome... Trump supporters have voting rights.
4
Who could have guessed that electing an unhinged reality television star would backfire? And anyhow, Hillary just wasn’t relatable enough for people who hate women.
Seriously, it’ll be a miracle if my daughter’s America is anything like the one I inherited as a young adult.
6
Actually, you could help yourself unless your impulse control is in the same league as Trump’s. This is the second piece in a row where you have made a gratuitous comment regarding Mr. Trump’s sanity. These comments detract from what would otherwise be intersting articles. You have solid arguments for your positions.
For "sanity clause," please credit the Marx Brothers in Day at the Races.
Liberals don't understand.. We are beyond a "Trump White House" the door of exploitation is wide open and the fix is in .. Chuck and Nancy will retire and let's see how long they fight for undocumented immigrant workers and better movie roles for LGBTQ. John Boehner is selling POT and nobody says a word!
"Edifice complex", "sanity clause" -- a Krugman column is as dense in throwaway references as a Simpson's episode. And I mean that in a good way!
182
'Would Trump look for solutions or refuse to accept responsibility and focus mainly on blaming other people? ... What do you think?'
As Doctor Who said, "The very powerful and the very stupid have one thing in common. They don't alter their views to fit the facts. They alter the facts to fit the views. Which can be uncomfortable if you happen to be one of the facts that needs altering."
270
I don't know, Paul......since we're now using Marx Brothers quotes in reference to Trump, try this one from Groucho; "who are you going to believe, me or your own eyes?"
2
thumbs up!
1
If Trump voters don't start becoming more patriotic instead of idiotic, they will return to their forgotten, benighted state once more. I don't understand what the Republican party has done for them lately that the Democrats couldn't do better.
6
Paul Krugman (former advisor to Enron) commenting on who is and is not qualified to advise and lead us through a financial crisis. Does anyone at all see the irony in this? Anyone?
3
anyone that works for or with trump will be diminished. there is absolutely nothing going on there but "the con". i predict that mick mulvaney will become the most damaged. trump continually creates crisis's..... and when things go wrong? he always blames others and he usually blames his own people. he is the classic spoiled rich kid that makes a mess, blames others and then waits for someone else to clean up.
the mesa he is making of our country is going to be his biggest yet.... probably bigger than W's.
3
The stock market may not be a real-time barometer for the economy but it's also not quite reading entrails.
Trump's gut is economically illiterate but it's what he belches. He says the stock market is a report card for the economy and he just got an F on his midterms. Market up? 4 more years! Market down? Send troops to the NY Stock Exchange. Lock Powell up!
Krugman explains why stock markets and the economy aren't blood relatives or why the market sneezes but the economy doesn't catch cold. But for most people it's counter-intuitive to not see a powerful synergy between market and economy. Who doesn't associate as cause and effect the Crash of '29 and the Great Depression?
That's why Trump intuitively sees the stock market the same way his base sees it. The Loser Ghost of Herbert Hoover (Trump's biggest fear) haunts him and the market sell-off has spooked him.
But the real scare Krugman posits isn't Trump. It's his not having a deep all-star bench come the play-offs. Trump's b-list team may be scary but Timothy Geithner's A-list bailed out Wall Street but let everyone else drown. And they did nothing to insure the next one is never instead of again.
John Donne was wrong. No Man Is an Island but Trump acts like he is when the economy isn't. Because perception is reality and if people are spooked by Trump's unrelenting chaos the markets will be affected.
Live by the stock market, die by the stock market. If that's Trump's best re-election bet, I'll take it.
3
More significant, perhaps, than Trump blaming Powell, are the investors blaming Trump. I heard few complaints when his idiotic pronouncements and decisions - such as the tax cut - helped power the market skyward. Well it's his idiotic pronouncements and decisions that are pushing the market down and now, of course, everyone is beating their breasts. They can't have it both ways.
Once again...has Krugman ever been right? I just wasted 10 minutes of a great Christmas.
1
All this without considering what climate change will cost the economy. A narcissistic kid is holding the wheel.
3
anyone that works for or with trump will be diminished. there is absolutely nothing going on there but "the con". i predict that mick mulvaney will become the most damaged. trump continually creates crisis's..... and when things go wrong? he usually blames his own people. he is the classic spoiled rich kid that makes a mess, blames others and then waits for someone else to clean up.
the mesa he is making of our country is going to be his biggest yet.... probably bigger than W's.
2
Donald Trump took a solemn sworn oath to preserve, protect and defend whatever profitable Trump Organization return that he is hiding from the American people in his personal and family income tax returns and business records.
Aided and abetted by Julian Assange, James Comey, Recep Erdogan Mitch McConnell Benjamin Netanyahu, Vladimir Putin and Mohammed bin Salman ,Trump is the antithesis of a ghost. Trump is their mutual dummy pawn pet puppet clown jester. MAGA means making Trump richer while enhancing their individual and national political influence and power at the cost and expense of American values and interests.
The Trump ghosts are the distractions of kneeling NFL players, fake news enemy of the people rhetoric, xenophobic anti- African, Mexican Muslim rhetoric, misogyny and patriarchy, Jared Kushner and Ivanka Trump's ignorant stupid incompetence. Along with Don, Jr and Eric profiting from their Daddy's occupation of the White House enabled by Fox News and the Wall Street Journal propaganda and Trump's entertaining tweets.
5
A minority party of racist, sexist, reactionary people has been (over-)running this country. This has damaged our body politic, our international relations, and the environment. High time to show them who's boss and change course.
2
In your opening comment, you mention that the market responded to trump's election two years ago. The move was not so simple. Something extremely odd happened. On the evening of 11/09/2016 and into the next day, the market plunged and then recovered overnight. At 9PM the SPX was at 2152. By 1AM on 11/10 it had dropped to 2028. From there it soared and within an hour of opening, the SPX had fully recovered. The SPX had never dropped and bounced so quickly. It's almost as if the major market forces had suddenly decided that that electing an idiot was not so bad.
The display in your photo shows Wells Fargo (WFC) at $45.02. Tuesday it dropped another 3.37% to $43.60.
Lucky for trump's friends that their financial advisors adhere to a fiduciary credo that enables them to shift quickly during severe downturns and short the market. Unlike regular people who mostly invest passively with IRA's and 401K's and suffer great losses, the wealthy make out like leveraged bandits whichever way the market moves. Mnuchin's calls to the big banks was likely preceded by calls to his connected friends and went like "go short now!"
4
The country is now being run by Coulter and Limbaugh.
4
Republicans are not a political party as much as a cult.
America is mediocre because it allows the cult to fake it as a political party.
6
I wish you would talk about the case of Claas Relotius which is sending shockwaves through not only Der Spiegel but the German mainstream media with the magazine being labelled the “lügenpresse” or “lying press” by populist opponents and others for years. I want this because I think the American people, too, have lost confidence in the press, including with writers such as yourself, Mr. Krugman. It is not that I disagree with you but that I no longer believe you care more about truth than you do about resentment. You are all caught up in hating Trump and gloating over your insistence that he is a failure. If there is anything you can do to make the case for integrity in journalism, please offer that in 2019.
I was looking for words to console and give optimism to my American neighbours this Christmas day and I came up with this column in Haaretz. I believe the economy is already obsolete and dangerous but there is room for optimism.
https://www.haaretz.com/israel-news/.premium-ex-mossad-chief-russia-ran-trump-for-president-1.6782359
Trump is a disaster for all American interests clearly, but with highly financed and sophisticated troll farms the petro-fascists won’t be done until they bring the whole world into a dystopic ruin.
2
Edifice complex - wonderful, Mr. Krugman!
‘You can’t fool me. There ain’t no sanity clause’. Chico Marx.
A NIGHT AT THE OPERA.
1
When things go sour, fingers start pointing. Elsewhere.
It takes a big person to blame themselves for a disaster. As a human being, Trump barely registers above microscopic. Not only that, he surrounds himself with even tinier beings in order to look bigger himself. But why was he elected?
What we need is disclosure laws for propaganda. Every magazine is full of trash ads, and they have disclaimers. 'Not recommended by FDA.' 'Not real currency.' 'No scientific evidence.' Et cetera. So why can Fox News tell blatant lies and ridiculous opinions and spread nonsense conspiracy stories and market it all as fact?
Don't tell me. It's all about the money.
2
Trump isn't a black swan. He's a flock of them.
3
You know it's going to happen unless we rid ourselves of that criminal traitor.
4
A few short years ago I never could have imagined the depths that the right would plunge to. I never would have thought that they would turn against law enforcement and label them the 'deep state' and seriously believe it. I never would have thought they would tolerate attacks on political enemies, the AG, the Fed. But they, the rightwing base, have. What could possibly drive 46% of the country to this state of insanity? My only answer is: propaganda. Fox, rightwing talk radio, "news outlets" like infowars, and now Russian invasions through social media. This appears to be the fascist wave that we were stunned had swept up Germany and naively thought could never happen here. But it has happened and it is 46% tall. This should be alarming to every voting citizen in this country. The rightwing appears to be hellbent to destroy our alliances, our regulatory infrastructure, our trade agreements, our treaties, our safety nets, our health care.... We should band together and over the next two election cycles vote the rightwing out of power. Merry Christmas.
6
Love ya, Dr Krug. But I gotta point out that "sanity clause" was invented by the Marx Brothers: https://www.youtube.com/watch?v=G_Sy6oiJbEk (skip to the end).
But as for Trump's border-wall "edifice complex" . . . now that's pure Krugmanian genius!!
Our two-party system is broken as was demonstrated with clarity in the 2016 coup d'etat.
Trump is merely the face of the rotting Republican Party. What is hard to comprehend is the why the mega-donors who own the Republican Party would allow a complete moron like Trump to create the financial chaos that is directly linked to his mental instability.
It is clear that the Republican Party now depends on two powerful foreigners to maintain their political power. Rupert Murdoch poisons the minds of millions with his Big Lie Fox Propaganda Machine - a bullhorn of fake news that stirs up hatred in the closed Red State Universe. Vladimir Putin gives the Republican Party huge support in the form of carefully crafted digital invasion of social media and hacking of politcal databases.
We saw a glimmer of what may help to overcome Republican corruption of the electoral process in 2018: voter turnout. Those who don't go to the polls to vote out the Republican extremists are in fact the best weapon these neo-fascists have.
4
“Edifice complex”
Very clever.
2
Trump's erratic decisions have a domino effect. Whatever he does has near catastrophic results. We have met the enemy and it is Trump and the cowardly, selfish Republicans. What adds to our chaotic administration are the sub par assistants like Miller, Kushner and Sanders, as well as department heads and temporary ones like Mnuchin and Whitaker. Add to this the toxic, petulant, uneducated Trump and you have a recipe for disaster. Donald J.Trump has ruined our Christmas, and will make the new year a year to forget. Buckle up, America we're headed for a devastating crash.
3
The stock market may not be a real-time barometer for the economy but it's also not quite reading entrails.
Trump's gut is economically illiterate but it's what he belches. He says the stock market is a report card for the economy and he just got an F on his midterms. Market up? 4 more years! Market down? Send troops to the NY Stock Exchange. Lock Powell up!
Krugman explains why stock markets and the economy aren't blood relatives or why the market sneezes but the economy doesn't catch cold. But for most people it's counter-intuitive to not see a powerful synergy between market and economy.
Who doesn't associate as cause and effect the Crash of '29 and the Great Depression?
That's why Trump intuitively sees the stock market the same way his base sees it.
The Loser Ghost of Herbert Hoover (Trump's biggest fear) haunts him and the market sell-off has spooked him.
But the real scare Krugman posits isn't Trump. It's his not having a deep all-star bench come the play-offs.
Trump's b-list team may be scary but Timothy Geithner's A-list bailed out Wall Street but let everyone else drown. And they did nothing to insure the next one is never instead of again.
John Donne was wrong. Trump is an island but the economy isn't. If only because perception is reality and if people are spooked by Trump's unrelenting chaos the markets will be affected.
Live by the stock market, die by the stock market.
If that's Trump's best re-election bet, I'll take it.
"Merry Christmas from the White House"
Merry Christmas Vladimir. You got us good with this one.
2
Morely's chains are rattling for me.
At last, Chico Marx's greatest pun line gets its due, in a most appropriate Trumpian context, in a NYT editorial.
About time.
1
What can we expect from a guy who gives a speech before the General Assembly of the United Nations and insists his administration has accomplished more than almost any other presidential administration in the history of the United States!! He earned a good laugh from “the audience”. But this wasn’t a skit on Saturday Night Live. This was the real thing!
Any bets on where the economy goes from here under this “administration” is anybody’s guess!
This is the stuff that dreams (nightmares!!!) are made of!!!
3
Things are truly horrendous when The Rich cannot tolerate being represented by the embarrassing "Ignoramus". Instead of the farcical George Ruggle character, they have the real one in the White House.
Paul Krugman always finds hope buried under the rubble of horror.
What can he do? Mishandling a recession is a minor concern. Possibilities for the next 2 years:
1. Trade war with China
2. Real war with NK
3. Real war in Middle East
4. Lose Syria, Afghanistan, Ukraine, allies
5. Politicized federal reserve
6. Unavailable medical care
7. Wingnut Supreme Court
8. Limbaugh and Coulter set U.S. policy
9. Saturday night massacre
10. Paralyzed, unrepresentative, subverted government
...just to stop at a round number.
3
Krugman, as usual, utterly misses the macroeconomic point. Treating Trump as an isolated data point—a discrepancy, as it were, from an otherwise healthy economy—fails to grasp his significance as a symptom of the fatally moribund state of late-stage capitalism in which the entire edifice of neoliberalism (economic inequality, depressed wages, social service and infrastructure austerity, tax cuts for the criminally wealthy, expanding military budgets) sets the stage for a coming (and entirely predictable) economic death spiral.
It’s as if Krugman is standing in front of a single dead tree asking “Hmm, what can we learn from this?” as the camera pulls back to reveal a forest of dead and dying trees as far as the eye can see.
But, what can you expect from the elites at the NYT?
Marx/Engels 2020
1
Haven’t yet read the article, but the subtitle has already made my day!
1
Trump rode in on the coattails of the Obama economy and has enjoyed the bragging rights of its success. Trump and his clown car of television personalities posing as economic experts has been in charge for the last year and the market is saying, God help us.
2
Well, OK; but who wins the carnation?
My greatest fear is a nuclear event.... he's clearly nuts, vile, untrustworthy, and capable of a tragic, traumatic, self-serving act of epic proportions....
4
Doesn't do any good to write these things for the NYTimes. Fox News is the main source of information for Trump, so it the minds of Hannity, Pirro, Coulter, and assorted other hard cases who have to be converted with the truth. In other words, it ain't gonna happen.
1
You should credit "there is no sanity clause" to its originator, Chico Marx after Groucho mentions the sanity clause in a contract: "You canta fool me boss, there is no such thing asa sanity clause". I think it's in "A Day at the Races".
Stephen Bannon once declared: “I am a Leninist.” “What on earth do you mean?” the professor asked him. “Lenin wanted to destroy the state and that’s my goal too,” replied Bannon. “I want to bring everything crashing down and destroy all of today’s establishment.” (https://www.theguardian.com/commentisfree/2017/feb/06/lenin-white-house-steve-bannon)
Trump is accomplishing what Bannon could not.
2
Before he became #45, this guy made money by finding loopholes in the laws. He hired shady lawyers with questionable ethics to find those loopholes. Now, in this position when he tries to find loopholes, he undermines the authority so many before him worked to establish.
But he has not done this by himself... he has had the support of voters, representatives and senators because of their thirst for power.
Stupid is, stupid does. To expect anything greater from such a man is foolish.
3
His boy Mnuchin surely didn't help things with his calls to bankers!
2
"put an unstable, ignorant, belligerent man in the Oval Office, and he will eventually do crazy things". This may be the best single sentence summing up of the trump presidency I've ever heard.
1
Wouldn’t it be wonderful if anyone could really predict the future with 100% surety? I think they call that “Probability and Chance”
If say 2 run-a-way trains were heading towards each other at 100 miles per hour and no one was at the controls, you could predict that in 30 minutes, they would collide. We call that “A no brainer”
Now substitute Donald Trump for the trains. See what I mean?
The only way to stop this train is to remove the tracks. Do you know any “John Henry Republicans?” If you do, then it’s time to wake them up!
Individual-1 is clueless. All he cares is about himself, no one else.
2
I'll say it again...Get rid of the guy.
2
What would Vladimir want?
1
Paul, please don't call attention to your puns -"... that there wasn’t a sanity clause. (Sorry, couldn’t help myself.)" - It makes it seem like you're calling attention to your cleverness or that you want to make sure that we get it, which takes away the fun of getting it.
Loved the column.
Paul we are in trouble. Trump and his incompetent administration would not have the wisdom and the temperament to handle any crisis and create appropriate policies. Trump is an ignorant, not very intelligent, and deeply disturbed demagogue. He has trouble recognizing facts and reality and lives in a twitter world of lies and delusions. He is unable to govern and would make any crisis worse. He is a master of bankruptcies. America and the world are his next targets of destruction. We are in a lot of trouble! 1929!
2
"there wasn’t a sanity clause"
Ho-ho-ho. That's funny. :)
If you want to know how this ends, check out Nostradamus. Spoiler alert: not well.
1
Why is it only in the OpEd’s that the NYT’s takes on Trump? The rest of the paper is so laissez-faire about him that they actually provide cover for his bad behavior. Witness the episode in today’s paper on Trump asking a seven year old if he believes in Santa Claus. This is such bad form from most any adults, never mind the President, that you would expect it to be called out for the awful thing it is. But the NYT goes on to give him coverage by trying to explain why it might be OK, To the NYT editors, No It’s Not! Thanks to Mr. Krugman the paper does show some sign of understanding the horror that is Trump! Wake up Mainstream Press.
1
Trump is trying to be the Grinch that steals Christmas by barricading himself in the White House and holding his breath until Congress appropriates money to build a billion-dollar monument to him. (Talk about grandstanding!) He is such a narcissist that he can’t allow a single day to go by without him capturing the headlines — even Christmas, What a truly selfish and nasty human being he is! An unrepentant Ebeneezer Scrooge who defies the spirit of Christmas.
2
Trump is poisoning this country with his incompetent, incoherent, divisive, chaotic presidency. His humorless and belligerent and rather awkward personality does not help either. I am sad to bear witness to the damage he is doing to my beloved United States. For the sake of all we hold dear and for all of US, please Congress, please remove him from office.
In some unlikely corner of an empire dominated by a loudmouthed tyrant a young migrant mother gives birth to a child. As that child grows in years and wisdom, he personifies the hope of the world and the impotence of the tyrant. Felíz navidád. Happy Christmas.
1
“Wiser heads would prevent him from doing anything stupid”. There were no wiser heads then and there aren’t going to be any in the future either. At least not in the next two years.
We all should be afraid, very afraid
2
Krugman used to say that if someone tells us why the stock market has gone up or down, we should be skeptical. I think maybe he should have kept that more in mind before writing this column.
1
So Paul, it now turns out that your infamous Election Night prediction about the financial chaos that would ensue from a Trump presidency was right after all.
With your trademark foresight, you were just two years too early in your comment. Maybe all the Trump supporters who roasted you for this remark will now start apologizing.
1
Paul, by saying, “there wasn’t a sanity clause. (Sorry, couldn’t help myself.)” and describing Trump as “an unstable, ignorant, belligerent man,” you leave us in peril.
The truth is much worse and rarely acknowledged. Donald Trump’s physical brain development causes him to lack ordinary empathy - feeling for anyone but himself. Look up the Hare Psychopath Test and rate him; he scores a 34, Extreme Psychopath.
1
We have our own Maduro in Trump.
You were wrong in 2016 and I believe your assessment is wrong now. This opinion piece is speculative and an attempt to give your past mistake cover.
1
Happy Holidays Mr. K.
God Night and Good Luck
1
If this were a modern Christmas Carol, Trump would wake up, after being visited by three ghosts, and fire Bob Cratchet, take away Tiny Tim's health care and build a wall to keep out any remaining ghosts. He is Ho Ho Hopeless.
1
Look upon them, Trump: Want and Indifference
Despotism with which many countries are experimenting including our own goes hand in hand with the degeneration of values in those societies. After all it is the values of the despot that become the norm as we hand over our independence to that dictator. Plato recognized that you need an enlightened philosopher king with the emphasis on enlightened to make a dictatorship work. But the problem with this is that the mechanism to find that enlightened being is a crap shoot at best. To paraphrase I believe Churchill, democracy is the worst system of government except for everything else and with Trump we have the worst of all worlds as he banishes any sense of wisdom or common sense from our government. We really do need a sanity clause.
149
Professor, I raise my hand to inquire: I have read that as much as a third of the money in our financial markets is from foreign investors. seeing the reaction abroad to President Trump's chaotic mismanagement and his alienation of our allies, is it possible that a big part of the market turmoil over the past month or so is the result of foreign investment being pulled out of the US? hasn't America seemed a safe haven for parking the loot of sovereign wealth funds, oligarchs, potentates, and international big bucks crimimals (something like overpriced NY condos and CA mansions?), and do these foreign investors see the writing on the wall?
1
Prior catastrophes have taken longer than a year to develop. Trump is only now becoming the Trump that he wants to be and his decisions won't become catastrophes in only a week or two.
In economics, much of the health of the economy depends on confidence, that of consumers, investors, and capital investment from corporations. As Trump becomes more and more unhinged and the stock market (not the economy) continues to drop, the contagion -- from loss of confidence in Trump -- is going to spread to the real flow of money and it won't be only the stock market that is dropping.
The whole thing belongs to Trump. He claimed the stock market to be the economy and took credit for rising stocks. Now he created the correction and, even for his base, will not be able to disavow ownership. He has spawned the loss of confidence in the economy.
He doesn't need to make any more truly economically awful decisions, he simply needs to continue to assert his unhinged self and the crisis of confidence will bury the market and the economy until he is gone.
Superb column, Dr. Krugman, as always. But I think you may have understated the severe damage that can be caused by mere lack of confidence.
316
In my work, I have to deal with emergencies on a routine basis, and I have always said, "It's not the crisis, it's how you deal with the crisis."
Crises reveal character.
Our President has revealed his character through his own self manufactured crises. And it is lacking.
God forbid a real crisis.
351
Following Trump's presidency is not so much witnessing a man's descent into madness as it is an uncovering of it. The personal, legal and political pressures upon Trump would severely test the brightest and strongest of people if, unlike Trump, they paid attention to them. And that's the key to understanding his coping mechanisms: Ignore, blame, attack, insult, punish, demean, lie, obfuscate, obstruct - there is not a single verb or noun there that cannot be applied to this man and his Presidency. There's an impregnable wall between reality and Trump's perception of all things - his survival is dependent on his delusions - and unfortunately he has been handed massive power which enables him to maintain asylum within his thought processes. Mr. Krugman's apology for his 'sanity clause' is not necessary - because we could sure do with one right now.
394
@Tom Storm
Trump is paying attention. Unfortunately, he is the opposite of "brightest and strongest".
The real problem is the Republican Party enablers. They are too busy pushing their plutocratic, anti-democratic program to bother with little things like the destruction of the country, the environment, the world..
The Republican Party lets Trump play Master of the Universe, as long as he lets them push through their agenda -- which, after all, is totally in-line with his desires as well.
40
@Tom Storm
I believe Mr. Krugman was apologizing for the pun:
sanity clause = Santa Claus, what with it being Xmas Eve, and all.
16
The professor is dead wrong when he says that there isn't a crisis-level event looming. Trump has been planning an "election stunt" war against Iran since he was sworn in. The idea is that a "war president" has never lost an election for a second term, so Trump sees it as his only chance to win a second term - and that is all he cares about now.
Trump is going to launch a sneak nuclear attack on Iran's nuclear facilities (he will say, "The fallout was going to be radioactive anyway...") Then will come a sustained war with ground troops in Iraq and maybe an invasion of southern Iraq to open the Strait of Hormuz, through which the majority of the world's oil sails on any given day.
The world economy is going to crash like it never has in history. It will make the Great Depression look like a calculating error. But Trump's base will vote for him, none the less, and American "patriotism" will be fed by hundreds of hours of gun cam film to whip up the guys who wear baseball hats into a frenzy of support.
Krugman has been frantically trying to diminish the potential for disaster under Trump because he doesn't want to face up to the responsibility of having this column in the most powerful newspaper on the planet and never once suggesting something that could actually be done to remove Trump from office. There is going to be a massive economic collapse on Krugman's watch - all because he was too gutless to state the obvious.
So sit back and watch folks. War is coming and soon.
1
Trump is about to repeat Obama's main blunder— starting to believe his own PR. Or is he?
Is this Jackson vs Jefferson? Or is it Einstein vs Heisenberg?
Is this Trump chaos? Or is it hidden variables?
Some scientists argue probabilistic formulations are fudge factors for systems we don't understand, systems w/ hidden variables, & that a "complete theory" would account for all observable phenomena/avoid indeterminism.
Einstein objected to the probabilistic nature of quantum mechanics, declaring famously, "I am convinced God does not play dice." He was a big fan of hidden variables.
The "elites" are prisoners of their "legacies" & their time.
Asymmetric warfare has no coordinates & requires only 1 consenting player. Cyberspace & outer space are the new battlefields, rendering missiles/range irrelevant.
Space Force can be the new frontier for peace. As the only superpower & benevolent force, we must quickly achieve dominion. That is Trump's calculus.
P.S. Trump will raise the Barr.
1
PK has been waiting two years to say he was right. Sorry, Paul. You lose. Wrong again. What’s really causing the hiccup is the end of printing money. Not Trump. And the economy will get over that and rebound soon enough. Just watch, and learn.
17
@Wildebeest
"What's really causing the hiccup is the end of printing money. Not Trump."
I so often these past two years have tried to imagine the mentality of a true Trump supporter and have, I confess, largely failed. But thanks to Wildebeest, I now have a place to begin.
The problem now is, having found that place, I refuse to go any farther.
I do hope the Mercers, the Kochs, the Adelsons and all the boys and girls down at Goldman Sachs and AIG are following this. We do indeed live in interesting times. And by "we" I do mean all of us.
286
@Wildebeest
Since when did anyone stop printing money?
1
@Wildebeest
And You thought that PK doesn't have any idea about that printing money...oh boy...….
Our society is the great sorting out of who gets what. The sorting is political and the gets what is economic, and together that narrative arc of our lives is the political economy. We will persist as a society so long as we can keep this sorting and getting process going in a measured manner.
What I understand Dr. Krugman to be saying is that a man got elected to the most powerful executive position on earth and has sown chaos to such a degree that the sorting process of who gets what has been disrupted a bit, and that the discombobulation could get worse.
Of course such chaos is the promise Trump made that got him elected, and we should take note of the fact that many people are not content nor supportive of the sorting process status quo, and they are hoping to see change. Even people on the left want a change in the manner by which the bosses run the political economy, if perhaps more staid and erudite in the way it is done.
It is always helpful to note to whom editorials are written, and in this case the subtitle addresses investors, and in particular, those who are near the very top of the class system. So the rest of us can peak in and see this missive addressed to them, but for only curious reasons: we have no agency in this discussion. But we will cast about our votes in a futile effort to express our agency through political means for lack of being able to do so with our dollars through economic means, and if anyone is going to disrupt society, it will be us.
28
Hi @Chris, I think Krugman's point is that Trump and his administration are not equipped to deal with a financial crisis, should one come along. I have to agree with him.
231
@Chris Went ahead and give Chris' post a recommend, even though I don't agree with all of it as a response to Prof. Krugman's post, because it raises some interesting points that I think Paul should address at some point. In particular the points about (1) the average Citizen's lack of agency in the face of Wall Street + the big-finance wing of the government (2) the desire of some percentage of the voting population for chaos that will fundamentally shake up the current order.
However, I will also note to Chris that (a) the faction of the Republican Party that voted for chaos did not get the chaos it hoped for (b) historically when a segment of a people generates chaos out of frustration the results are seldom what it hoped, and generally for the worse.
65
@sPh -- " the faction of the Republican Party that voted for chaos did not get the chaos it hoped for"
True. But the Trump only won because of the ever-growing Independents who also wanted to disrupt, and also did not get what they hoped for.
It isn't just minority Republicans vs majority Democrats, and only part of that minority Republicans seeking to disrupt.
There is a larger-than-ever-before faction of Independents, who rejected what status quo Democrats tried to sell them.
Trump may not be the answer, but Democrats will lose again if they think that makes what they offered before an acceptable answer.
25
Thank you for this measured and accurate analysis. Merry Xmas!
32
I believe the majority of rank-and-file, paycheck-to-paycheck families in the US would not agree that the 2008-2009 financial crisis got an appropriate response by either Bush Junior or Obama. The Great Ones simply propped back up a failing and corrupt banking system "too big to fail", and we're experiencing the identical issues now- push a button, get a mortgage. Please, Democrats, restore Glass-Stegall.
85
@vandalfan -- The Democrats who lost thought the crisis got an appropriate response. That is a big part of why they lost -- voters did not agree when Democrats openly claimed that.
17
@vandalfan Yes, yes, please restore some version of Glass-Steagall to protect the accounts of us ordinary folk.
2
Objectively the corporate tax cuts and cheap money have resulted in a share price bubble, exacerbated by buybacks and low returns in fixed income. The problem is that Trump wouldn’t recognize a real economic crisis if it was staring him in the eye, just as he couldn’t read between the lines of Mattis’ resignation letter.
99
@Jim -- Yes, but it is an all-the-assets bubble, not just shares. Every asset in which money could be stashed has inflated in a bubble with the cheap money the rich gave themselves to "fix" the crisis. Now the crisis is baaack like Arnold the Terminator.
23
While Paul's analysis focuses on mainly economic outcomes, Trumps "nyuck, nyuck, nyuck" foreign policy is starting to increase global risks resulting in lower stock prices (through higher risk premiums). Two examples; in Syria if ISIS strengthens according to an analysis I recently read then terrorism risk in Europe could increase significantly. Second, Russia has been snapping up oil assets in Venezuela including a large stake in (government owned) Citgo. When bad actors get stronger or richer, that creates increased geopolitical risks and as Paul points out it appears to just be starting.
69
Most people learn that if you have money to spare you can save or invest your money in a bank, a mutual fund, or in the stock market. However, your money is only as safe as the extent to which you can trust the people holding it or those upholding the regulations and laws which charters and governments allow.
It boils down to trust in people and their competence, not money.
However if you earn only enough to cover current expenses--paycheck to paycheck--it would not make sense to vote for a disrupter, and definitely not to trust a person who lies, reneges, shuts down the government and holds up that paycheck indefinitely in a Faustian bargain for an ill-conceived Wall.
50
@Fran B. I doubt most of Trump's base own any stocks or have any retirement savings. Voting for a "disruptor" makes perfect sense to them. Only liberals own stocks by their estimate, and whatever hurts liberals is okay by them.
51
@Fran B.
Just think, every single person who is forced to work without a paycheck or is furloughed without a paycheck and their families will never vote Republican again.
2
When I see a photo portrait of "The Donald", the Joker from Batman comics comes to mind. The movie with Jack Nickloson where he is at a museum gleefully destroyed the icons of modern aesthetics. Smashing vases, knocking over sculptures and cutting canvases.
This time Batman has yet to enter the room to confront the avatar of destruction and chase him away. I suppose Mueller is our hero in this iteration of chaos. Slow to act but hopefully up to the task.
Tump, like Tamerlane, the medieval tyrant who laid waste to vast territories and murdered millions, is less interested in governing than in slaughtering, for the sheer fun of it. He loves to lay waste to each moment and then revel in the madness of it all. Even though he is not a builder, as he would like to think, he is constructing an edifice, only this time it is one of confusion and hopelessness. My hope is that the portion of the voting public who support this casino magnate will cash in their chips and go back to the churches they profess their devotion to and reexamine their souls..
101
Instead of cribbing Chico's Marx's "sanity clause" line, Mr Krugman might consider switching to Groucho's diddy "whatever it is, I'm against it"--at least when it comes to Trump. I'm no fan of the president, but the Dow Jones is still up 15% since election day and 10% since his inauguration. If a Democrat were in the white house does anyone doubt that Mr. Krugman would be calling last week a totally expected adjustment from the longest bull market in history?
4
@Matt Ward You should not look at the falling courses in isoaltion of the reasons.What's worrying are the causes of the stock crash. These reasons are created by Trump such as the trade war, attacks on the FED, government shutdown and his B-team adminstration that fails to instill confidence and rather creates fear. Trump will be seen as what he is "Don the con" and unfortunately there won't any chapter 11 filing to escape the bill. We all will be paying the check.
77
Having read Krugman’s columns for ~18 years I think if a Democrat were acting out as this president is, Paul would call out the actions of the White House occupant(s).
You should remember that the recent past democratic presidencies have applied a steady hand on economic matters.
This cannot be said for recent past GOP Presidents.
114
@Matt Ward
Let's also remember that longest bull market started way back under Obama.
Same with all the other economic factors.
1
As I recall, the year 1986 was economically disastrous -- at least for certain parts of the country. That was the year the tax laws were rewritten, oil prices collapsed, and real estate in states like Texas, Oklahoma and Colorado was impossible to sell. There were blocks and blocks of vacant houses. This year reminds me of that era. Huge new homes in Dallas are sitting vacant, with no buyers on the horizon. Oil prices just fell 44%. And the business world is trying to adjust to a new tax law that allows the wealthy to horde more of their cash. At the same time, the fraud that is China may be running out of funny money. Our ignorant and childish president is trying to choke off trade and immigration. And states like Illinois, Vermont, Maine and West Virginia are losing population in an aging demographic. America is NOT great again. A traitor is taking orders from the leader of a rotten, corrupt oligarchy with the world's least productive economy. I don't know how we're doing as well as we apprear to be!
131
It seems that the Trump supporters believed him to be a diamond in the rough, only to discover that in reality he is merely a lump of coal. Merry Christmas!
86
@CV Danes -- True. Still, Democrats don't seem to have gotten their own message, that they could not sell the alternative they offered, not even when the other choice was The Donald.
Don't do it again, or we might get worse than Trump. Say Cruz or Pence.
18
I found it interesting that this article indicated that “There isn’t a crisis-level threat looming at the moment” while in the same issue David Brooks referenced an article by Andrew Sullivan describing a crisis-level threat. The opioid epidemic has taken 50,000+ lives a year for several years running and no end in sight. If that is not a crisis-level threat I don’t know what is. The Trump administration and others seem oblivious to this.
15
@John -- Opioids don't threaten rich people. Don't threaten rich investors. This was addressed to rich investors.
20
@John Just about as many gun related deaths per year as well. Not the least bit surprising nothing is done. Cigarettes, opioids, and firearms. The Holy Trinity of the United States.
1
@John
Oh, no, John. Didn't you know that Jared Kushner and Chris Christie, both men the epitome of "moderation in all things" took control of the opioid crisis?
How so, you ask?
Well, one of their first moves was to make it almost impossible for people in real pain to get the medication that makes life bearable.
Come to think of it . . . that's pretty much ALL they've done.
1
apologized for "sanity clause"
then nothing for "edifice complex"
i'm disappointed
and still in visceral pain
from that one.....
16
It will be an eventful 2019.... Merry Christmas, yawl. Hopefully "all this too, shall pass."
Life is about struggles: accept the struggle that may come.
We cannot be guided by emotion but by facts; and right now we (as a nation & world) are running on emotions: most fantastic based fear. 'Imagination-land' run wild again......
Thank you Mr. Krugman for your opinions but you are talking to the choir here. Those other people just watch TV.
28
Amazingly, a huge number of people, though less than a voting majority, believed and still believe that Trump is a good businessman, despite all his bankruptcies. He's clearly not; he's a bully and a manipulator. Even now, people who worked on his Washington hotel have not been paid.
Now the stock markets are catching on and catching up. I've been saying for two years that they were rising too quickly. Now I'm looking for buying opportunities. I probably won't buy at the true bottom, but that's okay. I will dollar cost average down and do well in the long run.
I only hope that others can hang on as well.
24
@Barbara
Why don't reporters from the NYTimes and WaPo do human interest stories on the workers on the Washington Trump Hotel who were not paid for their work on the hotel?
Such stories about hard working construction workers would appeal more to core Trump voters than all the stories about Wall Street finance and the Stock Market which is about as familiar to most Trump voters as Timbuktu.
The goals of journalism must include informing more folks with the facts. This includes those teeming millions in red states, where the only available source for "information" is carefully controlled by the Murdoch's, Adelman's, and their oligarchical buddies.
Social media? Mimeographed sheets handed out in Sunday Schools? Media needs to ask how to make inroads into RedAmerica.
1
Most mob bosses and con men are relatively smart with a clear objective to get around the law to get what they want. It is intentional and focused. But what if Trump is so delusional that he believes most of what he tweets, at that moment, is real and true. He thinks he knows more than his generals and his big brain can run our country with no help. This would lead to total unpredictability, the one thing investor would not want. This might make the Chaos around Trump the result of a free floating and ever changing reality. A fact is what Trump defines as factual. Rudy would have been correct, in that for Trump, there is no single truth. So our economic stability might be to some extent, at the mercy of the president's floating realities. I expect to see Powell go soon if he does not fit the Trumpian reality of the moment. Don't raise the interest rate when my big brain tells me it is wrong. If Trump believes he cannot be wrong, he must believe that most people around him are wrong and need to go. This may be why no one can control Trump's worst thoughts and ideas.
29
And consumer debt is at an all time high again.
17
There will never be any confidence in the market, or elsewhere, when the president's reply to all self inflicted crisis is 'we'll just have to wait and see.'
24
After having gifted his obscenely affluent colleagues over a Trillion dollars of taxpayer money, Trump couldn't care less about the chaos he is causing in the Markets. Of course, he loses bragging rights and won't take responsibility (nothing new here) for his ignorant, destructive, petulant actions, but he'll find some way to lie and spin this into some fable that his base can choose to believe, even though their 401Ks are extinct. Blame it on the Dems, on Powell, on Hillary, on Schumer - anyone but Trump; that's the M.O. of the Dotard.
Meanwhile, back at the ranch, he is plotting and scheming more destruction and distractions to Mueller's upcoming release of probable treason, fomenting doubt about the credibility of our justice system and blithering that only HE is honest. Nauseating and as untrue as anything could be.
If the Republicans support this tack, they are history. There is no positive outcome here because more than enough FACTS are already on the table to prove otherwise.
MERRY CHRISTMAS TO ALL, AND TO THE DEMOCRATS, A GOOD FIGHT!
44
@RealTRUTH
Don't overlook the fact that Trump gifted himself and his shiftless childrem too.
3
Trump called the troops to wish them a Merry Christmas and then discussed the border wall. Is this man sane? Has he no compassion? No sense of integrity? No idea of the meaning of Christmas? I guess I answered my own questions.
56
Trump, knowing more about economics than his treasury secretary, Fed chairman and a Nobel-winning Princeton economist put together, apparently thinks markets love uncertainty and are crazy about chaos.
We can't take two more years of this. I don't know at this point whether we will survive two more months.
43
The increase in stock prices over the last two years reflected ONLY human psychological need to deny bad reality, not real fundamentals. But denial runs out, and investors and voters are not stupid.
The Republicans have attacked the foundations of a healthy economy non-stop since 2016:
- Their policies have aggravated productivity-killing inequality, and seriously threatened our financial health with way too much debt and deregulation.
- They have financed grotesque wastes of our money instead of investing in productivity-boosting infrastructure and getting exhorbitant health care costs under control.
- They have greatly worsened grave economic and security risks from racism, sexism, terrorism, and climate change, instead of providing the basic stability and sound management we have the right to expect from our government.
This correcting behavior will continue in the financial markets until the next election as more investors make more realistic projections.
Hit ‘em in the short-term wallet - it may be the only way to break through the remaining wall of denial. Here’s hoping that Trump voters and discouraged voters can re-learn the basics of a well-functioning free market democracy.
21
I needed to wait until I turned 59 1/2 to withdraw some of my retirement savings from my IRA without penalty. Until very recently, my portfolio was doing just fine. But then trump started shooting his mouth off about China, the Wall, the FBI, the Federal Reserve, etc. . . It felt like a race; a race against time. By the time I could make a penalty free withdrawal, my portfolio lost some $4000 over the span of 4 days.
Robert DeNiro hit the nail on the head. https://youtu.be/1zNr8Pf1QkY
23
Maybe the Neocons were more forward thinking than we thought by not closing Guantanamo. Transfer the current occupants to mainland facilities for trial, and turn the place into a temporary Presidential Retreat. Oh, and disable the Wifi so no tweeting.
31
Nothing constructive to the benefit of U.S. citizens will happen as long as we have this crazy, unfair system of the minority ruling the majority through all of their vote rigging, and most of all, the unfair representation in the Senate.
When the popular vote winner by almost 3 million becomes the loser something is terribly wrong.
42
Most unfortunate that Emperor Nero Trump, the person who most urgently needs to read and react to this article, will be merrily twittering while Washington burns.
We can only hope that any outbreak of fire will be extinguished by less prestigious but more competent mortals going about their business in the lower reaches of the administration (if of course they are not waiting at home for the demi-god demagogue to end the shutdown).
13
To: Professor Krugman
Subj: Trump Chaos
Msg: If I were either you or any other member of America's MSM/Hollywood Power Elite Class, I would just not trust Trump on any of this.
I strongly suspect he is doing all of this on purpose. Worse still, when he says he is going to do something crazy, I have noted that he oftentimes actually does it.
6
This is not so much Trump as it is the hangover after the party. Think about these unexplainable events: Why did the market go up after his election? Why did it go up after a trade war rendered 90% of the soybean crop without a buyer, made Harley Davidson leave the country, and other predictable woes? Why has it gone up after real workers, who generally do not buy and sell stocks, and therefore do not influence the DJI, saw no rise in their wages? After housing starts have slowed? After milenials have chosen to rent instead of buy? After millions more are now without insurance and will consume even more of the GDP for their health care? After the bond yield curve inverted? These are all signs of an impending recession - which is probably overdue - and yet the DJI continues to rise. Finally the Masters of the Universe see that the emperor has no clothes and how his policies are making it worse, and will continue to make it worse; how Congress is pathetic, how there are no adults in the room to deal with the crash when it happens; how the entire world is woke to the reality that they must leave us behind in order to make a better world.
25
@Dr Adam Markets continued to rise because the corporations that got the $2.3 trillion tax cut used the money to buy back their own stock, artificially inflating its value in the process. With the current losses in the market, much of that money has now disappeared and reality has set in.
32
Poverty, economic insecurity, and homelessness must be jealous of all the attention that the DJIA gets.
13
"I'm all alone" Trump is in total meltdown.
Each new tweet painfully documents his desperate descent into madness.
He has fired all his seasoned advisors in the WH and now resorts to radio hosts, Limbaugh, Ann Coulter, for direction on how to run the country.
I'm sure Hannity and Putin are bit insulted.
Since the spineless Republicans "leaders" refuse to do their job and stop their out-of-control president, the Democratic leadership in the House of Representatives must.
Republicans should prepare for an major political earthquake on January 3rd.
38
Investors should have known that Trump declared bankruptcy 6 times in his private businesses before running for President . Even if they thought that the health of the economy depended mostly on the private sector and not so much on the government , that history of failures should have given them pause . You would not allow a man with such erratic and unhinged behavior to pilot the plane you are going to fly in or to drive the school bus of your children . Yet they felt that he was sane enough to be President . They were of course wrong , and they are realizing it now , and that is the reason the markets are tanking .
28
@Bernardo Izaguirre MD: With all due respect sir, Truman had a not very successful clothing store and associated with and was thrust on the political scene by some pretty questionable characters, yet I would conside America fortunate to have a man of Trumans character to guide us at this point rather than the Donald or HRC. I don’t feel being a successful businessman is tantamount to being a successful President, actually I feel they are different skill sets, especially translated to business as we know it in the twenty first century, most of the billionaires today I would not want anywhere near a seat of power, their ability to accumulate huge fortunes seems to hinge more on the ability to destroy and strip mine businesses and nations or engage in the next big thing to keep the masses momentarily entertained while they finacialize whatever it is they are peddling.
11
@Ted -- Truman did not run for the presidency on his own; he ran as Truman's vice-presidential candidate in FDR's last term, after accumulating
many years of government experience -- he was a judge, a US senator who had achieved reelection, before joining FDR. He was the head of what became known as the Truman commission:
https://en.wikipedia.org/wiki/Truman_Committee
He became president when FDR died; he did not seek reelection as president.
Comparing Trump to Truman is ridiculous.
1
The part's over. Maybe the Republican party, but definitely THE party. The tax cut sugar high party is over. The amount of buy backs for the corporations are winding down, the slow down in China is heating up, and the Democratic 'Tee Shirt Gun' subpoena machine is coming online. The cheating, short sheeting, weaseling days are through. Like any organism that darts for the dark when the light comes on, certain Republicans know that all the collusion material is going to come out through the House. So yeah, shady days are ahead.
17
@Richard McLaughlin Hoping the House Dems are going to be able to do anything is wishful thinking.
spanky's current advisers don't have the knowledge or intellect to deal with another real crisis.
15
After the crash of 1929, didn't an incompetent administration make things so bad that it took eight years recover partially?
Marx said that history repeats itself, first as tragedy and then as farce.The tragedy is that the Obama administration was punished for doing mostly th right things after the Bush collapse. What additional kind of farce can we expect now?
19
A few more years of this and we'll need a wall to keep people in.
48
IMPEACH NOW! Republican Senators will in the end vote for impeachment because they know leaving Trump in will completely destroy their Party.
9
Merry Christmas!
So, it turns out the Emperor has no clothes...what a shock!...and his exposed flesh is rather ugly.
Looking forward to the New Year, are we?
12
It has finally dawned on the big money boys and girls
that Trump has no idea what he is doing; that
he flits from news cycle to news cycle and that
he won't change.
word
12
I make no heavy demands on the resources of this country.
I have enough savings to get by and a family that helps me whenever I am in need of it.
I pay all of my taxes honestly and promptly.
I receive no special government benefits.
I rarely if ever contact government officials for help.
I have never publicly protested for or against anything.
I support no radical left or right wing causes.
I obey all local traffic regulations and place my garbage outside on the sidewalk on Wednesdays exactly as I am instructed to.
All I ask in return is government that acts in a decent, orderly and honest way.
I watched President Trump on television yesterday and decided
for the hundredth time that he is a nut job who is not keeping his bargain with me.
--- A once, but never-ever-again, Republican.
68
Trump voters, now’s your chance to help your hero.
MAGA!
Sell your house and invest every cent you have in the stock market!
15
Ironically, only Republicans -- especially Mitch McConnell -- can save us from the man-child in the White House wreaking havoc around the world. I am not holding my breath -- unless Robert Mueller realizes that now is the time to strike with his report and that it better contain an offer Mr. McConnell better not reject.
14
Trump is decompensating as predicted in "The Dangerous Case of Donald J Trump," a book describing his illness by 27 prominent mental health professionals (it's editor is a Professor of Psychiatry at Yale).
Threatening Trump will increase the frequency and intensity of his impulsive and irrational behavior. So it must be a threat that will be carried out and quickly.
17
How would congress initiate a procedure to remove the president? Everyone knows you can’t have a lying, impenetrably self centered crook the head of state. It’s time. Or will congress wait until it is too late, if it isn’t too late already ?
9
Once the investing class decides enough is enough, things will change. When big money talks, even the terrorist Republicans in Congress will suddenly realize that getting rid of Dangerous Donald is better, politically, than enabling him.
18
It was comforting to hear Donald Trump inform a seven year old caller that believing in Santa Claus at that age is "marginal, right?" http://pic.twitter.com/VHexvFSbQ1 After all, everyone knows that real adults believe in border walls that Mexico will pay for. And supply-side economics.
27
I would guess the stock market at its peak in August was expensive and the value today is more reasonable.
We think the economy is fundamentally unchanged with steady progress since 2011.
But maybe not.
The potential problem I see is the deficit / debt after this last Republican tax bill.
The deficit went from $600 Billion to $1 Trillion.
The expected addition to the debt the next ten years is $12 Trillion which is $80,000 per taxpayer.
I will get $a 1,200 tax cut, $50 a month, for seven years, for a total of $8,400.
And $80,000 put on my Federal Debt credit card.
I have seen articles predicting we will one day be paying more for interest on the debt than we pay for the military.
Wall St. knows these numbers and knows eventually we will have a problem.
30
@Independent
There are three big items for consideration missing: the Fed. The start of the increases back to where interest rates sat pre-Great Recession is relatively recent. In a recession, or depression, the Fed will not be far enough away from the zero lower bound to be as effective as it was last time around.
The other sizable item is the IRS. It has been collecting very little revenue and with the thousands of blows it has received since 2010, is not equipped to enforce taxation. See "The Golden Age of Rich People Not Paying Their Taxes" from December 11th.
https://www.rimaregas.com/2018/08/07/greed-malfeasance-never-sleep-blog42s-things-trump-did-while-you-werent-looking-august-december-2018/3/
12
@Independent. Not to mention that the Fed and the other central banks are withdrawing liquidity from the markets instead of adding to it. Which means that corporate interest on debt will increase, fewer stock buybacks, and other manipulations that make stock prices go up. Hence we can expect that even in the absence of continuing good economic activity, stock prices will almost inevitably go down. And of course they will overshoot to the down side, just as they overshot to the up side
5
I believe Trump's job may remain secure until/unless he threatens the fortunes of the "donor class" that controls the Republican party. If that happens, McConnell & Co. will get calls from their "masters" instructing them to dispatch Trump.
Until then, the nightmare will continue.
48
To impeach or not to impeach will be the question for the Dems. Having a president Pence with a democratic controlled congress is much more palatable. The problem will be the long term affects of impeachment. We are a fractured country now - Trump supporters watch Fox - and they actually aren't aware of many charges or if they are its fake news.
To move forward and improve we are going to need to bring many Trump supporters back into the fold (remember they elected Obama too). If not its going to be a permanent cold war. So whats fair and right might not be whats best. We need a marshall plan otherwise it may be like the treaty of versailles.
8
@Jon T
Another factor is the Democrats can impeach but the Republican senate will not convict.
4
My only issue with an otherwise insightful essay is Prof Krugman's description of the Bush and Obama administrations policies with respect to the financial crisis of 2008 and 2009: "both administrations responded competently". Really? I seem to recall that even Prof. Krugman appeared to be somewhat critical of the bank bailout and "quantitative easing" that pumped trillions of interest free dollars into the banks that caused the crisis, while leaving the public to foreclosure on their homes. Whatever you can say about the current incompetence at the top of the republic, it seems evident to me that "individual 1" wouldn't be occupying his current office if it wasn't for the competent response of the two preceding governments.
8
Krugman’s objection was to policy, not stunning incompetence.
8
@Arnd Jurgensen
In the last sentence of Mr. Jurgensen's thoughtful comment, the sole error is not putting quotation remarks around the word "competent." The two previous administrations left so many folks in red states less better off than they wanted/needed to be that they were ripe for an entertaining, malicious buffoon TV star.
Mr. Jurgtensen stated the obvious to so many of us, that Trump didn't really sail into history on his own hot air and lies. He was given a considerable pull by the rage voters like me felt toward Bush 2 and Barack Obama for favoring the rich in taxes and benefits.
Mr. Obama was and is an appealing personality with the right heart about most things. He and Michelle are admirable people with good American values. But the financial policies of the Obama Administration, the people the Obamas court in their private lives (Oprah, Richard Branson), and his effort to seek bipartisanship, were very Republican Lite - from his extension of tax cuts for the wealthy in 2010 to funding military actions in Syria and continuing those in Iraq and Afghanistan, somewhat.
The US has lacked a cohernt plan to distribute income and benefits more fairly to all of its citizens. Our tax code and laws are slanted to protect and enhance the fortunes of already rich people. The Feds don't house the homeless. Our government will remain open to buffoon dictators until we distribute wealth more evenly and equitqbly through public education, housing subsidies, and taxes.
7
@Robert
I quote: "Unfortunately, there is no reason to expect a comparable degree of competence if something goes wrong again." It was not competence but the extent of influence Wall Street had in both the Bush 2 and Obama administrations that shaped the policy.
2
Thank you Paul Krugman. Not often I can get both good analysis and a smile. Not all affluent people are benefiting from the Trump tax bump. This is not a complaint, but an observation. This is especially true in California where taxes are going up for those of us who pay large amounts in real estate taxes, the deduction of which is now limited. Apart from the stock market, I don’t think people are focusing on the fact real estate prices are heading downward, at least in California. This has a huge ripple effect, both perceived and real amongst the affluent, who are the same people most likely to start moving out of stocks. I feel like I have seen this movie before.
17
@NYT Reader: liberals ALWAYS say that "they'd happy pay more taxes". Then you raise taxes -- on the rich, because only fairly wealthy people have a SALT deduction, or a $900K plus home, or two homes! -- and they scream bloody murder.
The day that California real estates "goes down in value" and I can afford a nice house on the San Francisco Bay....call me.
1
"To be clear, voters have been aware for some time that government by a bad man is bad government. That’s why Democrats won a historically spectacular majority of the popular vote".
When Democrats win of the popular vote for the Senate by a whopping 12%, yet Republicans add a few more seats to the supposedly "Greatest Deliberative Body" in history, something is rotten into the State of the US of A. (The rottenness includes the leader of that elite body stealing a seat on the Supreme Court in order to shift the then already tender balance of that court to the arch-right)
The very same applies to the antiquated electoral college, that was actually changed to 'winner take all' in a state, contrary to the intent of the Founding Fathers to protect this country from a demagogue.
In no other advanced country in the world has a loser of the popular vote every become the leader of their respective government. That is called democracy, writ large.
But then, as the past, present and the next two years will show, the US is hardly an advanced country anymore, with Trump breaking alliances at a whim while cozying up to every strong-man on planet earth and imitating their slogans, albeit in broken English.
As a naturalized citizen and native of Germany - from the continent Republicans so endearingly call "socialist Europe" - I see the history of the last century repeat itself in my adopted country in the most frighting form.
95
@Sarah Remember over 100 million eligible voters did not vote in the 2016 election, Even so, Trump lost by 3 million votes. We must have hope that most Americans see thru this con man and now see the danger. Let us hope they take responsibility for their country , themselves , their children and the good of the world and VOTE next time.
12
@Sarah
We've had the senate and electoral college throughout our history. Its obviously a flawed system, especially the senate. But the reality is its not going to change, there's no way small states will agree to it. So the best recipe is to say it sucks but win some of the small states too (the only way to control the senate). Unfortunately the left's strategy today is less class issues which could resonate and more social issues which instead of resonate they can alienate as coastal knows best sermons.
7
Out of all the deficiencies outlined, the one that is most chilling for me and perhaps others is the idea that, "[u]nfortunately, there’s no reason to expect a comparable degree of competence if something goes wrong again."
Walking out of a casino "even" is considered a win. In the rare instances when one leave a casino with cash in their pocket, most will consider that a lucky day.
So far I think we have been lucky that nothing too bad has happened (think terrorist attack or significant military conflict).
As we all know, luck runs out. When it does, I think most would not feel comfortable having the current administration at the helm.
No strategic thinking coupled with ham-handed and capricious policy decisions are only what we can expect.
36
@ZigZag
Krugman argues that it's not the President we should worry
about, rather the entire economic team. Mnunchin, Kudlow and Mulvaney Lets hope they are up to the task
3
Donald Trump could be devoting a lot more time to erecting his Russia tower and other projects he envisages. So he could offer a way to get out of this presidential mess by accepting a few thousand more for a Wall, and by agreeing to step aside now before the Dems start their investigations.
The other condition is that Pence agrees to pardon him and all members of his family, and that New York states agree not to charge them for anything.
And Pence has to agree to allow for a vote for the presidency within 120 days.
8
@Murray Veroff
Only in true democracies are elections called after three months of the failure by the present government, sometimes through a vote of no-confidence in their head of government, be it a president, chancellor or prime minster.
Most democratic countries are governed by coalitions, and when these coalitions break, new elections are called as well.
The latter case just happened in Israel.
11
Pence? Is he not very likely fully involved with the Russia election conspiracy? Not initially, but as the Flynn escapades were under scrutiny and the coverup unfolded. Pence may not escape legal culpability, with associated impacts.
Next in the order of succession would likely be Nancy Pelosi, likely (majority) Speaker of the House of Representatives.
Would President Pelosi pardon Donald Trump?
Should we look for the kind of deal offered to Vice President Spiro Agnew? Disgrace, no lo, and no jail time. It is quite a model that ultimately benefited the country.
Would Trump and Pence need to be prosecuted concurrently for Nancy to be promoted to the Presidency? Hmmm.
4
The economy and the stock market dance with each other, but sometimes they dance so far apart that they lose track of each other. This may be one of those times. They will eventually come back together.
So why now this current disconnect? Maybe financial markets looked into the future and are disturbed by what they see. Not uncertain. Disturbed. Trump is not a rational actor. They don't teach us how to discount irrationality in finance courses. The least risky strategy is to get out and wait to see what happens. Bids for equities disappear and prices go down. And bonds look better and better.
8
@Prairie Populist
Very good analogy. Maybe the dance is a waltz, cha,cha,or
even a samba? But the music plays on and after a break, we rock and roll.
5
In the short term.
Short term trading on the Stock Market was identified by Brown in the UK before the Crash of 2007 he changed Capital Gains tax rules, likely Osborne has changed it back.
Millisecond trading should be taxed at least 50% on the Gain Financial institutions short term trading ought to be banned it excludes small trader making any money.
if one faces even 0.5% charges on trades how does one trade against banks and brokers trading there own money for 0.01% every second.
4
If the President has little effect on the market, perhaps this article is just political. Would a border wall or single payer prescription medication help the market?
2
@Eugene Patrick Devany
The only single payer prescription is the one for Trump's Beautiful Wall while the taxpayers are the single payers.
7
I live in Canada it appears that even Pharmacists aren’t making money.
We are in NAFTA so salbutamol is patented because of the delivery system in NAFTA so my sons prescription here in Canada which doesn’t have fixed price prescriptions is about $100 CND in the UK where I used to live has Fixed Price Prescriptions currently around £10.50 for payers all children, unemployed, disabled, and seniors get free prescriptions.
It used to be that the poor got them free at a minimum income but with the current Government it’s hard to know their war on everything is attempting to destroy the Welfare State system in favour of Dog eat Dog rigged capitalism.
So the Question which is better well the UK is extremely centralized so what could be called federal tax
3
Oh, what a tangled web we weave ...
I agree with PK that Trump's chaos-driven tactical methods, and his unpredictible nature, causes more fears, today, than eye rolls and shoulder shrugs. From what I have read and heard from econ' pundits, there are several dynamics in play.
First, the banks do seem to be ahead of the curve keeping more capital in reserve than in years past when bailouts saved their corrupt hides. There is also that thing called "consumer confidence" that keeps their spending rolling along. Real estate, no longer requiring subprime mortgages to keep it flying high, seems to be doing fine. Shoppers — online and at the brick-and-mortar stores — are throwing down those credit cards with abandon. Job security seems to be on cruise control.
And there is the matter of a trade war with anyone who contradicts Mr. Trump, with trade tariffs used like ransom notes.
But here's the thing. There could also be that term brought to us by former Fed Chairman, Alan Greenspan: Irrational exuberance.
Too many consumers keep more than 6-7 credit cards in their wallets. And too many of those cards are already topped out. And this is the subprime credit card debt now being stuffed into bonds. Make no mistake. There are short-sellers out there using Credit Defaullt Swaps to insure their investment in those fragile bonds.
So let's not get too carried away with the so-called consumer confidence in the economy. The Great Recession 2 is just around the corner.
Any takers?
15
Trump has said and done crazy things from the beginning of his campaign, but now, something has changed. It's too easy to blame the FED for sending equity markets sliding when the discount rate is still at an historic low. (Ronald Reagan would have given anything to have a discount rate this low.) No, this isn't about interests rates, it's about leadership. Chaos eventually leads to collapse. Competency does matter and Donald Trump simply doesn't know what he's doing. How that will manifest down the road is impossible to know with this president, but I'd bet your 401K has much more to give due to the Trump Effect.
27
@Aurora Perfectly said. I do believe that Trump will be gone in 2019. I think that mentally he has gone over the edge.
1
The Democratic victory in the House is s big factor in the market slide. Business folks take seriously house leaders promise to thwart Trump.
4
@Lane
The Democratic House is the only thing saving this country from being completely flushed down the Trump Toilet.
Most thinking adults are thrilled that there will be some oversight of unindicted co-conspirator Individual #1.
88
@Lane Are you saying that the market took a dive because business folks think that the Democrats will keep The Con Don from reeking havoc?
The Don's instability and irrationality is one reason that the market is down. I would think that anything which thwarts The Con Don would be to the good.
I am not sure that I understand your comment.
3
@Lane Nice try. Do I sense learning from the master. When things go badly blame the opposition. Fortunately, there will be increasing opportunities to blame Dems for all the chaos of the next two years.
2
I believe Trump has to go. I had long assumed the voters would dump him in 2020. But the resignation of Mattis is a turning point for me. Trump is a loose cannon. In a crisis, he may well sink the ship of state. We cannot wait another two years.
That said, I do not believe the Republicans in the Senate, no matter how disenchanted they become with Trump, will take on both Trump's base and their billionaire patrons at the same time. Only when they get a green light from those patrons, will they move against Trump.
And that green light will come only when those patrons—men like Charles Koch, Robert Mercer, Art Pope and Sheldon Adelson—decide that Trump is more a liability than an asset for them, that he has become a threat to their far-flung business interests, and the global stability those interests rely on. That time may be near.
I, too, have concerns about a President Pence, but let’s cross that bridge when we get to it. One problem at time.
77
@Ron Cohen
What sane man would enter a war that could not be won? Mattis was fired by Obama. It seems Trump was more resolute to get out of conflicts we shouldn't be involved in. The same people that have been apologizing for voting for a needless war in Iraq, are demanding we maintain troop involvement forever. Anything Trump does is opposed by hatred, not reason. You could never get democrats to approve of maintaining troops in Syria, unless it is Trump wanting to get out of the endless occupation he inherited. Lonely Chris Matthews agrees with Trump. When can others realize hating Trump doesn't mean everything he does is insanely wrong?
2
here's a good idea: let's get some of the smartest, boldest grifters on the Street to cobble together a bond issue to finance Trump's wall. for each tranche you get nothing in return, but you could have your name stamped on the bricks according to how much you put in, and, of course, the nothing you earn is TAX FREE! to save money on broker commissions, the bonds can be sold direct to the project's most likely supporters, at Wall Mart, and when the value collapses, you can sell your bonds at a TAX LOSS ! so, Trump gets his wall funding, it doesn't come out of the US Treasury, and rich people who can no longer use the dodges of mortgage interest deductions and state and local taxes on their mansions and palaces in the sky can find fresh,new ways to avoid paying taxes like the little people do! Republicans will eat it up like sugar plums and all it will take to do the deal is getting Trump to agree to declare a health issue (a flareup of bone spurrs, perhaps?) and go into immediate retirement with one more giant, phony WIN to celebrate on his way out the door.
5
Is Dr. Krugman invoking the Confidence Ferry?
Here is just one example of Dr. Krugman mocking those who invoke confidence and uncertainty as reasons for financial market and economic problems: "Then came the Great Whine — the declaration by one leading business figure after another that President Obama was undermining confidence by saying mean things..."
https://www.nytimes.com/2013/08/09/opinion/krugman-phony-fear-factor.html
Note that the main page link to the above article at the time it was published was "The confidence men strike out again as the latest economic myth about 'economic policy uncertainty' bites the dust." (You can see it in the page's HTML meta tags and in internet archives.)
2
@tew
The good professor Krugman is simply stating the curse of right-wing crazy, incompetence, and cretinism and their destructive effects on our national economy.
Thanks for missing the point.
85
@tew....ever get tired of whataboutism? I am, and am also tired of NOT evaluating our current president in his own light rather than the safe space offered by the past.
4
@tew
Are you suggesting a contradiction or flip flop on Krugman's part? I don't see it. His earlier column says that business fights regulation and government spending by arguing (incorrectly he says) that it reduces confidence and willingness to invest. His latest says an incompetent national economic team could aggravate a crisis. Neither claims confidence is not a factor both in the market and the economy.
3
We must never personify historical events.
Trump is a symptom, a symbol and the culmination of an economic stagnation and decline of the American economy that started in circa 1978.
America was already desintegrating. To state that if Trump wasn't elected, it would continue to prosper, is not only commiting the error of "what if" History -- it is ignoring reality.
8
@VK
In 2009, the CBO has shown that Obama's policies would create a decade-long solid GDP and job growth, and they did.
Economics isn't some kind of mysterious natural force, the economy is made by men and women, and some are good at it, while others make mistakes.
The only way to avoid making huge mistakes is to be the president of the biggest economy on earth, America's, and then refuse to consult experts, as Trump is doing.
THAT is when of course, you cannot but have a negative influence, sooner or later.
By the way, if the "decline" of the American economy would have started half a century ago, then why is it that until today, the US not only has the biggest economy but is also the wealthiest country on earth ... ? Any ideas?
33
@VK
Trump is a symptom of America's radical right-wing-infused intellectual and moral decline, which of course inevitably leads to economic decline.
Had American remained sane instead of being poisoned by Pachyderm Spongiform Encephalopathy the last 38 years, it would have a much more decent, progressive and functional society.
Republican moral, intellectual and economic bankruptcy has wrecked America by refusing to invest its people, its infrastructure and its society.
And Trump is the perfect poster child for the Grand One Percent nihilists who don't give a damn about the country they repeatedly rape.
It's quite appropriate to personify Republican wrecking balls.
125
@VK: I hit the job market in '77. I could see it right away. More for the manipulators and less for the creators. I've managed to squeak by with reasonable prosperity, but I imagine we all could have done better if things had veered the other direction.
17
The markets could be worried about how Trump would respond to an unexpected crisis? What about his response to a crisis of his own making (pick one...or several)?
43
Thanks Mr Krugman- I wouldn’t less from you. Reveling in a stock market decline that erases gains for America so as to prove your point. It’s a good thing you are limited to the economy - but failed to mention how wrong the Fed was to keep rates so low for so long. But finally recognizing that Pres Bush contributed to the turnaround is a revelation- and a change from your past stance. Merry Christmas Mr Krugman- it’s not the end of capitalism just yet
1
@Ray Ozyjowski
What's so wonderful about capitalism when you can't afford healthcare, highways, Water and sewer systems. I guess it's all good: the DeVoss family owns eleven large yachts. yeah!
Travel abroad and compare the splendor of our capitalism with places in Europe, Singapore, and Japan all of which spend an appropriate portion of their capital on public wealth. They look far wealthier than the US unless you stumble into a gated community.
12
@Ray Ozyjowski
He's clearly not "reveling in" all the negative things that are happening today - if you think he is, could you please quote a passage from this op-ed that proves your interpretation ... ?
As to your idea that the Fed should not have kept rates so long during the last decades: any concrete arguments? And are you aware of the fact that in that case, you're rejecting 99% of standard economics (across the political spectrum) ... ? If yes: again, in that case where's the evidence to back up such a claims ... ?
5
Dr. K: In all fairness this correction is long overdue, your good friend and esteemed colleague John Authers was calling for a correction in The F.T. four years ago. The continued, until recently, policies of zero bound rates followed by Trumps tax gift to corporations and millionaires juiced the market for awhile longer as the corporations used tax savings and repatriated monies to buyback shares, increasing stock prices and their bonuses, everyone knew this was a temporary sugarhigh aimed at getting Trump through the midterms with a rosy economy: Powell, in doing the exact right thing by increasing rates( long overdue) gave the market an excuse to correct itself, it’s still above 2016s already historically high numbers. Perhaps this time the hens will come home to roost, who knows: the one thing most legitimate economists do recognize( Reich, Piketty and Stieglitz among them) is we have been in a smoke and mirror economy since the seventies with the introduction of Milton Friedman brand of capitalism, it could not last forever. without creating serious problems; business can’t exist solely for the purpose of creating shareholder value as preached by The Chicago School, without some semblance of societal value as well, we now have what was a very predictable outcome, inequality in the extreme leading directly to Trump and Brexit with more ominous scenarios on the near horizon as strongmen become attractive to developed nations. Neo Liberalism has had its day.
30
Your average mob boss does not run for political office because they do not want the public scrutiny. Why did Individual 1? My guess is a combination of 1) He doesn't know anyone that's actually honest and assumes everyone cheats, and 2) Really believes he's a genius and can get away with it.
In any case as the walls close in he is likely to lash out in ways both predictable and truly unpredictable. We could very well be heading toward a constitutional crises the likes we have never seen before.
This won't be good for the markets, but that will be the least of our worries.
113
@PS True. I'm not so worried about a constitutional crisis as a nuclear one.
6
@PS
To (1) and (2) I would add (3): He has absolutely no idea what a president is supposed to do. And to be fair, he very likely never intended to win — the idea was just to parlay the whole thing into a Trump News Network or some such. But Russia and enough deplorables in the right states called his bluff.
14
The "business class" voted overwhelmingly for this clown, notwithstanding all of the evidence even then that nothing in his background or what we knew about his character prepared or qualified him for this job. Let alone what we know know.
His "policy positions" (although calling them that does them way too much credit) such as "great health care for less" and "tons of jobs coming back to America" were always ridculously facile and unrealistic. But our business class simply chose to look the other way. And "chose" suggests they were intelligent enough to know the difference. An alternative view would be that they were not bright or well read enough to know.
Either way, in return they got a massive payday in the form of tax breaks that I and all other Americans (living and yet to be born) will ultimately foot the bill for through our personal taxes.
So to hear that business leaders are now concerned about the President's economy policies, is just too rich. People get the government they deserve.
96
Apparently the markets suspect that the only reason the treasury secretary would phone home from Cabo to declare the banks in good shape is that he knows that they are not.
38
We are living on borrowed time. The financial markets rely on trust, confidence, and stability. When investors no longer trust their investments or even the value of currency, chaos ensues. Likewise, our international relationships also rely on trust, confidence, and stability.
President Trump is so chaotic and paranoid that it's impossible to predict what he'll do, or to have any confidence in his decisions. As Mr. Krugman says, for the time being, his tweets and policies may have little effect on the broader economy. But all that could change in an instant should a real crisis arrive - a war, a major economic collapse, a terrorist attack, etc. And because the President has burned so many bridges, none of us can be confident we'll have friends to help our country.
"I alone" now means "we alone."
39
How to fire a President? It will be less painful if he resigns. Should he be given a golden parachute? Not on the taxpayer's dime.
It is unlikely that Mitch McConnell would confront the Prez. For all practical purposes Mitch is pro-plutocrats and anti-middle class. He is just a twin of DJT. Forget about Mitch doing anything other than undermining the Democrats at every step.
So, we are left with the ghastly option of impeachment which in the past did not work. Its success would depend on whether Mitch would support it. The “plutos” may be able to persuade Mitch to rise to the occasion. That is a big if.
32
@ALM: It might be that golden parachutes exist because they are the only way to get powerful people out of the way without a tooth-and-nail fight. The parachute costs less than the damage that the fight would cause, and so is perceived to be a bargain.
If it costs a blanket pardon for Trump and his family, that might be a bargain. But if his finances are as wobbly as some believe, we might have to kick in a billion or so. If that's what it costs to save the nation, it would be painful but necessary. An impeachment and the subsequent social chaos from his followers could easily cost more.
2
@ALM
Golden Parachute? If those who despise him could take a dip into reality, such a safe landing for Trump as he exits, immunity to any prosecution for himself and his family, will be deciding to end a catastrophe as we did in WWII, rather than the WWI, when we demanded reparations that only perpetuated hatred.
Every third world country ends an autocracy with either assassination or prison for the leader. Our country was better off that Ford pardoned Nixon, which allowed us to have a few decades of relative partisan comity.
@ALM
We could try article 25. That’s why it’s there.
2
...aye there's the rub. Markets, corporations, and people don't like erratic behavior. Nobody can plan for "erratic." Even the most ardent supporters of Individual 1 would admit that one constant from 1600 Pennsylvania has been erratic behavior.
And that's the kindest remark I can make. It is afterall, Christmas.
22
@astop no they admit nothing
1
and thanks to the stable genius of a Scrooge in the White House and his manical minions, we're all Bob Crachit now, so may heaven help us, every one.
1
What is it about columnists that make them always ignore the environmental implications. Economics is based on the resources which we have. The way things are going, species are being wiped out every 20 minutes. Talk about an unsustainable future. Another issue is the number of judges in federal courts who have absolutely no understanding of biological or ecological Sciences. They crank out decisions that are solely related to economic issues. We are cutting off the environmental limb upon which we sit. This includes climate change and all the aspects of that are going to put the economy under water. Our cities have become large cancers on the face of the planet. What we call economic progress is nothing more than wholesale destruction of the environment. And while we're at it why do we need 80 plutonium pits a year for atomic bombs to be created at a cost of some trillion dollars?
33
Ah yes. But recognize that Part II of the Trumpunist manifesto calls for starting a war - any war - to create the ultimate distraction. I am very surprised that none of the commentators have observed the obvious, namely that by abruptly withdrawing from Syria, Bolton et. al. are setting a trap for Iran. Should the Iranians step into the vacuum, the Trump hawks will be lying in wait to initiate an immediate response and escalation straight into the 2020 election. The state of the economy, the deficit, the wall - it all becomes irrelevant.
24
I've thought this as well. Why pour billions more into the military and then withdraw it from all conflicts we are involved in worldwide? That investment will have to be justified at some point.
5
Who shorted the market in a new and massive way?
Who shorted soy beans and pork?
Instead of joining the Trump cacophony wouldn’t the public appreciate some information, some reporting on any and all profiteering from the Trump efforts to “shake things up”? What if there is another level of corruption that always slides under the radar. What if our new Russian relationships is re-distributing wealth in very mundane ways? Which nations will “lose” if coal becomes abhorrent? If the cost of oil transport, defense and war, degradation of the environment and diseases were factored into the price at the pump who could afford it?
When will our intellectuals turn to investigating who profits from war in Iraq, Afghanistan, Syria, who relies on our addiction to hydrocarbons, who is responsible for the “Opioid Crisis” in the Pharmaceutical industry, why all other industrialized nations can pay less for healthcare and get better results?
Corporate propaganda and institutional biases govern what we read and learn about our policies. Trump may be a bit of fireworks that. Distract us from the real criminals. Clearly, he is not in charge. Inviting the whole world to sit on the edge of our seats terrorized by the spectacle of Trump with nuclear codes, trade wars, insults and distrust is the ultimate distraction. When will Trump “resign”?
27
AMEN! This is what living in an oligarchy looks like from the inside. Thank you for your insightful comment.
3
It’s kind of funny, this market collapse. Donald Trump is giving the business and investor class everything they’ve wanted: A massive tax cut, massive reduction in red tape, increased privatization of government, reduction in size of government, business executives in charge of departments, government “run like a business”, and yet the market is tanking.
Not that it will occur to them that this is the natural consequence of the investor class’ overweening belief in their own unique wonderfulness.
But investors have been so determined to extract wealth that they forget that stock prices are only numbers. And that wealth can be destroyed far more quickly than it was “created”.
Oh and the laboring class that has been so oppressed has no wealth to put into the stock market. This collapse doesn’t really bother them.
34
@Liz
Right.good post.
One small issue. Except none lf the alleged benefits you point are actually accurate. Trump has tried to do some of those things but has failed at most of them. E.g., deregulation; the absurd for every new reg dump 2 policy was stopped. Hes surely trying to undermine the clean air and watee acts but without success, yet. So much of the supposed benefits to corporations havent materialized.
As Dr K says, the stock market and the economy are different. Though the market priced all of trumps bluster in in late 2016/early 2017. Not much of it happened. Even so, Corp profits are still strong - something agent orange cannot reasonably take any credit for. So whats the problem?
Most obvious answer: corporations and markets abhor instability and unpredictability. Its been two years of chaos and noone thinks its going to stop any time soon. That is the real problem: trump and his angry band of know-nothings.
1
You asked the appropriate question in the article, "So why do investors seem to be losing their what-me-worry attitude?"
I think the answer goes beyond economics, though. The markets were initially bouyed by candy, i.e., tax cuts and deregulation, but the reality that there is an unconstrained lunatic at the healm of the country is sinking in, especially as Trump increases his irrational antics and "stabilizing forces" leave the White House.
Unless there is some form of intervention, I ear the fall could be precipitous.
14
I write fiction for a living, so take this with a grain of salt. Here's a scenario:
A few days from now, before the Democrats take control of the House, the Republican leadership sits down with Pence and some of the cabinet. Pence agrees to make a video record of Trump in one of his ranting, swearing meltdowns. The recording is leaked to the media.
A day later, as reaction sets in, Pence and half the cabinet sign on to Article 25. Trump immediately ceases to be president, and Mueller is waiting with indictments and handcuffs. Trump disappears from view, and Pence and the Republicans declare that "our long national nightmare, part two, is over."
The "base," propagandized to by Fox, Coulter, and Limbaugh, et al, who have been reminded who butters their bread, quickly segue to a Pence presidency.
Before Trump can mount his sixty-day opposition to the coup, he is tried and convicted, and gets sent off to spend the rest of his life in jail.
I know, I'm dreaming. But how more unlikely is this scenario than the reality we're living through?
31
@Matthew Hughes L Ron Hubbard wrote more believable fiction than that.
This is just about the time when Trump would be filing for bankruptcy on one of his projects.
43
In true trumpian fashion- the phone calls- to reassure- are likely tipping off people that the banks have been up to something- again. What will it be this time? Betting on cockfighting? Betting on which way the old lady will turn when she walks out the door? For so long , and repeatedly, they have played fast and loose with our investments, enriching themselves and beggaring the country. I suspect the German bank raided by authorities will be just the tip of the iceberg. This time, I hope we do the right thing- let them crash, seize their assets and off with their heads.
17
Let's also be clear, the stock market is not an indicator of how the economy is actually doing. What is being called a bear market now is actually a return to a level that the market should be at if it hadn't gotten too exuberant over the past two years. Basically, it spiked up after the last election and is now moving back toward the longer term trend line.
Other indicators are reflecting a slowing of growth. Unfortunately, the US budget has been placed in a position the it will not be able to respond to even a slight recession and in fact will be driven to do the wrong things because of an increasing deficit.
8
Bye, bye retirement! Lost my shirt over the past 6 weeks, and with no end in sight, it doesn't look to good for this not-yet-retired senior citizen.
16
The chaos that portends won't be a "ghost" from the Executive Branch but from other flesh-and-blood thirsty branches of government. The House of Representatives promises to block all legislation designed to boost the economy which will hurt Trump but more importantly the welfare of the country. Investors realize this and are backing off.
1
@Wayne Barr. You mean like the Republicans did during Obama’s Presidency? Actually, the GOP needs no help at all from the Democrats to ruin the economy. Remember George W. Bush? He took a Clinton surplus and turned it into a gaping deficit. Maybe your scenario is just a projection of past Republican behavior.
7
My Christmas wish is that every Trumpist, and some of the leftish, would develop a little respect for the complexity of the systems they’re screaming at. And if I could have gravy on that, it’d be that they at least try to learn what they’re yelling at, preferably before yelling.
No, it ain’t simple.
2
Our President is systematically undermining the economic health and the security of our country in ways that alienate our allies and increasingly benefit our adversaries. Even parts of his base are being negatively impacted. Could he be so indebted to Putin that he now must do Russia’s bidding? What price would Trump pay if he didn’t do as he was told?
13
Is it reasonable to think that somehow, Trump will change his entire approach? Recruit really knowledgeable, experienced hands to help shape domestic and foreign policy? Tone down the rhetoric? Close his Twitter account? Develop empathy and sympathy? Work on behalf of the nation?
Of course not. Trump ain't going to change, just as a leopard won't lose its spots. He is what he is: a brutish, angry, insecure, bloviating fraud. Trump will continue to believe that he is a stable genius with business acumen, which no one else thinks, least of all those who have chosen to work with (for) him.
So the nervousness and uncertainty about the future is entirely justified. The real uncertainty has to do with whether there is any opposing force that can blunt Trump's worst instincts and gut-level impulses. It won't arise from the Republican Party; that's for sure. It won't come from the White House staff or the Cabinet. The Dems in the House will do what they can but many will be distracted as the Presidential horse race gets underway.
There is, in fact, a great deal for everyday Americans to be worried about.
15
The Fed precipitated the market downturn with its overly aggressive interest rate increases while at the same time unwinding its balance sheet. Trump isn’t helping the situation, but at least address the Fed’s role instead of devoting the entire column to Trump.
1
One thing I am hopeful for is that there will be some oversight along with the usual checks and balances. The Congress and Senate need to rein Trump in. The other thing is Trump's trade war is killing us as predicted. He needs to lift the tariffs especially with our larger trading partners and allies.
6
This past week has been a "stress test" for Trump and he has failed spectacularly; the markets have taken note and reacted accordingly.
Prior to this week I thought it would be a waste of time to impeach Trump; but his recent behavior has changed my mind, and Tom Friedman's too, and perhaps lots of others. We can't risk allowing him two more years of such terrible decision-making. There is too much at stake for our nation.
15
It all boils down to "when there's no one minding the store, bad things (including some very bad things) will happen".
8
Can Trump and his administration respond competently and intelligently to any crisis? No doubt there are still good people working there who worked in previous administrations and have experience.
But when the president cannot be trusted to survive a long weekend without tweeting inanities and conspiracies of covfefe, what will he do during the Trump Shutdown when he is exiled from his golf resorts?
Trump has already proven he is inured to good advice. The State Department, intelligence agencies, and the military are some cases in point. He regards them as the deep state or suspicious rivals or disloyal. He consults himself on foreign policy. He knows more about ISIS than the generals do. And his gut checks access more knowledge than found in anybody else's brains.
It is doubtful that financial experts can reach him or persuade him to much.
The tragedy of the Trump presidency besides the obvious corruption, conspiracy and crime is that there were numerous competent and intelligent people who wanted to see the country succeed and would have been happy to give him advice.
Instead his TV tuned to Fox talked to him, Limbaugh and right wing poltergeists talked to him, and his inner WH cabal talked to him.
12
If one takes the market melt down out of the discussion a far more sinister prospect must be considered. An unstable POTUS who is dangerously out of control accesses the nuclear code. And has mused about limited nuclear strikes. A horrible thought on the eve of Christmas.
7
"Would Trump look for solutions or refuse to accept responsibility and focus mainly on blaming other people?"
He will blame other people. Sessions was his worst mistake; now it's Powell. He cut Mattis rather than assure a smooth transition at the DoD because he realized Mattis told the truth about him.
He can't keep his story straight on anything - he knew nothing about the payoff to Daniels; maybe Coen knows something but he doesn't; Cohen represented him in a deal with Daniels & nothing to do with the campaign; Trump paid Cohen for the payments he previously knew nothing about.
He is incapable of telling the truth or accepting that he has made a mistake.
17
hopefully in life one learns something everyday, I'm not sure this is the case with the current president of the united states, what you are writing about are his motivations in relation to his irrational behavior and his tweeted conclusions. This has left the markets clueless.
4
Sanity Clause, no. But apparently there is an unspoken Hannity clause. Other, actual Presidents and British Prime Ministers have had unofficial groups of friends and advisors. Trump has FOX
“ news “, and it’s illustrious cadre of highly trained, eminently respected paragons of learning, objectivity and truth. Truly a symbiotic relationship, based on greed, spite and fraud. They truly deserve each other, in perpetuity. Or Prison.
15
Well, in America it matters who is president. Unfortunately, Trump wasn't, and isn't, fit for any public office and has put together a cabinet of grifters and incompetents. That's not surprising for him, as he has never known what it is to know anything or valued that capacity in anyone else.
The long Obama recovery, goosed by Trump's tax-cuts, is coming to an end as all recoveries do. And Trump's trade war, incoherent belligerence, corruption, and obvious unfitness might just make a down-turn severe and prolonged. As millions of Americans lose their jobs, they will not pardon Trump or the Republicans who enabled his run for the presidency. 2019 doesn't look like a good year for the "stable genius" in the White House.
11
The photo of Trump crossing the Lawn from Marine One isn’t image of a troubled guy. There. May not be any clear problem but trouble can strike from a clear sky. And confidence is key.
1
I wonder if Trump supporters will finally get the point he is unbelievable as their savings go away ?
9
Isn't driving the bus off the cliff what Donaldo's supporters voted for? The Republicans in Congress thought Mattis, Kelly, Sessions, perhaps others, would be guardrails to keep the bus on the road while they moved non-whites to the back of the bus, but even they cheered the Donaldo's erratic antics and disregard for road signs.
Is economic chaos, another severe recession, a Second Great Depression coming? Are they possible?
A) No. The economy will be just fine because Donaldo schooled China, Mexico and Canada and other countries now understand they owe America big, and America intends to collect.
B) No. The economy is doing fine. A 4,000 point decline in weeks is the new normal in profit taking. The real evidence of the healthy economy is that 67-year old Alice is still able to keep a roof over her head collecting her social security retirement benefit and working thirty hours between McDonald's, Walmart and the Dollar Store.
C) Forget the economy, the bus is over the cliff and in free fall.
Good luck one and all
8
Trump, Mnuchin, and the rest of the Republican administration are trying to fight the equivalent of a smoldering bush with gasoline. And if the economy blows up they're going to blame Democrats, or Mexicans, or China. Hey, it worked for Trump in 2016, and Republicans simply cannot think of anything else to do.
7
The Presidency of the United States is too important a position to be trusted to an amateur. Future Presidents should be required to have extensive government experience, preferably at the federal level.
5
The market isn't in a panic over Trump's kayfabe "trade agreements.'
The market is in a panic that Trump is destroying the foundation of the post-world-war stability, and seems likely to trigger regional war in the middle east and more Russian military adventurism.
7
"Are you still a believer in Santa? Because at seven it's marginal, right?"
There are many reasons why Donald Trump enjoys chaos. Chaos certainly keeps the spotlight both on him and, mysteriously, away from him.
Looking at what Mr. Trump told a child on the telephone, on Christmas Eve, we see something else about him -- not that we haven't heretofore -- and that is, he goes for laughs. Any laughs. Sometimes it's mocking a man with disabilities. Sometimes it's making up demeaning nicknames for people. Trump's a guy who loves television and, for that matter, the lowest common denominator of television, reality TV. "Because at seven it's marginal, right?" is a punchline, here sadly, badly aimed.
I cannot wait for this joker to quit, be fired, or disappear. Perhaps he'll fly to Russia, where we knows he has friends.
14
I wish that Mr. Krugman’s analysis of the markets were the only problems. There’s much more going wrong.
Criminality—the Trump crime family has conducted business in the shadows for decades by scamming investors and workers. Now that it’s out in the open, it’s getting normalized by the GOP and the gutter press at Fox. While we do not know all the facts, those that we have would have indicted an ordinary citizen.
Domestic policy—Trump’s notion of border security is literally medieval, build a wall. His racial views are more modern in that such thinking emerged in the 1500s. His notions on representative government look like those of 1900 where white men were the only ones who could vote because they were "very fine people". GOP gerrymandering and voter suppression enables radicalization. Like a drug addict, they cannot live without the Trump base.
Foreign policy—Trump has dismayed allies and emboldened opponents. Russia is on the march in Crimea. The bulwark of the EU is crumbling before our eyes. We are in retreat everywhere.
Neglected issues—Federal debt service will spiral into debt servitude. Healthcare policy is a confused mess. Coal continues to cook our climate. Equal rights under law is attacked by party hacks in courts and legislatures.
We face two more years as the Trump circus grinds on where tweeted lies are endlessly cycled and a million Pinocchio noses cannot erase.
8
With approximately 40% of voters still supporting Trump, looking forward this country will always be just like a car with two flat tires.
7
A year after the market crashed in 2008, Larry Ludlow was still in denial. Look at what he said then and you'll get an idea of what the future holds.
5
Trump will look for a way to have the 4 trillion in quantitative Fed assets ‘disappear’.
To him, its all play money and if you need it, you print it.
2
Wall Street and the economy has always struggled with robustness against negative "Black Swan" events.
In hindsight, the causes of the 2008/2009 financial crisis seemed obvious and even inevitable. Yet almost everybody missed it. The 'psychological biases that blind people, both individually and collectively, to uncertainty and to a rare event's massive role in historical affairs' are well known but hard to shake.
The election of a profoundly ignorant emotionally unstable career white collar criminal to the Presidency was a Black Swan event in itself.
Wall Street did not price in the future cost of that disaster, perhaps he could be constrained by the institutions and laws we have in place. The GOP's subservience and complicity has punctured that illusion and now we are left to wonder:
What hard-to-predict event may occur during the remainder of the Trump administration that will have an outsized negative, perhaps disastrous, impact on the economy because of Trump's gross incompetency and increasing unhinged behavior?
The clock is ticking. And no one knows how to price in the impact of a delusional and malignant President incapable of performing any aspect of his job.
No one knows. It's never happened before. It will be "interesting" . And very expensive. How expensive? It will be obvious only in hindsight.
8
Before going any further, I suggest everyone read Tom Friedman's column in this morning's Times. Then, absorb what Mr. Krugman has written and act accordingly.
America needs a president and Trump isn't one. It's that simple.
12
History is full of circumstances in which Chaos gave way to order.
2
The new year is a good time to look back on how we got here. I believe one individual was a primary catalyst for our country's current political, social, and environmental demise. That individual is Ralph Nader. He was well aware that running for president in the 2000 election would accomplish nothing but siphon votes away from Al Gore. He was repeatedly begged not to hand the election to G.W. Bush. He ignored all such requests.
Once in office, G,W. Bush, R. Cheney, C. Rove ..et al .. demonstrated that there are no penalties to be paid ... no political consequences .... no significant loss of support ... for lying, cheating, and corruption. They lied about motivation for the Iraq war, its cost and the thousands of Americans killed. They corruptly gave billions in no-bid contracts to Cheney's company ...Halliburton. They lied about torture ... and about tax cuts for the rich. .. and about handing drug companies billions of tax payer dollars in the passage of Medicare Part D. There is more ... but no need to continue that sad litany
Bush/Cheney proved to the republican party that in the United States, massive deception is a winning strategy. Trump and his cabal of Republican enablers have embraced those Bush lessons ... and applied them with a vengeance.
13
@sookie where is your paragraph about Jill Stein? I’m sure all those environmentalists must be happy how their votes for her have helped the environment
The Republicans added a $300 Billion stimulus to an already hot economy, despite Trump the economy had to grow. But now, even with a $ Trillion annual deficit spending our economy is failing. Not all the money in the world can save us from this madman.
9
There goes my plan to retire in 2 years. I want to thank all those voters who stayed home, all those voters who voted for Jill Stein, all those voters who figured Hillary’s email scandal was the absolute worst act in history, all those voters who would not see what was coming from DJT (even during the primaries), and, finally, all those low information voters that can’t be bothered to look up from their Facebook.
Thank you.
19
Thank you for sharing my exact thoughts with diplomatic words. Up to this point I only had a series of four letter words to describe my position and feelings.
11
Dr. Krugman, "with apologies to Chico Marx" would have been better; perhaps with a reference to "the party of the first part".
I do love "edifice complex" however.
3
It seems more than obvious to me that a huge crash is coming and that no one in the trump administration has the knowledge or wisdom to deal with it.
11
What will the enormous national debt do to our economy? Nobody talks about it.
3
@Donny Roman
The enormous national debt at the end of WW2 did us no harm at all--management of the economy was in Democratic hands. The economy grew so fast and vast that the debt shrank as a percentage of GDP.
In the hands of the other party now...well, the fate of the economy is not looking so good.
3
The weirdest thing about this misbegotten presidency is that Russian sailors and soldiers and marines have not swarmed up the banks of the Potomac and ordered Americans back into their homes upon pain of instant death.
I have expected a military parade down Pennsylvania Avenue but they soldiers would be goose-stepping and the flags being blown around on their staffs would reveal a deep red with a yellow sickle and hammer in the upper left corner. On the reviewing stand would be Vladimir Putin. Donald Trump would be under house arrest at Trump Tower.
The corridors at the Pentagon would be filled with Russian, not English, and the polished doors would be held open by American general officers while enlisted personnel polished and waxed the floors.
At the Senate, a grinning Mitch McConnell would admit to the Russians that the Constitution was a mere tool with which to fool the people. Paul Ryan would be ordered by the Russians to reveal how a balance budget works. Ryan would say, "I don't know." The Supreme Court would be disbanded and the Justices jailed.
American citizens in flyover country would cheer the Russian invasion until they were told to hand over their weapons. Those who refused would be summarily shot--along with their families.
In the cities, police departments would muster and prepare to serve as "a well regulated militia" to keep at bay America's mortal enemy. The oligarchs would applaud. "We finally did it" they would crow.
Think it can't happen here?
6
That's what the red Christmas trees lined up at the White House were trying to symbolize--a living x-y graph of the Trump's administration's financial metrics, possibly the stock market this December.
Naturally, the graph starts after the undecorated green trees of more normal times.
3
Campaign financing, gerrymandering, media concentration, constant scaremongering about the ‚left‘, money as the only currency in the political entity.
The road to authoritarian oligarchy has been set upon and the social contract shredded.
I am truly grateful there are - still - other countries that prove it can be done better.
I certainly hope the US turns a corner. A future Chinese/Russian world spooks me.
4
Merry Christmas, Paul. Please explain why a lawyer should be in charge of the Fed. We know you can’t wait to have the economy fail.
1
@Jackson
I’ll-tempered snark. Merry Christmas anyway.
Considering that our Ship of State has hit a 'bit of an ice cube and so will be slowing down for a bit, but everything is OK, please, plenty of time to finish the first course.'
'Oh, Take no notice of the Ship's Dutiful Officers going about their business and checking the safety of the Life Boats. There are plenty for all the Crew.'
Somehow I do not think that we, down here in Steerage, are getting anything like Honesty from the Crew, are we? We tell them there is flooding they sent mops, buckets and towels.
'At this point, rearranging the deck chairs and setting up the Band are of prime importance, of course.'
But everybody with Brains followed the Dutiful Ship's Officers out on Deck earlier, and the boats are away and moving fast.
We are Leaving His Orange-Ship Donnie his Sinking Ship, the rest of us will take our chances with Icebergs, Sharks and Normal type sea hazards, rather than sail with the Dipper, Done-in Donnie and his Band of Merry Robber-Barons any further.
Seeing as how Drumpf could not even keep the Government Open during Christmas, almost like he was trying to cancel the Holidays or something. Let alone working to Sink our Leaky Tiki-Torch bearing lesser, petty officers and the Orange-ship of statelessness they rode in on.
The Sinking of the Trump-Tantrum-Trick, and the Captain always goes down with the Ship...even if the crew has to manacle him and his cabinet to the pipes as they depart.
5
Normally, massive income inequality would lead to rebellion by the masses, alerted to their betters looting the treasury.
But the true genius of Trump is to make a stew of hate and confusion and lies, and feed it to the very poor, who were ignored by the leaders named Clinton and Bush, and so weaken the possibility of the poor getting their fair share.
Divide and conquer, and along the way play monopoly with the world's greatest economy, it must be his greatest dream.
Hugh Massengill, Eugene Oregon
3
As I have been saying since Trump was just one of the gaggle of Republicans chasing the nomination, no psychologist would expect a person with a long-standing mental illness to become mentally healthy.
To be specific, schizophrenics are typically designated as either process or reactive. A process schizophrenic typically loses touch with reality before the age of 25 and never assimilates. A reactive schizophrenic may start out with just a few neuroses (like megalomania and paranoia) and get along pretty well, as long as he or she doesn't get too stressed too frequently. However, repeated stresses drive the person further and further away from reality, and delusions - events which did not happen - are perceived as reality, and reality sometimes seems like an illusion.
Before his election, Donald Trump experienced multiple bankruptcies and multiple family breakups with wives and occasionally with children. He was publicly humiliated at the 2011 White House Correspondents' dinner by Barack Obama's monologue. He was vilified by media coverage - including Fox - during his nomination fight, and he was a predicted loser. Winning came as a shock, but he thought he had been lucky. Since his inauguration, he has suffered so many setbacks and personal attacks - most importantly the last election - that he is in a hole that he'll never climb out of.
But that's not the worst. He hasn't hit bottom yet. When he does, it will not be a good thing for our country.
12
For those who paid attention, Trump was always guaranteed to be a disaster. But, the GOP has been a disaster for a long time. Trump is the fruition of the counter-intellectual movement in the GOP. The mouthpiece of the Right, FOX, has the collective ear of working America, not because of its fair reporting, but due to its racism, which makes the working class feel better about their plight. The working class and rural inhabitants of America have few real answers for poverty. They fall for the race baiting of Trump and Company.
13
@Anthony The GOP took a wrong turn when they adopted Nixon's "southern" strategy. Somethings go along with the "southern " strategy -- racial/cultural/religious antagonism, anti-intellectualism, anti-science, anti-fact based decisions, etc. I wonder if Nixon understood where the Southern strategy would lead. Once you adopt a strategy based on racism, your followers won't let you stray.
After about 150 years of southern politics based on racism, one would think that people would wise up. Not a chance of that.
3
As was reported today on NPR Marketplace, the 5000-point drop in the Dow over the past three months will pale in comparison to what is in store if (and when) Trump fires Jerome Powell. Investors want stability with a technocrat as the Fed Chair, not a political lackey who will goose the economy for short-term financial gain, ultimately wreaking havoc down the road by willfully overheating the economy.
Isn't the good of the many (everyone) supposed to outweigh the good of the few, or the one (Trump)? The root of our problems lies not in Trump constantly firing anyone of value in his administration. He really needs to fire himself.
8
Don't pay attention to that man jumping up and down ranting.
Merry Christmas to all, peace and good health in coming years.
2
Paul Krugman is still making excuses for his Terrible, Horrible, No Good, Very Bad call on how the market would react to Trump's election. Now it turns out he was right all along. It was the market that was wrong. Finally it has come to its senses!
1
"In 2008 and 2009, it mattered a lot that officials of both the outgoing Bush administration and the incoming Obama administration responded competently and intelligently to the financial crisis."
They acted like chickens with their heads cut off throwing public dollars at failed financial firms - that the Market had killed - that we would be better off without.
1
Dr. K-- You are very missed here in Princeton. I so wish you still had your blog -- there would have been a link to the Marx Brothers when you clicked on "sanity clause" -- everybody knows there ain't no Sanity Claus. Happy New Year to you and yours.
4
This attack on the independence of the Federal Reserve coming so soon after the resignation of General Mattis makes Trump's 'madness' much more frightening.
He is gathering the reins of all the major cabinet departments more and more into his own hands. Now he's showing his intention to render the Fed an extension of his will. While keeping us all distracted with political theatre he's setting himself up as the First Consul. There won't be any others.
3
The guy could not keep casinos open. A sea slug could and probably is right now. His economic knowledge consists of being aware how much money his tax cheating papa gave or left him. It will be ironic if the toxic clown brings down the economy - his supposed bedrock. Even billionaires get cranky when their investments tank. And don't look for anyone competent to waste time with him from now on - there is no point to it and getting dissed for no good reason followed by public shaming looks bad on your resume.
4
What happened to Republicans, and who are they now? They seriously sound as bad as those in the South who would break up the country in support of slavery 150 years ago.
We never reconciled that issue so we could recognize it and deal with it, and if we do not we are going to relive these nightmares again and again, but with increasingly powerful technology in the hands of an increasingly hard to identify evil power elite.
This is a mental situation in the minds of people who are behaving irrationally. Even if you appreciate some of the values and policies Trump espouses, he is a dangerous person to give power to because he doesn't care about the policies, he cares about whipping people up to gain more power and terrorize the opposition. That is criminal.
5
There is an old, snarky put down in the construction industry, aimed at the lowly-but-well-paid plumber. All one needs to know to be a plumber, the saying goes, is that "stuff," (as Krugman delicately puts it) flows downhill and payday is on Friday. And in the construction industry, payday is usually the day one finds the layoff notice in one's pay envelope.
Trump is not conversant with the laws of physics, whereas your much-maligned toilet installer is, in terms of practical application if not exactly in complex formula calculations.
Now, if Trump were a competent general contractor, president, if you will, he would be sure his plumber was better at his trade than the contractor himself would be. Mnuchin, it appears from his puzzling actions, has not even started his apprenticeship, but he's the top toilet installer?
Gravity is a foreign concept to both men.
4
When things went bad for Trump's business deals, he declared bankruptcy; he did that 4 times and walked away with his money intact. What is going to happen when the US goes south? Trump will, of course, blame everybody then he will declare bankruptcy of the US economy and pocket all his emoluments winnings. The GOP and his base will applaud this and declare him a "stable genius".
3
We now know Trump's problem solving strategy to any national or international disruption: 1) turn on Fox News and/or Rush to gather data on the problem; 2) all cabinet officials and experts connected to the problem are sent home or on vacation; 3) initiate policies or pronouncements that will worsen the problem; 4) blame an individual in the proximate vicinity of the problem; 5) keep repeating steps 1, 2, 3, 4,
4
Cheer up folks. Starting in January Nancy Pelosi will be third in line to the presidency as House Speaker. If things work out according to plan Nancy Pelosi could very well be our first woman president.
5
@sharon5101
Sorry to disappoint, sharon, but the only way that line of succession comes into play is if the offices of pres and vice pres are vacant simultaneously. Otherwise, the VP becomes Pres and chooses (with the consent of Congress) a new VP (See Agnew, Nixon, Ford and Rockefeller)
1
Sorry investors, the Grinch in DC has held up Santa at ICE and sanity is on ice!
But we all know it is not about presents or even returns.
Merry Christmas!
1
Since there has been little competence from day 1 of this presidency and obviously none right now it is time. Time to get rid of this man and lock him up for good, fire all his helpers and enablers and replace this administration with competent people.
We are on the edge of a precipice, morally, economically and politically. This is not a bump, this is an error if history which if not corrected very soon will cost America and the world at large a great deal. The Statue of Liberty is shedding more tears by the day, lots of Americans are depressed, sad and angry ( take your pick). It is time for the GOP enablers and sycophants to change their tune and act.
5
"Would Trump look for solutions or refuse to accept responsibility and focus mainly on blaming other people?"
Is this a rhetorical question? Trump never takes responsibility for anything bad that happens, only credit for accomplishments by others. We are all in for a very bumpy ride; fasten your seatbelts and keep your hands inside the car.
2
I roared at the photo! Oh, I think this one will be a classic in ranks with the sailor and nurse kiss in Times Square, with the leggy dancer in red from "A Chorus Line," with the Afghan green-eyed girl on National Geographic. Bravo NY Times photographer. I've had a Merry Christmas.
2
I get the reasoning that even an insane president cannot do much harm to a stable economy. Very much like one termite does not mean the house will fall down the next day. However, the current stock market dive may well represent Pogo's stark realization that 'we have met the enemy and he is us'.
These greedy wealthy republicans are looking in the mirror while their republican leader melts down and coming to the realization that none of their elected officials want to change things or even that a Pence presidency would not change things.
The reality of this view of our present governing structures at the state and national level is a truly depressing reality.
Kick the republican bums out. Put the criminal republicans in jail through the courts rather than by Trumpian fiat and move on to the train that is speeding in the right direction. Look at California's impressive economic numbers despite the strong national head winds.
3
Who does Krugman beleive should be the President? Suggest someone who has broad appeal, beyond the narrow political fringe, and the coastal elites. Name some one, Krugman, who speaks to the needs of the working class. Someone other than Hillary Rodham Clinton, who has nothing but contempt and disdain for Americans who actually work for a living. I support the President. I support Trump. America First! MAGA! Thank you.
2
Let's face it, there's a Mad Man in the WH whose after a legacy. Legacy to him means something solid that can be seen. That's why he likes that wall so much. We might laugh at his antics but in Trump's mind, that great big beautiful wall is the equivalent to The Great Wall of China. That's what he sees all day. Unless he can get slave labor to build it, it ain't going to happen.
This administration manages his expectations badly. The problem must be pushed back onto Trump to admit to his base that it is not deliverable. Congress must make that happen. The solution is managing the mad man. Once that's in check, he might become more subdued or leave knowing he's beaten.
2
Just image the sigh of relief FROM THE WHOLE PLANET if he departs voluntarily or is removed from office! Followed by the peeling of COUNTLESS bells, the honking of horns, the singing of Te Deums, the offering of millions of Votive Masses (Divine Liturgies, Eucharists), the popping of champagne corks AND THE CHANCE TO HAVE A GOOD NIGHT'S SLEEP AND PEACEFUL AWAKENING!.
4
There is a sanity clause. It is section 4 of the 25th Amendment. Unfortunately, the insanity, narcissism, and greed extends beyond the President.
4
Everyone should revisit THE BIG SHORT.
Saw it again last night. What would have happened
ten years ago if there had been a Trump in the White House?
Let's hope the fundamentals are ok, because the
fearless leader isn't.
3
Blaming the other side is the middle name of American Conservatism. They are capable of creating alternative relity to explain things their way. Since they were very successfully doing it last few decades be assured they will continue exactly that. The danger for them of course is that Trump will go ridiculously overboard with accusations and lies and ruin the effect.
1
If you ever wondered whether or not Don Trump was evil, consider the fact that while the entire World is celebrating the Prince of Peace, Trump is erupting into chaos.
I think everyone should should simply ignore him and continue to continue!
And here's another thing. The Trump tax cuts were turned into stock buybacks. The market has now suffered a historic drop. The money Trump and his GOP co-conspirators directed away from productive work has gone up in smoke, leaving nothing but a bloated federal deficit behind.
5
Poor trump: Jesus is getting all the attention, while trump knows he’s the one being persecuted more than anyone in history.
6
Example of 31st U.S. President Hoover, is there to say it all. Hoover put tariffs in 1929 and the Great Recession was on us in 1930. Trump picked this tactic to sink U.S. economy so that his friend Putin can admire and rejoice!
3
trump’s dealmaking abilities were only possible due to bullying, bribery, and bankruptcy. Those actions may have worked in the New York City real estate business but they aren’t effective in Washington D.C.
He is woefully incapable of forthright negotiations and his dishonesty further impairs trust from his counterparts, domestic and foreign.
does he really think anybody cares if he is alone in the White House on Christmas? It is his own doing. His responsibility. His aberrant behavior. His cruelty.
I offer sympathy to the government workers who must toil while waiting for wages and those now furloughed who may never recover back pay, but it is time for congress to stand up and block wasteful spending on the wall, enact improved immigration legislation, and act to remove the crybaby-in-chief if the special counsel’s report forcibly reveals the crimes and misdemeanors that warrant impeachment.
1
“First of all, let me assert my firm belief that the only thing we have to fear is fear itself” -- FDR
"I am all alone (poor me) in the White House waiting for the Democrats to come back and make a deal” -- Donald Trump
My, how we have fallen.
1
look, no doubt, Trump is quite different from what Krugman and his followers want. Trump is a spoiled real estate guy. real estate guys live off of debt and asymmetric information. his tweets are sometimes aware and others distracting. the careful oped writer and reader will make this distinction. everyone has thus far ignored scaramucci's advice for dealing with trump at their peril and heartburn.
1
"Edifice Complex." Very clever:) A bit of welcome humor to off-set the holiday tumble.
1
Stock markets hate instability. We have an unstable president. When are investors going to start hating Trump? When are Republicans going to start hating Trump? Do they not see the irony in those TV ads thanking him for his economic performance?
1
But Paul...what about all the people who voted for Trump because he was good for their portfolio of stocks? They've taken a big hit here and it likely will get worse. Will all the selfish, self-centered, scrooges wake up to the fact that Trump is not beneficial to them, much less the country?
I'm not holding my breath. The average Trump voter hates to admit that their vote for Trump was the biggest mistake of their uncivil lives. Like Trump they will blame anyone and everyone but themselves. They are already blaming the Democrats for the government shutdown. No doubt they will blame Hillary or Nancy Pelosi for the stock market's downturn.
When will it dawn on the people of America that Democrats are good for the actual economy and republicans are bad? You certainly can fool some of the people all of the time.
4
Stock market values have some relationship to corporate earnings, by that criteria S&P 500 still looks overvalued as it has been for 20-30 years. Valuation is still high historically. Trump is erratic but its very hard to know if what he is doing is long overdue. What good is U.S. troops doing in Syria. In Afghanistan, the source of almost the entire world's heroin what benefit have we gotten from our troops there? It is true Trump makes impulsive unreasoned decisions but if we announced. 90 to 95% of the Worlds Heroin comes from Afghanistan; a similiar percentage used to come from Indochina. Would troop departures potentially disrupt the supply of heroin worldwide? We are not benefiting from Afghan minerals its unclear why. While Trump cannot make an orderly normal decision it is unclear if what he has decided is wrong.
1
Trump's "edifice complex"
Well played, Mr. Krugman. Well played.
1
And do not forget the nomination of two conservatives, theocratic, pro Big Business and anti workers and anti unions judges chosen by the Federalist Society to the Supreme Court. And we have seen the result of it: ruling in favor of Big Business, religious organizations, anti-gay baker, the Janus decision which imposed right-to-work regime to the public union in the 50 states and DC.
@Wilbray Thiffault, I know that Roberts maintains that the Court is non-partisan. And perhaps so in narrow Dem/Repub terms (although personally I think he's full of it/too little too late/doth protest too much), but you are right (no pun intended), they are nothing if not ideological appointments. Thomas himself openly accused the majority of politically (small P perhaps) motivated bias in the recent Planned Parenthood decision. And dont get me started on the travesty/gift-that-keeps-giving that it Citizens United. So, who are we to argue?
1
Give it a name now, in case it comes later: GOP - Trump Depression.
2
If the economy tanks, I guarantee Trump's C-team (not B-team as Friedman suggested) will hide behind the bushes (a la Spicer). They will be clueless on what to do because they are all fakes.
2
While in the past it was true Presidents had little effect on the "markets", etc. The insertion of Trump into that system has shown - much like other places - he has knocked down the fences and let his hounds of chaos into various yards. Every norm and respected boundaries have been or are being trampled by Trump and Camp.
Picture Trump as the ill-trained dog on a leash in a fenced-in yard. Where we hope the leash (the alleged adults in the room) would mostly hold Trump, and the fence (norms, traditions, laws,congress) would stop him if he slipped the leash. But for 2 years Trump has been working on both stretching, and/or losing the leash, while also pulling the fence in closer. (crushing norms, violating laws, and ignoring traditions - without proper oversight) So even with a leash, he could leap the fence anyway, and maul passersby. Now the fence is pulled in, within the former limits of the leash, and the leash has been summarily frayed to the point of uselessness. (Mulvaney as Chief of Staff is not going to reinforce the leash)
Trump is exactly where he wants to be, always should have been. His own council, getting the compulsory "Yes's" from his cowed children, and left to rage and rant to a spineless, acquiescing staff of inept, often demonic (Miller) lying (Sarah, Conway) mouthpieces.
From here on out, Trump is free to go full-in on fulfilling his destiny of Death by a 1000 self-inflicted cuts. Every word and action now all owned by him, no matter his spin.
1
It looks to me like Trump is prepping for an insanity defense.
2
And what about the 42% of Americans who still support a man like Trump? Where does such a level of wilful ignorance, greed, and resentment come from? Is this the result of 40 years of blatant corporatism or does the problem lie at a much deeper cultural level? I shake my head in disbelief!
5
@Barry Lane
The 42% are a mixture of yes, wilful ignorance and resentment, I believe. In my family, the two Trump followers neither read or follow anything but Fox and defaulted to the cultural norms of rural and religious demogoguery as many in the past who hewed to Father Conglin, Billy Graham, George Wallace, etc. There is also an extreme dislike of Hillary that defies logic. Even now, with all the evidence of Trump's corruption and amoral behavior, they cannot be swayed to change their opinion. False ride then enters the debte.
3
Many of us knew it then and know it now.
Trump is the demented love child of Ronald Reagan. It was with Reagan that government became the enemy, regulations to temper the amorality of free markets were gutted, a folksy version of white nationalism emerged, the dependability of print and broadcast news was intentionally assaulted and a primitive kind of Christianity was given a special place in the nation formerly known as a democratic republic.
Reagan's geniality fooled a great many people. I must say that I knew what was coming. And it's here.
4
"sanity clause". Thanks, Mr. Krugman, best play on words I have read in years!
1
I was ready to turn off the computer at midnight ... but after reading: ... "just in time for Christmas, people are realizing that there was no such agreement, or at least that there was no sanity clause ( Sorry, I could not help it.) "... I had no choice but to laugh for a while.
Merry Christmas, Mr. Krugman ... and thanks for the mental health and good humor.
2
Do Republicans actually belong to a "party" or has it become a cult? Their fealty to some non-belief system that prizes both personal responsibility and centralized authority is a nonsense of the highest order. Paul Ryan, for example, is a word-jumble not the policy "wonk" they labeled him. McConnel appears to have no philosophy beyond vote counting. And that leaves Trump to explain. Boundless self-aggrandizement, disloyalty to everyone other than flesh & blood advisors, and world class lunacy. Yeah, it's a cult.
2
Trump rails against imports from Mexico, yet his Treasury Secretary (who also produced The Lego Batman Movie) tweets about the health of the banking system while he's on vacation in--Mexico! Shouldn't the dude vacation in the U.S. somewhere, preferably at a Trump resort?
1
@tanstaafl With respect to optics the Trump administration is totally blind: $30,000 dining furniture, insulated phone booth, security detail, government paid trips to Trump resorts, the list goes on and on.
2
Regrettably and to my dismay I had several friends and even family vote for Trump. Interestingly enough, they don't like him as a person or a leader. The Republicans, like an eagle have managed to sink their talons so far into those voters that when the eagle will drop them into a den of wolves, they are still accepting of their choice. It's bizarre. Hopefully communications professionals will one day unravel this mysterious behavior. My concern is how much hurt are we has citizens be willing to endure from these incompetents before a revolt occurs to take back what's been stolen. I hope there is a peaceful and civil way out of this mess.
474
@Curt I don't think there is anything mysterious about this. Clinton didn't do a good job selling herself to enough voters to get the right states. She was not effective in fighting the lies and smears that the GOP machine, Trump, and the others put out about her. Trump said what people wanted to hear. Clinton did not counter with anything that stood up to what Trump said. Politics in America is not about competence. It's about who says the catchiest phrase, makes the most cleverly insulting remark, but not who has a grasp of critical situations.
Ignorance in America is touted as a wonderful thing. Having more than half a brain is not. And that, more than anything will be this country's undoing.
102
@hen3ry
The difference between Hillary and Trump is that between black and white.
Hillary, as any human being, wasn't a perfect candidate. But she WAS perfect compared to someone as devoid of any moral values, experience, competence and character as Trump.
There's only ONE main reason explaining how Trump won the electoral college vote, and that's the fact that 50% of the American people (including so many young people) decided to stay home during extremely important elections.
In the meanwhile, Fox News watchers will continue to support Trump and vote for the GOP as long as Trump copy-pastes the main Fox News lines of the day. And Fox News and the GOP have created an "alternative facts" world for two decades now, precisely to be able to manipulate the GOP voter base's vote as they like and independently of what the GOP is really doing in DC and independently of the real state of the union and of this planet.
The only way to break this spell is to systematically engage in real, respectful debates with Trump supporters - "real" meaning accepting that on ANY point we can be wrong too, no matter how convinced we are that we're right, and "respectful" meaning refusing to attack the messenger, even when the messenger attacks us.
47
@Curt Your reference to Trump-supporting family and friends here in Wisconsin reminds me of a conservative voter I encounter while canvassing for Democrats in my neighborhood last month. He was very pleased with Trump's actions, and those of local Republican officials. But he was planning to vote for our Democratic senator, not that he was "supporting" her (his clarification, but to provide a check on Trump, whom he did support but did not trust.
So Republicans (and independent conservative) continue to be pleased with the choice they made in electing Trump. Just how much they will tolerate and how long this will last is not clear. Trump has been successful by his own standards (wretched that they are). And I am fearful.
42
Oops. Night at the Opera.
Paul Krugman had me at “sanity clause”.
Last night at a Christmas Eve dinner for the extended family at our house, the adults were bemoaning our shrinking stock portfolios and voicing unkind words for the inept leadership in the White House.
I suggested that Donald Trump had ruined our 401(k)’s, but we should refuse to let him ruin our Christmas by forcing us to talk about him.
We dropped the subject – after raising our glasses to toast Robert Mueller.
6
What we have learned about Trump as the next-door neighbor, is his absolute untrustworthiness. The whole NAFTA saga showed that there are very few gaps in his ignorance. He could never acknowledge that the US does not have a trade deficit with Canada and he obsessed endlessly about Canada’s dairy policy, a tiny part of trade between the two countries. He tweeted recently that Canada and Mexico should thank him for the new NAFTA, while we are still hit with tariffs on steel and aluminum because we are deemed a security threat. And he is ranting on about imposing tariffs on automobiles decades after an automobile pact resulted in a highly integrated market. It is hard to convey the utter disdain in which this man is held. And the fact that his base seems to solidly behind him has undermined what used to be a strong relationship. Two more years will be hard to take. Six more would be unthinkable.
8
Great puns, Paul!
All needed to be said.
Let's see if we can have a Christmas miracle where enough people wake from their stupors to see that Trump disruption is exactly the wrong kind for the US and the world.
My fervent hope for 2019 is that all the world begins to pull away from many bad decisions and directions.
14
Add to the list of small, yet in the same direction as the other stock market downward factors: The year end sell-off of stocks in order to offset tax losses against gains.
1
While I agree with Krugman on his analysis. there is one item he omitted in his considerations, Pence.
Companies also have understood by now that that even if they get rid of Trump, there will still be Pence and he is in no way better or even different than Trump, he just looks less like a freak but is still no ore than a clone of Trump with a dead friendly face.
So even if Trump will be stopped from damaging the economy, Pence will not be able to save anything and that kind of future expectation worries the markets as well.
You know that the eye of the hurricane is in sight but also know that the eye of the hurricane is always in the middle of the storm.
15
Is Krugman asking if in response to a 911 Trump might lie us on nto a disastrous war. Or perhaps in response to a ressesion threatening his reelection with the help of the hacks at the federal reserve Trump might create a housing bubble that would give an illusion of a healthy economy only to blowup the economy after the election. I mean but for the housing bubble created by Alan Greenspan we would have had president John Kerry. The point being that we may be actually better off because at least with Trump the media and other institutions may not help make the situation worse as they helped W Bush.
3
Hopefully, enough of our economy will be left on January 3rd when the Democrats take the House and there begins to be some check on Trump's actions.
If we are very, very lucky, those Republicans still holding office will be taking a long hard look in the mirror, and see that they are equally responsible for Trump's chaos.
It's going to be a long, dark winter.
Here's hoping we hold on till spring.
21
@D. DeMarco If you haven't figured it out yet, here's the lesson you should have learned: Congressional Republicans and party stalwarts across the nation are firmly in bed with Trump. Whether by desire or due to blackmail, they will not in any meaningful numbers oppose Trump. They - and the party itself - soon will be going the way of the Whigs.
1
Wow. I feel better now that I know the "401K-Republicans" are beginning to turn on Trump.
All it took was a drop in the DOW.
Wait until they receive their year end 401K report.
29
@Pat McFarland: The straw that breaks the camel's back could happen in April, when millions discover that Trump's tax "reform" raised their taxes.
1
@Steve Bolger
You are 'spot on'. My theory is that the administration jimmied the withholding tables to give voters the feel-good paycheck boost before mid-terms.
1
One of the first things Obama did during that transition between administrations during the crash was to give each working American an immediate $400 tax deduction on their returns for two years - they had to do nothing - it was automatic. I've asked 100 of my so called-conservative friends who supposedly love tax cuts and to a man deny it happened (provably untrue). Obamacare offered any American who needed it a tax subsidy - a "tax cut" but again conservatives contradicted their own passion for tax cuts. This lack of reality makes an imposter like Trump possible and a danger to our well being.
51
Uncertainty in markets is man-made. There is no Magic Eight Ball determining what markets decide, though such pretense of sentient, man-made financial institutions relieves some politicians of their responsibilities to the governed.
Investors get greedy, anxious, or frightened, especially, it appears, when industries and institutions are too deregulated to benefit a few (history is supposed to teach us something) and when elected officials purposely create disorder, a rare occurrence in this country historically, but well-documented in world history as well as natural disasters impacting every corner of the planet over which no one has control.
I recall Candidate Trump promising both disruption and so much economic success we “wouldn’t believe” it. In my view, we cannot naturally or logically have both. Disruption leads to uncertainty, which leads to disorder, which leads to chaos. Market collapses are man-made.
Attacks on a Free Press, attacks on the rule of law, attacks on the Constitution, attacks on human rights, government corruption and possible criminality, purposeful ignorance of man-made environmental influences and literally permitting fraud through financial deregulation, and decisions or posturing increasing market uncertainty are all disruptions happening simultaneously. One can surmise such a multitude of purposeful disruptions have an aim. If accurate, the US economy the US as we know it are in big trouble unless human courage and values prevail.
18
Putin is dancing.
A Soviet leader hardly could have outlined a better scenario than Trump has created for Putin:
A rift between the United States and NATO allies over the future of the alliance.
A U.S. demand that Russia be returned to the Group of Seven , as Russia continues provocations in Ukraine.
A U.S. threat to pull out of the World Trade Organization, and a round of U.S.-imposed tariffs that severely weakened it.
A U.S. president abandoning human rights, accepting Saudi Arabia’s murder of a U.S.-based journalist and embracing repressive leaders around the globe.
A U.S. president creating a rift with Europe over Iran (the nuclear agreement) and climate change (the Paris accord).
A U.S. president embracing as “very honorable” North Korea’s brutal dictator without any tangible concessions on nuclear weapons.
A U.S.-launched trade war that, the Federal Reserve said this week, is partially responsible for cooling worldwide growth.
Lost confidence among Americans in elections, the Justice Department, the FBI, the courts and the free press.
And the loss of a bipartisan consensus against the Russian threat. Forty percent of Republicans called Russia an ally or friend in a Gallup poll, up from 22 percent in 2014.
94
@William
Russia has widely financed the GOP for years. Every Republican recipient is subject now to Russian blackmail .... https://www.dallasnews.com/opinion/commentary/2017/12/15/putins-proxies-helped-funnel-millions-gop-campaigns
2
@William
I'm sure he took copious notes during their one on one love fest in Singapore and Helsinki.
I could only imagine how it made
Putin extremely happy with his 72yrs old apprentice.
Plus how easy it was, he whispered him sweet nothing about the tapes and voila he handed him his instructions and off he goes.
Never think you can escape Russian rule, silly me.
4
The elites still don’t get it. You moved manufacturing overseas, outsourced good jobs and bought in millions of workers on H1b, opt, l1, h4, j1 and so on at the expense of American workers. They struck back with Trump and brexit. The average joe has not much to lose and a lot to gain with rampant nationalism. You can not reason and show long term fancy charts to people who don’t know where their next months rent will come from.
As for the stock market, it will bounce back, unlike 2008, GDP is still growing and not negative.
13
I have never understood how a candidate who promised to keep wages low and cut taxes for the rich was a solution for the “average Joe.”
He also made impossible promises about bringing back certain industries instead of helping workers adjust and retrain for 21st century jobs, which could have included high-paying green jobs.
3
@Realist
So you're saying that the Democrats moved jobs overseas? And you call yourself a "realist"? It was Republicans who moved jobs overseas, and it's Republicans who give jobs in the US to undocumented workers, because they are powerless and easier to cheat. Greed drives these moves and greed is at the core of every Republican policy.
1
@Realist. Exactly what are they gaining with nationalism?
1
What if it’s not (just) Trump? What if the financial markets are doing what they are (theoretically) supposed to do and incorporating new information accurately? It seems to me that this fall has seen a drumbeat of new evidence and analysis showing that climate change is likely to hit sooner and harder than had been thought, and that the probability of averting the worst damage is lower than had been estimated. That means we are poorer than we thought we were. By at least “4000 points on the Dow.”
16
@Phil Prince
You can't just take out a US president from the equation like that.
Let's suppose that you're right and that all of a sudden stock markets would start to have a stake in long term thriving of the planet (which I don't see how they could ever do, as by definition, betting on what will happen the next day is what makes you win on Wall Street, even if what happens is bad for the country).
In that case, it's precisely the fact that the US is withdrawing from the Paris Climate Agreement and strongly encouraging the fossil fuel industry to pollute as much as possible that they would have to deal with and dislike ...
The kind of stock markets you're talking about, however, where those of the 20th century, when what was traded on Wall Street was real, material stuff, made in plants and traded by boat and airplane and trucks etc.
For decades now however, most of the money circulating has to do with financial transactions, NOT with the "real" value of things.
So you can buy stocks betting on the economic collapse of an entire country (Greece, for instance) and then win tons of money when that economy indeed collapses, today ...
That's why well-designed Wall Street regulations are now more important than ever. And yet, the GOP is once again doing the exact opposite...
27
The elimination of regulations, the absence of a requirement for making an orderly market that used to be the domain of the floor specialist, and the proliferation of computer driven high frequency trading, which now accounts for about 70% of volume companies combined with the hundreds of ETFs (exchange traded funds) that buy bad stocks with the good and vice versa, all contribute to the volatility that results in huge swings in the indexes. There is a difference between investing with analysis and thought and pushing a button to execute a trade based only on the fear and greed factors that impact decisions.
This like the person with money who says someone with experience is needed to manage it. When the day is done, the person with the money has the experience while the person with experience has the money.
2
The American constitution was written on the assumption of one point of failure at a time - we are having two points of failure, President and Congress. Congress will recover some of its weakness in the New year. That may cause more chaos in the Administration. The President, the chaos in chief, may not be able to handle this intensity and the presidency may collapse. The stock market is trying to measure the consequence of that state of American market - a collapsed Presidency. The events that are emerging from Trump’s Twitter storm are the early signals and this irrationality will increase in the New year. If three systems collapse - justice system, homeland security and military command discipline, the catastrophic shift in the stability of internal economic structure may reach a Tripping point. America can reach an unknown state of internal security and any stray event can cause the riots and civil strife that can not be controlled by security forces. Market is trying to assess this unseen situation - it is not standard economic reaction of the market.
17
@Kalyan Basu: The US Constitution was written without any conception whatsoever of what technology would be commonplace today.
The Trump formula for dealing with an economic crisis is obvious. Replace both the Fed chairmen and Treasure secretary with family members.
24
@HL
That's not dealing with an economic crisis, that's trying to deal with a ratings crisis.
This presidency, as Trump himself constantly reminds us, is all about his "ratings".
To keep them high, he needs Fox News' 24/7 "alternative facts" machine, but he also needs people in his cabinet - and wherever a president can nominate someone - to accept to make the world believe that they buy into the narrative that he "feels" he has to construct to keep his ratings high, so to actively sell it too.
I'm quite sure that the only reason why he wants to withdraw all US troops from Syria and Afghanistan is because it allows him to make his voter base believe that the "war on terror" is over and that he defeated ISIS. And he needed that "message" after he saw that Fox News would reject his government funding bill that didn't contain money for the wall, because his agreeing to Congress' stopgap bill sent the message "we're losing", which logically required him to do something sending the message "we're winning" again.
He's clearly way too cynical to believe that real, effective government is somehow possible or required.
And THAT is why picking a president with a strong moral compass and personal moral values is SO important, contrary to what Evangelicals came to believe. You cannot separate spiritual virtues such as honesty, hope and courage from taking the right decisions (conservative or liberal) for this country. And merely being anti-liberal is NOT a virtue...
24
@HL
more simply, blame, blame, blame
@Ana Luisa
"You can't separate spiritual virtues such as honesty hope and courage....' etc. You would think that those who claim such a close relationship with Jesus as their personal savior would know that in their bones.
I seem to remember the market taking a dive around the middle of Bush 43’s first term, with no response from the Administration that made much sense. I wondered then if it was a strategy: force the market to tank now so it will be in recovery mode by the election. Then take credit that the economy is coming out of the hole you put it in. Seemed to work too.
Hmmm.
3
One of the things that prevented a stock market crash in Dec. 2016 was that his cabinet was just a typical GOP establishment cabinet.
That tends to include competent people at Treasury, Defense, Homeland security, etc., and corrupt people at the EPA and sometimes Justice and Education.
"Competent" means: taking objective information and advice from experts into account.
With Mattis gone, most of those people have now left the government, and unfortunately they've not been replaced neither by competent GOPe people nor by competent, more "populist" people. They've been replaced time and again by people who accept Trump's decision to turn this WH into a full-time propaganda machine, and to take Executive decisions ONLY in function of what he (and he alone) believes will keep his "ratings" among the GOP voter base high (in constant consultation with Fox News, of course, because no tweet can create an alternative facts world on its own, even not presidential tweets, you do need a 24/7 "news" network to fabricate such a bubble).
And it seems as if the markets are now finally getting it, and starting to measure the consequences.
So will the GOP (a brand standing for tradition and calm) now reject Trump? As long as Fox News supports him, that would turn the GOP base against the entire party, and only create more chaos.
In that case, stock markets can only hope and pray that no major crisis requiring competence at the WH will break out. But stock markets hate uncertainty...
20
So there’s a confidence fairy after all? Who knew?
13
I love Paul's use of "sanity clause."
It's a perfect for the time of year, perfect in describing the lack of logic and reasoning of anyone who voted for him and perfect in describing the absolute mess that is the tRump administration.
23
@Marla
Of course, the good doctor borrowed the term from the Marx brothers A Night at the Opera," as heard here:
http://www.marx-brothers.org/whyaduck/sounds/opera/sanity.wav
'sanity clause'? 'edifice complex'? Someone's enjoying the holiday spirit.
It's hard to resist reading the stock market movements as "statements" on one thing or another, and only after the fact.
"markets have decided..." fill in the blank.
It's almost as sketchy as, "The American people want us to..." fill in the politician's preferred ideology, to justify doing whatever it is they want to do.
There still needs to be a 'fill in the blank' name to run against Trump in 2020 from the democrats. And for me, there's a gnawing absence of vision and clarity coming from the dems.
Who will beat Trump in 2020, and bearing what message? As long as Trump keeps hammering on divisive issues like 'immigration', it splits the opposition and prevents the forming of a unified front.
I don't like Trump's policies or his presidency, but he's way shrewder than he's given credit for.
4
@Oh
If the media stops giving oxygen to the potus and his antics and cover other opinions, even hunt for them, perhaps we will stand a chance. What is the need for press corps at a white 'washing' house?
You gotta' hand it to President Obama.
The economy and the stable investment platform he created that helped the Market was very resilient.
It remained vibrant and bedrock steady two full years into electoral president bone-spurs' mentally unbalanced tenure.
But not even President Obama's rock solid economy was stable enough to withstand the onslaught of putin's beard forever.
Even a mountain is ground down by erosion eventually.
73
@Victorious Yankee
Actually, the 2009 CBO analysis of the combination of the bank bailout and Obama's Recovery Act predicted that it would lay the foundation for an entire decade of steady economic and job growth. And as what is mostly the case with CBO calculations, they turned out to be right.
No president, however, can create economic growth for decades and decades to come, and regardless of what subsequent presidents do to the economy and the country.
Any fully developed, Western capitalist economy needs a steady hand at the helmet.
Not small hands feverishly pointing fingers at everything that moves 24/7 ...
25
@Ana Luisa,
"No president, however, can create economic growth for decades and decades to come."
But FDR's 'New Deal' did just that.
When the GOP-crafted Great Depression ended thanks to the 'New Deal' (And The Glass-Steagall Act) we had no recessions at all.
Zero.
Zip.
Nada.
That is until hollywood reagan began acting like a man and was elected president.
Since that fateful day we have had one recession roughly every 7 years.
Honest presidents can indeed build decades long growth.
Republican presidents cannot.
7
With Trump, the stock market highs are his doing.
When the highs disappear, he says they're leveling.
Of course, a crash would be the democrats fault, according to his tired bluster.
One thing I've learned. If anyone has unbridled ambition, is willing to con, and accepts help from a hostile enemy like Russia, anybody can be president.
Also, I heard that in the 1950's, when Joe McCarthy was finally dealt with, his approval rating was still very close to where Trump's approval is right now.
30
There is no there, there. this How is it that wages continue to be stagnant for decades and people still go thousands into debt at Christmas? The answer is “easy credit” borrowed at usury rates from 15 to 19%.
People losing real income year after year who borrow more can not dig themselves out of such crushing debt. The banks know this.
18
@RVN ‘69
Which shows why it's absolutely necessary to have solid bank regulations in place, because if not banks will tear down the entire economy if that's how they see they could increase their margin of profits.
And yet, this GOPe-Trump administration has been doing the exact opposite for two years now.
13
@Ana Luisa - If the banks could not engage in criminal lending they would at best break even.
So, late stage capitalism will continue its inevitable march.
The party of cherry-pickers hasn't learned that screaming about what is wrong with government and governing are two entirely different matters. That's ok. We are getting a mulligan( to use one of Trump's favorite type analogies) in 23 months. McConnell's attempt to pack the judiciary with sycophants is already backfiring.The judiciary may turn to the right but their point of view is tempered by getting into law school and having a successful law practice, save Whitaker. We just need to hold on and wonder if the rubber meets the road whether we will deal with a "Seven Days in May" situation.
12
I hope you are right about the judiciary. I have next to no confidence in Alito, Gorsuch and Thomas. Kavanaugh--who while clearly primed to do real damage-- is still, I think, an open question if there is any line he will not cross.
2
With economic geniuses like Trump, Kudlow, Mnuchin (currently on holiday in Mexico), Stephen Moore, Mulvaney and Hassett in charge what is there to worry about? LOL
57
@John
You captured the real problem “ in a nutshell “.Thanks!
1
"In 2008 and 2009, it mattered a lot that officials of both the outgoing Bush administration and the incoming Obama administration responded competently and intelligently to the financial crisis."
Somebody needs to buy Krugman Nomi Prins book, "Collusion: How the Central Bankers Rigged the World".
WHAT IF we are stuck with a situation where errors just compound previous errors?
4
@Janet Hanson
What Obama did was bailing out the big banks. He did so because they were all failing simultaneously, whereas GDP was in a very rapid downward spiral.
Last time that happened, GDP went below -10%, which means a Depression. And that happened because the government refused to step in.
And that's why economists across the political spectrum agreed that the government HAD to bail out the banks, knowing that GDP was already at -8% and 700,000 people were losing their jobs each and every month.
Moreover, a bailout isn't a tax cut or taxpayer money just given away. It's a LOAN.
And as soon as Obama took over from Bush, he and Geithner attached some serious strings to those loans: they had to be paid back, and soon, and WITH interests.
Which is what happened. So taxpayers ended up winning millions of dollars here. And more importantly, it indeed stabilized the markets, and then together with the Recovery Act laid the foundation for a decade of solid GDP and job growth (which would have happened faster if the GOP wouldn't have blocked all Dem bills since 2010).
So if you disagree with that Krugman quote, what would your arguments be?
78
@Ana Luisa
TARP was a W program. Obama continued it. Obama did bail out the auto industry, which was needed.
@Ana Luisa
Obama did nothing for people underwater from illegal mortgages. He let millions lose their homes while bank Execs prospered and blue collar workers continued to lose ground. He didn’t make the banks eat any of those loans, putting the human cost of the collapse squarely on the backs of average people. This is a big reason why Trump defeated Clinton.
3
What do I think?
There are contractors and subcontractors within this who are high up as they are in Columbia and Honduras as they were in Nicaragua and Panama no Wall is going to stop, only hide and distract.
I think the broadband installation within the United States is benefiting only a very few directly and that there are forces within acting as contractors and subcontractors with influence over those we elect who should be running the thing but would rather invest in favored private companies.
I think Putin has been given green lights and an open door in Syria.
I think Social Security, Medicare and Medicaid are being smeared by crummy jobs most don't even exist that will result in another service those elected to manage scrapped while companies favored they will be investing in to manage our money the same as insurance companies do and banks work against us.
I think that disasters create havoc those in government choose private interests over renewable energy resources or alternative means favoring old dirty fuels and dirty wars that just create more havoc and invoices to taxpayers.
I think that military mercenaries such as Erik Prince create a competition for services that create sidebets that detract from the best interests of the country and largest invoices to taxpayers.
I think the plan is there is too much democracy and too much credit and that there are influences in government to eliminate any relief so that they can get your money.
6
Trying to divine the actual condition of the markets in particular and the economy in general, either to support or contradict Krugman here, is missing the point. Regardless of how you want to feel about the economy or the stock market, you have to admit that Trump and his administration haven’t handled the last few weeks very well.
If you work in crisis management you know that how you communicate your solution to the problem is just as important as actually solving the problem itself. Rushing to get CEOs to acknowledge their banks had money ahead of the holiday - evoking the run on the bank scene from It’s a Wonderful Life - was comically amateurish.
Implementing a policy, defining it, convincing others to go along with it, deploying it and adapting, is painstaking work that takes a lot of time and thought. It’s incredibly hard to prepare for a market crash, and we’ve seen government officials do much better with much bigger crashes in the past. Does it look like Trump and his team have put in that time?
Put another way, would you let Donald Trump and his team manage your retirement savings right now?
42
In other words, if some crisis arises the Trumpists will probably do the wrong thing. Trump always does the wrong thing. That's why I sold my stocks before the recent market crash. The market dislikes uncertainty above all else. With Trump, that's all you get.
32
In the lead up to the last election, Congressman Mark Sanford of South Carolina was critical of The Con Don and The Con Don was in turn was critical of Mr. Sanford. The result was that Mr. Sanford had a primary challenge and (even thought he is a former Governor of South Carolina) lost his primary to run for Congress. The seat was won by a Democrat in the 2018 general election.
But what I am getting at is: republican congress members and senators who wish to be reelected are afraid to buck The Con Don because he might get them defeated in their next primary. What it amounts to is that many republican congress people and senators are afraid of the republican base or the Trump base. This base remains faithful to The Con Don because some of them base their support on racial/cultural/religious antagonism which has absolutely nothing to do with policy or government action. He hates who they hate.
But there is also the large body of the trump base who get their news exclusively from FOX, Rush, and company. What we have in this country is effectively government by Fox and Limbaugh. This was demonstrated this past week by The Con Don's actions on the border wall. At first he was ok without wall funding but Fox, Limbaugh, Coulter, and others said no. The Con Don quickly got in line and got the right talking points.
I guess the question is: How long will Fox, Limbaugh, Coulter, and company stick with The Con Don?
61
@Aubrey - Or rather, how long are we going to let unelected talking heads dictate our domestic and foreign policy?
6
Tom, if we are going to take the long view, we have to acknowledge the gap between the rich and the rest of us has grown too wide. Further, that the winds of change do not carry the necessary seeds to reverse this fact. Capital always wins, so Government must always be diligently re-balancing, lest the whole pie be owned by them.
28
@Bill Barbour - it's so simple, but what could save us all just won't happen, it seems. The government must raise revenues and it'll have to start with progressive tax rates on high income earners. But this is too simple, right? Oh, it's so much more complicated, right?
12
How progressive do u want it to be? I’ve always wondered about the answer to how much is that famous “fair share” that people like to talk about. The only definitive bit of the answer has been more than me”. When everyone is ready to really contribute it can all work out but until then, the math just doesn’t work.
1
So much opining, so little evidence. Could it be that stocks are falling and millionaires are unhappy because millionaires with stocks worry that Trump's antics will result in his defeat in 2020?
2
True, the stock market is not the economy of the present. But it is often a predictor of an economy yet to come.
18
There is a crisis looming if only because we have been on an upswing in the business cycle for a very long time. When the cyclical downturn hits the wealth imbalance could easily cause a tip over into credit lock up which could result in another great recession or worse. I think Prof,. Krugman himself has pointed this out in other writings. And should a sever recession hit these guys are totally unready. They may even try to balance the budget as Hoover did while they call on the churches to feed the people. It will be bad, but it might sent the Republican party back into the wilderness for another fifty year term. That would be a good thing.
36
@shiboleth - I’m not sure that very many churches are going to be able to feed the people. The churches I am aware of face (1) dwindling membership since Gen Xers and Millenials and the like are not church-goers and (2) decreasing pledges because the members they do have are settling into fixed incomes.
12
@Karla Cole - I think the "churches" have untapped, unknowable treasures we can't imagine. No worries there.
1
@willw
Churches are sitting on millions in real estate.
For them to cry poverty is absurd. Throw in the artwork and gold and they are very comfortably off. More than their parishioners especially the ones reliant on fixed incomes.
1
"In 2008 and 2009, it mattered a lot that officials of both the outgoing Bush administration and the incoming Obama administration responded competently and intelligently to the financial crisis."
I read take this comment and recall that it was the reaction to the financial crisis and the bail out of Wall Street at the expense of Main Street that set in motion the Tea Party which was subsequently repurposed by the right wing 0.1%'ers that was integral to creating today's mess.
19
Wasn't it Koch brothers money that funded the creation of the Tea Party and wasn't it that same money that dictated the change in direction when the original goals proved nonsensical?
I’ve been told that it takes about a year and a half to see the impact, on the economy, resulting from the policy shifts that occur due to changes in an administration.
Up to now, markets have been buoyed by policies initiated by Obama with a slight boost from last year’s tax cuts. Only now are markets starting to react to Trump’s (lack of) long-term economic policy.
55
So why would Trump fight with the Fed?
Probably most of his business loans from overseas banks are tied to the Fed funds rate on a variable rate basis. A rise of a quarter percent means an increase in his payments. If of course he actually makes payments. A know dead beat.
54
@Art Seaman Thanks for reminding us that Trump’s self-interest (notably financial self-interest) is the most likely driver of Trump’s behavior. Makes absolute sense.
8
@Art Seaman
EVERYTHING Trump does is based on how it affects him financially.
Accept that simple fact and it's easy to understand why he creates chaos. It's to attempt to hide the fact that his every motivation is to gain financially.
6
Merry Christmas and thank you for the bon mot "edifice complex".
A bit ironic that Mnuchin phones-in from the much maligned Mexico to issue his bizzare statements to the banks.
For those of us whose retirement income is in market-based securities, the stock market is the economy. My hope for 2019 is that we don't have a repeat of 2008-2009 with this crew of incompetents tweeting away from their palatial get-away spots.
101
I was in NYC during 9/11 can still smell the smoldering plastic, phones, Internet, endless confusion and nothing seemed worked.
A stock market collapse is something that neither circuit breakers, hour long stops and bank holidays can prevent.
Our top priority should be to keep all talking channels open in our congress and world-wide
ready for whatever.
I read that Mrs. Merkel and Putin have met repeatedly for many lengthy talks at some German private castle.
Any talks are good.
Locking down is the most dangerous and without the top cream of the crop generals on the watch in DC, that is really scary.
16
"But let’s play devil’s advocate here: Does all this Trump chaos matter for the economy, or for the stock market (which isn’t at all the same thing)? At first sight, it’s not all that obvious."
A closer look at the connection between the economy and stock market may show that as the market drops, as it has, we who have 401K's and retirement plans that are tied to the market will suffer a huge drop in our assets. This might then cause a huge drop in confidence across the board.
Talk about trouble? We ain't seen nothing yet, just add the political turmoil around the world and combustion seems more than possible.
We saw this in 2008. A friend whose retirement depended on his stock investments lost $1.8 Million. It ruined his life as he was too old to start over.
58
@Harold
I’m sorry, I don’t understand your friend’s dilemma. Stocks were down about 40% to the trough in early 2009. So your friend’s $1.8 million loss suggests he started with a little less than $5 million. So he had about $3 million left. Stocks are up 3.5x since the 2009 trough, so he should have about $10 million today.
14
Funny how when the market was going up, before Pelosi won back power, it was just the rich benefitting. Now that it’s turned, it all the working class getting hurt. Just the way it is these days I’m afraid. My team can do no wrong and the other side is evil.
1
@Matt Not all investments are the same- he could have lost it all, or most of it and then sold at the bottom.
2
Things will get interesting when "essential" government workers decide, likely after several weeks without pay , to invoke "No Pay, No Work" and walk off their jobs.
When air travel, border crossings, and ports close down with nobody to operate them (or we just let them operate unattended) we will then notice what a government shutdown really means.
53
I think the billionaire investors like Soros have walked out with their investments in stocks after making profits. Those with their retirement portfolio heavily in the stock market are holding the almost empty bag. This is the time those timing the market will return for bargains. So not to sell at a loss will be my advice. Don't believe the fear mongers and the perceived ghosts. Believe in America and the American judgement. To the never Trumpers I will say I hear you but you hear me too, every day that Hillary is not the president is a good day for America. Just because the Trump changes are highly complex even for Nobel laureates that does not mean future chaos. It just means future uncertainty. Which is always the case. No one has a crystal ball or the third unbiased eye into the future.
3
Yes, that must be what’s happening. Trump is such a super genius 3-dimensional chess player that the highly educated and experienced people who are sounding the alarm are actually just overreacting because his brilliance is beyond their grasp.
My eyes have officially rolled up so high into my head that they’re stuck that way.
59
@Girish Kotwal
By mentioning both Soros and Hillary in your statement you show your hand, as it were. And the comment about Nobel laureates indicates a forgiveneness of all that Trump undoes, does, by his daily actions and Twitter news. If you don't believe that Trump equals chaos, regardless of the stock market or the future, that's terrific for you. Many of us worry about the daily dose of bedlam and behavior from Trump.
6
@Girish Kotwal The fact that you attempt to disparage George Soros and Hillary Clinton in a vain attempt to deflect attention from trump's ineptness is telling about your comment. Neither Soros or Clinton have anything to do with this conversation. There is nothing complex about trump and Paul Krugman has precisely described the trump with whom we must contend for now.
5
The Trump crew and the Republicons are either incompetence or evil. Or both!
44
@Bos Both.
1
@Bos Is there any doubt in your mind but that they are both? Exacerbating the gulf between haves and have nots is surely evil. Removing safety nets, same. Releasing more toxins into our atmosphere and onto our planet is stupid, and evil and deadly. And that's just for starters....
2
One supposes we should be grateful. It will be when the Republican donor/puppeteer class starts feeling real pain and bleeding, in their stock portfolios, (they are indifferent to the genuine article suffered by human beings,) will moves be made to hobble or remove Trump.
We've seen Trump's behavior with a docile, agreeable Congress. That changes in January and what Trump's reaction will be with serious, motivated opposition in control of the House is anybody's guess. It likely won't be rational. That might speed up the process of hobble/removal.
I predict that 2019 will be a very interesting year in American history.
32
@Ralph Averill Old Chinese curse: "May you live in interesting times!"
Paul? How W and Obama handled 2008 may have been intelligent, but only if you were part of the economic elite support team.
Every one of those hundreds of billions of dollars would have made it to the banks vaults if first given to the little folk.
29
@Dennis Speer If you read an older editorial by Mr. Krugman in which he recalled the 3 days on which the economy stood on the brink, you might remember that the infusion into banks allowed the country to stay solvent. The U.S. was suffering from a liquidity crunch, and without the intervention, the entire economy would have collapsed. Sure, one wishes that the infusion of lucre came with the caveat preventing huge bonuses to bankers that same year, but the fast action is what prevented our economic world from collapsing.
16
@Dennis Speer - the government seems to think they got the money back with interest.
@Dennis Speer If the money had been put into consumers hands through immediate credting to every social security card number with a caveat that it was only good for 7 days so must be spent the money would have immediately gone into the banking system through check and credit card transactioins, as well as directly transfered to pay off card debts. Instead of going to the banks directly it could have come through the population instead of getting locked up in bankers hands to somehow dole out to consumers.
"Put an unstable, ignorant, belligerent man in the Oval Office, and he will eventually do crazy things."
Merry Christmas your self, Dr. K. and thanks for the above observation. I think if ever were a week to prove your theory, it's been this past one.
I love the fact the whole Federal Reserve committee voted for the rate hike. But I love even more that Jerome Powell raised the rates in a brazenly defiant way that told the president in no uncertain terms who's in charge of interest rates.
It must be driving Trump crazy not to be able to fire the man he appointed so recently.
This man should not be alone in the coming days, in case he does something irrational and dangerous. Please, Florida, send some Mar a Lago friends up north to keep him company.
He should look them in the eye and ask, "aren't you glad you're now a lot poorer?
63
@ChristineMcM
@ChristineMcM
''I love the fact the whole Federal Reserve committee voted for the rate hike''.
Be careful as about these interest rates Paul Krugman might be on the side of Trump?
Like with ''The Trump Boom'' should have gone on and on and on...?
3
Yes! -
Trump promised to destroy our ''gubernment'' and ''the people'' erected him for this purpose - but he isn't done yet - totally -
So -
Merry Christmas - too.
21
Perhaps someone will be selling this bumper sticker:
PENCE for PRESIDENT 2019
I've thought Trump's Republican support was solid, but with Trump behaving as if he's fending off the Deep State and can trust nobody (and therefore can't run a normal administration), perhaps twenty or so Republican senators might put him on notice that unless he begins to behave like a normal president, they might vote to convict, if the House impeaches.
20
@David Martin - Trump will not be impeached. In my opinion, it will not get that far. He will walk away when the heat gets to be too much for him. We will let him go so long as he never runs for any public office again.
4
@David Martin. Don’t hold your breath. Trump basically owns the GOP. The Republican establishment is well aware that their only true constituency is their rich donors, and while they provide tons of money, they only have but so many votes to give. For that, they rely on Trump’s rabid base. If the Republican Senate votes to impeach the President, then it’s pretty much Game Over for their political careers. No, they’ll wait until Trump self-destructs, or until we face a true crisis, like an economic collapse. Until then, you can count on the GOP to vent privately and cower publicly.
2
@willw Most people in that position would do as you describe, but not DJT. Impeachment is the only way we will rid ourselves of this nightmare, kicking and screaming as he's dragged out the door.
These people convinced themselves it was okay to let Trump run the country - even though they didn't trust him enough to loan him money after seeing what he did with his businesses.
They figured the tax cuts and deregulation were worth it. What's the worst that could happen?
Well reality is calling - there's this check that needs to be cashed.
The one good thing that might come out of this is that people stop saying government should be run like a business. You'd think our MBA president George W. Bush, of the trillion dollar deficits, would have been lesson enough - but no. Mr. "Stable Genius" was going to turn things around and Make America Great Again.
How's that working out, Mr. Dow Jones?
225
@Larry Roth
Good time to bring this up - the current drive to turn the Post Office over to a private business. Really, really a bad idea. The Post Office is a service; not a business. It provides all Americans the same access at a low cost to each. Put the Post Office in private hands and there will be vast areas of our country under served and the cost to each person will be higher. Some organizations are not a business and should not be run like one.
69
Of course, Trump, like king Canute, can claim extraordinary power over the market, (which nowadays is really the world market), but we know that capital accumulation has dynamics and contradictions of its own. People like trump can create friction or accelerate those, but can’t be regarded as cause. “ The healthy economy” is a mirage of financial wizardry. The slowing of the emerging markets, the debt of non financial corporations, the inability of the working class to meet their own needs, and so on are factors- both symptoms and causes - that create an overdetermined situation. The question is whether this will end up in a more or less severe crisis -ruin, stagnation, ongoing social decomposition, and desperate political responses based on narrow visions of this global reality. We can safely assume the short cut of selfish and simplistic nationalistic answers to this world problem. Trump is one good example of it. But it is a dead end alley.
However we need to transcend the narrow vision of national borders and act together to prevent catastrophic climate change, ensure the provision of clean water and food, and reasonable employment to all abled bodied people. Under the current arrangement we can only continue the cycle of boom and bust of bubbles, wealth concentration on one pole and extreme poverty on the other, unemployment, and desperation along with political parties that act on very selfish and short term bases.
14
@Enri - lots of ideas here but what should be done? Which door do we open, which door do we close? If we go down this path or that can we retrace our steps and start again? The short term answer which will get everybody's attention and should calm the markets in the long run: raise the income tax rate.
2
In our hyperconnected world, something could go wrong at any moment and cause a melt down. Think about a series of cybersecurity attacks on Washington, London, Tokyo. Think about a crazy nuclear attack on any one great city. Or, better, just think how much damage an unhinged president can do to batter a perfectly good market and instill fear and lack of confidence in government management. That is, think about the last few days. And think of the attacks and poor judgement continuing for 20 more months. Any sane person, even at the beginning of this administration given its chaos and vindictiveness and lack of any kind of administrative structure, would have long ago decided that the stock market was not a safe place for one's hard earned retirement money or investment money and would have moved to safe government bonds. I am not at all certain that the Republicans can influence Trump to change his behavior, most likely because he is incapable of change. He has too many personality deficiences. It looks to me as though his behavior will continue to wreck anyone's confidence that the ship of state can be righted with him at the helm. So, I suspect the market will continue to suffer and also the economy. Obama left that economy in a good state of health, Trump is destroying it, just as he is destroying everything else. Even the Supreme Court by appointing ideologues.
70
When the smoke clears and the investigation ends we'll all find out that the Kremlin does indeed own Trump, not because of any tapes, but because they own him financially. The incoming congress needs to subpoena his tax records as their first priority.
We'll find out that they have a strangle hold on his assets as part of their loan contracts.
That also explains some of his behavior.
146
I’m not sure tax returns will show the details of loan contracts.
8
@CitizenTM - you may have an important legal point there, but Swersky is correct to believe the Russians have influence over Trump. Follow the money (if you can).
10
@CitizenTM but they would reveal with whom he has contracts.
5
National rivals/adversaries of the US would presumably welcome the chaos and unrest arising from a financial meltdown. A combo of interest rate hikes, trade war dislocations and maybe something unforeseen like a major mideast oil patch war could produce such a meltdown, and that in turn could result in civil unrest, The possibility of violence exists, as radical rightwingers are encouraged to get arms and ammunition and be ready to get violent. Meanwhile, the safety net is being tattered ever more by rightwingers. Maybe the House victory will put a stop to that. But it's still a potentially dangerous national predicament.
20
As long as Mr. Trump's administration is so integrity-challenged, it probably makes sense to wonder whether the chaos is a smokescreen/diversion of larger malfeasance or itself part of the plot. Graft or grift? Or several of each?
A percentage of a lot of retirement funds evaporated this month. Straightforward taxation would be much easier to experience emotionally, and it would be more efficient.
22
as prof. Krugman says: "as the bumper stickers don’t quite say, stuff happens. And if and when it does, the people who would be supposed to deal with it are the gang that can’t think straight. Merry Christmas".
make no mistake about this scenario : the key words are : the GANG THAT CAN'T THINL STRAIGHT.
14
Paul’s point is that IF a problem arises, THEN the Trump administration will drop the ball.
As for the shape of the general economy? Well it’s all tea leaves and entrails. The daily so-called explanations in the evening news for the Dow or the S&P 500 are as solid as people’s reasons for picking a lottery number. In the meanwhile, subterranean tectonic forces silently move on and occasionally cause a tsunami without warning.
There is where Paul’s nightmares begin!
8
@John Brews ..✅✅ - you mean like continuing to operate on the basis of a deficit?
"edifice complex" Perfect!
On January 3, the checks and balances under the Constitution will be restored. The intellectual class and the media should make an effort to educate the public on the inevitable disputes that will be generated by the House Majority.
The President is consequential under the Constitution but I think the days of using tweets to make policy are numbered.
It will seem dull, so it will take great reporting and analysis to show how the problems and policies addressed by the House of Representatives are important to the future of American society.
From what I read, the Congress wants to move on a "green new deal" including our infrastructure.
U.S. infrastructure in poor repair: As a large country, the U.S. global competitiveness depends on transportation and logistics efficiency.
However, the U.S. is facing large financial challenges national debt and large annual deficits, and must choose the most cost-efficient options to meet the demands for operating and maintaining a national transport system.
In 1987 Senator Moynihan was remarkably prescient in foreseeing the condition of the U.S. transport infrastructure, and his committee agreed that we could not continue with the same old system but should use our existing rights-of-way to build a 300 mph, Maglev network for trucks and passengers. www.magneticglide.com It caught my attention and was the greatest idea in energy, environment, and economic efficiency that I heard in 60 years of service.
18
@james jordan - while you're at it, how about building another tunnel under the Hudson between New Jersey and New York City, maybe two more.
2
@james jordan : I like this the best :
"the days of using tweets to make policy are numbered".
i'd add : a few more things are numbererd as well ...
1
Trump was unqualified to be president not having experience in governing and lacking knowledge of foreign affairs and economics.
Compounding those deficiencies as an ego maniac Trump does not listen to advisors or his cabinet.
He behaves like a corporate CEO who believes that his advisors' only role is to agree with Trump and tell him how great he is.
This is not a recipe for effective governing.
59
@david a corporate CEO trending like trump by this point would have been removed by the board of any company that cared about its long-term survival.
More likely the board would never have hired someone like trump to the CEO position in the first place.
71
@morphd
Sorry to contradict but companies hire CEOs like Trump or worse every day. That is why America - and to a slightly lesser extent - the world is in the (economic) mess that it is.
32
I was discussing the attitude of many CEO's toward employees of the CEO's corporation.
Why Boards of Trustees appoint someone CEO or retain him /her as CEO is a different discussion.
Many CEO's have the attitude.
"People who succeed in my corporation listen to what I say and then say something supporting my position. If you disagree with me go work somewhere else."
Unfortunately if you have an incompetent CEO [or an incompetent president of the US ] that yields a disaster.
3
Uncertainty drives market instability.
Predicting the impending interplay between the executive branch and a divided legislative branch given past dynamic substantively increases perceived uncertainty.
These types of psycho-social dynamics have the potential to morph into a self fulfilling prophecy. This is particularly exacerbated by media frenzy.
Be careful of unintended consequences that flow from circumstances that are wished.
3
The post-Lehman shock bull market was bound to end sometime.
I despise Trump as much as the next guy, but I’m not ready to blame him for the recent market drop, just as I don’t credit him for any of its rise.
That said, it is interesting that in my lifetime, markets seem to boom and bust under (respectively) Democratic and Republican presidencies.
20
Reuters reported today "that China's soybeans imports from the US plunged to zero in November marking the first time since the trade war between the world's largest economies started that China, the world's two largest soybean buyer, has imported no U.S. supplies." and also reported " China bought 5.07 million tonnes of soybeans from Brazil in November, up more than 80% from 2.76 million tonnes a year ago, data from the General Administration of Customs showed...Meanwhile U.S imports plunged from 4.7 million tonnes in November 2017 ..."
53
@Sally: Doesn't matter. US farmers will be bailed out with tax dollars from the blue states, and they'll continue to support the Republican party unconditionally.
2
Maga at its best.
@Sally
Looks like those Iowa soybean farmers may have to rethink their Trumpian fervor.
1
Mr. Krugman's summary of market performance is inaccurate. When Trump was elected, the market didn't just rise. It exploded. The Dow rose 30% while the economy was growing 3%. And so an adjustment was inevitable. And that's what we got this month. The Dow is now up 10% from the time Trump was elected. Market technicals suggest that as long as growth remains steady, the market will level off and the current instability will end.
Mr. Krugman tells us that market analysts have lost faith in Trump's economic stewardship of the economy and that bad news is around the corner. But the economy is doing just fine -- record low unemployment, steady growth, and measured interest rate growth. Mr. Krugman factors in a panic factor. Panic investors lose their pants. Mr. Krugman needs to buy some pants.
4
@michjas The markets advanced after DJT's election for two main reasons. First the uncertainty of what a Clinton administration might mean for the economy and market was eliminated. And more importantly the promise of tax cuts for corporations and the 1% fueled stock prices as lower taxes>higher earnings>higher stock prices.
During the last few months investors have heard company managements talk about uncertainty they face because of Tariff Man's volatile threats/policies. Companies I talk to are pushing out capital spending and hiring plans until they have a better idea how things wash out. They have also bolstered inventories the last few months to create buffers against possible higher expenses from tariffs. This artificially boosted the economy earlier this year, as did the tax cuts, as did the shift to allow faster accelerated depreciation, as did the boost in the U.S. deficit. 2019 was never going to look as good as 2018. The increased in volatility at the presidential level is accelerating the uncertainty. Money markets rates of 2-3% are looking pretty good now. I hope finding a bottom will not be too painful.
19
@Dave S
I find those who tell you the two economic reasons the market went up and 25 economic reasons why the market will go down to be suspect. Apparently you believe that your conversations with "company management" allows you to project a decline in growth rates. The consensus view is different:
"The U.S. economic outlook is healthy according to the key economic indicators. The GDP growth rate is expected to remain between the 2 percent to 3 percent range. Unemployment is forecast to continue at the natural rate. And there isn't too much inflation or deflation."
Nobody really knows where the economy is headed. But I'll take the consensus view over the view of you and your buddies.
2
@michjas nonsense - big stock buybacks from the tax giveaway bloated the market - exploding deficit - little wage growth - around 2% GDP estimates - with so many people working why such tepid growth? its over.
3
My worry with Trump is what destructive actions - intentionally destructive - he may take if faced with the possibility of criminal prosecution, impeachment, or defeat in 2020. In these cases, he would remain on the job for several weeks to a few months.
Given his mental state, who can discount the possibility of Trump starting a war or, a terrifying possibility, launch a nuclear strike before his forced removal from office?
62
I’ve been saying this on these pages for awhile now - lame duck governments (Federal and State) are amongst the worst elements in our constitutions. No laws should be passed and no executive power beyond defending the country - defined as breach of borders or attack on our soil - should be given to an outgoing President or Governor. Voting should be on a Sunday in September or election day declared a major holiday and the new government sworn in 2 weeks later.
1
@DBman
No one will allow Trump to launch a nuclear strike unless the US is directly attacked with nuclear weapons. Nixon was on the edge at the end of his presidency, and no one would allow him to launch a nuclear strike. This sort of comment is irrational and irresponsible fearmongering.
1
@Blue Moon
The Washington Post had an op-ed this week explaining that "no one will allow Trump to launch" is a widespread, but erroneous assumption.
There is no legal mechanism for doing that, and any ad hoc scheme to prevent such a launch is illegal.
Yes, of course some improvised (albeit extra-legal) action that prevented something would be better than the legal alternative....but the point is we need to change the law, get a new president or both.
2
Just wait 'til those year end statements for 401K's start showing up in the mail. I expect a run to the exit and further big losses. Trump will have to find some way to blame anybody but himself and there will be additional pain. It is a long way from over.
32
@JimB - imagine you are that person's financial advisor and you have to explain why he or she now has to pay capital gains taxes.
The near collapse in 2008 of our fundamental financial institutions and industries brought us to the edge not of recession, but of depression. Soup-kitchen, buddy-can-you-spare-a-dime depression. As Professor Krugman notes, it was quick action by officials of the Bush and Obama administration that pulled us back from that edge.
It is impossible to imagine Trump orchestrating such needed action were a financial crisis of the same kind as 2008 to occur, as Professor Krugman points out. Not having the faintest idea what to do, Trump would confine his efforts to blaming everyone except himself for the crisis.
Is there a better reason to hope, pray, and work to see that Trump’s tenure of office can end soon?
52
If Trump is the "very stable genius"(VSG for short) he claims to be, then there would be no panic. On complex fiscal and trade concerns he would sit with his knowledgeable advisors and heads of state, and engage in reality/fact based discussions, arriving at consensus/conventional based conclusions.
But we know that Trump is not a VSG, and he often gets trapped in discussions with those who are much closer to the mark than he is. In such a setting he is unable to win the day by barking out Trump Facts, so he becomes the polite, docile, agreeable, nodder, on the outside, and the raging Twitter addict on the inside. When the proceedings end his first need is a Twitter fix to vent his rage.
Just a theory.
34
As I am fond of saying, behavior remains consistent over time. I think that whatever happens in 2019 is going to push Trump closer and closer to the edge. If he were wise, or at least smart, he would resign now before the stuff hits the fan. But as it is, he will throw as many people in front of the bus as he can before he careens over the edge, including Don Jr. and Eric, and then take as many other people down with him as is humanly possible. The wheat will be separated from the chaff, and hopefully, once we come out of this on the other side, the United States will be a much better country than it has been in the past thirty years.
29
@Jackie - all right up to the part about the kids. I don't think he will let them suffer. He'll just throw pardons around until he can't.
There is a saying "garbage in-garbage out" For Trump this can be amended to be "chaos in-chaos out" Trumps mind is in chaos mode all of the time so we can't expect nothing but chaos to follow from his actions
The nation should now accept the fact that the mental health of POTUS is as least as important as their physical health In my opinion it is more important FDR functioned as POTUS despite debilitating health. JFK's back issues caused him great pain yet he was a fine leader in crises
Compare them to the paranoid amoral Nixon he prolonged adolescent Bush who allowed Cheney to be the defacto Commander In Chief and now the multiple personality disordered Trump who follows the advice dictator Erdogan of Turkey rather than his Secretary of Defense
Future presidents should have to have a clean mental ill of health as well as a physical one There are many objective personality assessments that could be administered to POTUS candidates just as there are physical ones
If there are police officers who have to have personality assessment in some cities and even priests why not a potential Commander In Chief
Remember "crazy in-crazy out"
21
If someone, say djt, wants to further enhance a real estate empire or shower gifts on the master of the universe donors, creating a massive asset crash is a great way to do so. First he gave them the tax cut, so they are flush with cash, now phase 2. Destroy value in takeover targets. The spoils of an economic war
15
"There isn’t an obvious crisis-level threat looming at the moment."
Hard Brexit. If it happens, the crisis won't start here, but how the US responds will either serve to contain the damage or amplify it.
26
The economy is floating on a vast sea of debt. Ultimately that has to mean something.
23
@John F Not entirely. As long as the debt is issued in dollars and backed by the U.S. government, default is impossible. Even if there is some kind of investor confidence crisis, in the last resort, the Fed can buy its own debt. (It already holds substantial bond reserves -- look it up.) This would trigger some inflation but would not crash the economy.
Further, every dollar of debt is a dollar of assets. To say that "the US is in debt" -- that is, the entire country including the private sector -- is false. Our net foreign debt position (the sum of foreign obligations we hold versus what we owe) is pretty close to zero. Most of the "debt is bad" things that are said in the media are myths.
The risks of high public debt are mainly in the following areas:
1) Interest on the debt (the cost to service it) grows faster than the economy can sustain. We aren't even close to this point; it'd require doubling or tripling the real value of the debt.
2) We suffer some kind of domestic catastrophe that shuts down enormous amounts of production capacity, causing a hyperinflationary cycle and forcing us to borrow in other currencies to sustain demand.
There is no plausible scenario for either of those to happen.
7
Corporate debt indeed- at least 50% of non financial corporations are rated BBB
The simple answer is Trump has proven a determined, single minded person can wreck a nation and a world order even if he is only president of the United States. To be honest, he has had the help of a motley crew of greedy, power hungry and craven opportunitists, so he cannot get all of the credit. Conducting his personal “diplomacy”, he has fractured decades old alliances in Europe and Asia that insured peace while embracing and empowering tyrants. Using business skills that have landed him in bankruptcy and in court, Trump has started trade wars with friends and enemies, encouraged the breakup of the European Union, and walked away from economic agreements while trying to enrich himself. He has sabotaged ever repair his appointees have attempted to make whether it be to the economy or foreign affairs. And he has made the topic of politics verboten at family holiday gatherings. Trump has made his mark; let’s hope it isn’t indelible.
89
@DO5
Don't for get the wrecking ball he has taken to the environment and to making progress on climate change.
3
Powell continued the same policies as Janet Yellen, of slow but steady rises in interest rates. Of course, Trump criticized her and Obama for rates that were too low. Now, that interest rates are 1% higher, he wants to fire Powell, whom he appointed. As banks are starting to pay savings and CDs up to and beyond 3%, investors may feel safer with FDIC accounts and some bonds than with stocks which involve risks. Hence, one reason for the decline in the stock market.
33
@Alan J. Shaw
Anyone paying attention would know the Fed had literally no interest rates, and quantitative easing one, two, and three during the Obama presidency. When did slow and steady start? How many rate decreases did Obama get? How many rate increases did he incur? You are obviously not aware of what has happened over the last 10 years, especially the last 2.
2
Since Trump personally drove the markets higher after taking office, there's no need for him to be concerned now that they are down: he simply needs to do whatever it was he did, again!
32
@Kerry Leimer
He can't ride Obama's fumes anymore.
He can only ride his own fumes.....and they're fatal.
133
@Kerry Leimer
What he did was an unnecessary tax cut that has provided few benefits to sustain the real economy, while exploding the deficit. This is a one-time trick.
If you take a look at the trend line for the Dow you can see breaks at nomination, election, anticipation of the tax bill, passage ... then a break in Jan-Feb as every serious investor (as opposed to speculators) started asking, "Where's the beef?" The past month has been the market's sustained "Oh! S4!+" moment.
1
Algorithms running the big money may be panicking over an inverting yield curve and darkening national outlook. They know Trump likes to break things and the Administration has no contingency plan other than martial law.
23
Eh Seems likely we’re not quite done winning yet. Trump will pull off a landmark deal with China and the lovely Trump economy already way overdue for a recession will triumph yet again. Merry Christmas to all! And god bless our president!
2
@Bill All of Trump's la-dee-dah deals so far have been lacking in luster, substance, or remarkable results.
China is much more disciplined and stubborn than Trump is, so whatever landmark deal we get will be likely half a loaf, just like the NAFTA-II deal was.
Simply put, Trump has solved almost no problems nor created any institutions worth remembering. The object was to create a good climate for business. Instead, everyone, including the captains of industry, are truly afraid of this president because of his half baked ideas and lack of real progress on any fronts.
2
The trade war is mostly to blame for the current economic turmoil. When Asian stocks began falling in the summer due to trade tensions, and European stocks in the fall, it was a clear warning that America was next. The world economy is interconnected and we cannot cause trouble in another major country without it coming back to bite us.
This year reminds me somewhat of late 2015. In fall 2015, Chinese stocks and currency fell significantly because of concerns about Chinese growth. Although the US economy appeared resilient at first, the Chinese slowdown ultimately dampened growth across the world and caused a mini-recession in the United States in late 2015-2016 (arguably leading to the election of Trump). The Fed ultimately had to pause interest rate hikes to take pressure off China.
The experience of late 2015 should have been a clear warning to everyone that a slowdown in any major economy ultimately hurts the entire world. This year, we are repeating 2015 in a much bigger and more avoidable way.
29
@Aoy
As an example of how interconnected the major economies are, the various Central Banks often coordinate their actions.
6
The Trump presidency has made it clear that the U.S. legislators must start working on legislations that:
1. Make it expressly legal that a sitting president can be indicted for crimes commited before or during his presidency.
2. Require a presidential candidate to produce his tax returns.
3. Removes an Attorney General from overseeing the work of a Special Counsel.
4. That prohibits a president from appointing his children to serve in the White House.
5. That prohibits the Senate from using the "nuclear option" when confirming supreme court candidates.
1196
@Thomas
I'd like to add one more to your list and put it first: Abolish the Electoral College or, at least, find a way to make it irrelevant. We need to find ways to improving the lives of all citizens, but the Electoral College makes a mockery of our democratic ideals by giving too much power to too few.
181
@Thomas: 6. Eligibility to even be considered a candidate for POTUS predicated on passing the background check required for the highest security clearance.
139
One more: must finalise his FEC filings from all previous campaigns before (a) taking office, (b) returning to office, and/or (c) running again, for anything.
57
I am experiencing true schaden-freude. Freude that I (and so many others) were right after all. Schaden at the thought of where all this might lead.
55
This chaos presidency seems designed to erode international confidence in the stability and trustworthiness of America. In his business career Trump used the technique of being "crazy like a fox" to keep adversaries, competitors and associates at a disadvantage, unable predict or prepare for his next move. He still seems to think that coercion, threats, and surprise are effective weapons in international and domestic affairs. They are not.
As the rest of the world watches America implode, there are bound to be those in the rapidly emerging new world hierarchy who will see the opportunity to challenge the Dollar's privileged role as "reserve currency" to the world.
America's loss of prestige, power and trust under Trump's isolationist doctrine will only hasten the rise of alternative currency choices, and the decline of the almighty dollar, a fitting irony for an administration so devoted to enriching the few at the expense of so many.
85
Paul Krugman's simple drawing depicts the stock market as reasonably valued:
https://twitter.com/paulkrugman/status/1075015107581763584
Paul Krugman @paulkrugman
Stock prices are a mystery wrapped in an enigma lathered with derp. Still, remarkable that after-tax profits soared with the tax cut, but stocks actually down at this point
https://fred.stlouisfed.org/graph/?g=mv9H
5:09 AM - 18 Dec 2018
2
@Nancy - "Stock prices are a mystery wrapped in an enigma lathered with derp." = Nice!
I am glad you are so sure there isn't an obvious crisis-level threat looming at the moment. That's exactly what the cognoscenti thought in the roaring Twenties. But they ignored the growing disparity in wealth and incomes between rich and poor. After Trump's tax cut for the wealthy some think the wealth/income disparity is even greater today than it was at the time of the 1929 stock market crash. I know Trump is not thinking about it, but if you and others like you are not thinking about this historical disparity, then it is probably a crisis-level threat.
56
@James Ricciardi
Our government has gone over the edge. None of this is normal. The authoritarian thing was in place before Trump took office and the republicans were accepting of it. The republicans want something different than democracy and they have prepared the government for it. I wouldn’t be surprised if the next step is the military moving to power.
32
@Mark If that were to happen, it would be through the coordinated efforts of the military, on their own. It wouldn't be Trump's Army, Navy, Air Force, Marine Corps or Space Force. It would be the Army, Navy, Air Force and Marine Corps of the United States of America. The best Trump could muster up would be a few thousand undisciplined armed MAGA citizens and maybe some local police, and that would not be enough to defeat our military forces. We still have the best in the world.
All in all, it would be a fairly peaceful coup, and then the admirals and generals would hand the reins of power to somebody competent to act as President until the next election. I have every confidence that those in the military have more patriotism than most of the remaining staff at the White House, and if they had to take control, they'd do the right thing and it would be a short-term solution.
8
@Jackie You mean like in Egypt?
1
Well Paul I agree. The world economy is too large to be significantly effected by trump's shenanigans. The bear market will pass and the world economy will continue its slow but steady growth into 2019 and beyond IMHO.
Happy Holidays and go renewables one and all.
11
Paul Krugman's stock market valuation graph redrawn for clarity:
https://fred.stlouisfed.org/graph/?g=mv9H
January 15, 2018
Corporate Profits After Tax * and S&P Share Prices, ** 2014-2018
* With inventory valuation and capital consumption adjustments
** Dollars and Indexed to 2014
1
@Nancy
That is the most frightening graph I have ever seen.
The Donald is not a functional representative of constitutional democracy. Whatever his other legal problems, therefore, he should be impeached by the House of Representatives and brought to trial by the Senate; further, the proceedings there should be broadcast - live - to the nation. The Constitution was written to account for moments like these. It should be employed as advertised. There is no reason for daily bouts of mania to destabilise the Country's governance.
138
@Wm Conelly And since sunlight is the best disinfectant, when Mueller finally is ready to submit his report it should not only be provided to Congress, to be reviewed in secrecy, but should simultaneously be provided to every newspaper and media outlet in the nation. The people have a right to know.
11
@Wm Conelly
How about Article 25? He's crazy as a loon and that should be provable by professionals in that field.
1
The person I would like to read about current stock market values would be Robert Shiller. Shiller has newly examined stock market values over more than a century, but the system of valuations now being used by him puzzles me:
http://www.econ.yale.edu/~shiller/data.htm
What would a reasonable market value be? Using the work of Shiller, I do not know.
Brad DeLong has just written about the stock market, but the analysis is not clear to me:
https://www.bradford-delong.com/2018/12/note-to-self-americas-equities-are-worth-20-less-than-they-were-worth-three-months-ago.html
5
@Nancy I think I do understand Brad's basic point (even though I am not an economist, and he sometimes loses me). CAPE at the present uses a denominator that is based on a 10 year "average earning" that includes the awful earnings of 2009. While you expect to include the kind of recession that might be expected in a 10 year interval, 2009 was much worse than that. Brad adjusts for it, somehow, replacing it with a more usual value.
Doing that gets him right around the average CAPE over history. With the still low interest rates we have now, the CAPE model would expect higher than average stock prices - which we don't (anymore). So he thinks that at these relative prices, stocks would be at bargain levels (if we had sane government).
His final comment that he understands the current CAPE, but not the one from three months ago is thus pure snark about the administration. Trump is, in his mind, worth a substantial discount in the market price.
3
"But growth is slowing, and as the bumper stickers don’t quite say, stuff happens. And if and when it does, the people who would be supposed to deal with it are the gang that can’t think straight. Merry Christmas."
I like the way you got the "Merry Christmas" into the picture - used in anger. As the radio station used to broadcast: "And the hits just keep on comin'".
20
Well, if we do have a consumer economy, I'm not so sure everything is rosy. Soybean and other farmers are taking big losses, tariffs are driving prices here up and are driving small companies out of business, wages are stagnant with the $.02 tax benefit, car manufacturers are moving plants overseas, companies are converting to robots, the 5% will be hit with tax increases when the new cap on deductions of state taxes kicks in, a very large percent of Americans have no financial safety net, and as interest rates rise they are cutting into the housing market. So I think the main thing driving this market dive is the realization that Trump's promises are actually empty, and the reality of lean pickings for the consumers who drive our economy. Trump drove six companies into bankruptcy, he's just applying his tried and true approach to our country.
166
@Eero-There's also the problems of a tax system geared to favor the rich and enshrine inequality, falling business taxes putting more of the burden to fund the government on taxpayers, increasing poverty because jobs don't pay enough, a bloated DoD, policies enriching weapons manufacturers, rabid deregulation and privatization of public resources, and earned safety net protections put on the chopping block. In Trump/Fox News world the finger is always blaming evil others and never acknowledging the truth. Hopefully reality will be kinder than in 2008.
29
@Eero
Let us hope our country is not his seventh!
2
I must disagree that it's all perception and not reality. The truth is that "Tariff man" Trump's trade war with China has succeed in damaging China's economy. But the "easy win" has turned into a global nightmare as the blowback from China's downturn has ended the Goldilocks economy here and around the world. Markets are tumbling which augurs a recession or worse. With an erratic, unstable man in the White House lacking any semblance of a "sanity clause," it's clear that unless the new Democratic House asserts control over tariffs as the Constitution requires that the global economy may very well continue to tank. The real solution is to do what businesses do in this situation--replace their Chief Executive Officer.
208
@Paul Wortman -- You have an interesting perspective. Americans tend to mostly focus on the economy of the US, with the world economy's state considered peripheral, a factor but not determinate to how the US economy does. Europe struggled for a time while the US was chugging along in recovery mode under Obama. Trump inherited that momentum, claimed it all as his own doing, and now disowns the downside of it's inevitable slowing down. Meanwhile out in the world economy, "Tariff Man" Trump has lobbed bombshells into the global trade system with tariffs aimed at many significant world markets - steel, aluminum, everything China... these disruptions, with the US a large enough part of world economic activity to disrupt it, risk pushing the rest of the world's economy, in many places less robust already than in the US, into a recession. And recessions tend to spread, particularly when the disruption behind them has its roots in the US. If Trump's "Trade War" triggers a recession in e.g. China, Asia, Europe, or all of them, its hard to see how the US escapes being caught up by it. Trump could very well pitch the whole world's economy into recession with his unconsidered, inept bungling, attempts at economic policy.
7
Paul Krugman has in the past suggested looking to this relationship between corporate profits and the S&P:
https://fred.stlouisfed.org/graph/?g=mv8Z
January 15, 2018
Corporate Profits After Tax * and S&P Share Prices, 2014-2018
* With inventory valuation and capital consumption adjustments
(Indexed to 2014)
5
I remember the days of Greenspan’s “irrational exuberance”. We currently have chaos and stupidity, but without the exuberance. The only path for the markets now is south.
Trade partners are afraid to deal with us if commitments are included. Military allies realize our strategic commitments mean nothing, and that Putin and bin Salaman are listening in. Even our movies are horrible.
Kennedy boosted us out of Cold War doldrums. Carter showed us compassion, Obama, truth.
We need all of those qualities now in one man or, better, woman, and I don’t mean you, Pence. Soon.
406
@Mike Roddy
Not all our movies are terrible. Manchester by the Sea is one of the best movies I have seen in a decade.
4
@White Buffalo
Thanks for the tout, I'll check that movie out.
2
@Mike Roddy I agree Pence would be terrible. However, as we are suffering under a Trump cult of personality phenomenon I don't think a President Pence would inspire quite such slavish devotion. So Democrats' prospects in 2020 would be much better. But of course there is always the ever present right wing election fraud to worry about.
8
Can anyone doubt that Done the Dishonest is a mad man, he exhibits the symptoms of having rabies, must have been bitten by a mad Republican.
It is baffling to see two out of five voters supporting him in any matter, and yet they do. What kind of mind, kind of personality is attracted to someone who behaves as he does? Not to enumerate all his personal characteristics, he fits all the definitions of a psychopath with paranoid characteristics, a narcissist who believes his feeling are valid observations of reality, who has told us he knows more about everything than the best experts in their fields.
We can all see and hear just what a proto human being he is, devoid of any human qualities, yet elected to the highest office in the country, by like remnants of human evolution. We will all pay the price of allowing this remnant of protoplasm to infect us with his special brand ignorance and ineptitude, dragging us all down with him.
those who are his voting core are the ones who will be hurt the most by this.Those with 401K retirement plans, and funds that are being fled from by the fearful. Anyone who relied on his judgement to invest is a fool, join the rest of the fools who voted for him, you have been had by your own avarice and greed.
135
@David Underwood:"you have been had by your own avarice and greed"
The greed is spread across the political spectrum.
A lot of non-Trump supporters are/were also in the market and mutual funds.
4
@David Underwood
What kind of mind, kind of personality is attracted to someone who behaves as he does?
That my friend is the million dollar question. It has to be some deep emotional response because looking at him rationally, and based on the evidence, one would never be attracted to him as a leader.
But we have to remember that others like him have done the same thing, Hitler keeps coming to my mind. A man who was not afraid to act like he knew everything, ran his mouth to the masses delight, yet was the architect of his empire’s downfall. I just read recently how his generals said after the war they lost in 1940 when Hitler chickened out and stopped the panzers when they could have scooped up over 300,000 British soldiers at Dunkirk. Rommel and Guderian were livid. Yet everytime there was a defeat the generals got blamed, replaced, shuffled around and the best ones, who didn’t agree with him, removed. The yes men were all still there at the final defeat. Sound familiar?
4
The economy pretty much runs on its own. The Fed, Trump's latest foil, has a great impact on it because it controls the discount rate banks are charged and the supply of money, which is liquidity. Both are very powerful tools and both are used to stabilize the economy. That means they try to minimize the unemployment rate and hold inflation at bay. The stock market, basically does what it wants.
The government can help to shape the environment the market functions in. From 2000 to 2008, Bush 43 turned the other way and the market invented unregulated financial scams that caused it blow up and we all paid for it.
Currently, Trump goosed the markets with unnecessary tax cuts that blew up the deficit and have forced the Fed to raise interest rates to compensate. That has pushed the DOW way up and the markets are now compensating for these excesses, as it always does.
That's what is happening now. It's called a bear market, and it will pass. When it bottoms, a buying opportunity will emerge. What will not pass is the irresponsibility that caused this up and down ride in the first place, and that is Trump.
The economy was doing fine under Obama. Growth was slow but steady and sustainable. Trump pushed on the gas and coupled with his trade disruptions and alliance breaking, the world is on the verge of a global recession. Markets always compensate for these kinds of excesses.
685
@Bruce Rozenblit
Currently, Trump goosed the markets with unnecessary tax cuts that blew up the deficit and have forced the Fed to raise interest rates to compensate. That has pushed the DOW way up and the markets are now compensating for these excesses, as it always does.
[ This must be justified at least to me, since Paul Krugman has not used such an analysis to my knowledge. Please do continue. ]
9
@Bruce Rozenblit. The economy runs on many things, including investor confidence and consumer sentiment. Things can be chugging along smoothly and then something can happen suddenly to change things for the worse—and it’s possible for things to go from pretty bad to much, much worse. An ill-informed, unhinged, chief executive with a clueless, tone-deaf Treasury Secretary is a recipe for disaster. Markets have never had to “compensate” for what we’re seeing now.
107
@Bruce Rozenblit Very good comments. The Con Don is such a dunce. The Obama economy was working fine. We could have left taxes as they were and the economy would still have grown and we would not be increasing the deficit at record levels. In fact, in the Obama economy, the deficit was declining a little.
37
The Party of Greed has always known that their bedrock Greed Over People platform is a fundamentally untenable and unelectable platform.
To compensate for their psychopathic avarice, the Republican Party traffics in stupidity in order to hold office.
This works well for electoral purposes when Republicans can easily dupe the masses into voting for millionaire welfare by feeding them fear, loathing, racism, Jesus and beautiful lumps of clean delicious, nutritious coal while rigging the vote into 'elected' office.
The problem arises when actual governing is required.
Republican politicians, who have no real interest in any public policy whatsoever beside personal and corporate greed, have zero tools to govern besides 'tax cuts' and the elimination of all rules (anarchy).
Additionally, Republican politicians immerse themselves so deeply in all of the cultured stupidity that catapults them into office by rural, red, religious, regressive Republican states that they actually become stupid by osmosis.
Twice in sixteen years, the Party of Stupid has rigged a demonstrable Moron-In-Chief into office due to Grand Old Propaganda's disinformation campaigns to reject thoughtful Democrats and to embrace GOP Presidents who could barely muster a coherent compound sentence.
For the second time since 2008, a Grand Old Phony President will have wrecked the economy because the Party of Greed demands stupidity in governance.
The Republican Party is Frankenstein and must be destroyed.
1693
@Socrates
You left out the other GOP pillar of government: punish our enemies! (We al know who they are).
"Government is the enemy, and we'll prove it." And they do whenever they con their way into office.
191
@Socrates
Don't forget the stock crash of 1987, as well as the savings and loan bubble-burst.
130
@Socrates to be clear. All the repubs are interested in is empire building, continued wealth building for the 1%, and convincing the 99% these GOP policies are good for them. I still don't get how they get away with it. Can someone explain that to me please?
163
I was hoping that in 4 years the stock market might stay at 2016 levels plus maybe 3% for inflation. I'm starting to get nervous....
17
Between Fox News and the domination of talk radio by Limbaugh and the like, a large percentage of Americans receive almost nothing but conservative Republican propaganda in lieu of news. Concentration of media ownership is one of the worst effects of uncontrolled capitalism. It helps explain the Trump floor of 40% in polling. Until even the oligarchs - the Murdochs, the Sinclairs etc. - become truly alarmed and start changing their message, the level of support from his base won't change much either.
1347
@writeon1
Indeed. And it was under Reagan that the broadcast rules requiring equal air time for opposing views and limiting local monopolies were weakened or done away with altogether. Today we are reaping the rewards of that deregulation.
840
@writeon1
Absolutely.
To add to what you and Peter have written, this is the best argument for media ownership decentralization and the Fairness Doctrine that can be made. Media outlets need to be treated like public utilities, and regulated accordingly.
Also, I should mention that while Paul is correct that the economy and the stock market are not the same thing--certainly the stock market has been known to rise when corporate profitability is perceived to be enhanced by tactics that hurt the 99%--one of the few silver linings in the Orange cloud may be that when the campaign-funding oligarchs who reap all those profits perceive that his Unfitness' behavior is threatening that gravy train, they may just tell their Republican lickspittle toadies to mount a primary challenge to Orange 45. If things get bad enough, they might even be told to seek a 25th amendment or impeachment solution.
(Usually, I've very vocal about the need for public funding of election cycles, with no big private or corporate contributions allowed, but right now we might need the leverage of oligarchs, unfortunately.)
34
@writeon1
What the greatest majority of people who watch Fox News don’t realize is that except for small segments here and there, it isn’t news, it’s opinion. And opinions are like derrières, everybody has one.
However, all those cuties (well, many are cuties, not all) on Fox News are more photogenic than many other people and are more willing to run their mouths. Only difference. Their opinion is worth no more than anyone else’s so they need to to be scrutinized carefully, not just accepted as presented.
39
What really keeps the right in line behind Mr.Trump is fear of the left. It's pretty well understood that they're just waiting for a chance to make a hard left turn when they next get into power. Mr. Trump may not be everybody's idea of a great president, but at least, as Mr. Krugman admits, his behaviors won't have much effect on the economy. The same cannot be said for the intentions of his Democrat foes.
5
@Ronald B. Duke - The voters on the right fear the lies they've been told about what the left MIGHT do. The voters on the left fear what politicians one the right attempt to do and do. The right fears fantasies they tell themselves. The left worry about reality here or fast approaching.
282
@Ronald B. Duke
The "Democratic Socialist", Sanderite wing of the party gets most of the notice in the press, but a majority of the 40 seats won in the midterm House elections went to moderates, in some cases recent ex-Republicans like Rouda. This should be a signal to the Democratic Party about the optimal candidate and platform for 2020, if the overriding objective is to unseat Trump.
The Trump base might be afraid of a hard left turn, but that fear may be as unrealistic as their hope for improvement under Trump.
62
@Ronald B. Duke You mean the "hard left" that creates jobs and lowers deficits? Because I'll take that any day.
44
While the stock market is reacting to Trump’s volatility, the stability of the domestic economy is threatened by the extreme concentration of wealth in the .1% and stagnation or decline of the bottom 90%. The public overestimates all President’s influence over the economy—he controls only federal discretionary spending and proposes tax policy change, a tiny part of the budget. Obama bailed out banks in the ’08 financial crisis, and Trump cut corporate taxes. Now the federal debt prevents either, and consumer buying, driving 70% of the domestic economy, will almost certainly follow incomes and decline. The major political issue, which Trump is aware of, is whether the coming recession happens before the 2020 election. Though he won’t be to blame, he’ll lose support and possibly the election.
21
No sanity clause :)
Too bad this isn't a real Marx Bros. epic instead of a Fake reality episode - if we were watching the Marx Bros., we could look forward to the food fight scene with the inimitable Margaret Dumont, and some comic relief to what the GOP'ers set in motion in 2016 by not insisting Agent Orange from KAOS produce his tax returns to secure a place on their ballot.
We're now at the point where there is no choice - if we're to be a nation of laws - other than for Dems to divert their attention and the country's energy into removing the clear and present danger of Un-indicted Co-conspirator 45*.
Meantime, Americans should watch for the flailing actions of someone trying to create so much havoc that it will be worth essentially 'paying him off' to GOP'ers.
After all, CEOs leave all the time with golden parachutes, and we already know His Unhinged Unraveling Unfitness looks at this whole POTUS gig as a way to increase his 'brand'.
The CNBC poll of millionaires pretty well explains why the Orange Jabberwock doesn't want to see his friends down at Mar-a-Loco; they might be reminding him of his remark after the tax cut last year about how much richer he had made them all.
107
@R. Law - Expanding and expounding: Havoc 45* succeeded in taking a slap at McConnell and Senate GOP'ers this week by reneging on the budget deal they passed after he told McConnell he would sign it - he pushed out of the newsfeed entirely the Senate resolution that the Saudi Crown Prince was behind the Kashoggi murder of a permanent U.S. citizen journalist kidnapped (because it was a Saudi consulate, not a Saudi embassy) from Turkish soil and disposed of.
It would be a pretty safe bet that the 'our favorite president' has been looking to see which of the 22 GOP'er Senators up for 2020 election voted for the resolution, so he can turn his base on them.
And one of the more telling moments was when Very Stable Genius intoned 'the shutdown will last a long time', as if he were some Banana Republican dictator who had dismissed the legislature which he found inconvenient.
Americans should be on guard to not accept as 'the new normal' this 3rd government shutdown under Alertthedaycarestaff Donny, same as we have been on guard against a slow-motion Nixon-esque Saturday Night Massacre.
Those remarks, combined with turmoil at the Pentagon this week from Jabberwock Syria and Afghanistan policy moves whilst Russia has troops inexplicably massed on Ukraine's border, are red flags.
39
@R. Law
Beautifully written speaking truth, thank you.
May you and all have a wonderful and loving Christmas in spite of absolutely no Sanity Claus despite what whomever needs to believe (belief systems unfortunately Trumping Twittering reality and truth). And may we all have a (hopefully not disastrous, me praying though a non believer) fulfilling committed to being constructive New Year!
The Paradoxical Commandments:
People are illogical, unreasonable, and self-centered.
Love them anyway.
If you do good, people will accuse you of selfish ulterior motives.
Do good anyway.
If you are successful, you will win false friends and true enemies.
Succeed anyway.
The good you do today will be forgotten tomorrow.
Do good anyway.
Honesty and frankness make you vulnerable.
Be honest and frank anyway.
The biggest men and women with the biggest ideas can be shot down by the smallest men and women with the smallest minds.
Think big anyway.
People favor underdogs but follow only top dogs.
Fight for a few underdogs anyway.
What you spend years building may be destroyed overnight.
Build anyway.
People really need help but may attack you if you do help them.
Help people anyway.
Give the world the best you have and you’ll get kicked in the teeth.
Give the world the best you have anyway.
Dr. Kent M. Keith
10
@R. Law
Kashoggi was not a US citizen -- he was a legal resident
Trump says we are respected -- so respected that minor countries like Saudi Arabia feel free to murder our residents.
7
I can't believe that any other western democracy would have allowed Trump to get into office. Where did the system break down? The Electoral College was supposed to be a fail safe to stop someone like Trump, but instead, somehow we thought it a good idea to take a chance with this guy or at least the republicans congress did. What did they get with Trump that they wouldn't have gotten through Pence. Just not getting it.
'No Sanity Clause." Very clever
47
@Mark - They got his super-loyal base, which is needed to keep from being "primaried" out of office.
20
@Mark - Another western democracy is struggling with something similar. This is our Brexit.
21
@Mark
Even cleverer:
His edifice complex (yes, we are in a Greek tragedy)
Pointless wall (see the Twitter picture of the slats)
I wonder what more gems are hidden in this piece that I missed?
1
Of course things will get worse: a 3.7% unemployment rate is absolutely unsustainable. And when stuff inevitably happens and the you-know-what inevitably hits the fan, The Donald's reactions will also be entirely predictably: initial denial followed by a surplus of blame. The latter will be directed first at the Fed, then at the Democrats, then at his fellow CEOs and finally at everyone else (excluding only the ignoramus who glares back at him in the mirror). Dear God, if the Apocalypse is truly on its way please just get it over with...
648
@stu freeman,
You have been missing for awhile now; some of your comments were addressed to Richard Luettgen, and it is good to welcome you back to hear your views of the Ghost of The Present and the Future.
What did I hear earlier, but a hostess exclaim 'But I do not care what is happening "Elsewhere", it does not concern me and so what if I am selfish'! Silence is Golden and why venture that America is linked to 'Elsewhere'. You know that it is time to leave the table of overabundance pleasantly and politely.
You come home to greetings here, there and everywhere, but there was one from Europa that made this reader smile at the conclusion 'Wishing you the happiest of New Years, but it is going to take a miracle!'.
The foundation of the pyramid is still solid but bricks are starting to fall from the top; the president appears to be fighting to survive our current state of affairs and is out of it.
The G.O.P. to send in our economists and form a panel soonest. There is a thread of infectious fear to be detected in the air and it could turn into panic.
Establishing a strong, steady and stable financial forum of our finest economic experts would be all to the good. When our wallet is hurt, down goes the cradle.
40
@stu freeman
While the blame will be misdirected, maybe even humorous, the actions he would take to try to look leaderlike and smart are what’s really scary. He demonstrates over and over that he has no understanding of consequences or collateral damage his words and decisions cause. This was evident during his campaign.
Having the wizard behind the screen pulling levers and pushing buttons to try to save his kingdom and reputation, with no reasonable advisors left, is a terrifying thought.
23
@Miss Ley
Miss Ley, yes, it is good to hear from Stu Freeman again, but speaking of "silence is golden" let's not re-awaken the Oracle of NJ. There will be more than enough "I told you so's" to deliver to Trump defenders in 2019 as it is ...
Marry Christmas and Happy Mueller New Year!
21
"So why do investors seem to be losing their what-me-worry attitude?" Many Trump supporters have the same "what-me-worry" attitude as the investors have had. Elections have consequences. Trump's capriciousness is one of them. This is finally affecting the economy. We won't need a wall. We'll have Trump to ruin things.
There is no clause in our Constitution that says we can force a re-election or turn Trump out of office if he loses the confidence of his party or the voters. Our system was set up for stability. Trump however, is not stable unless one counts his consistent back and forth as stability. He is not dependable. The only things he happens to be are untrustworthy, incompetent, unable to work and play well with others, and selfish in the extreme.
The Grossly Overbearing Popinjay party is as selfish as Trump. Fools that they are they decided in 2008 to have a huge temper tantrum over the fair election of an African American male as president. Rather than basking in the glory of working with the man to improve America they decided to work on destroying America for every person who wasn't rich. What they did was not patriotic. It wasn't productive. It certainly didn't come under the category of serving their constituents. Not attempting to put up a decent candidate to fight Trump was further evidence of their unmitigated desire for power.
Even if Trump is impeached or somehow removed from office we have to contend with Pence. Will he be any better?
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@hen3ry
No. He's differently equally bad. Besides, he was intimately involved in the campaign and managed the transition. He has been vocal about his support of Trump since. He needs to go down with Trump.
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@Rima Regas
But we have more of a chance to reach 2020 intact if Pence takes over -- and then the nation can vote him out of office.
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@Peter Czipott
Why do you think that?
Some of the worst people were put in our government by Pence. Seema Verma, for example, used to work for Pence in Indiana, undoing their healthcare system. She has been, rather quietly, doing that at the federal level.
Pence wouldn't blow up the boat like Trump, but he'd still rock the boat violently enough for everyone who is in the 90% to feel it. The Kochs wouldn't expect any less from him.
Then, he's a true believer. If you think Trump's SCOTUS picks are bad, think about who Pence would put in place.
Trump is the face of the GOP. They're all as bad as he is.
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It’s hardly surprising that so many Republicans support Trump - all they hear in their media bubble is the far right’s side of the story. Screaming “fake news” doesn’t change reality, and blaming scapegoats for the inevitable result of bad policy doesn’t solve problems.
We need to return to teaching critical thinking and propaganda-spotting in our schools. It won’t help us today, but may help in the future.
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@John M
Of course we do, but the party that hates public education has a created a nice feedback loop--the more we skimp U.S. history, civics, and higher math, the more likely to produce an electorate that buys bad soap, as some Labour pol once said.
While American history as taught to boomers at assorted grade levels was still not panoramic enough about indigenous people, the residual harm of slavery and the problems of colonialism, there were also two factual articles of faith: the progressive income tax and the reassuring thought that extensive laws and oversight developed in the wake of the Depression would prevent another one.
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@John M
"We need to return to teaching critical thinking and propaganda-spotting in our schools." For the most part, critical thinking was never taught in school. Or I was never aware that it was taught in schools. I remember when I was in grade school in the 50s how most kids had no clue as to what critical thinking was.
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@Grennan
Your first paragraph is exactly right. The testing craze initiated by W was pushed so hard that tested subjects, especially math and reading, took over the curriculum in a vain attempt to get everyone “proficient” in those subjects. History and civics began to be pushed aside because they weren’t tested. I saw the beginnings of it in my last years teaching.
I think it is beginning to relax a little, not sure how much since I have been out 12 years now.
15
"Would Trump look for solutions or refuse to accept responsibility and focus mainly on blaming other people?"
That one's easy to answer - he never, ever takes responsibility, so yes, he would blame other people (including, but not limited to the Fed, Democrats, the "deep state," the press (if y'all weren't out to get him...), Clinton, Obama etc.). In doing so he would also insist it was up to them to fix his problem and/or impulsively fire people and/or create an unrelated crisis.
"Would his Treasury secretary and chief economic advisers coolly analyze the problem and formulate a course of action, or would they respond with a combination of sycophancy to the boss and denials that anything was wrong? What do you think?"
What difference would it make if they analyzed and formulated? Trump believes that he is himself the only expert he needs - and it's not his mind but his gut he believes he should follow (which, in his case, might be better than following his chaotic, uninformed mind after all).
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@Anne-Marie Hislop: Memo to anyone trusting their gut - think about your gut’s output.
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@John M
Remember, the gut produces at least two outputs: one into the bloodstream, another into the loo. You need to be more specific. ;-)
13
@Peter Czipott trump listens to his gut, senses its volatile emanations, and tweets policy before leaving the throne.
1
Well, may Luck be a Lady for some time to come. FDR said the only thing we have to fear is fear itself. Not true in this case - but no reason to precipitate anything by fearing fear.
8
Thanks for the shout out to the Marx Brothers; yes, there is no Sanity Clause. Of course, 45 will blame others when things go wrong; he can't do anything else. He is unable to ever take responsibility when things go bad.
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The oligarchy took a gamble in keeping Trump safe. They knew their operatives would do what they'd planned, had their preferred candidate won the GOP primary in 2015. What's the harm in keeping Trump in place while all the major rollbacks, including the mother of rollbacks, the Tax Scam Bill?
The harm is what we're seeing on Wall Street and an economy that, in principle, is sound enough, though highly unequal, in danger of collapsing - not because of the banks, not because of some sort of catastrophic event, but because of the meshugas of one very uninformed, highly unstable man.
Trump wants things to work out in his favor. When they can't, he changes the rules, facts, points the finger elsewhere - anything and everything, as long as he ends up coming up roses.
That isn't how it works in real life. Unfortunately, with a cabinet that is largely left with megalomaniac sycophants, Trump is about to find out that you can only cheat when you're largely out of public view. He no longer is and the jig is about to be up. Most unfortunate of all, those who will take the brunt of Trump's follies are those of us who can least afford it: the poor, minorities, those who are still living the Great Recession, the elderly who are still working, and the young for whom the economy is so brutal, their future looks nothing like ours or our parents when they were starting out.
For those of us below, the end is silence.
---
Things Trump Did While You Weren’t Looking
https://wp.me/p2KJ3H-2ZW
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Trump will go down. Those who study history are finding some interesting answers. Here's one that appeared in my news today:
"Questions were mounting over the president’s taxes.
A drip, drip, drip of news reports stretching out over months suggested he had seriously underpaid his taxes.
Donald Trump? No, Richard Nixon.
The mostly forgotten story of Nixon’s tax troubles, long overshadowed by the simultaneous Watergate scandal, is now getting a new look from lawmakers and legal experts.
That’s because Democrats want to tap a rarely used law to seize and release Trump’s tax returns when they take control of the House next year."
https://wp.me/p2KJ3H-2ZW
It is hard, darned hard, to be patient in these times, but it is going to take the patience of a million saints to a) give Robert Mueller the time he needs to be as meticulously thorough as we all need and b) for House Democrats to double back on the hatchet job Republicans did on their investigation of Trump, and then move forward with all the things that should have been looked at. That all takes time.
On a final note... Some of you were asking about Richard Luettgen. He and I engaged in some epic comment battles over the years. Sadly, he passed away on December 1. RIP!
The NYT noted his passing here:
https://nyti.ms/2Rhdry6
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Rima- Yes, the Donald will go down. But in might be in the way of the finale to the Ring Cycle. And then, in the ruins of our once proud and strong country, one could say, “If you seek his monument, look around you.”
If we can survive this and then rebuild with economic justice to the 99%, we truly can make America great, for the first time.
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@John Graybeard
For the first time.
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