As my portfolio dips $50,000 or $100,000 with each new incompetent move by the president in his trade war, I think of it as an investment in a better 2020.
Trump and Republicans, you put yourself in this situation, including what you blame on the Fed. They absolutely did not raise interest rates too quickly, we are teetering on the brink of a recession because the Fed did what they were supposed to do, but did not know how ruinous a trade war Trump would start.
I welcome recession because it's the surest way to rid ourselves of the worst president of my long life.
1157
@Clearheaded - "As my portfolio dips $50,000 or $100,000 with each new incompetent…I welcome recession…"
It's easy to feel sanguine about recessions when one starts out rich, eh?
70
@Clearheaded
The surest way to get rid of Trump is for the Democrats to work the six states that flipped in 2016. It is that simple...to say. It has to start now. But unfortunately the Democrats aren't willing spend the money to market a six state anti -Trump campaign. Unlike the Republicans (who actually manage to hold their collective noses and get behind Trump), getting Democrats to work together is cat herding.
56
@Miss Anne Thrope Well, as a retired person with a substantial portfolio, I stand to lose more than I would have back in the day when I was a working stiff with not very much in the bank - unless it got so bad that I lost my job, of course.
30
The dems have stooped to a republican low, wishing , yes hoping for an economic failure for their gain. The politics are in the mud. Trump is correct in dealing with China , if we turn back now (by electing a weak dem) the Chinese will have us forever and we will be swallowed by them and their cheap labor. You can kiss the middle class goodby.
27
@J Clark
China DID need to be addressed, but Trump is doing a totally incompetent job of that. He should have formed a coalition of our trading partners and allies to present a united front to China, who would then either have to deal or die.
Instead, Trump has started trade wars with all of our trading partners and has dramatically weakened our alliances. This makes presenting a united front to China impossible. Worse, China is strengthening its ties to our former trading partners. When Trump's trade wars are over, China will emerge as the world's dominant economic power.
I hope that China sends Trump a "very beautiful" Thank You note.
336
@David
Indeed. That coalition of trading partners could have been called the TPP.
282
Well let’s elect a strong president from either party. NMW this man was not chosen to ruin our democracy,economy,and government, no matter what he fantasizes with his incompetent buddies
31
"Even Susan Collins, the least right-wing G.O.P. senator (although that isn’t saying much), insisted that the 2017 tax cut would actually reduce the deficit."
Hey! All you dyed-in-the-wool centrists who insist that our two parties are comparable, that there are decent honest Republicans out there, take a good look.
No way is Collins stupid enough to believe the malarkey she was peddling. She lied. Since she supports McConnell as leader of the Senate she is responsible for all his misdeeds.
Senator Susan Collins is an evil human being. We need to be clear. We need to not fear being called extremists or haters.
The contemporary Republican party needs to be seen for what it is: an evil conspiracy against the American people. The Republican party must be destroyed.
34
I’m so tired of winning.
17
Trump's propensity for lying may finally hit a brick wall when it comes to his supoorters' pocketbooks. They can laugh all they want about or ignore his other silliness but when it comes to their greenbacks that's a horse of a different color.
17
Is this man for real ? Trump is a disaster for American economy.
18
The evangelicals who helped elect Trump and support every vile and immoral action he takes are telling the sheep they're sheering that Trump was 'chosen' by the Lord and the Lord sometimes choses 'imperfect instruments'. Those words might come back to bite them in the rear. Trump's imperfections are shamelessly divisive and the pompous pious supporters will have to deal with the consequences of a man apparently determined to do to America's economy what he did to bankrupt six of his businesses before the got 'chosen' by the Lord.
Trump's imperfection will prove that the evangelicals who supported him are equally 'imperfect', disastrously so and they will have to revise their account of the Lord's Chosen One to explain how the Lord chose a lying fool for our president.
18
Is there any way to spring the "liar paradox" on Trump? That is, get him into a contradiction that he cannot resolve.
See the Star Trek episode "I, Mudd" (https://en.wikipedia.org/wiki/I,_Mudd#Plot)
I don't want to see his ears steam, but it would be great if he just said, "I quit". Maybe not even that, just go to Mar-al-Lago and never return.
13
Another clear-eyed view of the current Oval Office Occupant's circus. Trouble is, the gymnastics just don't work, and the lion tamers are having a hard time keeping their charges in their cages.
Krugman for chair of the Fed. But only with some other like-minded people along with him.
9
“The recent recession is the direct result of Hillary Clinton using a Private Email serve 10 years ago and the corrupt FBI illegally getting a warrant to investigate the Trump campaign in 2016’. Fox News spring 2020 — prediction
9
100%! not only am I a disloyal Jew I spend a lot of time hoping the economy tanks big time because I’m sure that’s the best and surest way to stop the madness.
10
I do not think for a second that the republicans actually believe the lie about trickledown economics. It is just a rationalization that they expect others to believe when taxes are cut for the rich. The reality that DJT lives in is full of conspiracies and a belief he can sell anything to people who are willing to be duped. It is all black and white, no shades of grey. Friend or foe. It is a very irrational world view disconnected from the complex reality of our world. The reality is that the Fed has a limited set of options, and the chaos brought by the unpredictable and erratic policies and actions that DJT intentionally generates causes the uncertainty guaranteed to screw up the world economy.
7
The guy who thinks he is the King of the Jews and the messiah/ Second Coming seems to actually believe that we can use our "negative thoughts" or "evil eye" to make the market tank.
That's hilarious and nutty. He believes in magic?
If we actually had such magical powers - we would most certainly use them to wish him out of the Oval Office!
22
So Trump wants negative interest rates, so for you to save will cost you money, not pay you money. Someone ought to explain to him and his lackey Navarro the argument from Milton Friedman that the Fed cannot control interest rates in any case. Maybe if Trump were able to grasp that notion, a doubtful proposition, he would demand the Treasury stop holding auctions for Treasury debt and instead set the rates, take it or leave it. He was so pleased at the Germans doing that with negative rates, but then he didn't mention they didn't sell as much debt as they wanted to.
3
Trump "governs" (to the extent you can call it that) virtually totally by impulse--more often than not fueled by the reflex of revenge. And he is so lacking in self awareness he hasn't a clue that that impulsivity—by definition unpredictable, except that we know he will react impulsively in SOME way to negative news—is one of the biggest drivers of our slide toward the economic ditch.
Will he do X or Y? Or will it be P? Maybe J? American businesses have no idea which way he'll leap--or whether he'll leap the opposite way the very next day. Or whether the day after that he won't declare the factual reports of his previous actions “lies, lies, total lies” and announce a different tack altogether. And until they get some kind of stability--which they’ve got to know by now they can never count on from this White House--they will sit on the funds they might have otherwise used for investment. And that’s a whole lot of what’s driving our economy into recession.
Calling himself a “very stable genius” certainly doesn’t make him one and in fact tells us something quite the opposite—as if we hadn’t already gotten the message from his wild swings from outrage to outrage. Yesterday it was dissing the Danes for not selling him Greenland, today it was ordering private shippers to search all packages from China, tomorrow . . . who can possibly predict? Until the president can control himself, he cannot possibly hope to control the downward slide of our economy.
8
I'm still waiting for the $4,000 pay raise for workers Republican South Dakota Senator Thune promised would result from the tax cut. Unfortunately for us (and fortunately for Senator Thune) South Dakotans have very poor memories, or they are under Republicans' voodoo spell and so will elect Thune again.
9
Gee. Why bother with willing a recession when such power could actually be used to will DT out of office. Just saying.
9
Blame his repugnant personality, his lack of forethought, even his lack of rational thought, but there is a kernel of truth in pointing to the countries that made hay from the loopholes in the "globalization:" economy. For decades countries like China have benefitted by selling things lower than the true cost of their goods. They have exploited the environment, child labor, their ability to manipulate currency, powerless labor, their own authoritarian controls. and many other factors that have a heavy cost for the earth and its people.
Something does need to be done. Most would wish for a better spokesman. So my question is; why have the alternative leaders of the world's most powerful economy NOT addressed this? Why do democrats talk about Medicare for all to the exclusion of rational fixes to the flaws in 2016 era globalization? Why does no one talk about forming a new coalition to resist Chinese abuse? Why does no one talk about finding a way to make global trade include the FULL cost of production?
Elizabeth Warren talks about fixing Capitalism but her plans are often myopically aimed at business in the US, and therefore fix last centuries problems at best.
I hate to credit Trump with anything, but he has hit on a real issue that must be addressed, even if he has't a clue how to do it or even the real scope of the problem. How do we curb China's bad behavior? The next President IMO must have an answer or cede this important issue to the self-proclaimed "chosen one".
5
There may have been a time when "trickle-down " theorists actually believed that cutting taxes would improve the economy overall. But of course that has never happened. It does, however, work to make the rich richer. And Richie Rich is the biggest donor to GOP politicians. I suggest that this is why they continue to put it forward: to enrich their donors. It is a major factor in growing income inequality. Surely the GOP knows this by now, so we should assume thats what they want. But they are smart enough to sell it differently to their gullible base: that's where the voodoo really lies.
10
The "evil eye" theory of policy failure is not new with Trumponomics. It was also the most popular Republican excuse for the miserable failure of the Iraq war. The defeat of the occupation couldn't be due to justifications based on lies, poor planning, lack of understanding of the culture or history of the region, or abuse of the occupied people. No, it had to be because disloyal opponents of the war "wanted us to fail." As with so many of Trump's outrages, this one has abundant precedents in the rhetoric of the GOP in the late 20th to early 21st century. He did not come out of nowhere and we did not get here overnight.
8
Unfortunately get ready for a second term of Trump as the evangelicals are still tightly behind him.
2
everything is going to be OK.
the dictator has just given orders to businesses about how they should operate.
the next court appointments he will make will have to be bankruptcy judges - taking a line from a movie - You're goingto need a bigger bankruptcy court.
and taking another movie line - help us obi wan - you're our only hope.
2
While business may be the business of America and all that, the millions who cheer Trump on and support him care not about business or money. They’re all about the end times, the second coming, and making sure that impoverished, uninformed pregnant females carry to term. So bad times stemming from Trump’s dumb economic-policy decisions won’t affect that crowd.
4
Fer not, Trump has Kudlow and Navarro. What else would someone like Trump need?
He certainly knows how to sow chaos. Is erratic, acts on whim. pride, ego, tantrums, culling favor from his base....you don't have to sit in the washing machine on spin cycle..we have Trump.
4
Mr. Trump's Plan B is simple really: Start a war.
6
the gop trickle down plan is based on the laffer curve that has been the main stay of republican economic policy for the last 40 years. the laffer curve predicts that as tax rates are lowered from very high levels federal revenue will increase due to increased economic activity. now while it is true that economic activity will greatly increase from a large decrease in tax rates (a tax rate of zero would very greatly stimulate economic activity) the laffer curve also predicts that tax revenues will at some point fall because the decrease in revenue due to the tax cuts will not be made up by the increased economic activity. furthermore the large increases in the budget deficit and the national debt will at some point result in hyper inflation and economic stagnation or even a significant recession. part of the republican tax plans has therefore always been to drastically reduce federal spending to reduce the impact on expanding deficits that would result from their tax cuts. we know from experience that given the ever increasing levels of spending on the military, medicare and social security federal spending will never be reduced enough to make up for the lost revenue from republican tax cuts. so even though there is not a shred of evidence to support the laffer curve lets all accept it as a proven hypothesis and also accept as fact its prediction that government revenues will fall as a result of cuts to the tax rates and that this will inevitably result in economic disaster.
6
Socialism, central government control, and a wealth tax are sure to fix all this in 2020. Be patient!
3
The only issue I take with this analysis is the notion that Trump has a Plan A. He clearly has no Plan B, but to suppose he's currently following something coherent enough to call it a plan is magical thinking.
23
Excellent review, as usual, except that the good professor, as well as many Americans, shows a limited understanding of the Evil Eye: the Evil Eye, or Nazarlik, is a symbol that attempts to PROTECT one from evil. Of course, with trump in the Whitehouse, we all should carry one.
16
The rate hikes by the FED in the last year have nothing to do with what's happening to the economy presently. If the economy is slipping it's because of Trump's trade war. The cause and effect is clear. The amount of available capital in America, combined with - even after the rate hikes - some of the lowest interest rates in American history, shows us that the money for investment is there. What isn't there is confidence in our leader, so-called.
13
If Trump reduces payroll taxes and income is increased, won’t the income be subject to more federal taxes at the end of the year?
7
Bylar,
If the payroll tax rate is lowered temporarily, then yes there may be more tax due at tax time. If it is made permanent, then less tax would be paid and less tax would be due at tax time.
1
The truth is Trump (and the GOP) doesn't have a plan A (beyond personal enrichment at the cost to everyone else -- up to and including a global existential threat).
22
Not only does Trump not have a plan-B, the GOP hasn't had one since before the Reagan Administration. The difference this time is Trump is like the engineer of a railroad train headed full-throttle toward a washed-out trestle.
13
Don't forget, when Laffer's prediction that Clinton's 1993 raising of taxes on the wealthy would bring economic disaster turned out to be 180 wrong, & Clinton presided over an extraordinary run of ever-healthier economy, Laffer's excuse was that this was a delayed reaction to Reagan's tax cuts 12 years earlier! He ignored that reagan's tax cut led to a recession within months, as every tax cut for the rich had. Conservative Governor of Kansas, Sam Brownback announced that Kansas would be a "laboratory" for Milton Friedman's, Arthur Laffer's, & the heterodox Austrian School's supply-side economics. He cut taxes on the rich, & pushed the Kansas economy into a death spiral. QED
37
Okay. I keep waiting for the current bit from Monty Python's Flying Circus. And now for something completely different.
12
"unemployment is in fact near a historic low"
True, but irrelevant. Write a column about our massive *underemployment,* Mr. Krugman! There are still too many Americans who want and need to work, but vanished from a dead job market in many regions, or who are impoverished working part time.
22
"Are Democrats hexing the Trump boom with bad thoughts?"
How can we not have bad thoughts as we are being tortured by hate and anger?
And, considering the rampant untruthfulness now, can we believe the government figures showing the condition of the economy.
And to all of you who would call me "Vlad", I am not.
6
Trump doesn't understand much.
But McConnell and Susan Collins and Lindsey Graham and some of the other Republicans do.
They know what they are doing to our country.
23
Laffer curve 101. So the basic idea behind what is called the “Laffer curve” is not fundamentally wrong: a graph showing tax revenue vs tax rate. If the tax rate is 0, revenue is 0. As you (slowly!!!) increase the tax rate, revenue goes up, obviously. So keep on increasing, increasing…eventually, if you increase taxes enough you will actually harm the economy and tax revenue will level out and then even start to turn down. When the tax rate reaches 100% then the economy will completely shut down and revenue (for the next year) will be 0 (even though the tax rate is not 0, it is the opposite of 0, it is 100%, everything). So it is not completely beyond imagination that decreasing the tax rate will increase revenue. The problem is that there is really no way to know where you are on the “Laffer curve.” If you are to the left of the hump (we have always, apparently, been to the left of it), decreasing tax rate will decrease revenue. Joseph Laffer decided, and apparently has always decided, that we are to the right of the hump (and apparently are always to the right of it), that we have stymied the economy with over taxation, and therefore, quite logically concludes that lowering taxes will increase revenue. How Laffer determined that we are to the right of the hump? Two possibilities. He has either employed voodoo or sheer crackpottery. But that is good enough for the GOP, the Dirty Party and the aristocrats they really represent. They should be serving us cake, soon.
7
Democrats can bend the economy to our will? I'm thrilled to know we have such power!
13
Susan Collins' statment that the tax cut would reduce the deficit is as unintelligent as Paul Wolfowitz's claim that the war in Iraq would pay for itself. Republicanism is bankrupting America!
21
I thought I'd let you know something occurred to me yesterday; not only are Republicans trying to take away people's health care, but their medicines as the prices have become unaffordable. It' hard not to think the Republicans are practicing some genocidal acts of attrition to destroy us.
11
@PATRICK absolutely
4
Trump said he would eliminate the deficit in 8 years. So far just the opposite.
King George III was more sane than this madman!
15
Thrice the brinded cat hath mew'd.
Thrice and once the hedge-pig whined.
Harpier cries 'Tis time, 'tis time.
Macbeth Act IV Scene 1
4
One thing that would help is if the Times switched its classifications. The reason this would help for example; Krugman's column relates factual coverage of actual events. Whereas the front page is loaded with quotes, he said she said ad infinitum. Not to mention large chunks of supposition, speculation, bogus analysis, thinly disguised opinion, and opinion utterly undisguised, tabloid fodder, and mega tons of stuff anyone paying attention to the world already knows. Anyone else notice all the three day old stale content littering the Times pages and digital content? Often times more than the Times as we often see in Readers Comments. So what will it take for the Times executive editor to become cognizant of the fact that most of the time what people do is far more relevant than what they say?
2
@The Iconoclast
What source do you reccomend?
King Minus is calling his appointee to the Fed an "enemy" now. Imagine how desperate he'll be if/when the economy really flounders.
"“My only question is, who is our bigger enemy, Jay Powell or Chairman Xi?,” Mr. Trump wrote in one of a series of Twitter posts."
8
Tired of the electoral college yet? It has handed you two imbeciles in a row, overturning the will of the American people.
When are you folks going to demand that this nonsensical, undemocratic system be overturned?
10
Actually, the electoral college was created to avoid thos problem, not exacerbate it. It was to be the backstop against an (then -- maybe now) illiterate and mis-informed population. Sadly, the college has abrogated responsibility and voted party line. I believe, SCOTUS just reaffirmed the college is to vote conscience, not party.
6
@Jim Anderson
I assume you mean the last 2 Republican presidents.
3
I continue to be astonished.......not just by Trump's incredible stupidity but chiefly by the way in which every insane tweet or statement by Trump is analyzed by the business media as if they were legitimate.
We have a President who doesn't have a clue, yet analysts pretend to study his ignorant actions as if they are part of a complex, well considered "strategy."
The truth is...........
our government is in the hands of a blithering idiot and his team of equally stupid sidekicks.
27
Who is breathing all this junk economics into Trump's ear? Is it Miller? Mnuchin? You know Trump's doesn't know anything about economics....is it Stephen Cohen?
9
@Bruce B.
His yellow brick road to the presidency was to follow Fox News opinion and spew it back out to the masses. Not like a politician, choosing his words to project a more nuanced view, he speaks exactly like a crazed RW pundit with all the name calling, fake news, lying and hyperbole that goes along with this. This was so successful that he now watches "Fox and Friends" for policy advice when he can't reach Sean on the phone.
6
I came to this conclusion after thinking about him for a while, that Trump is a unique human being (hopefully the last one in human history), who does not believe in any constraints imposed on him by physics, biology, logic, nature, reality, economics, U.S. Constitution, rule of law, etc. In short, he is impervious, oblivious and invincible to all those natural and man-made constraints that applies to lesser mortals. The result of all this is, he does not know or believe or understand any trade-offs that are part of living. He wants to have it every possible ways, even though those choices are contradictory. That's his magic. And that's why he is so loved by his supporters because they too believe the same.
12
Sadly, he will not be the last feckless leader. Too many times in the past, similar incompetence..., has been allowed to lead people to destruction. Trump could be Mussolini 75 years on (hmmm, reincarnation anyone).
3
I feel a great empathy for the author who has had to research and compile all of the idiocies of Trump and the Republicans around tax policy and economics. But it isn't necessary to bolster common sense with such diligent proof. All we have to do is simple arithmetic: admit that massive reductions in federal tax revenue increases deficits.
All of the mysticism surrounding economic theory from the likes of Laffer and his colleagues can be thrown in a garbage can. Common sense and reason indicate that we live in a structurally mature economy, highly developed and refined, and as such, sources of credit, burden of taxes, etc. will cause no magical elasticity in economic activity - the economy simply will not grow more than x percent per year... forever.
Only a simpleton could believe that a tax cut from these low levels does anything but increase the net worth of the top 1%. I am one of them, and I can see Trump and his party making my net worth larger and larger, while the federal deficit is reaching alarming proportions.
As a wealthy bond holder, I would seriously appreciate the political parties reducing the deficits - even if it means raising taxes on the 1%. I'd rather be taxed somewhat, than living in a country destroyed by inflation, deficits, and attendant social disorder. Insolvent governments are DANGEROUS.
22
I don't take anything Trump says seriously.
But the problem is Trump still has 40% support.
And the problem is Republicans are willing to hurt our country to so the wealthy can pay less taxes.
18
I am a small bulsiness owner that employs 14 people and I am Democrat.Like most people earning a living and getting by, trying to save and keep a roof over my head, the last thing I want for my employees, my community and country is a recession. I am pretty sure of 2 things: I am not the only Democrat that feels this way and I am not the only American that wants the Trump nightmare to end. 2020 can't come fast enough, hopefully with a steady economy despite Trump's best efforts to ruin it and a new administration to improve it's performance.
17
Why is it that economists (i.e. Art Laffer) can be so incredibly wrong and still have status and taken seriously or even have a job? Could an air traffic controller or a surgeon keep there job with a Laffer type record? In my next life I want to come back as an economist, the ultimate tenure.
12
Well, Trumpian economics equates to putting a monkey in charge of the vegetable garden. Guess what will be in the baskets come harvest day.
8
@Loud and Clear
We already had a "Cleanup on Aisle 5" situation well underway the moment he began his bizarre inaugural address.
13
Remember, before he was President, he stated that America could default on it's debt. Using classic Trump logic he mused defaulting on his companies debt had worked out well for him so why wouldn't it work for the country as well. This is the "stable genius" we have put in control of the country. He is in over his head, he spews out whatever thought crosses his mind at the moment, and he has control of nuclear weapons. Sleep well everyone!
15
In response to your headline, I'm doing the best I can, but I had no idea it was working. Yea!
3
Why don't we ever see it pointed out that the GOP has presided over every panic, depression and crash since the civil war?
Isn't understanding that the GOP is an economic assassin an important fact to be aware of? (of which to be aware?)
Why aren't the papers and news orgs discussing that? Because news orgs are now mostly owned by RWNJ
13
Right now, our elected officials don’t serve the people and this country but the political parties and the narow partisan agenda...
4
@Kenan Porobic
Actually, deficits went up under Reagan and deficits went down under Clinton.
And Clinton got almost 50% more jobs than Reagan.
Deficits went up under W Bush and deficits went down under Obama.
And Obama got almost 400% more jobs than W Bush.
And that was with W Bush's "two tax cuts for the job creators" and Obama's "jobs-killing" Obama-care.
W Bush gave us the worst recession since the Great Depression and the Iraq War.
Obama gave 20 Million people healthcare.
21
@Independent
Excellent concise summary of economic reality comparing presidents by party! Thank you.
6
@Independent But independent, quit now. Your using facts and actual results to compare Republican policy with the democrats. How can that match up with Trumps failed economic dogma, delusional fact free twitter rants, scapegoating, refusal to accept any responsibility for his actions, and Fox News running interference for the Dear Leader. You must know that he is the chosen one. He said it on TV.
1
Since Trump believes that in order to buy groceries you have to show ID, it’s clear that he doesn’t remotely understand how the majority of Americans live. I doubt he has a 401K, nor does he have to even think about retirement savings or buying good insurance. And, since he cannot feel empathy, he cares not that people are suffering.
The Tump Presidency has been stressful in a myriad of ways. One major stressor for many has been watching their financial picture change on a regular basis. The so-called tax cut that benefited the few, the increased cost of daily living due to the trade wars - these illustrate the hollowness of Trump’s promises to the middle class. There are people that cannot afford to save for their futures, some people cannot afford medical insurance, others have dutifully put aside the maximum toward retirement and are now watching their hard-earned savings plummet.
Everywhere you look there is destruction and damage, hurt and stress. Please tell me this will be over in 2020. I’m so tired of winning.
12
We don’t live in a democratic society.
Constitutionally, the elected officials must serve all the citizens equally, fairly, justly and in accordance to the law.
Being a member of the political party prevents the elected officials from treating all the citizens equally what is the fundamental democratic premise.
To finally enter the long overdue democratic era, we must request all the elected officials to publically renounce any and all previous political memberships.
From now on, all the elected official must reneged on their previous political alliances before being sworn in.
Constitutionally, the political organizations are allowed only TO PETITION THE GOVERNMENT, MEANING THE POLITICIANS MUST STAY OUTSIDE OF THE ELECTED BODIES – executive, legislative and judicial ones.
Banning the partisan caucuses in the US Congress would enable every elected official to vote based on their consciousness and intent to serve their voters in the best possible way, without being subject to enforced partisan discipline and blind obedience to the partisan agenda.
Should I mention that this approach would prevent the polarization, divisiveness and antagonism within our government?
1
nice read
4
Dr. Krugman, please get over the silly notion the conservatives actually thought tax cuts to the wealthy would pay for themselves by spurring higher economic growth. That was just a lie told by conservatives to us dups as they laughed up their sleeves.
For conservatives, tax cuts for the wealthy have only one purpose - to put more wealth into the net worth of the already super rich, for well, just because. And if the tax cuts hurt the federal government and the needy, well, that's good too.
15
Thank you! This article is the laugh I needed to start my weekend.
1
Stop worrying -- the Arctic Refuge will produce trillions in leasing and oil revenues. Just as the Iraqi oil fields covered the cost of the Iraq war.
oh wait ...
12
Wish I had a gig like Krugman. Be wrong 100% of the time and make great money!
4
All Hail Fredonia!
5
If only Republicans understood what for them are obscure references.
Say the magic word and win...
Our current electoral system is unconstitutional.
No political party is entitled to choose anything or anybody or hold the official primaries.
According to the US Constitution, the political parties only have the right to petition government, meaning by definition the politicians must stay OUTSIDE OF THE GOVERNMENT.
The elected officials cannot be the politicians but just the public servants, in the same way our military officers are.
If the officers are prohibited from joining any party, the elected officials should be on the same boat.
The elected officials are sworn to equally serve EVERYBODY.
Being a member of any political party is inherently connected to the political bias and preferential treatment of the narrow group of individuals, what is the in direction violation of the oath given during swearing in…
Being sworn in the elected office must represent the end of membership in any political party and it demands the public severance of any and all previous allegiances.
1
@Kenan Porobic Republicans serve the country. Democrats serve other countries.
If Democrats can ever again nominate a competent politician for President, if they take the Senate, if they can hold the House, then they should not fall into the “moderate trap” that prevailed in 2009 and slowed the Obama recovery. Rather, expand the debt and the safety net, and yes “debase” the currency. Let the rich bond boys see where their Republican hypocrisy has taken them.
5
This Is the Long Game of the Republican Coup d'Etat
A tax "reform" scam to steal a Trillion dollars from the young, give it to the rich in return for never-ending campaign donations for the GOP.
Then they dismantle social security, pensions, healthcare, wages, cripple government revenues, stuff the Supreme Court and federal courts, increase gerrymandering, cripple free speech on the internet, and end democracy in America.
Then civil war and martial law (run by the super-rich and the fascists)
The Atlantic - The Long Game
https://www.theatlantic.com/business/archive/2017/12/the-long-game-of-republican-economics/547721/
The New Yorker - The Gutting of the Welfare State
https://www.newyorker.com/news/our-columnists/the-next-step-in-the-radical-trump-gop-agenda-gut-the-welfare-state
9
@William
And Paul Ryan received Social Security survivor benefits which helped him get through college because Ryan's father died when Ryan was a teenager.
And McConnell was treated for polio as a baby at what was at the time the FDR polio center.
Charitable help is good for them but not for others.
7
There is no denying the success of trickle down economics. The voodoo has worked perfectly. The rich are richer than ever and that was always their goal. That's why they pumped so much of their money into candidates in both parties, knowing whichever won, they'd win too. And voodoo economics has been a bipartisan effort. Clinton and Obama punished the poor and rewarded the rich slightly, but only slighly les than the Republicans. (Obamacare pumped a public fortune into private insurers for very little in return - easy money). The military industrial complex. the prison industrial complex. The legalized drug dealing that is big pharma as currently constituted. Housing bubbles building and bursting _ for 40 years working people have had no friends in american politics and the rich have never had it better. I may hate the social policies based on the worst of conventional prejudice cranked out by Trump, but he didn't open up this casino. Everyone in power in this country rode this gravy train. Give to the rich, not to the poor, because the rich will pay you back handsomely.
4
There is no denying the success of trickle down economics. The voodoo has worked perfectly. The rich are richer than ever and that was always their goal. That's why they pumped so much of their money into candidates in both parties, knowing whichever won, they'd win too. And voodoo economics has been a bipartisan effort. Clinton and Obama punished the poor and rewarded the rich slightly, but only slighly les than the Republicans. (Obamacare pumped a public fortune into private insurers for very little in return - easy money). The military industrial complex. the prison industrial complex. The legalized drug dealing that is big pharma as currently constituted. Housing bubbles building and bursting _ for 40 years working people have had no friends in american politics and the rich have never had it better. I may hate the social policies based on the worst of conventional prejudice cranked out by Trump, but he didn't open up this casino. Everyone in power in this country rode this gravy train. Give to the rich, not to the poor, because the rich will pay you back handsomely.
2
Democrats can't take any credit for "hexing" the "trump" boom. He's a one-man U.S. economy crashing band.
8
First you buy Greenland, then you put some condo's on the beaches of North Korea, then you cut taxes so tax evading corporations will bring the overseas money home, then you cannot buy Greenland and a nasty woman hates Israel who just blew up some stuff in Iraq which they claim is Iranian after which you put 4 year olds in prison for illegally crossing the border into.....Point? Expecting the chosen one to make sense is as sensible as expecting the evangelicals who chose him to do good.
11
Trump giving Art Laffer the Freedom Metal says it all. Trump does not believe in traditional Republican economics, and this was a clear message that Trump is going to do whatever strikes him as a good idea. More unpredictability, more inconsistency, and more instability. Obviously, there is not an adult in the room.
8
Trump appears to believe we can use our "thoughts" to wish the economy harm.
Believe me. If we could use thoughts in a magical way, we would not waste our magical powers on the economy.
We'd wish him out of the oval office.
20
1). The man will always blame someone else for the failure of his actions. His stunted mind prevents him from ever taking responsibility for anything, except for the fantasies he spews in lieu of reality.
2). He is king of nothing other than that fantasy world.
3). He has never met debt he can’t default on.
4). He is incapable of seeing beyond the proverbial end of his nose. His inability to understand that there are ramifications of his actions (I’ll leave aside the issue of his “rhetoric”) and interconnections between such actions as trade wars, tax cuts, growing economic disparity, a burgeoning debt stock and a slowing economy is breathtaking. (Or, for that matter how our desire to keep the Chinese out of Greenland might be hampered by his insulting (and nasty) behavior towards Denmark.). I’d actually love to play chess against the man for money — and I’m a lousy chess player.
I seriously worry that we will not survive this.
9
Good summary of voodoo econ. Tump couldn't pass Econ 101.
Virtually everything he and the GOP says is a lie and propaganda.
None of their policies benefit average workers, only the wealthy.
Yet why do the red state voters keep buying the lies and worthless promises, decade after decade.
It just defies comprehension. Why is ignorance so hard to cure.
9
Irregardless of Trump`s inanities and the headlong utter greed of those republicans who worship Trump; we are all part of this bloated evil country that is despoiling and destroying the planet.
Yes evil! As long as we allow this to go on we are all guilty! Oh, but I don`t like Trump how am I guilty? It won`t matter what your politics are when the planet we live and breath on is so badly damaged that life on her is going down. Poisoned and unbearable for the masses.
We heard Jaime Dimon and The Business Round Table tell a truism about the elite business mans greed. Only thing is it was only meant to keep the pitch forks from coming for them. If you want to here from a truly moral billionaire watch Nick Hanauer`s TED Talk on : Beware, fellow plutocrats, the pitchforks are coming.
Not much time left, for this all consuming greed, to last on this little rock we call Earth.
1
Well, I like Trump. I threw away my TV 20 years ago, and he keeps me abreast of cultural debasement.
1
Given that Trump never backs down, is a “ready, fire, aim,” kind of guy, political death from a thousand incoherences may be what gets him in the end.
1
Professor Krugman is on point, as usual. But I am tiring of the fact that the Times and other legitimate news sources keep presenting Trump's behavior as though it were subject to reasonable analysis. When will we start seeing the press admit that Trump is seriously mentally ill, thinks solely of himself, enjoys cruelty, and is incapable of rational thought? Most of what Trump says should just be dismissed as the ravings of a mad man.
8
Trump has no coherent plan for the economy of anything else, just a penchant for offending people's sensibilities, and taking perverse pleasure in doing so. The more outrageous his plan is, the more it is applauded by his sycophants. This gives the "eggheads" he despises howl, and increases his sadistic pleasure.
His philosophy might well be viewed as "ready, fire, aim!" Then enjoy watching everyone scatter as the bullets rain down randomly and the mischief-lovers who call themselves Trump supporters cavort in glee. This is the nightmare Trump's America has become.
4
Now getting close to the point where I'm starting to be afraid of what Trump will pull out of the hat next.
A trade war with the EU must surely be next? They will make China look like amateurs in the way they respond, with laser precision, against American industries.
Maybe ban Boeing selling in China? Put a 100% tariff on, for example, IPhones, in an attempt to force Apple to manufacture in the US?
And I'm not joking here. Trump is off his head, and his advisors are clueless cowards.
4
Supply Side Economics as a concept shouldn't even work. Demand has to precede Supply. Stock the inventory all you want, diversify all you like but w/o demand being stoked from below, how do you sell enough? Windfalls don't lubricate the economy, Demand does. There lies the equilibrium that cycles demand by targeting tax breaks where they'll get the best and fastest results. That would be Econ. 101 if republicans didn't exist to Boomerang their campaign funds back to themselves by representing issues the sources benefit from. Republican schemes, when you unpack them, are all so desperate. Everything but representing the best source of Demand. Our interests are represented as a by product of trickle down, that politicians, the purviews of whom, are qualified to offer except as a "prediction." Employers determine if there will be any trickle down.
Target the peons for tax breaks and they'll go out and buy bread and circuses all day. We just have to find the Real Equilibrium. That would be the only honest strategy. It could be too late depending on what vector you use. The GOP have been targeting the treasury enough lately where The Big Number is probably impossible to erase. They don't represent us, the majority, not really. They'd be better described as a syndicate than a political party. They're even Pro Pollution. Keeping track?? Many of us are.
2
With all of Trump's attacks on the Fed why is this the first time I'm hearing this: "The Trump tax cut was supposed to create a boom so powerful that it would not only withstand modest Fed rate hikes, but actually require such hikes to prevent inflationary overheating."
This type of reporting should be mandatory every time this administration takes a swipe at the Federal Reserve.
Thank you for being one of the few sources of actual information of internet.
6
We can see the walls of this economy cracking right before our eyes. We had a brief sugar rush from massive tax cuts to the wealthy which, like always, did not produce the promised budged results. So for an additional 2 trillion in debt, some rich people got richer, and we had some employment numbers basically on par with Obama's without any real gains for the poor or middle class.
I have to say though, I'm impressed by Trump. Usually it takes a republican 2 full terms to completely wreck a Democrat-built economy, but Trump is hell bent on doing it less than 1. He truly is the chosen one.
11
Thank you, Professor Krugman, for this credible insight on trickle down and voodoo economics. Now, if we could just get Americans to examine the evidence.
4
In this destruction-by-tweet mess it's a stretch to call what Trump is doing economic policy. He is an anti-Midas. Even the Medal of Freedom took a hit when he awarded it to Laffer.
4
What else can Trump do? I'm sure Republicans would support the arrest and silencing of certain naysaying Democrats.
2
" You can fool some of the people all of the time, and all of the people some of the time, but you can't fool all of the people all of the time. "
Abraham Lincoln.
So let's cheer up. This, too, shall pass, and if God is merciful, it will pass before our country and our culture and our environment suffer irreversible damage.
1
No intelligent President would claim responsibility for a strong economy. The current President has just done that, many times.
Will he also claim responsibility for the disaster that seems to be brewing? I doubt it.
I don’t blame him for anything he has done wrong. He was just being himself. We knew who he was from the very beginning, even before he announced he was running. I blame the Republican party for everything that is wrong with the current administration, including the President. They continue to use him for their macchiavelic plans, and will squeeze him until they get their way. They will discard him then. Not sure the country can wait that long.
3
You are right, but...as of lately, everyone has done voodoo economic policy and nothing more. It’s what happened after money became a relativistic abstraction.
@Lucas R Who is everyone? and can you provide an example?
2
Seems like Trump is using his finely honed casino financial expertise to bolster the economy. What could go wrong?
10
It seems to me that the economy is in trouble because too much of our wealth is controlled by such a small segment of our population. We used to have a strong and robust middle class, but that had disappeared only to be replaced by most wondering how they will ever save enough for retirement.
7
It's pretty clear that Peter Navaro and Larry Kudlow aren't wizards. Trump, on the other hand, seems to have cast a very strong spell on Moscow Mitch.
5
If the success of our economy depends upon playing it by ear, as Trump seems to be doing, then we're all in trouble!
3
I miss the days when Trump idiotic pronouncements would rattle the markets and provide a bounty of bargains. It was especially nice when I could count on him to back down later when it was time to realize the gain. Now he is in an existential crisis so he has very little choice but to drag the entire world economy down with his shambolic presidency. Luckily I cashed out short term equities and converted to all long term and interest bearing instruments back in Jan. '19 when it started to become clear that the tax cut sugar high would fade and the markets turn bullish. Good Luck in the coming recession.
4
Voodoo economy is understood by the educated people, however majority of the Trump voters are uneducated masses whom their only knowledge comes from Fox News. No wonder he said "I love the uneducated".
10
Starting with Reagan and moving forward the Republicans have proven themselves adept at vastly increasing the wealth of the already wealthy at the expense of everyone else. They have mismanaged the economy consistently. Why would anyone except maybe the top 5% wealthiest in this country entrust our economy to any Republican. Oh wait they elected six times bankrupt trump didn't they. Republicans aren't very bright are they but we Democrats have learned how to put a curse on them, just ask President McNasty.
4
There is no logic. Whatever on a certain day at a certain time gets through the brain fog of The Self-Absorbed One the next day becomes a tweet, which I guess is what passes for policy and governance these days.
Seriously. What will this privileged and uneducated dunce think tomorrow? The ultimate truth is, we do not know.
The only reason why things aren't collapsing is because everyone realizes this fellow is incompetent and ineffectual. He actually thinks an executive order is "law of the land."
They are rarely more than glorified memos, with a big signature, signifying nothing.
9
By Trump's logic the left could "wish" him out of the Oval Office, using our "thoughts."
Were it only so!
Heck, we could use or magical powers (or thoughts) to wish the Dow up and down at will.
Sorry Occupant, not all of us believe we are the Second Coming or the Messiah.
Colbert is right. The Occupant is a "Heretic to Reality." Truth, reason and rationality are his enemies.
9
Donald Trump can't stick with a decision. He's mentally unstable. His narcissism always looks for a win. He lost in killing Obamacare. Then Ryan & Co, as they always wanted to cut taxes for the rich & cut social spending, passed the tax-cut bill. Republicans, especially Susan Collins & John Mc Cain sadly went along with it. Thus we got the horrible, unnecessary tax-cut bill. Trump signed it, claiming his badly sought after victory!
Too bad, things are going south, as sensible economists expected. Trump being a salesman says all kinds of senseless things about the economy. But sometimes his mind works correctly, said about cutting payroll tax, which is sensible as a stimulus; the extra money working poor & middle class get will be spent for basic necessary things.
But payroll tax-cut should be coupled with raising the cap on it, to get the lost revenue. Perhaps he couldn't think that way. If he did, Republicans would HAVE to go along with it; he has that much hold on them!
4
This just in Paul! Trump has requested that the Yippies levitate the White House (like they levitated the Pentagon) to demonstrate how "Great" the economy is & will be.
1
Oh, Mr. Krugman, don’t you know you’re tempting Mr. Trump to call you nasty?
He tends to do that when faced with opinions and facts (especially those!) that don’t conform to his world view. Then again I have the feeling you just don’t care about that.
Thank you.
3
No plan A
No plan B
Trump’s modus operandi :
Load, shoot, aim.
5
And even if it's not "bad policy" politicians have been irresponsible running up the deficit like this! Highest % of GDP since end of WW2.
3
@Mark Browning
Take all of your credit cards out of your wallet and go on a shopping spree. You work so hard; you deserve it--treat yourself! Max them out. You will certainly be stimulating the economy in a small way. But sooner of later (usually sooner) the bills come due.
2
Bill Clinton raised taxes marginally- in the top brackets, and cut spending, and the deficit went down, as the economy took off like a rocket with low inflation, lifting all boats. Bush reversed these policies, no following administration did what Clinton did, and the economy has been in a rut ever since. The deficit is so colossal now that there's not much room for fiscal policy. The Fed has already cut rates to all-time lows since the 2008 implosion. Cutting rates can't solve bad policy.
10
I feel like I am in a "Ground Hog Day" nightmare. Republicans pass massive tax cuts for the wealthy(their top political donors). They promise booming economy that will provide massive revenue gains and thus lower the deficit. The market responds from the sugar high and the Dow rises. But at the end of the year the tax cuts don't end up being even revenue neutral, the deficit explodes. It happened in the Reagan years, it happened in Bush 2 administration, and yet again Trump continues the trend. Trump and the republicans will blame the fed, blame Hillary, blame the press,blame Obama, blame the tooth fairy. What they won't do is finally blame their flawed strategy that has never help reduce the deficit. The deficit has gone up in every Republican administration that has gone down this road. Bush #1 raised taxes because he had do something to stop the red ink and the Republicans punished him for his heresy.
16
Read the label on the little red slippers.
Trump always finds new ways to blame others for his own stupidity. Dems hexing his economic brilliance is a new one. Does that mean the Republicans were responsible for his multiple bankruptcies when he was still a Democrat?
11
The simple answer to why does this turkey keep laying eggs, is the American people are ignorant and gullible. All the evidence points to a failure in policy, but the masses still drink the koolaid.
11
In the Trump environment where education is bad, science is wrong, and news you dont like its fake...what do you expect from Trump? To be reasonable? Of course it is anyones fault but his. That's his M.O.
10
@Scott. Scotty.whom are you quoting when you say education is bad?
Betsy de Vos, of course.
5
It occurs to me that very few people want a recession. It just causes too much pain for too many.
BUT the President's chaotic rhetoric in search of a scapegoat is convincing many people that we could experience a crisis of confidence in our economic future and tip consumer's scale's to saving rather than spending.
It's almost the reverse of FDR's famous statement in his first inaugural address, "Only Thing We Have to Fear Is Fear Itself".
The President's behavior, tweets, press conferences, and visual facial expressions are oozing fear because of the high amount of consumer debt that has accumulated this economy can come unglued in a hurry. I am also concerned that the government has created a lot of negatives in its unilateral use of tariffs and sanctions.
After he was elected I thought he would begin to evolve our transport infrastructure to improve its efficiency. Instead he seemed to be totally possessed by border security, tearing up anything that Obama initiated including the Obamacare Health Insurance program, and the size of his crowds. I am disappointed that members of his party can't seem to get through to him. Now, I have concluded that it would be better for the country if he did zero.
3
It has long been the central mantra of the Republican playbook: Make the rich richer by lowering their taxes, claim against all evidence that this stimulates the economy, milk the rest of America as much as possible when deficits soar, and distract voters with emotional nonsense so that they vote Republican against their own interests. In the interim, America's infrastructure is eroding - as is the standard of living for most Americans. You can call this voodoo economics or simply reckless.
6
"Are Democrats hexing the Trump boom with bad thoughts? ... Trump doesn't have a Plan B ..."
Wonderful illustration. He's got the graph upside-down. The decline in economic wellbeing looks like an increase. And time moves backwards, from right to left, in the direction of toxic nostalgia. The economic gains are still President Obama's, delayed by Republican obstruction which put power and, let's be frank, white supremacy ahead of the wellbeing of our democracy and nation. In that light, my bedtime hexing has a different target. I hex, with good thoughts rather than bad, the bad-faith, lack of morals, and short-sighted opportunism of Congressional Republicans, and I hex the nature of the white supremacist whom those Republicans and the Republican base are following over the cliff.
1
You mention the recently announced revisions to employment data reported by the Dept of Labor. For many quarters now I have noted a consistent difference between data coming from Labor and similar data coming from ADP. ADP generally reports significantly fewer private sector jobs being created than Labor. And now we see a dramatic downward reduction in the official data. I know economic data is always subject to revision, but with this administration, everything it says and reports is suspect. The Trump administration has been shown to lie about everything. Isn't it possible that the Trump Dept of Labor has been lying about employment data? I would not trust anything being reported by this administration that cannot be independently verified. Do you?
5
Our God-like president is as full of himself as anyone can be. A pathetic example of total incompetence and a willingness to flaunt his ignorance. Yes Paul, he has no plan B. But in fact he has no plan and never did. Trump does not plan--he reacts like a raw nerve ending. So unless something is perceived as a personal threat, he sees no need to articulate anything that one might call a plan. I would be even more worried if I thought Trump gave even a minute toward planning because his incompetence would have an even more damaging effect. So he bounces between pillar and post like a pin ball while global chaos and chaos at home are the rule of the day. It's not just our economy, it's the abandonment of all formal thought that should concern all of us.
8
Trump never had a plan A. The congressional GOP wrote the rip off tax cut. They made sure they cut Trump in for a huge slice. The GOP never thought Trump would win the presidency. It makes sense because Trump is a achievement free purveyor of his own personality cult. Trump came in and his cronies have done the rest. China and the trade war are where Trump has made his stamp. Powell and the Fed will use interest rates in an attempt to keep the economy going despite Trump's aggressive misuse of the presidency.
2
The way this “chosen one” is now ordering American companies to stop using China and thereby spooking markets further, it is now time for the 25th Amendment to be used. This man has become completely unhinged. Air Force One should not take him to the G7 summit tonight.
5
Pretty darn good Paul!
No plan “B”? How about not plan “A” either?
You could punch it up a bunch of notches and still not adequately portray just how absolutely toxic, destructive, and dangerous genius Trump is to the nation.
America is in for a mega-dose of the Perfect Storm politically and economically as the election of the century approaches.
3
I would be curious what Watson would have to say about all of this up and down.
Our current economic system is solely based on " fears." Fears of who might get elected, fears of this company missing its earnings, fears of a trade war... blah blah blah.
It is completely illogical.
Human nature is repetitive, self serving, selfish and too often defeatist. This perfectly explains the current economic system and why it is continually problematic and not sustainable.
I am sure if you asked Watson he would come up with something much more radical than any of the Democratic 2020 Presidential candidates, and it actually might make sense as it would be the results tens of millions of calculations, probabilities, statistics, and facts and not fear.
How refreshing would that be?
1
Two observations:
• Trump supporters routinely allege that he’s kept his campaign promises. But Mr. Krugman cites a glaring exception (there are doubtless others): During the 2016 campaign, Trump claimed that he would raise taxes on the rich.
• Mr. Krugman says, “You don’t get to turn around and claim betrayal when when the Fed does exactly what you expected it to do.
Au contraire! You’re talking about Trumplandia, where conventional logical consistency has withered. Whatever Dear Leader says is true and revered.
4
Free money! Who doesn't like free money?
A suggestion: replace IRS with am automatic electronic tax on the movement of all money. One rate for all-No credits- A rate high enough to balance the budget and pay down the debt. over 20 years. The rate is set by the Federal Reserve.
All l the Trust Funds could be added over time.
All the money going in pr out is a tax paid by the sender.
It's hard to believe Mr Trump is not executing a plan, hatched, funded and directed by Mr Putin to destroy the US by giving it's least reasonable citizens exactly what they want.
7
Krugman, which Democratic candidate do you want to see in the White House?
My guess - Warren
The rest are lost in the weeds.
Warren has an uphill battle.
The drive to the center will be fun to watch.
P&L, how does Elizabeth Warren have "an uphill battle?" If you mean, against Trump, allow me to correct you:
Center or Left: Senator Warren in a Landslide.
3
Since Ronald Reagan, the laughable Laffer Curve has been used by the Republican Party to justify massive tax cuts mostly favoring the wealthy and corporations. I don't believe for a minute the Republicans and their handlers actually bought into the "balanced budget" nonsense. Rather, their actual agenda was to allow the deficits to surge so in the name of "fiscal responsibility" they could justify reduction/elimination of entitlement programs like Medicaid, Medicare and Social Security. But terrified of the inevitable political blowback, they always chickened out and instead ignored the surging deficits (unless the president was a Democrat, of course.) in favor of just focusing on providing even more goodies for their handlers. Which is what they're doing right now.
8
Wondering how employment figures are calculated now that more and more workers have multiple jobs. In households with two wage earners, each working two jobs, do they count as 2 or 4? Could counting them as 4 be the reason the employment numbers look so good?
6
Good post, Dr Krugman. You say "But [a payroll tax cut] seems unlikely, among other things because top administration officials denounced this policy idea when Obama proposed it." I would not bet on it -- consistency means nothing, and it's the only thing that might actually give the economy a boost, other than completely backing off the trade war.
Trump is sounding more and more like a tin-pot dictator in a banana republic -- let's hope our institutions can stand up to him...fingers crossed!
7
A democracy that doesn’t value truth nor ethical law or moral virtues cannot stand. Greed as a foundation erodes all such values and must be placed far lower in our society if we value individual liberty and justice for all.
12
What would the Trade War Treaty look like?
1
I guess the major difference with the previous iterations of voodoo economics with this one is that Donald Trump thinks that the Democratic party is actually using voodoo! I'll take the pins out of my DT doll if you do too.
8
We've heard lots of senseless or inane babbling about the economy and everything else from the empty headed orange occupier of the White House. But what is his "Plan A" for the economy? How can he have a "Plan B" when we have yet to figure out what his Plan A might be. Impulsive responses to talk radio or other social media rants are not a "plan".
10
Only Donald could make Lucas and Sargent look good.
If I had a little voodoo powers, it wouldn't be the economy I would be putting under a spell.
He only destroys and disrupts, which is to be expected when someone has no knowledge of how anything works and no interest in learning. And perhaps no ability to learn.
The ideas of desperation he has repeated will starve Social Security - a when we should be figuring out how to fund it -- and further drive up the deficit. Note again: social security is a target of some far right Republicans, and Trump and his chosen crowd don't need it themselves.
Personally I with those who think he is unable to deal with the demands of the office, and has continually risked the security of the entire country to make himself seem bold, only to have continual meltdowns - now more and more in public -- when things do not turn out well.
Talking about his has actually gotten so repetitive -- and yet here is no real government response. How much freedom will elected officials allow a lunatic?
4
No one loves "The Big Lie" more than the GOP and their constituents. And no one is a more faithful practitioner of it than Donald Trump.
5
I fully expect trump to start blaming the script writers for the failure of The Trump Presidency.
4
If Democrats had the power of the evil-eye regarding the economy, then don't you think that they would have used the power on politics during the 2016 election to win?
5
Peter, because they did not field a male candidate -- of the quality of Obama -- the Democrats [unfortunately] didn't stand a chance against Trumpty in 2016. The reasons (tied for 1st place):
1. Too many "establishment-disgusted" voters ("the 35%") -- albeit, justified in their disgust -- wasted their vote on a Con Man
1. Hillary was a weak, self-possessed candidate who alienated too many otherwise intelligent voters (e.g., middle-aged and elderly males)
1
These are the best of times these are the worst of times.
The economy is the least of our worries.
Men like Mike Pompeo believe stuff that has zero basis in reality. The Amazon is burning because the same people that believe we are one nation under God supported Balisanaro supported Trump.
The country whose founders were Deists and believed the creator took no part in the affairs of men has allowed the Abracadabrans to run roughshod over science and the laws of the universe.
We are wealthy beyond our wildest dreams and superstition and VooDoo occupy the most important positions in our society. We let economists run our daily lives and grow economies even as the populations in all economically successful countries continue to decline and the only countries where things are getting better and population still grows are India, Mexico and Indonesia and there they have near the magic 2.1 fertility.
When we allow belief and magic to run our lives we doom ourselves , our society and our planet.
Reality is that our economy is growing and our population is shrinking and our Voodoo may be better than their Voodoo but Voodoo is Voodoo. We are not nations under God or gods we are in charge and we are not up to the task.
It's time that everyone on the planet is in constant contact with the universe so they can do the texting not the sex thing.
The economy works as designed and it is the design that doesn't conform to growing wealth and decreasing population.
2
@Montreal Moe - You left out the Burning Bush telling us, "The Sky is falling. THE SKY IS FALLING !".
Halle Julia !
@LouAZ
This is Canada. The sky isn't falling I am 71 and how bad can a little warming be?
Our fertility rate is the same as Germany's about 1.5 but we have already committed to 350,000 new Canadians a year in an economy whose growth is not the be all and end all. We know what Germans look like and if you can look at a picture of our Federal cabinet you would understand that Canadians look like the world so the fact that every nation in Europe has a fertility rate below population maintenance is immaterial.
Here in Quebec our state religion is secularism and if we could we would ban all religion, we would.
Mark Twain said you couldn't throw a stone in Montreal without breaking a church window, it may still be true today but that church window today belongs to a restaurant or may be an architectural element in a high end condo.
Saying we decide the future may seem pessimistic to many Americans but to me it is the opposite of "the sky is falling".
Twixt Gog and Magog there will be no apocalypse or rapture, there are no horsemen just a world where we decide what's next. You may be a nation under some supernatural being but we are in a world where we decide que sera sera. The sky may be falling but we alone will decide whether it will continue to fall not the King of the Jews or the Chosen one.
2
The photo is BRILLIANT !
It perfectly and completely explains Trump Ǝconomics as taught by Trump University.
6
When is Mitch McConnell going to admit that trump has a mental problem, oh yes, after he has finished stacking the courts with conservative judges.
10
@Steve - Just as soon as the Senate completes the Hillary Bengazi Inquiry . . .
1
Does everyone now realize why Donald Trump went bankrupt several times? He takes no advice because as a narcissist, he believes his ridiculous "gut" is reality rather than delusional. Trade wars are not easy to win, China is not paying his tariffs and Russia was not dismissed from the G8 because of President Obama. Donald Trump's lies are catching up with him, unfortunately they are damaging everything, our economy, our security and our democracy.
6
Trump seems to treat the UN economy as a casino doubling down or going all in on a bluff until some country flinches. This is no way to run a $22+ Trillion dollar economy - at the hands of a 5 times bankrupt philanderer.
5
After Dear Leader ordered companies to leave "Jina" and move jobs to the US, next up he is going order tax receipts to go up, GDP to increase to 5% and the national debt to disappear!
I can't wait to see the results, just like the "Laugher Curve".
8
Mr. Krugman keeps calling the Reagan tax cuts, proposed by Mr. Laffer "Voodoo Economics." The fact is, that they accomplished exactly what Mr. Laffer said they would. They stimulated the economy and increased tax revenues. In fact, US income tax revenues more than doubled during the Reagan years. The deficit increased during those years, because not unsurprisingly, Republicans like spending just as much as Democrats, and spending rose by even more than the vastly increased tax revenues. Tax revenues rose during the Bush administration, and again, spending rose faster. Mr. Krugman knows this, and to state otherwise is simply dishonest. Blaming the deficit, or tax cuts for the great recession is absurd. The recession, which may have been due as a business cycle, was made much worse by bad housing loans which were largely mandated by the democrats, and Bill Clinton. It had nothing to do with deficits, and in fact, Mr. Krugman has argued many times that we needed even greater deficits to get out of the recession.
Tax revenues have also increased after the Trump tax cuts, though we have only one year of these under our belts and it is too early to know what their ultimate effect will be. In fact, from where most of us stand, the economy is doing pretty well. Employment is up and millions of people who were unemployed at the end of the Obama administration are working now.
I agree that we could do much better on the deficit.but there seems to be no will to address this.
1
@chip
Mr. Laffer had all the corporations laffing all the way to the bank, but the rest of us weren't laffing or getting rich. Laffer's curve has me laffing out loud.
2
Let's not put the cart before the horse, the fight's not over yet Paul. Unemployment, the stock market and GDP are all in better standing than under the Obama administration. There are setbacks and contingencies in all things business, it's no different with Trump. However with Trump he's actively trying to advance the American economy on the world stage where Obama sat in the audience and watched the show.
2
If Laffer wants to argue that Obama is actually to blame for the slump at the end of George W.'s presidency, simply because the very idea that Obama could win the election caused a loss of confidence, then how does he explain the recovery that took place while Obama was actually in office?
6
Our family undoubtedly benefited from the Republican tax cuts, for which we are thankful, but I think President Trump is making a mistake if he thinks that alone justifies his re-election. And I'm not just talking about the negative impact of his trade wars on equities and the bond market and its lesser impact on the economy, but the possible negative impact of his immigration policies on long-term growth. His retrograde, 17th century, thinking on immigration and mercantilism could very well more than wipe out the gains from the Republican tax cuts. Then where will we be?
3
@Keitr
I they cut all your taxes you could think you are in paradise, until you awake and realize the disappearance of all public services including roads and bridges maintenance, police, firefighters, clean water, safe food, safe adequate housing, cars, healthcare, etcetera. Tax cuts have effects and the main beneficiaries are not those who paid a few thousand dollars a year, but those companies and billionaires who make billions of dollars and who stopped paying millions and billions of dollars and without those taxes for their use of the country's resources the country's infrastructure goes down the drain.
5
It does not matter what scientific evidences or mathematical evidences prove.
For most of Americans who love Mr Trump and his theatrics these above does not matter and for the rest in GOP and some on the super left that have stopped thinking with facts and figures all together.
GOP have done weird turns about "Deficits" and DEMS ( I do not know from where ) gets the idea that the Super rich who does not even allow rest to vote or right to go to schools and colleges ( which really work to lift people from poverty ) will happily give up all their money to pay for the billions for "Free" life on Earth!
Put very simply a tax cut for working Americans has always been off the table because Republicans fear it would actually make our economy a lot stronger, heaven forbid. It would expose the sham trickle down economics has never helped the working man for any length of time. Our economic foundation is being turned to rubble while the Republicans still pass the buck to (the wealthiest among us).
10
Tell me professor K, isn't an inverted yield curve merely a symptom, rather than a cause, of hard times to come?
The real predictor of an economic downturn would be the historically low long-term rate number in the yield curve calculus, because it reflects an existing market consensus that the economy is headed for a rough patch. Fed action to artificially manipulate short term rates, with the arbitrary goal to make them lower than long-term rates, would have little effect on this existing negative consensus on future growth. Moreover, how can reducing short term rates lead to increased economic activity when there is already plenty of money available to lend/borrow at historically low long term rates?
1
Almost every Krugman column holds a hidden gem, sometimes something as unexpected as today’s item about Laffer’s explanation that the Great Recession was precipitated by a massive loss of confidence because people (who knows who, Republican oligarchs?) anticipated that Obama might win the next year’s election. Take a sip of coffee and ponder this: what kind of person (let alone economist) sees the US economy as a giant long con, with outcomes based on how effectively you can hoodwink movers and shakers into gaining or losing confidence based on... smoke and mirrors? Only a grifter works this way, which is what you get when the economy is so totally financialized.
11
This is the kind of clear-minded economic message that Trump's base needs to hear and I wish that Democratic candidates have the gumption to deliver it to them in a clear, succinct manner. Because otherwise, most of them are going to just believe Trump's false assertions that it's the Fed (or the Deep State, or China, or Mexico, or the evil-eye) that is responsible for the coming slowdown.
13
@Santa: Trump's base votes for Trump on 4 principles 1) white male supremacy, 2) anti-non-white immigrants, 3) anti-liberalism, and 4) guns. Where the Trump base are losing their jobs because of his failed economic policy they blame the 4 principles of their political life. After all the Trump base universally believes that Obama was born in Africa which made him ineligible for the Presidency, despite the fact that our Constitution clearly states that any child of an American Citizen is an American Citizen no matter where born.
2
Or Obama.
The man is simply awesome, unbelievably visionary and immune to static from any quarter. The Fed, what do they know. Just because they have people with a PhDs doesn’t mean Trump isn’t a genius in quantum economics. With his sidekick Steve Minutia they have it all in the corner pocket. The main thing that matters is for the president to have a comfortable retirement ASAP!
4
Krugman misses the point in Republican advocacy of supply-side economics. It has nothing to do with belief in the efficacy of tax cuts for the rich. The entire point is tax cuts for the rich. It never was about a salubrious nostrum to improve an ailing economy. It was always -- the Laffer curve and so on-- just an elaborate cover story used to gull electorate.
We should call this stuff hoaxenomics.
19
According to Wikipeda, Arthur Laffer is a Yale and Stanford educated economist. He was on the faculty of University of Chicago among other institutions. So, with respect, he is one of “you”. Perhaps the problem is with the discipline rather than the individuals that practice it.
2
@Barry Newberger: The problem with Laffer, he distorted the economic rules to fit hisextreme political agenda of all power and money to the elites.
4
@Barry Newberger
Take your Wikipedea search a littler further. There is Keynsian economics and, wait for it, The Chicago School of Economics. Not a physical school but it is closely tied with, again wait for it, the University of Chicago. These two schools of economic thought are very different so saying Krugman (a Keynsian economist) and Laffer (a Chicago School economist) are the same shows a Laffable lack of knowledge.
4
The problem is the rich are not just like you and me and everyone else, and I doubt they really put on their pants one leg at a time.
We should have learned by now that if you are rich and powerful and live in a utopian free-market economy of your own making, you can buy the truth, re-fashion it as you see fit, and rely on armies of paid liars to spread the 1%ers' revisionist truth throughout the land.
We need to realize just how many occupations and jobs in this country rely on various forms of lying, which include: misrepresentation, deception, exaggeration, withholding information, ad hominem attacks and smears, and full-fledged campaigns of misinformation and disinformation.
Many of us realize that either we are being fed a pack of lies designed to elevate the wealth of the already rich and/or that Republicans have a brain wiring problem called "Oppositional Synapse Firing" (OSF),
Republicans are especially susceptible to OSF, which occurs when individuals process and explain information incorrectly, and end up by saying the very opposite of what is true.
Almost every Krugman column over the years has provided a innumerable examples: the "wrong-about-everything-people," the "austerians," "voodoo economics," and the ever lurking "zombie" ideas that never really die and disappear.
OSF is highly contagious, and the entire Republican Party is a carrier. We are experiencing an epidemic with the virulent Trumpism form of the disease, and truth has no effect.
15
It's a sad state of affairs to think that the Democrats would wish a recession upon the country just to win an election; but, under present circumstances, it makes complete sense. Trapped animals have been known to eat a leg off to escape. Perhaps that's the situation we're in. Given the alternative, a recession might not be that bad. While praising the intelligence of the American electorate, he secretly knows that they can be led around like bulls with nose rings - only instead of bull rings, he uses their beliefs and prejudices to lead them wherever he wants. If DJT doesn't destroy our fragile democracy, he has published the blueprint and playbook for some other demagogue to do it later. If a democracy like America's is going to exist, there will have to be a paradigm shift in human thought throughout the world.
In the near future, we will program the human mind in the computer based on a "survival" algorithm, which will provide irrefutable proof as to how we trick the mind with our ridiculous beliefs about what is important and what is supposed to survive - producing minds programmed de facto for dirty tricks and destruction. These minds see the survival of a particular belief as more important than the survival of us all. When we understand this, we will begin the long trek back to reason and sanity.
See RevolutionOfReason.com
2
I'm a Democrat and most of my friends are too. None of us want a recession but we do want an American that is not ruled by hatred for all but the wealthiest white men.
5
“The Democrats are trying to ‘will’ the Economy to be bad for purposes of the 2020 Election.”
Coupled with the other headlines this week it's clear we are well down the rabbit hole. Does anyone know when the caterpillar with the hukka expected to arrive? Right now I feel like I could use a hit off that bad boy.
13
I am surprised he hasn't blamed it all on Obama and Hillary Clinton yet. Given the fact that he is also claiming to be the new messiah, can't he just ask his dad to fix things.
12
Many years ago, Laffer appeared on Louis Ruckeyser’s Wall Street Week where he predicted that by 1995 the current accounts deficit would be zero. I remember this because I made a contemporaneous note which I stuck away in a desk drawer. 1995 came and went and, of course, the current accounts deficit was not zero. Why we put any stock in the prognostications of economists is a mystery to me when a farce like Laffer can persist in the field.
4
I did not understood wall street's 2-year exhuberence after Trump took office. I guess the big tax break for the Investment Bankers and Traders made them think times were really good, and would remain that way. However, how could anyone with sophisticated financial knowledge as most of these people claim not see that this administration's plans and actions is not going to end well? The recent market gyrations are also mysterious to me. What exactly is causing the market to determine things are headed south one day, and then determine it must not be so bad the next? My guess is that automated trading algorithms are part of the signal. but surely something else is happening.
I guess I shouldn't expect rationality. The people who dominate trading are the same types who bought into "Collateralized Debt Obligations."
9
@Brian H.
The main reason for the Wall St gains in 2018 was the buybacks of stock by these same CEO's who now profess to change the mission statements of the corporations to serve the interests of the stakeholders. Yeah, after they've taken their shares They loved the tax breaks for business, and as Paul has pointed out numerous times, they did not plough any of this loot back into the economy. 2017 was all Obama. Wall St. is apolitical as we will see later this year when they will give up all the gains well before the next recession.
3
If a recession comes the poor will still be poor, the middle class will be mostly still living paycheck to paycheck. The people that will whine the most will be those who are insulated from the harm of a recession, and that will be because their drive towards wealth will have been impacted. A real travesty. They may have to sell their beamer or drink Californian wine.
1
Trump, through this life, appears to have a personality that wants or needs turmoil to feel excitement, happiness, or accomplishment.
CONGRESS — Stand at the side of this puts the world at great risk. And may you be marked in history as enablers, hoping to benefit.
1
"And the truth is that last year’s rate increases pretty clearly were a mistake."
How so? The Fed had to raise the rates during a period of economic strength. Is the Fed supposed to leave rates excessively low, so that in an economic downturn, they have no tools available? The problem was not the rate increase, but a tax cut that failed to spark the economy. Rather than reducing taxes on the people who would spend, they reduced taxes on corporations, which, in turn, bought back shares. That does not spark the economy. It helps only contributors and special interests.
7
trump has offered artificially sweetened lies to Americans since the Jurassic period. Americans suck up to it like hummingbirds at the feeder. They don’t realize it’s going to eventually kill them financially or otherwise.
5
To start to understand what the so-called market economy (ME) is all about and appreciate the continuous overreach in national security since 1999 with respect to it, please read my posts at http://instagram.com/heroictabbycat
1
Just some quick observations.
Trump may be crass and a moron based upon recent standards for our Presidents, but his agenda seems familiar:
1) The Federal Reserve is to Trump what Biddle was to Andrew Jackson;
2) His divisive rhetoric has faint echoes of James Buchan, who may not have been as crass as Trump, but his actions led to the Civil War, which Trump seems to want to start over again;
3) Andrew Johnson killed Reconstruction, which fits right into the Trump playbook;
4) And finally, Wilson wanted an unarmed unified Europe without any military capability, whereas Trump followed the lead of the post WW I Republicans, who wanted no part of Wilson’s 14 Points or anything to with Europe for that matter. And Trump wants an armed Europe.
1
Dear Sir,
In plain English, would you please explain why increases in government spending are better at stimulating the economy than reducing taxes. Somehow it seems that the money involved is the same and unless you believe the government is better suited to spending it I don’t get the difference. If that is the case then make that argument and in turn perhaps people will not support lower taxes.
1
For one thing, reducing taxes on the wealthy does not increase spending
11
@Paul Here is piece to read: https://www.nytimes.com/2011/07/03/business/economy/03view.html
2
@Brassrat Spending doesn't increase prosperity, saving and investing do...
2
When did the Democrats get extinct from the planet Earth?
They could have easily reversed EVERY bad policy or tax cuts by the GOP elite...
It means "trickle down" theory is a child parented by both the Republicans and the Democrats.
Nobody has ever liked the party poopers or the people telling us the truth.
Why?
We prefer do live in our imaginary world free of the unsolicited intrusions and hot-air-balloon-piercing critics.
The problem is that we are paying out of our very pockets for our foolishness and naiveté that it’s allegedly better with the Democrats in power…
The fact that the real wages have been frozen for four decades is not supportive of such a bias.
That’s why the scarecrows like Reagan and Trump are created.
Their role is to district us from the sad reality and hide the truth there are no humans in the field to protect the crops or the fruits of our hard work…
1
Oddly, it turns out that it’s pretty hard to run the government if a) your voters can’t be bothered to get off their duffs and vote, and b) they have no idea how their government actually works.
7
@Robert
The problem is that neither the government nor the free press know what their duty is.
Their duty is to run the government and inform the public.
Their duty is to collect the taxes and pay for the services the voters entitled the government with.
There is no such a thing like free lunch.
It's not governmental job to make the businesses profitable. That's not its concern.
Putting the profitability of the global corporations above the national security and stability is equal to betrayal.
It's happening because the free press has no idea what they are doing.
The problem is that the free press is owned by the global corporations...
2
@Kenan Porobic: Hum, until the last Congressional election the Democrats were the minority party in Congress. So, just how does the party with fewer votes, control the policy of the Party with the most votes? It is so sad that the American far-Left is so blinded by their political ideology that they have no idea how the US political system and Government actually works. They vote for political "purity" and so will probably give Trump 4 more years because no Democratic Party candidate will be pure enough or left enough for them. Thump loves you.
Quite the laugher from Laffer!
4
I wish Krugman would stick to economics and leave psychology to those far better qualified.
The truth is that while Trump may (or may not) have a Plan B, Krugman doesn't even have a Plan A. He doesn't do "competent" policy any more. He does sound bites and personal attacks. He is too busy looking for racists under the bed to think anymore.
For example, Krugman suggests "calling off the trade war that has been depressing business investment?"
Well, what about it? Would that be a good idea or a bad idea? Krugman has never said. A while back he pronounced China a bad actor over trade, but now he suggests that Trump capitulate to the bad actor? Really?? So Krugman would kiss goodbye any possibility of getting China to play by the spirit and the rules of an open world trading system? For what? All to avoid an economic slowdown that is probably inevitable no matter what Trump does?
If Krugman has nothing worth saying, he should not say it. He has the Constitutional right to remain silent.
3
@Ian Maitland you have that right too. Plus you seem more qualified that Krugman to need to exercise that right.
1
@Ian Maitland: Its appears that you prefer the "Right to remain silent," which, by the way, is a Criminal defendant's right above a Citizen's right to criticize the Government.
@Jeff
Not so. Compelled speech is just as much a violation of free speech as is speaking.
No miracle for the economy from tax cuts. Tariffs are paving the way into a recession. But I must take up your last paragraph Paul. As members of the American psychiatric community confirm Trump’s narcissism personality disorder it is clear that he is forever in a combative state with anyone who disagrees with him and instantly their friend again if it serves his ego. Much of the world does not trust him, and do not know how to take him. On his delusions of kingship and Israel, this becomes more concerning once you delve into the religious base around Trump. He is more their “divine wrecking ball” to help bring about the end of the world. We are seeing his destructive character play out all over – from the rise of domestic terrorism to yes – the eventual ruin of our economy. Divine? No. Deranged? Yes.
4
Trump has no plan B.
He also has no plan A.
10
Yes, the Republicans are fools, liars, and hypocrites, and Trump will never take responsibility for any failure. However, I fully expect both to juice up the economy in 2020 any way they can, no matter how inconsistent with their previous statements. Trump might even call off the trade war. I also expect the FED to aid and abet this charade since for the past year it has seemed more concerned with making Wall Street and Trump happy than with its statutory mandates of low unemployment and low inflation. But there is a bigger question here: How long can economies be supported by low interest rates set by central banks? That isn't a rhetorical question. We've had 10 years of monetary stimulus, and we don't seem able to wean ourselves off it. Fiscal stimulus in the form of the tax giveaway for the rich didn't move the needle much. Maybe the fiscal stimulus that the House Dems agreed to will work over the next few years, but it seems to me that something else is weighing on the economy. Maybe demographics? Massive wealth inequality? Young workers who can't spend much because of student debt?
4
I hope the producer of "Mr Bean" movies is taking notes. This administration is producing a wealth of information for countless future scripts.
3
There is something inherently wrong in our political system when a grossly incompetent, odious person like Trump can remain in office when he would be removed from any Fortune 500 company if he were CEO.
8
I 've heard it said that if Trump had taken the four million or so dollars that his father gave him and put it in the bank, he'd never have had to stiff his creditors, declare bankruptcy or turn to crimes such as money laundering for Russian mobsters to keep his crooked empire afloat. And he'd be worth much, much more.
Likewise for the present and coming disaster. Think about how much better off the economy would be without the chosen one's incompetent blundering and if the Obama recovery had been allowed to continue unmolested.
4
Rule #1: Republicans never admit they are wrong even when the available evidence is overwhelming.
Rule #2: For Republicans, It always the Democrats fault irrespective of who controls the White House.
Rule #3: The Republicans always have their excuses ready for any situation. They remind me of the John Bellushi skit:
https://www.youtube.com/watch?v=JFvujknrBuE
3
This so explains Trump’s repeated assertions of positivity in the face of contrary evidence - assertions like “best economy ever”; “greatest political movement in the history of our country”; and the China trade war is “going very well, as you know.” Clearly, Trump’s technique is simply Professor Harold Hill’s Think Method from “The Music Man”: if you think you can play a John Phillips Souza march, you CAN play it - without practice, without plan, without effort. Two snake oil salesmen, one playbook. No wonder Trump is so worried about “bad thoughts” from others interfering with his discipline.
369
@Citizen
As you know, there is still no comparison. Prof. Hill had some of the best music. Trump cannot hold a tune for 30 seconds.
24
@Citizen, Norman Vincent Peale.
4
@lynnep; At least Norman Vincent Peale's positivity was based in realism. Trump's has no relation to the real world. He is unhinged.
15
Arthur Laffer’s statement about the failure of tax cuts for the rich seems like a cynical twist on G.K. Chesterton’s statement about The Christian Ideal: “The Christian ideal has not been tried and found wanting. It has been found difficult; and left untried.”
Tax cuts for the rich have been tried and found wanting. It is a simplistic idea and will be tried over and over. Maybe because they offer politicians an easy way to do something about economic concerns without ruffling any donor feathers in the short run.
2
Magical thinking is alive and well. Economics in a system as big as the US can be complicated, difficult to comprehend even when presented with integrity and clarity. Imagine a slick daily bombardment from fox/brietbart/sinclair/etc. everyday dishing out the latest propaganda for their oligarch puppeteers. As a viewer all you really know is you find it painful to give the gov. $. Reagan's message was republicans will cut your taxes and we'll still give you medicare, social security, infrastructure, education, and all those other gov. programs that help you. P.S. the resulting ballooning deficit will magically go away. This lie has worked for decades. Thanks to Krugman and others who make the effort to simplify, clarify our economic issues with integrity.
1
"You see, according to Laffer, everyone lost confidence upon realizing that Obama might win the 2008 election."
Another possibility is that if people realized the Obama might win the election, the recession would never have happened in the first place.
Don't you love the way that economists can think up an explanation for just about anything?
3
I am an economist, please don't lump Laffer in with us. He was joke in the 1970s when I was in graduate school.
8
@James Tallant My instructor in under and grad school in later years considered Laffer and St. Ronnie's economic policies as gross wizardry designed to fool the masses.
6
@James Tallant
Nevertheless, you can always find an economist with a ready explanation for the latest up and downturn.
1
I know that Krugman never met a printing press he didn't like but I just wonder when he will come to recognize that our gigunda deficits and the virtually free money the Fed is already providing are going to be very, very bad for the economy in the not-too-distant (and maybe very-near) future.
@J. Cornelio Perhaps he has. But, in this column he is speaking of Donny's sleight of hand economics and the evil eye of those who do not support his carnival barking methods.
3
In the economic universe created by Reaganites and beefed up by every Republican politician since, "trickle down" is the con in a game that actually produces a "gush upward".
The redistribution of wealth from the working class to the gold-plated toilet crowd is there for all who have even the smallest morsel of intellectual curiosity to see.
And therein lies the problem. Thirty percent of Americans make massively important political decisions by turning over their thinking and analyzing duties to Fox News, right wing radio and conspiracy websites.
To secure their political support, all a "news source" needs to do is sprinkle in words (the actual meanings of which elude them) like "socialism" or "elitists".
And, liberals, do not believe for a second that any amount of economic adversity that they personally incur as a result of GOP policy will shake them free of their poisoned beliefs.
506
@James J
When did the Democrats get extinct from the planet Earth?
They could have easily reversed EVERY bad policy or tax cuts by the GOP elite...
It means "trickle down" theory is a child parented by both the Republicans and the Democrats.
Nobody has ever liked the party poopers or the people telling us the truth.
Why?
We prefer do live in our imaginary world free of the unsolicited intrusions and hot-balloon-piercing critics.
10
James J, outstanding, spot-on commentary. To add to the woeful truth that 30% of Americans (1 out of every 3!) warps the means of "socialism" and "elitist" in support of their unfettered ignorance --
Note to those among the misguided:
1. Socialism does not mean Communism
2. Democrats AND Republicans espouse socialist policies (see Social Security)
3. Elitist is wonderful word, in that it refers to people who USE THEIR MINDS.
67
@Rob C I am part of the 30 percent. I will vote for Trump because he is the only president who has stood up to China on trade. We need to confront them on trade to avoid a military confrontation in the future. Time to watch Fox News!
1
All of his life, since he was a small child, Donald Trump has been given good things which he did not deserve. His father, Fred Trump, was extraordinarily generous to young Donald and also to the adult wastrel.
Fred even forced the government and working men and women to give his favorite son millions in the form taxes which should have been paid by Fred, but which were evaded, leaving public expenses to be overpaid by the public.
President Donald Trump took office with the gift from President Barack Obama of an economy which was strong, in spite of the efforts of Mitch McConnell to weaken it.
We all recall the Republicans blocking infrastructure improvements and any programs proposed by Mr. Obama to put more money into the hands of working people to spend.
Donald Trump has weakened the American economy by his hare-brained mismanagement. As a man who has never accepted blame for any mistake throughout his life, Trump is now striking out at Democrats and at anyone who dares to mention his blunders.
Republican politicians are keeping their mouths shut and trying not to roll their eyes.
8
Is this really a surprise, its been shown time and time again that the Republican Party and its followers disregard facts whether it be in science or economics, for political and religious reasons.
14
America must blame itself.
It has elected disastrous presidents endlessly, then doubled down.
Nixon, Reagan, and Bush 2 were granted second terms, even after their damage was apparent.
The real ZOMBIE tragedy is our inability to learn from mistakes.
15
Trump doesn’t have a Plan B? I didn’t know there was a Plan A.
11
Nice to make light of the situation Paul but enough already with bud light opining. We need to take this guy seriously and take actions not words. Impeach him in the house for a start. Keep hitting him with blows to the gut and face via actions not words cause words don't mean much any more with so many untruths bombarding us daily. Actions speak so much louder than words my pontificating friend.
2
Just found out the set of tires for my car has gone up 200+$ thanks to the tariffs. donald, I'd have sworn you told us that China was paying all the costs of the trade war you started.
Econ 101 donald. I think I'll just put off buying those tires for another year or so.
11
"...according to Laffer, everyone lost confidence..." when they decided "that Obama might win..." Kinda like today when so many think the Democrats will doom their chances if they nominate someone with progressive ideas. I guess such a candidate has no more chance than a young, black law professor did in 2008.
4
I am not convinced that Republicans in power who shovel trickle down on us really think it will do what they say it will. I think they know full well that it won't, and cynically plan to wring as much wealth as they can out of most of the rest of the country while they can, knowing that the other half of the trickle down cycle - Democrats back in control to clean up the mess - inevitably follows, avoiding disaster.
The greed of these folks blinds them to evidence pointing at it not being a cycle, but a spiral. Or a pendulum. Every swing gets juiced so that the back swings are bigger; sooner or later, the pendulum will break and full on Great Depression comes along. And we now have the increasing effects of global warming thrown into the mix; Mama Nature doesn't care about tweaking interest rates and debates about national deficits and debts.
It's Occam's Razor time. Either Republicans in power are incredibly so stupid that they don't understand the evidence, or they get it and they don't care; they're playing everyone not of the top 1% or thereabouts for suckers, even their own everyday party members. Suckers, or hangers-on willing to go along as long as they can stay out of the bottom 90%. It's not reasonable to believe that all of these Rep Congresspersons, Presidents, and business leaders can't see the pattern, or think they can change the pattern without doing anything significantly different than the last time they tried trickle down and it didn't work.
7
Who needs competent policy when you’re the chosen one and the king of Israel? That is the question. The immediate answer is: all of those who vote Republican. Next question: If we believe in a two-party system, what should the ones who believe that competent public policy is necessary do?
2
Remember the goal of the radical far right dominated GOP is to shrink govt and then drown it....compund this w/ trump and the GOP being under the thumb of Putin who actively seeks to cause chaos and division in the USA and other western nations...this is done w/ purpose, it is very sinister, not fumbling but focused on destruction.
4
“The Democrats are trying to ‘will’ the Economy to be bad for purposes of the 2020 Election.”
I wish we could 'will the economy to be bad .....' but I agree with Bill Maher in hoping the economy goes south because maybe .... just maybe that will shake the cult out of their stupor and they'll see this president as the snake oil salesman that he really is.
6
These are entirely Republican created problems, the same nonsense and mismanagement for 40 years.
The solution: get rid of Republicans. All of them. Each and every one of them.
November 2020.
9
The real "Voodoo" monster is the incurring deficit/debt which the previous Republican party so denounced when a Democrat is in the W.H. but is of no consequence with a Republican and especially as incompetent and mentally unbalanced as Trump. As Paul Krugman said months ago, "It is only going to get worse!" and sure enough, it has! This is not going to end well! The "Chosen One" is simply an unprecedented disaster!
10
In your willingness to be fair what you have written looks like the kind of "on one hand but on the other hand" journalism you criticize. I believe you agree that we should not give these peole even a fig leaf of cover. Just slam the facts out there and let us develop constructive wrath.
1
This farce is no longer tolerable let alone humorous.
2
NOTHING will change or move magical-thinking Republicans unless the stock market tanks--and tanks FAST.
2
Plan B? Is this what you call A Plan?
Because Trump loves witch hunts, he'll probably blame the Democratic Squad, claiming they're a coven that has hexed his booming economy.
1
@Andrew
Good thing he doesn't read, or he'd be tweeting that idea as his own next great thought.
2
The trade wars aren’t easy to win.
No trade or real war is actually EVER easy to win.
We think the wars are cool and entertaining just because there is no public draft and no war taxes to pay for these extraordinary costs.
Actually, nobody has ever won any war. The war only gathers the losing nations. Each of the participants loses every single time.
If you lose several hundred thousand soldiers, the millions end up with the ever-lasting PTSD, and hundreds billions dollars are wasted on the killings of other human beings, how anybody can be victorious in such a contest of wills?
Is it the contest of will or stupidity?
Any leaders not capable of negotiating the peaceful solutions to the disagreements should forever live in infamy.
How could anybody with the trade wars?
First we exported our manufacturing base to China and now we are going to ban those imports we urgently need?
The prerequisite for the trade wars is to imprison those who promoted the concept of free trade making us dependent on China.
That put us on the unsustainable course.
There is no doubt who can make the goods cheaper if the other side has ten times lower wages and the identical technology we generously exported overseas.
Who saddled us with such an unfair competition?
The businessmen declaring bankruptcies several times until they started milking the federal government endlessly?
All those mistakes were made a quarter century ago…
1
You better have my back after all this, Krugman. They talk politics all the time. The problem I have in a lack of purchasing power in defending rights, including my own.
1
An alternative to Voodoo is Demand Side Economics.
All other things staying the same, If workers get the new money that is created when their efficiency goes up, then they can spend that extra money in the local store (without fear of creating inflation because productivity is up.)
This new consumption clears store shelves. Factories must produce more.
Investors work hardest when trying to fill new demand!
Of course stimulating demand while the planet heats up is not a long term plan either.
The next thing we have to do is stop using aggregate numbers to say that growth in GDP is always good, even though inefficiency grows the GDP more than efficiency does.
If you bought the perfect refrigerator, it would keep food perfectly, and last forever. without breaking. But if the refrigerator lasts forever, you can only sell it once. That doesn't leave much work for the refrigerator industry, however. If you design products, using statistical analysis to predict the aging of parts, then you can build stuff that breaks soon after the warranty runs out, which means a new one has to be bought. This new one is a waste of precious resources and energy.
I grew up in the 60s while everything that could be disposable was made disposable, and we all loved it. It grew the GDP and it made life easy.
But the earth's crust and the atmosphere are thin. We have limited resources, and we need to figure out, DEMOCRATICALLY, how to best distribute these resources to help all humans do well.
6
Who is the most patriotic leader?
A person that knows perfectly well that some economic measure or fiscal policy is going to be very unpopular with the voters because it’s going to cause some temporary pain, as any personal sacrifice requests, but in the long term is going to be great for the country, so he or she implements it.
The patriotism is exactly that willingness to suffer for the greater good.
The patriotism is readiness to sacrifice personally to protect the future generations.
The patriotism is ability to take a hit financially in order to protect the economic foundations of the country.
The patriotism is the courage of leaders to do what is needed for the sake of country although it’s going make them lose the next elections.
If democracy cannot focus on the long-term objectives because the social culture seeks the instant gratification and lavish perks in order to reelect the leaders, then democracy isn’t a viable social system.
Any system unable to adhere to the necessary measures protecting the long-term objectives and priorities isn’t sustainable in the long run.
If our federal policies are determined by the wild swings of the Dow Jones index and the caprice of global corporations, then we don’t have the long-term strategic vision and competent leaders.
All those problems preexisted Trump and his rise.
The incumbent has proven that he is no better than his predecessors…
1
It may seem like a century ago, but only 20 years ago, I recall that in his last few years in office President Clinton actually eliminated the budget deficit. There were economic projections that the national debt would be eliminated by 2010, and Alan Greenspan wrote an essay fearing that if the national debt was eliminated the demands for more and better social programs would sharply increased. Greenspan’s fears were quickly assuaged by Dubya, who immediately cut taxes and restored the budget deficit. This year, the deficit will hit the trillion dollar mark. Congratulations.
18
I hope that if a Democrat wins the White House, they don't suddenly find it necessary to cut government spending to deal with the deficit. They need to play hardball with the GOP. If suddenly the deficit is the biggest problem facing the country (and you know the GOP will go that route), we start rolling back tax cuts first. Trump's tax cut first, then start rolling back Bush's tax cuts.
For all the bashing the candidates do of Obama, his capitulation to the GOP on the deficit doesn't get mentioned too much. That has me worried that should the Dem's take control, they'll immediately wanting to compromise with the GOP on "bloated government spending".
4
@Scott
Obama didn't capitulate to the GOP on the deficit. He pledged, soon after he took office, that he would cut the deficit in half by the end of his first term. He basically kept that pledge (with allowance for fiscal-calendar year overlaps). You can argue that he was misguided in making that pledge, but it was a goal he set long before the Republicans gained control of the House and began their fiscal hostage-taking.
Moreover, Obama tried to reduce the deficit by raising taxes on the wealthy. He managed to raise the effective tax rate on the top .1 percent of households from 23 percent in 2010 to 28 percent in 2015. That may not sound like a lot but it reduced the deficit by about $50 billion per year. Let's see how the next Democratic president fares if she has to work with a Republican Senate.
3
@fbraconi
I understand what your saying, and I'm not a big time Obama basher, but my point is that he did not campaign on reigning in the deficit.
The exception to this was to end our involvement in Iraq and Afghanistan.
He formed Simpson-Bowles in 2010 at a time when the economy was still very weak. What that ended up doing was legitimizing the GOP's claims that the deficit was the big problem and we were one step away from insolvency.
I would hate to see a Dem president raise retirement age, reduce healthcare subsidies, reduce an already depleted and underfunded federal workforce in the name of fiscal restraint. This would be really bad if these avenues were explored prior to rolling back previous tax cuts.
2
For crying out loud, Obama DID reverse a lot of Bush’s tax cuts for the rich: the right-wing screaming went on for YEARS.
2
My portfolio has gone down over $130,000 since trump became president. Thanks trump, I'm getting tired of winning.
11
@Bill
You're a smart enough guy that you have lost more in your portfolio than most people have in their entire portfolio. You should have known the old adage that political uncertainty, or in this case insanity, breeds economic uncertainty, thus instability.
donald hasn't been stable in 40 years.
3
It is very important that Trump not get a second term. I think all Democrats and truly patriotic Republicans should stop buying any. unnecessary things at this time in order to cause a recession to occur before the next election. Deficit Don Has caused many things to hurt the economic situation of the majority of Americans up to this point and many more will show up in the near future. However the negative results of Deficit Don’s policies may not show up till just after the election.
4
@Roy Greenfield
Best idea of the year! Markets NEVER get demand right.
Trump's business was to borrow and spend money and not pay it back. Trump & Repubs run the country the same way. Cut interest rates, cut taxes, borrow and ask how the economy is doing.
It is absurd to ask how the economy is doing after a $2 trillion tax cut during an economic boom that created trillion plus deficits forever. Most of us would enjoy a $500 dinner provided we do not have to consider paying for it. Unfortunately, the dinner was only OK and its $2 trillion cost equates not to $500, but to about $30,000 of new debt for all joint filers to give to redistribute to Don Jr.
The question is not "How is the economy (currently) doing? The question is "How is America." I think we know.
7
Trump is exactly right about the Democrats. They know that their best shot at defeating him is a bad economy. And Krugman knows as well as anyone that the economy is largely psychological. If they say “recession” enough times, people get spooked and stop spending, stop hiring, etc.
@Max
So, Max, in your opinion the Hedge fund guys, the smartest traders on the planet along with the bank trading units who consistently make money and are repositioning trillions of dollars of positions are doing so just to hurt donald?
Those institutions are willing to gamble trillions and reputations just to "smear" a grifter/reality tv game show talking head who to around 70 % of the planet is clearly insane?
Max, I believe you've watched way too much Fox News.
2
@KC
I guess you're referring to the yield curve? No the institutional investors are not trying to hurt Trump. But they're smart enough to know that with enough scary headlines of "trade war" and "recession", consumers will pull back, resulting in a self fulfilling prophesy.
@Max yeah right. And if that’ll get rid of Trump, I say let’s go.
2
Paul Krugman should create the Cryer Curve (opposite of the Laffer Curve) that shows how when the government pumps money to the poor (rather than the rich, as in voodoo economics), they spend it, driving up aggregate demand and boosting tax revenues. I don't have the math to do the calculations, but Krugman does. The Cryer Curve would be a great point for the Dems to stand on.
11
It's great to see the myth of the Trump Boom finally getting some sunlight. The statistical agencies keep revising 2018 and 2019 downward, while CBO just updated its debt forecast:
Real GDP growth in Trump's first 10 quarters averaged 2.6% after sizable downward revisions, the same as Obama's last 10 quarters. BEA has revised the 2018 and 2019 quarterly growth figures down an average of 0.5%.
For example, GDP growth in Trump's best quarter (Q2 2018) is now 3.5%, vs. the 4.1% initially reported. Obama had 3.0% to 3.9% growth in 8 quarters; 4.0-4.9% in 2 quarters, and 5.0%+ in 2 quarters.
Job creation in Trump's first 30 months totaled 5.2 million after a sizable revision downward of 0.5 million, compared to Obama's last 30 months of 6.6 million. Monthly job creation during that time under Obama was around 220,000 per month, vs. 175,000 per month for Trump.
Trump has also added roughly 50% to the 2018-2027 deficit trajectory he inherited from Obama. The CBO January 2017 forecast was for $9.4 trillion in debt additions (sum of annual deficits) over that period; that figure is now $13.7 trillion.
And the number without health insurance is up 2 million under Trump; 2017 had the first increase in uninsured since 2010.
P.S. Laffer knows full well that the economy performs far better historically under Democratic Presidents, a fact Trump admitted in an interview some years back.
13
@David Doney
And why in the world does a half million person error in jobs created over the course of a little over a year not gain any traction in the markets?
2
Gloomy and true is like a tonic that tastes terrible but is good for you. Trump's first tax cut was passed before the turn to the Democrats in the House. I worry that the next suggested cut on payroll taxes will hurt Social Security, whenever it comes, possibly as suggested before the election. Tax cuts on capital gains as Trump looks for more ways to boost the economy can't happen, so what's next. The Fed is independent thus Trump's inane rhetoric about their agenda suggests he has some concerns about the economy and is looking for more money to boost the economy. Tremors around the world are creating rumbles about a recession as tariffs hit trade. Trump is ruling from his own business sensibilities. Declare bankruptcy. Stiff contractors. Move on. Borrow from another bank. And yes, the Southern District in NYC is there waiting. We in this country never saw his tax records and continue to be under the reign of Trumped-up plans.
5
“You see, according to Laffer, everyone lost confidence upon realizing that Obama might win the 2008 election,” writes Krugman.
“Everyone “ means right-wing Republicans, affiliated pundits, faux economists and Fox “News.” However, the election of Obama to President boosted my confidence in sound governance of the U.S. Obama And his team managed the Office of the President, the Executive Branch, Congressional and foreign relations and banking and finance with thoughtfulness, honesty and integrity.
Now we have Trump’s tariffs to take down the U.S. economy and agriculture, a cabinet secretary who sleeps at high-level meetings, environmental policies to accelerate climate change and global warming, white nationalism, “The Wall,” and an elite 1 percent with a more private Gulf Streams, helicopters, private islands, off-shore tax havens, private fishing camps and control of vast land holdings in the western U.S. Meanwhile, Brazilians burn the rain forest, which supplies 20 percent of the world’s oxygen, to plant more acres of corn and soybeans for China, courtesy of Trump’s tariffs.
U.S citizens are becoming serfs to the elite 1 percent. “Lost confidence” is Trump winning the next election for POTUS.
15
Speaking of Trump being "the chosen one", there's a documentary on Netflix, "The Family", that explains how that language and meme came about.
Apparently there's a highly influential religious cult that has secretly existed for 80 years, started by a group of religiously oriented businessman, who believe elected leaders are chosen by God, and therefore can do no wrong.
This is a convenient belief for elected leaders and petty despots.
"The Family" maintains a gracious home in Washington DC, often visited by elected politicians and heads of state from around the world.
The cult's leader was a man named Doug Coe, I don't know if he's still around.
By invoking this cult's language and 'code speak', Trump is able to intertwine himself in their agenda. (Same thing Trump does with white supremacists, and evangelicals more broadly).
Trump's presidency is just rampaging destruction on every front. So who is the democrat who will challenge Trump in 2020?
Not a fan of Trump, but someone who is actually a real person has to run against him, and not scare the bejesus out of Trump's base.
8
Economics is not a science. It is voodoo by its very nature. The reason for this is that it is tightly coupled with politics, religion, greed, lust, law and crime. So anyone who says they know anything about it is fundamentally dishonest. All the wars we have fought were caused by this economic voodoo.
There is only one hope. When AI becomes a reality we may be able to predict economic outcomes that humans cannot scientifically perform. One of the known issues is the delay between cause and effect. An economic policy-change made today results in an effect after a long time-delay humans do not like. This is because the “long term” is comparable to human life-time (100 years). The idea of wanting things here and now does not work.
Wealth is a real thing known in science as energy. It is delivered to us by the SUN God. Life forms on earth generate useful wealth like food out of that energy and star-matter namely elements like hydrogen, oxygen, carbon, etc.. The idea of ownership starts with land to capture the energy worked upon by slaves namely plants, animals and humans who transform the energy into useful products. Now with increasing knowledge of material science, information, communication and computing, we are able to make machines do some of the transformations needed to generate wealth. AI, in a sense is the next frontier.
@TR
Well you just called a Nobel Laureate dishonest.
AI could indeed figure out what we cannot (or refuse to acknowledge). But, suppose it does. I see strong arguments that indicate humans are the problem. If an artificial intelligence reaches the same conclusion we could face problems ranging from rejecting the conclusion to a worst case scenario in which we have created an entity that will work to "solve" the problem. I don't remember who said and I am paraphrasing but it is detrimental to introduce a being more intelligent than we into our environment.
1
Since you’re into the SUN god, let me point out a little something: we don’t know (and possibly can’t) what every little individual atom is doing in Mr. Sun, but we have a pretty good idea of what they all add up to together.
Economics is similarly iffy with regard to individual behavior, but pretty good at understanding what all the bitty behaviors add up to in terms of economics.
3
Someone should tell Trump that if all it took was "bad thoughts" to ruin the economy, he would no longer be President, but either in jail or having lunch in a fiery inferno.
11
@Jim - Brilliant. Best comment of the day.
4
Economics and the poor mantra. Poor people live day to day hour to hour. Economics is unknown to them. White poor people think they are not poor just unlucky. Mean while these same poor folk claim poor people of color are just lazy. This is why they will vote against themselves in order to protect their unlucky, but not them, status. This is up there with wondering why the uneducated just doesn't figure things out. Pride (racism) keeps all blinders in place.
7
Just heard about the trade wars that are easy to win. 75 billion in Chinese tariffs on USA goods. Must be that wicked penetrating gaze of Nancy Pelosi or a wink from AOC.
We just got a front-row seat to watch how our "economist in chief" transforms a perfectly healthy economy into a recession. This is much more than Voodoo Economics and Evil-Eye Economics. This is a high-level Macumba socio-economic spell.
417
@Aurace Rengifo
Mr Trump's behavior displays unmistakable symptoms of possible frontal lobe cognitive impairment. The symptoms include "sudden changes in behavior including aggression, impaired moral judgment, memory loss, ... declining intelligence, inability to understand/interpret social cues ..." His family should consider a neurological evaluation, diagnosis, and treatment.
57
@Aurace Rengifo
So true. Never before has a President's actions - in this case a 'trade war' - been so directly responsible for an economic downturn, or in this case a very probable downturn on the immediate horizon.
38
@Mike
Good point! Trump is working hard to contradict the principle that Presidents don't have that much influence on the economy. On the other hand, that principle was always less powerful later in a Presidential term, and he has been in office more that 2-1/2 years..
15
I would just like to emphasize that Jimmy Carter was the most patriotic American president since the end of WWII without any doubt.
How do you measure the patriotism of any president?
By his or her ability to motivate the countrymen to sacrifice for their country, for the better future and on behalf of the next generations.
The corrupt and incompetent leaders adhere to spoiling, pampering and reckless spending to buy love and affection of the voters.
In 1979, President Carter’s yearly budget deficit was only $55 billion or 1.5% of the GDP. He supported the Fed Chairman Volker who raised the interest rate to 20% by the end of Carter Administration. Carter was the only president not to saddle or engage America with a new foreign conflict. He even managed to lure the USSR into the invasion of Afghanistan that broke the back of the Russian economy.
Ronald Reagan just took the credit for all the sacrifices and visionary leadership of Jimmy Carter.
Of course, if as a trainer you make your athletes practice with 50 lbs burden on their shoulders all the time, they are not going to break any record.
The next coach that just happens to allow the sprinters to take the burden off will get all the credits for the improved results...
However, never forget who truly made you the champion!
It was the guy who had courage to take all the blame to make the entire country better!
That specie has disappeared in the US politics many decades ago...
17
The Reagan, Bush and now Trump trickle down economics is a well known sham, It's an old trick that keeps on tricking. This is an old con job to line the pockets of the few, blow out the deficit and expand the wealth gap. Wake up people!
11
The key is to remember Trump has no idea what
he is doing and will never accept responsibility
for his own policies. He is surrounded by fullers
who will never tell him the truth
Worry
Alfred E. Neuman
8
Accusing Trump of "magical thinking" is an oxymoron. It implies he is capable of thinking, which he has never demonstrated. Does anyone really think there is any connection between his brain and what comes out of his mouth?
6
@R.E.
Ha ha ha Good point!!
I needed a laugh.
Ummm Hmmmm No there is no connection between the two points you mention.
Another great reason to vote Susan Collins out of office!!
12
Republicans approach economics as if it were Halloween. It's the one night of the year when there's a fancy dress party. The witches are not hags with warts on their noses. Tax cuts for the rich is Morticia Addams arranging her roses. Trump's the King of Israel but that's another story. So Democrats, don't go into the gory details but pay attention to the glory.
I'd love to hear Trump say in a presidential debate that the Democrats are sabotaging the economy by "willing" it to be bad. And then I'd love to hear the Democratic candidate say, "No, Mr. Trump, your economy is bad because you're a fool who enacted stupid policies."
No one's ever spoken to Trump face-to-face like that in his life, and it desperately needs to be done. If it's done in front of an audience of tens of millions, so much the better.
6
Some people say that when Obama made fun of him at the Correspondents Dinner, thin-skinned Trump vowed to get even by undoing every good thing credited to Obama.
3
@Hope
I wouldn't doubt it. That would explain a lot, wouldn't it?
1
I am tired of reading about this adminstration’s economic policies as if they are susceptible to being corrected by rational thought. From the top down, definitely including Trump, Kudlow, Navarro and the sadly co-opted Wall Streeters like Mnuchin who should know better, they are all economic morons. Until they are history we’re going to have to live with idiocy.
18
No country on Earth in history, no company, corporation, small business, or bowling team would put up for a month with such malicious incompetence and self-serving dishonesty. This is like having a cranky toddler wave a loaded revolver around while discussing what to do about the flying bullets. The Constitution could use an Idiot Provision, allowing for a citizen referendum to remove a President who is obviously incompetent, or emotionally and intellectually unfit to serve. Do we have to take a page from our courageous Hong Kong brethren, declare Removal Day and start renting busses to take people to DC and surround the White House with 2 million people, then advance peacefully until Trump and his gang of crackpots and criminals are expelled? If Congress won't act in the face of imminent danger, it is time to hit the streets and shut business as usual down until the boil is lanced.
12
I wonder if a recession will even hurt Trump with his base. They seem ready to stand in soup lines for him so long as he keeps caging brown people and otherwise keeps up the show of preserving their white majority and white privilege.
And on top of that we’ve got the wild card of Putin’s response to Trump’s “Russia, if you’re listening” shoutouts. We know for sure the Russian trolls are continuing to sow division and disinformation among our electorate and that, if anything, the Russian hackers have stepped up their efforts to skew our election processes. And we know for sure that this administration is doing virtually nothing to stop any of it.
So given the strength and virulence of Trump’s race and immigration messaging and the Russians’ ongoing interference, can we really be so sure a recession would necessarily scotch this man’s reelection? The usual rules haven’t applied to him so far.
6
@Steel Magnolia
Trump is in solid with Israel, Putin and the Saudis et al. Now if he can cosy up to China by removing tariffs he's in like Flynn.
4
I have said this on a number of occasions in the past; the Democrats had an excellent opportunity during the 2008 financial meltdown to breakup the corporate and financial stranglehold the current Robber Barons have on our political system when they agreed to the TARP bailout, instead of a government takeover of the banking industry.
Without TARP the banking industry would be a shadow of its former self, and the GOP’s donor class would be standing on a corner signing “Brother, Can You Spare a Dime.” And even worse the shareholders in the auto industry were wiped out while those who held on to their banking stocks are sitting pretty today. They failed to follow the sage advice of Churchill by letting “A Good Crisis Go to Waste,” a move they most surely regret today. I know the argument has been raised that without TARP the country would have been much worse off, yet Iceland has recovered and they refused to bail out their bankers, and opponents of TARP here were on the Far Right, as well as the Far Left, which should have been a hint that if the extremes agreed on something it was probably a good idea.
All TARP gave us is the continued dominance of the GOP, and Donald Trump; not a very good ROI. Not to mention a SC totally in bed with corporate interests.
4
SOP for Republicans, blame everybody else for their mistakes. Of course it's hard to call them mistakes when their plan was to embezzle as much as possible to begin with. With the concerted plan by Republicans to misappropriate government funds this should be eligible for prosecution under the Rico act.
6
Dems need to beat Trump (or whoever ends up running, since he has lost his marbles) without hoping for a recession. Beat him by putting up the best candidate with a winning prescription for America.
No Dem should be caught hoping for Americans to suffer job losses and the rest. That goes for you too, Bill Maher. Cut it out.
1
Wait . . . Laffer blamed Obama? Why he didn't include Hillary is something I don't understand.
2
... the world is on fire, the world’s least intelligent humans seem to be in charge of everything, and the planet and the human race seems doomed. Sigh.
6
Great column, as usual, from Krugman. Very small nit to pick: there is no such think as a "sugar high". Time to put this tired, and false, metaphor to rest. Which one can do even after eating sugar.
Have to take a moment to comment on Paul Krugman. He is,
in my opinion, the clearest and most consistent voice of reasoned opposition to the trump travesty that we have.
Regarding trump: Quite simply, the man is a sociopath.
And republican voters knowingly harnessed him to suit their needs. Or is the other way around?
8
A coo-coo practicing voodoo is a bad combination.
Reagan, the patron saint of voodoo and its end result, increased deficits, has been praised as someone who helped the middle class just as the Trump supporters praise him.
Yet, when a Democrat is in the White House and the deficit increases the bleating a braying about that cursed person increasing the deficit and killing the economy is deafening.
But, never fear. Trump will find some other shiny bauble to dangle in front of his supporters in Congress and on the streets and they will cheer ignoring the increase in deficit and the decrease in jobs and business which goes back to a coo-coo who couldn't make money on casinos attempting to manage the country's economic plan.
3
@Dan
Just a suggestion change the last word of your comment from plan to pain. That's also a observation.
1
@Alecfinn Agreed.
Since Trump is, factually speaking, an epic liar and has zero credibility one would think that his lies won't cover up the fact that his disastrous tariffs are a key reason for any economic downturn. Unfortunately, Republicans appear to be allergic to evidence and facts so they will believe whatever rubbish excuse Mr. Trump dreams up.
1
I am nominating Paul Krugman for the next Nobel Prize laureate in literature.
That would make him the first person in history to receive the Nobel Prizes for the economics and literature.
His work is much better than anything Hans Christian Andersen ever created. All those fairy tales of the Danish author don’t come even close to the mastery of our American writer.
Krugman’s creativity and fantasy is unmatchable by any other human being. In his imagination there are no Democrats nor have they ever been in power.
Everything bad happening is solely responsibility of the GOP.
If the Republicans have been cutting the taxes on the wealthy over the last four decades, God forbid that the Democrat-controlled White House and the Congress could have ever revoked any of the reckless fiscal policies.
In this pseudo-infantile world created by the author, the blame for anything rotten in the economy should be assigned to the conservatives but everything prosperous to the liberals.
There is no need for personal sacrifice, thus “the truth is that last year’s rate increases pretty clearly were a mistake”.
In the real world, the federal funds rate was 11% when President Carter appointed Volcker as Fed Chairman in August 1979. By the time Reagan took office in January 1981, Volcker had pushed the rate to 20 percent...
At the moment Trump was sworn in and Obama left, the interest rate was 0.5%.
The only problem is that the national debt is $22 trillion...
1
Ask Bill Clinton how a tax increase was received by the opposition and you’ll understand why it’s become a third rail. If you aren’t satisfied with his answer, ask Ken Starr or Newt Gingrich.
2
@Kenan Porobic
The 22 trillion national debt is not the only problem.
2
@Peg
The prerequisite for the elimination of the national debt is fixing all other problems...
1
Thank you oh Great Dear Leader, our Magnificent Lord Smoot-Hawley!
One wonders what "Tim Apple" contributes to this chaos. Is he, and other prominent business people invited to the White House just to be eye candy?
1
I think I am not alone in saying that such stupidity and observing the people, such as Trump, who physically embody it, can cause extreme nausea.
One has to ask: How can people keep voting for the same failed policies over and over again? Is it some sort of death wish?
3
It’s best to just let Trump keep digging his hole bigger. When the recession hits before the election, it’ll be the final nail in this presidential disaster.
1
@Paul Kucharski
The last recession hit just before Mr Obama was sworn in.
Mr Obama stopped the Fed from giving money away and forced those who wanted a "bail out" to sign a promissory note for repayment.
I clearly remember that.
1
"Who needs competent policy when you’re the chosen one and the king of Israel?"
I know that when you wrote this you were only partly serious, however, many, many voters in the USA are very serious about their "belief" that Trump is God's chosen entity on earth, that Trump is truly in a fight with Islam for Israel, and, even more odd,
the end of the world, referred to as the "end of times" is nigh.
These are the American voters John Adams worked so hard to enfranchise when he wrote his "Thoughts on Government" to the Continental Congress.
And so they are; enfranchised to vote that is, but,
not able to think.
2
T rump, as usual, chose wrong. Instead of becoming the King of Israel (by the way, isn't that the title given to Jesus: "born is the King of Israel"), he should have styled himself as King Midas. This way, he wouldn't need the Federal Reserve to bail him out. He could just produce gold by himself. Between being the Savior and being a gold producing king, I am sure he would much prefer the latter. What a great way to put up his name on buildings with real gold.
2
@Frank Casa
I thought his ceilings in N.Y. Trump Tower were already gold. Perhaps that could be a source of Nah.....
1
Although he’s been doing his usual flail-and-lie show in response to bad economic news—“Maybe I’ll lower payroll taxes.” . . . “No, I never said that.” . . . “No, I never said THAT either.”—my guess is that his base doesn’t much care, recession or no. They will stand in soup lines for him so long as he keeps caging brown people and otherwise keeps up his show of preserving their white majority and their white privilege.
To the extent this president ever has a plan for much of anything at all—whether A or B—he may well be looking to surviving a recession with his white-is-beautiful messaging. Supplemented, of course, with Putin’s response to his “Russia, if you’re listening” shoutouts.
2
The answer to Voodoo Economics has always been out there hiding in plain sight: Dave Stockton gave it away upfront. The lovable Laffer Lie was never about economics, it is just a cover for cutting government by starving it for funds. Rational conservative governance is not longer the guiding ideology of the Reactionary Party, it is a weird amoral Randian Libertarianism summed up in the campaign throw away line "Government isn't part of the solution, it is the problem."
4
I've always agreed that Republican belief in tax cuts paying for themselves is nonsense, a matter of some crazy religion always predicting the second coming. But I followed the Susan Collins link you provided, and found the good senator at least seems to have done her homework.
Sen. Collins cites a lot of economists and economics departments. Were they actually saying what she claims they were? I don't have the time or energy to run that question to ground.
But it would be nice to have an answer. After all, if Collins was doing a lot more than burning incense before casting her vote, then we need to understand that aspect of our policy discourse.
1
I disagree that the Fed was mistaken in raising rates last year. Each increase was data-driven and modest. Now, wisely, in the face of President Trump's growth-killing trade wars, the Fed has reversed course. If President Trump wants to goose the economy heading into the election year, he should push for much-needed infrastructure spending. Sure, it would further explode the budget deficit but what's another few trillion to the King of Debt.
2
Correction, it’s now the “King of Israel” that you are referring to.
1
Not convinced that the last rate hike by the Fed was a mistake. It has given the fed headroom for a future better application of, therefore more significant rate cut.
I don't that that the fact that The Chosen One's advisors once attacked a payroll tax reduction has any affect on today"s policy. If Dr. Krugman has shown us anything, it is all the president's men hypocrisy.
But they are waiting for the right time. A payroll tax cut today would not be remembered in November, 2020. Expect a cut in about a year.
2
I have watched the brocken CNN video of Trump
repeatedly proclaiming the dangers of China and the EU.
He only said one thing:
That he is the only one to stand up to the Chinese and the Europeans. He made no reference to being God-like in any way. He looked up in despair that no other American President stood up to protect American products as he is trying to.
3
@JBT
Come on, man. It was pretty clear that Trump was riffing off the idea some Evangelicals have that his victory was God's will. He's been hearing that the same Evangelicals love his policies to Israel because of the predictions in Revelations that a Jewish homeland are part of the path to the End of Times. He's not that knowledgeable about the subtleties of Christian theology and he's prone to making everything about himself.
And, of course, he always says that no other president has been so whatever... Perhaps other presidents haven't achieved everything they sought in regard to China because it's complicated. Trump still doesn't understand that.
I won't argue that he was making a joke of it. It sounded like mockery of those Evangelicals to me.
6
And as he is clearly failing to do.
5
@BUT
You are looking at another, different video of Trump spouting inanities. O realize there are thousands of those. Look harder.
4
Mr. Krugman, the tax cuts acted as a substantial pay rise in an economy where all but CEOs and upper mgmt are stuck for years in salaries that hardly cover the rent. Absent the willingness of Congress to legislate that a CEO and on-air personalities and other stars total compensation (salary plus bonus) should make no more than 20 median salaries/compensation in his company tax cuts are the ONLY way a President can raise wages. I got 400 dollars per month extra from Trump's tax cuts, and I am grateful for it.
The last time America was great, the CEOs made only 16 times more than the median salaries. Let's return to that.
As an independent, I notice that both Ds and Rs only mention the facts that undermine their political foes. With this attitude in journalism, we all lose.
I wish you and the NYT would start a campaign of measures for lowering the economic inequalities, instead of the obsession for open borders and accusing everyone who oppose illegal immigration of being a racist.
2
@Alexgri
@Alexgri: Enjoy your $400 tax cut. Do you realize that your tax cut is temporary, expiring in 2025, while the huge tax cuts for the wealthy and Corporations are PERMANENT? You complain that they make so much more income than the rest of us, but are grateful for the tax cut (the whole bill - if you are grateful for your temporary tax cut, you are also grateful for the permanent cut for the wealthy). Do you also realize what the tax cut has done to our annual budget deficit and our national debt? That will negatively impact you for the rest of your life. I hope it was worth it to you. There are already signs of a slowing economy and potential for a recession. Tax cuts are like candy; they taste great for a moment, but have no nutritional value. In excess, they can make you sick.
7
Neither the NYTimes, media in general, nor the Democrats are for open borders. The pervasive notion they are among mainly rural and white Americans despite ample information to the contrary is fueled by some flaw in their perception. Racial nationalism certainly appears to be the most obvious.
2
I may have gotten a bit more in my paycheck, but my tax burden increased by $7,500 because of the “tax cuts,” and the caps on deductions. I even claimed single with no exemptions to have extra withheld. We are being fleeced by the Corrupt-Licans - you are just not paying attention.
2
I have worked with enough Republicans--on the Hill and otherwise--to think we are dealing with two problems. One, is that some Republicans take on faith many positions that all evidence challenges. Like a religious person who believes good things are God's work and bad things just show we do not understand God's plan, some are capable of rationalizing away facts and evidence because they want to believe their position is correct. Others know that what they are saying is balderdash but prefer to lie to their voters then actually telling them that they are looking out not for them but their donor class. Susan Collins and many other Republicans likely knew better but caved to the pressure to go along with leadership but could not tell their voters the truth. The voters should see that their dishonesty is rewarded with forced retirement in the next election.
4
The generally held ideas about how the economy work are at the core of our economic problems.
Consumers, not the wealthy or corporations actually "create jobs" by increasing demand beyond the ability to supply.
Tax breaks do not translate into venture capital investments in new companies. The wealthy invest in stocks that already exist.
Giving money to corporations creates wealth while giving money to individuals in the form of things like nutritional assistance, and other forms of assistance create dependency. Why isn't giving cash to corporations called welfare also?
Poor women need to work outside the home in order to teach their children the value of work. Wealthy women, on the other hand, are encouraged to stay home to nurture their children in a loving family environment. I guess, since the family has money their kids will never need to work or privilege will assure success.
Undocumented people are lazy and drain public assistance dollars. Really, try getting public assistance without proof of citizenship and check out the people in the various service industries working for low wages.
There are a lot more examples but our thinking about the economy is generally wrong yet our legislators believe all the myths.
9
Almost forty years after Saint Ronald Reagan the GOP still maintains his dogma that tax cuts on the 1% will spur the economy. I am guessing that some luxury car dealerships and yacht brokers saw a surge in business from the Trump tax cut but that is about it. For those who watch the national debt, eight years of Reagan resulted in a quintupling of the number from under a trillion to over four trillion. The republicans are only fiscally conservative when there is a democrat in the White House.
7
He never admits failure. That seems to be most of the problem. Reality is something for other people.
Meanwhile - The main beneficiaries of this economic drivel are extremely rich. What do they want, revenge?
3
Tax cuts for the wealthy aren’t truly a zombie policy, in that Republicans don’t truly believe the nonsense that they’ll pay for themselves.
Tax cuts for the rich are the entire reason for Republicans’ presence in Congress. They are bought through legalized bribery from their wealthy and corporate donors. It is simply a service rendered.
When the government is bankrupt and the social safety net and other key services must be slashed, well, that’s a problem for the rest of us.
8
I must take exception to one of Mr. K's statements: that Trump won't implement payroll tax cuts because he and Republicans opposed them when Obama proposed them. Mr. K should no better than anyone Trump's and Republicans' objections to Obama policy do not apply to the same policies when proposed by Republicans. The leading example is that deficits are bad - horrible - when Democrats propose them, but don't matter when Republicans propose and implement them.
4
I prefer stink-eye economics but let's not quibble. Trump's economic policies were always bound to tank the economy. The deregulation alone is an excursion in bizzaro land. Think of it this way: We've already invented the LED light bulb and Trump wants everyone to switch back to incandescents.
That's a pretty accurate summation of what's going on in the auto industry right now. It doesn't take a Nobel prize to figure out this is not good economic policy. People get confused. "You want me to take the more efficient light bulb out of my socket?" That's Trump in a nutshell.
But we've known this from the beginning. I predicted it would take Trump about two years to ruin Obama's economy. The serious storm clouds started rolling-in at about two and half years. I was wrong about the direction though. I underestimated Trump's capacity for incompetence.
I expected $2 trillion in stimulus to overheat the economy and pop a bubble. Instead, Trump expended our fiscal leverage on a fizzle. Borrowing for stimulus is good when interest rates are low. However, not when the economy is decently robust in everything but equality. And not when you blow that stimulus on bridges to nowhere. That's what voodoo economic means: One big bridge to nowhere.
Now we have a dual problem. The economy is weakening and we don't have the tools to fight another recession. Low and behold, stink-eye economics is born. Trump senses he's done something wrong even if he won't admit it.
4
Isn’t it amazing how the combination of intelligence, honest history, and common sense almost takes your breath away? Perhaps it’s the age? Perhaps we’re being starved of oxygen with all the intense attention being given Trump?
Thanks, Paul Krugman.
3
The fact of a recession will be in the numbers and suffering of the people. The bond market, corporations and governments around the world are telling us that a recession may come. That Trump blames Democrats for the discussion of this possibility is of course a political ploy. Trump's policies have to a large extent triggered these fears, and it fear is at the root of things it is he who is responsible. Trump can't have it both ways. He stokes fear to blame democrats, but then says everything is fine. Trump is caught in a web of his own lies.
4
Ideology over logical thinking same as Party over Country. This mindset has poisoned the Right wing with a win, no matter what it costs mindset.
4
Donald Trump proudly and repeatedly trumpets his gut as the source of his 'thoughts'. The cheeky terminus of the human digestive tract has never been a source of great ideas. Except while relieving oneself of human waste while reading a book.
While economics has too many variables and unknowns to craft the double-blind controlled experimental tests that provide predictable repeatable results that are the essence of science. Economics is gender, color aka race, ethnicity, national origin, history and politics plus arithmetic. There isn't a Nobel Prize in Economics. There is the Swedish National Bank Prize in memory of Alfred Nobel.
Economists are like fortune tellers, oracles, soothsayers and voodoo priests. Donald Trump's first and last best economic financial choice was his 'selection' of a New York City real estate baron daddy to inherit 295 streams of income that shielded him from the consequences of being the single worst businessman in America over a ten year period.
By refusing to declare and disclose and divest his assets into a blind trust you can't tell where Trump Mar-a-Lago ends and Trump White House begins.
Since we know that the barbarian Neanderthal Trump clan has never worn an American military uniform nor volunteered to serve in any civil or human rights service the brave honorable patriotic ultimate question that must be asked is have the Trumps paid their fair share of local, state and federal income taxes?
6
That chart trump holds just about sums up the America at the moment.
2
The only thing that motivates him now is how to keep himself out of jail after Jan 2021. If only Mueller had indicted him, or if Pelosi would get on with impeachment, he could get on with life and let Pence of a Ford pardon for him. Dang it. What else can I do to get these guys to force me out of the White House?
2
Trump has no plan "B" for the economy... He is too busy planning his plans for representing Russia at the G7 summit.
3
The only thing that motivates him now is how to keep himself out of jail after Jan 2020. If only Mueller had indicted him, or if Pelosi would get on with impeachment, he could get on with life and let Pence of a Ford pardon for him. Dang it. What else can I do to get these guys to force me out?
The chosen one and the King of Israel who will bring the Second Coming retweet shows that he is not one of "magical" thinking, but of maniacal grandiosity thinking.
My fear is that should realized that he won't win the next election, he'll start a little war abroad. Nothing unites Americans more around the flag than dropping bombs on other nations, while they approach state-side based troops in uniform in public to "thank them for their service".
My dream though is that he'll be taken out of the White House even before the election in a straight jacket by men in white coats and transported to the nearest closed facility.
6
All this reminds me of the Soviet economy during the 1930's.
Then, of course, the thinking was a little more straightforward. You're trying to INDUSTRIALIZE a country--build up factories, machines, roads, canals, hydroelectric dams, and so on.
Well then--you WORK the people. Work 'em HARD. You employ (as needed) slave labor till you GET those factories, hydroelectric dams, and so on.
Et voila tout!
But even then--dreadfully clear-eyed as the Communists were about their means and their goals--
--victims had to be found. "Wreckers." Enemies of the people. Sly sneaky people, ever sticking a spoke into those spinning wheels of the Soviet economy.
These were dealt with. Harshly.
ALL THIS TO SAY--
--okay, you Democrats! How come our patented "voodoo economics" ain't working? We've slashed taxes left and right. We've lightened the tax burden upon our millionaires and billionaires to a feather's weight
And STILL--
--ah! Must be those villainous Democrats! Liberals lurking in the wings. Emitting "bad vibrations."
My Mom used to talk to her plants. Remember? People did that.
I got behind her once. "DIE!" I murmured to some lusty piece of greenery.
"Stop!" cried my Mom. Then (addressing her plant)--"No no! Don't listen to him!"
I am imagining our President (while scowling at his Democratic nemeses) turning to the American economy.
"Stop! Stop! Don't listen to them."
Mr. President? Sir?
That ain't gonna work.
Sorry.
2
Trump proposes an interesting idea for those who want him to be a one-term President: Crash the market to influence the 2020 election. How might that come about? Trump's talking about this eventuality actually makes it more likely to happen....
@SAF93 he actually wants to be a one termer. The only thing that motivates him now is how to keep himself out of jail after Jan 2021. If only Mueller had indicted him, or if Pelosi would get on with impeachment, he could get on with life and let Pence do a Ford pardon for him. Dang it. What else can I do to get these guys to force me out?
Supply side economics, aka Voo-Doo economics, is not a policy belief, it is a bait-and-switch political move. It's been that way since the 1980s. David Stockman knew this when he was head of OMB and gave a notorious interview with the Atlantic magazine. He was "taken to the woodshed" by Reagan for his trouble.
Nothing has changed since then. Tax cuts are always an easy political sell by Republicans who then point to the budgetary consequences as an opportunity to reduce social spending. Thew pity is that we keep falling for this ruse.
4
Ronald Reagan, who first practiced voodoo economics, eventually raised taxes some 11 times when it became clear that the debt was exploding. George H.W. Bush famously raised taxes after running on "Read my lips: no new taxes." Both used voodoo economics to win votes, but both at least had a slight responsible streak when it became evident that it wasn't working.
I don't see any evidence of a responsible streak in the current administration, even though it is filled with faux deficit hawks.
Yes, I'm cheering for a recession before the 2020 election. A recession is inevitable. If it is delayed until after the election, and Republicans retain the White House and Senate, Democrats won't have the power to prevent Great Depression II.
2
How many times during the last two Democratic presidencies, have the Dems been accused of achieving prosperity by "rolling the printing presses". Now, a Republican president wants to do the same thing and nary a peep form the Republicans.
But I guess we shouldn't be surprised - if, after their great alarm about deficit, then passing an unnecessary tax cut that everyone KNEW was going to balloon that same deficit, then what more do we need to know?
4
I no longer believe anything Republicans say. Republicans are against everything that Democrats propose when Democrats are in office and then are for the exact same proposals when Republicans are in office. Republicans never put the good of the country first. All that matters to Republicans is taxing the poor and working class and giving the money to the rich. Vote every Republican out of office for the sake of our country!
10
The housing market is showing signs of rolling over. The bond market is signaling a recession on the horizon. GDP is taking a hit from the trade war. But it's the Dems fault for using "ill will" to tank things? News flash - lower interest rates aren't going to do much to help, because the people are in debt up to their eyeballs, the people got no money. Why? Because it's all piled at the tippy top. Time for a recall election. I sense a landslide. Just gotta hope it includes the senate.
3
If the opposition party could will the economy into recession, how did President Obama create the longest recovery in our nation's history? Perhaps it requires a majority of citizens, rather than electoral votes.
4
@Thad
Thank You!!!
I understand why the GOP keeps insisting that “Voodoo Economics” work; it benefits their donor class, and reinforces the old adage “It is difficult to get a man to understand something, when his salary depends upon his not understanding it.”
What I do not understand is why this misconception persists among Middle Income wage earners who have seen very little in the way of salary increases, yet carry the burden of increased personal income tax collections, as well as picking up the entire burden for the increase in social security and Medicare tax collections.
It seems the GOP has mastered the art of telling their base, “who are your going to believe, me or your own lying eyes.” And the sad part is there a very strong possibility Trump will be re-elected by these very same Middle Class wage earners.
What is even more sad is the Right Wing agenda is supposedly based upon the Hollywood images of tough guys, such as John Wayne and Clint Eastwood, who at least in their movies were men of action and would never whine about being victims, whereas Trump is always crying about being a victim, yet his followers fail to see him for the crybaby that he is.
6
In the words of Ronald Regan, Professor Krugman “there you go again”. The consistency of your narrative of economic “failure” is only matched by your desire to ignore the facts to fit your politics. No, the last recovery under Obama was not marked by similar rate hikes by the Fed, just the opposite with negative real interest rates for years. Obama also correctly spent massively to stimulate the economy and extended the very tax cuts that you refer to as “voo-doo economics”, increasing both the deficit and debt by a far greater extent than Trump to grow the economy. Unemployment is at near record lows, the stock market is up over 25 percent and the long bond yields are at record lows signaling confidence that inflation is not a threat despite our national debt. All this while the Fed has been trying to normalize rates, something it never attempted under Obama. If the last 2.5 years have just been a “sugar high” then that is some long lasting high! I guess if your favorite candidates like Warren or Sanders won then we could really see some brilliant economic policy, just like all the examples of successful socialist endeavors. When all else fails, just keep complaining about the Trump “failure”, no matter the facts, if you keep saying it some readers will believe it.
1
I recmmend that you take a look at the current deficit and debt estimates in what we’re told are boom times, then look back at the deficit trends in the Obama administration, before going on.
2
@Robert You mean look at the 9 trillion dollars that Obama added to the debt? Amazing miracle! Guess what, servicing that very debt has added to the current deficits itself to the tune of about $300 billion a year in debt service alone. So, I recommend you look back at the Obama record before going on as well.
@michaelf Obama reduced the budget deficit every year of his Administration.
2
Republicans keep talking about putting more money in people's pockets but they never do that.
42% of Americans make less than $15 per hour. It looks like at least 42% of Americans could really use more money in their pocket. Our economy requires that we be consumers. Let's try powering the economy by empowering consumers.
8
Trump should be proud the global economy is tanking. Its the one result where his policies actually worked as intended.
6
Voodoo economics is the biggest heist from middle class to benefit ultra-rich, a reverse Robinhood of sorts. The playbook of voodoo economics just doesn't stop with cutting taxes for rich with that claim that tax cuts will reduce budget deficits. The next step, when the much-touted reduction in the deficit fails to materialize, is to cut safety net for the middle class.
8
So let’s buy Greenland so DJT can make more people embarrassed, enraged, and miserable.
Every time I see a Trump voter being interviewed and asked if they’ll vote for him again, they get a big smile on their face and trump-et the great economy I have to wonder what alt-universe they’re living in. DJT debases everything he touches including that medal around Laffer’s neck. There’s only one thing I agree with Gillibrand on and that’s wanting to bleach the Peoples House clean.
11
It would have been useful to highlight as well the sheer intellectual bankruptcy of his sham "economics" team, consisting of a TV economist, a wing-nut discredited and marginalized by most of the profession, and several ex-bankers whose knowledge of and experience with macro-economic and trade policy can be fitted into a thimble for the pinky.
It is by now conventional wisdom that one fights recessions by lowering interest rates and running higher deficits. The problem is that there is little wiggle room for either because those levers have been pulled. One can argue that moving into negative real interest rates and more debt will help stave-off recession for a while, but it's the proverbial little Dutch boy with his finger in the hole of the dike. It's the underlying fundamentals and the restoring of confidence that needs the greatest policy attention, but this motley crew either don't know where to begin, or they are preaching to the pathologically challenged, or a deadly combination thereof. There could be sad times ahead for a great many people, the only silver lining in this storm cloud being that all the vermin gets washed back into the sewers it came from some time down the road.
7
Our president has no policy. His economics are honeybee economics.
His drones flit from plant to plant (flowers) seeking to capture gold for himself (pollen) and his family, sycophants and captains of industry (the hive). Most of the wealth (honey) goes to the entitled (the hive) and only the most skilled and careful among us can divine a path to access that wealth (beekeepers) often using subterfuge through IPO's or arbitrage (smoking hives).
The group endlessly supports its leader (the hive queen) and if stressed or if the group gets too large, it will find a new place to move for safety far away through bankruptcy or offshore tax havens (the swarm).
And for the rest of us? Crumbs. (Bee stings).
Capitalism, like pollination, can have beneficial effects but both remain subject to external risks such as globalization and recession (colony collapse disorder).
Economic downturns are not events caused by the will of perceived enemies any more than the death of bees is because anyone wills it to happen. Actions, like malathion or more modern neonicitinoids, have consequences.
5
It's the "see what you made me do?" syndrome.
The ultra orthodox cannot see beyond their own rhetoric. Whether it's politics, religion, economics, parenting, it doesn't matter.
Blame the victim.
6
The CON has always been --further inflame enough people who already are fearful and angry about race, sex, zygotes, guns and the Bible...and scoop up wealth while they're punching down and sideways. Oh, and suppress the political power of any who challenge the CON.
Republicans have been, IN FACT, hexing America with powerfully "bad thoughts" (Fox News, Limbaugh, Beck, Trump Tweets, etc) for the sake of the short term profits of their Plantation Masters -- the foreign and domestic oligarchy Trump wants so badly to join as a peer.
4
God help us. Your president lives in a make believe made for tv environment filled with people whose only credentials are that they came from tv. Sadly most came from Fox "News" which is less reality based than the NBC series "West Wing".
Sadly, rest of us live in the real world. In 2020 it is critical that everyone vote out your malevolent Chauncey Gardener - a.k.a. Trump - and his enablers before they totally drive the economy and the environment off a cliff.
9
The unread, gamer POTUS uses Parker Bros. Monopoly as his sole economic text. Wherein, everyone hates the Community Chest’s tax card particularly the guys with all those big Red hotels. A game where the market is dominated by a single economy. “I want to buy Greenland” is the perfect example of Trump’s slumlord-Greedland sophistry. Re-election is his “get out of jail free” card.
380
@Prunella
Bull's eye Prunella........Right on the money......our money
10
I really wish K would stick more to economics. There are plenty of other columnists to tell us how bad the Republicans are. For example, Why didn't the tax cuts help more? I'm not an economist, merely a lowly mathematician, but I don't think this so complicated.
We need money money to buy and sell goods and services.
As the economy grows, we need more and more money to do this. This is especially true when the economy is strong, in the "boom."
Money usually comes to people, businesses and state & local govs from the federal gov which thru the FED can create as much as it needs.
Suppose the gov gets a TRILLION to Daddy Warbucks. He doesn't need to spend it. He puts he puts it in his basement or uses it for financial speculation. That money doesn't help us buy and sell stuff very much at all.
That means to keep the economy running well, the money has to go to the people who need it and will spend it, not to the people who do not need it and will use it to speculate. The tax cut did NOT do this.
The federal gov can get money to us in two ways--increase spending or cutting taxes.
If it cuts taxes, we have seen that the cuts cannot be for the Rich if it to help the economy.
If we cut poor Joe's taxes, he spends the money on stuff--
food, house paint, etc.etc. This promotes production of food, etc. This increase in production keeps prices from going too high.
BUT if we pay Joe to fix a bridge, the money still gets into
the economy,
AND we get the bridge fixed.
7
@Len Charlap
O my G-d you make sense!!!
Did not Mr Trump say he was going to invest in infrastructure? Then the U.S. Great Wall hasn't been approved by "The Democrats" a perfect scapegoat for our poor victimized POTUS. Sigh cannot anyone see as Mr Trump has screamed at us his ability to do deals and lead with his giant intelligence?
Just listening to the noise coming from Washington D.C. I find myself amazed that no one is preventing the dismantling of the agency's created to protect and help us.
But the main thing seems to be the noise is so entertaining that the damage is being ignored.
Just an old white man's opinion.
2
Even when 45 loses power He will not shut up
All media including NYT and WaPo love His circus
Don’t forget media made Him ‘news’
4
A 2.5% Fed Funds rate now 2.25% is killing what is supposed to be the greatest economy ever. Trump is either dumber than a box of rocks or a complete liar. It's probably both. Savers be damned, the age of a 5% safe return are gone forever, courtesy of both parties and the experiments of Bernanke and his friends. Capitalism as we know it is now doomed and the debt unpayable.
3
Yet treasury revenue and employment is at an all time high. It’s a spending problem. John Maynard Keynes would be chortling over the level of deficit spending is a booming economy, after all according to his disciples government spending is an economy unto itself.
Isn’t it ironic that Krugman doesn’t credit our good fortune not on deregulation and tax cuts, but government spending? After all this is the guy who told us the Obama stimulus plan failed because it wasn’t big enough.
Heck, down in DC they haven’t signed an annual budget into law since GW, that was not one, but two Presidents ago. Instead we have these quirky political footballs called “continuing resolutions” which make wonderful ways to bash the other guy.
Insane. And Krugman is loving it. Now that Paul Ryan is gone he is free to bash them all. Quick, what happens when it’s the Government sucking up all the capital? Not billions, but trillions
1
@hawk Keynes maintained that the debt be paid down during economic rallies.
6
The paltry investment of the windfall tax benefits of Trump’s tax cut in actual capital is refutation of your assertion. Instead they bought back stock and gave C-Suite bonuses of obscene proportions. A confiscatory tax increase turned into public works would have had a greater stimulus effect.
3
Though not the main point here, how is it that Trump has not been denounced for blasphemy? The "chosen one" comes close to being anointed by God, and that to comparing himself to Christ.
Where are the evangelicals on this very strange matter?
6
The GOP has been turning budget deficit reductions from the Dems into exploding deficit--soon to pop--balloons. Wrong for decades and supply-side "guru" get the Medal of Freedom...This picture couldn't be any more wrong.
The end is nigh seems appropriate since the Dunning-Kruger effect has been amped up to 11.
4
What's best for the economy? More money in the hands of more people and less in the few who hold an absurdly large proportion of it. The most democratic way to get there is through government mandated wage standards that puts a progressive price in relation to how extensively businesses tap into the general work force. It makes sense, that as corporations grow larger and more influential in society, government should in turn increase it's oversight to defend against the drag of exploitation. This regulatory role in government in relation to wages is necessary for healthy capitalism.
5
As long there is widespread unrelenting fear, as long as we believe our faith is the only true faith, as long as we have racism and sexism, as long as the privileges of the wealthy supersede the human rights of the rest we will have a Republican Party. It’s time that we end the Republican Party. The “both sides” false equivalence is invalid. Republicans are the champions of division, and strife because they rely on emotions that obliterate genuine rational self interests.
Many Americans have been mesmerized by Reagan’s “government is not the solution, government is the problem” when he ascended to the Presidency of government. He convinced Americans that because our government could not solve all of our problems, it was the cause of all of their problems and he and corporate oligarch’s could solve them all, if only government got out of the way. If only government stop stealing the wealth of the wealthy, then the wealthy would solve our problems. Elected officials are the enemies of oligarchs and elected officials do not “creat jobs”. This is all a lie.Even intelligent Americans argue the merits of this lie as if it deserves consideration. A false equivalence always relies on the appearance of plausibility in some context. Republicans represent a false equivalence in all contexts. What Democrats and Independents must do is recognize and denounce the oligarchic/plutocratic foundation of all Republican/Conservative beliefs. Democracy cannot survive under oligarchy.
4
While one generally agrees with Krugman here he also throws in the assertion that it was a mistake for the Fed to raise rates last year. There is no basis for this claim at all. The economy was performing strongly, unemployment was on the floor and the increases were by Krugman's own admission fairly modest.
3
“But such action seems unlikely, among other things because top administration officials denounced this policy idea when Obama proposed it.”
I’m missing the connection. Are you saying they wouldn’t want to be seen as hypocritical? Really? Or that they don’t believe such an action will work? Again, really? They didn’t truly believe the tax cuts would stimulate that much or cut the deficit either (despite saying they did).
Paul, you are forgetting trump's newest plan, buying Greenland!
Think of all the revenue from the surge of Greenland coal mining!
2
Democrats have gleefully jumped on the recession bandwagon because a strong economy(and it is) has been Trump's singular 'achievement' during his administration, whether he has had anything to do with it or not. And Mr. Krugman knows full well that simply talk about recession can in fact start to drive the economy in that direction given it's predictable effect on consumer spending.
Democrats need to stop fear-mongering on this topic and get back to their core values...that's what will ultimately get them the White House.
@Steven Robinson
Er.. the economy has been performing steadily for the last 10 years. Trump inherited an average growth rate of just over 2% and that's where it is now. He inherited a strong economy, has added trillions to the deficit, and is now busy wrecking the economy.
4
@Steven Robinson if driving the economy into a recession is what it takes to drive Trump’s lunacy out of the public square, then it is well worth it. No voodoo or hexing - just go out there, withhold spending on anything other than bare essentials. No need for any more chatter, let your wallet do the talking. And start this holiday season
Trump is in to plan Z and has no where to go. He’s now talking about cutting all ties with China, which is so juvenile and self defeating all of its ramifications can not possibly be comprehended.
It’s now becoming clear that there is simply no exit and that things will only get worse. I’m trying to be positive but when the President resorts to the “Evil Eye,” you know we are in deep trouble.
5
All that remains necessary for VOODOO ECONOMICS to achieve fruition is a volcano and a virgin to sacrifice. Both are in short supply during hurricane season here in South Florida.
5
"Who needs competent policy when you’re the chosen one and the king of Israel?"
Who, indeed, Dr. Krugman? And in the current political environment, not only is there nothing amusing in this question, your closing sentence may in fact be the most sobering in this opinion piece.
We all know who has no need of competent policy: Dictators.
6
He has no plan B.
So the rest of us might consider plan V....death by vodka. It would be more pleasant than trying to survive the world if Trump and the GOP take us to unprecedented depths .....the likes of which the world has never seen before.
I’m going Grey Goose and some premium blue cheese stuffed olives with a wicked playlist.
5
Another good reason to not vote for Susan Collins, the supposed 'moderate'.
Vote them all out. Every. Single. One.
15
Absolutely right!
4
Mr. Krugman, are you still trying to make sense of Trump? There is no plan, no logic, no hidden meaning that can be divined, no rhyme or reason. Trump knows nothing and speaks and acts where his whims push him, responding to his moment by moment impetuosity in feeling his ego has been stroked or slighted, whether real or imagined, or just due to a wild hair. Nevertheless, we do appreciate your chronicling his boundless idiocy and demonstrable descent into lunacy.
4
Please Paul. Take a breath. Your good ideas are so wrapped in vitriolic hyperventilation that it’s almost impossible to hear you. You are a nobel prize winning economist and a teacher. Teach us. We beseech you. Don’t stomp and yell.
What part of "this is all going to collapse" do John and Jane Q. Investor NOT understand?
This nincompoop and reality-TV mogul is going to lead us in sailing right off a cliff. I need to check my portfolio, tomorrow, before he invades Greenland.
3
Column ended with a bang, thanks Dr. Krugman.
Thanks also for that bit of wisdom from Medal of Freedom winner Art Laffer, that Barack Obama was responsible for the Bush recession. Sure, and I'm Marilyn Monroe.
As for our businessman genius, all he had to do to get what he wanted was to pass a different kind of tax cut, helping everyone, as stimulus for the middle class--and not start trade wars. As such he's dug himself in a hole, and all the tweets against Jerome Powell and the Democrats aren't going to save him now.
We're paying the price of decades of voodoo and nothing more to show for it than a mountain of debt and massive income inequality, which is simply not healthy for any society.
No, Mr. President, liberals aren't conspiring with thoughts to kill your economy. You've done that all by your lonesome.
7
@ChristineMcM
Yes! Your words describe it all!
The chickens are happily roosting. We are paying the high cost of having an incompetent clown as our political leader.
The pain is real; the situation, absurd; the future, scary.
Hope that having Conservative Supreme Court judges, easy gun sales, cages for immigrant children, an increased national debt, and Jerusalem as Israel's capital was worth it.
4
I understand that you have a set of images about "magical thinking" going for the purposes of your article. But I wish progressive thinkers, in particular, but everybody else too, would stop slapping the word voodoo onto this that and the other thing they wish to paint as crazy, violent, bloody, ignorant, primitive, magical lunacy - calling up a racist trope - because this use of the word Voodoo is based purely in colonialist racism. Voodoo is not some primitive magical thinking craziness. The word Voodoo comes from Vodou and Vodou is a West African religion that is as deep, serious, profound, and complex as any other religious system in the world. But it is constantly slandered and exploited for racist memes and stupid Hollywood slasher movies, and commentary like this, that ruins its own excellent message through the use of a tired, unkind, ugly, racist trope. Please stop slandering Voodoo. Understand that this kind of slandering has literally cost people their lives and culture. Go learn about what Voodoo is and is not, and then find a better word for what you are trying to say. Thank you.
The anointed one casts his eye about land, "Look what those people have done to my good works."
5
There is no question that Trump’s defeat would be a boon to the domestic and global economy.
Trump was an awful business man and a worse president.
He grew wealthy through inheritance, serial bankruptcy and fraudulent conveyance, tax evasion, money laundering, fraud, and a failure to pay bills large and small.
He gained office by working with Putin and the Russian mafia.
Interest rates and taxes do not need to be cut when the economy is booming.
This is Trump’s admission that the Obama expansion is ending due to Trump’s foolish trade war and erratic administration policies.
Both the stock market and jobs gained more under Presidents Clinton and Obama at the same time in their first term than Trump.
They just didn’t crow about it like Trump, until of course, the boom started to bust.
A recession is normal. Trump is not. Adam Smith’s invisible hand is giving Trump the hook.
9
@David Parsons
A fine and hopeful scenario.
From your pen to Smith’s hook...
1
An economic downturn is inevitable. The question is when and how severe. Given all we regrettable know about this administration and its “big brain” head, I’d wager said downturn is a whopper.
1
Plan A: Populism;
Plan B: Blame
3
For better effect, the picture at the top of the column needs, in addition to Trump holding the sign upside down, should also appear mirror imaged!
1
The GOP tax scam and failure followed by the blame gain is the definition of schizophrenia. What’s the explanation for everyone else repeatedly falling for this snake oil? When will the American people finally say enough, after having the wool pulled over their eyes so many times?
4
I this we need to suffer a recession to get rid of Trump.
3
Only the US central bank increased the interest rate while all other nations have been doing nothing. Fed should have checked other countries before raising the rate ‘bravely’ again and again. Managing the economy like this while surrounded by enemies both inside and outside is actually magical. Preying for recession while the chief executive is fighting against arch rival, China, is pathetically treasonous. Criticize democrats and yourself, not Trump.
@Young
D’ya really think there’s not enough blame to go around?
He that points the blame away from himself must look to himself.
1
Americans are the Charley Browns of economics, falling for these charitable tricks every time. What a country.
3
Evil eye by Democrats against President Trump's voodoo economics? Anything's possible these days of dark conspiracy theories, Dr. Paul. Donald Trump is spraying the global landscape with blame for the possible recession ahead so his base will re-elect him next year.
We will all be glued to the G-7 coverage in Biarritz tomorrow to see whom Trump will insult or befriend. Boris's moment? Fortunately, Russia and Saudi Arabia aren't among the G-7. Unfortunately, racism and protectionism are Trump's go to core-values today.
It will be very hot this weekend in Biarritz, France. Will it be climate-warming on the Cote Basque and in the Hotel du Palais in addition to the possible conflagration stoked by Donald Trump at the G-7 summit?
1
Savage. And all too true.
Heaven help us.
1
Many people will remember that scene from Monty Python and the Holy Grail where the monks smack themselves on the head as they walk in procession and chant:
https://www.youtube.com/watch?v=P6WjhzzEHmE
The same thing is going on with voodoo economics. You wouldn't be able to peddle it if there weren't so many people willing to smack themselves on the head.
6
I am not sure whether I should laugh or cry.
2
The GOP has consistently expected Americans to be too stupid to realize their policies don't work. I believe: the GOP hasn't had one good idea for solving 21st century problems...in the 21st century.
But thanks to Krugman for continually reminding people that voodoo economics has been around for nearly 4 decades; has never worked as they project, yet they still line up behind it with solidarity.
There's an old economist joke that economists are the only ones paid to be consistently wrong. But the GOP has easily surpassed that ignominious distinction.
What's amazing is that America is some sort of beacon of capitalism for the world, but so few Americans actually understand capitalism, or "socialism" for that matter. Sen. Gardner and Nikky Haley rallied people in Colorado Springs recently around defeating the "socialism" of the Democrats but the City of Colo Spgs itself has for decades been quite socialistic (public ownership of the means of production) in its approach to serving its citizens - with city ownership of its water and energy utility (could be privately-owned instead, like in most of Colorado); its own golf courses; its own hospital; and even the concession for tourists on top of Pikes Peak. Why all this public ownership? To keep costs down. Hmmmm
Do Americans get that we need all kinds of capital to be built, not consumed, to be economically healthy over time? Including natural capital? Pathetically, no. A $1 trillion deficit is pathetic!!
4
@cljuniper I'd like to make a correction. It never worked as they *pretended*.
1
I'm blaming Paul. If he hadn't pitched in so enthusiastically with his own pitchfork while the DNC/Clinton cabal maneuvered the primaries to sink the Bernie insurrection, we'd not be having this discussion now, Trump would still be just a scary NY clown, and the world would not be teetering on the precipice. I call it evil eye opining.
2
I agree with almost everything you say. I love reading your economic insights.
However I continue to cringe every time you use the racism line, especially in a situation like this where it is clearly forced and has no relevancy to your argument.
I know the times is supposed to be using that word more now, but maybe you could be an example for the rest of them and buck that trend?
2
There isn't even a Plan A---Having a plan is defined as a thought out series of actions that aim towards a valued organizational end---Trump and his team of incompetents never think, they act or react---that's it. Each day begins with a new action or reaction---none of which are coherent or continuous. So far, this daily chaos of random thoughts and pay-back grievances keeps the President from doing some real damage to our country---but, if we get into a real crisis--look out...
2
Should the seas rise enough to reduce habitable land to a mere acre, the theater of human folly will remain the seat of government.
2
Most Dem Candidates are 'behind the curve' and not talking about looming recession. Except for Bennet (https://www.vox.com/2019/8/22/20827080/michael-bennet-recession-federal-reserve-fiscal-stimulus), these Dem candidates are allowing Trump to set the narrative.
What with $16 Trillion Plan from Sanders about fighting Global Warming, when we have more authentic Green Candidate (WA governor) withdrawing from the race! Sanders seems to be the most 'tone-deaf' candidate.
Anyways, Dem candidates should reply as follows when Trump blames Dem for 'recession':
- Trump is the one 'in-charge' claiming all the credit for the first 2 years when Economy was good. He squandered that good economy by giving Tax Cuts to Rich and starting China Trade Wat without the 'homework'. Throw that bum out as any sane Democrat can fix the economy by:
- removing Tax Cuts for Rich,
- making Capital Gain Taxes same as regular Income Tax over years,
- remove 'cap' on State & Local Tax Deductions,
- borrowing 'ultra low rate' money to improve our physical and social infrastructure to stimulate the economy and
- give a Trillion-Dollar shot to the economy by naturalizing all immigrants who have stayed in the country for more than 10 years.
"Why did George W. Bush’s tax-cutting presidency end not with a boom, but with the worst economic slump since the Great Depression?"
Because of the popping of a colossal real estate bubble, brought to you by the leftist idea that government should underwrite, or at least guarantee, home loans for even the least qualified of applicants because, well, it's the 'right' thing to do. Thus were born the institutional priorities of Fannie Mae and Freddie Mac, a mortgage for any borrower who wanted one - qualified or not - and the entirely predictable national-scale defaults that subsequently resulted. Of course the big banks made things exponentially worse with their black-box bundling of mortgages and other debt into exotic and preposterously leveraged financial instruments (the real voodoo in this conversation) but the backbone of the Great Recession was brought to us by our good friends from the left who never met a voter with an outstretched hand who didn't 'deserve' the federal government's benevolence, however epically stupid the risk.
1
@MinnRick Every time the GOP tries the old supply-side voodoo, we have a disaster. And every time, someone comes up with some excuse or other that blames everyone but the wrecking crew. Still expecting the same utopian result from tax cuts? Insanity.
2
@tony zito
Minimal taxes are only one part. Minimal regulation of enterprise is another. The federal reserve staying out of things as much as possible is another. Smart, minimally-interventionist trade policy is another. And, perhaps most importantly right now, is responsible spending restraint, which is a foreign language to Democrats and on which today's GOP has gone into a clueless, populist coma.
The name of the game is capital. The more of it that is freely flowing throughout our own economy and with our international trading partners, the better the growth, which translates into more investment and risk-taking, more entrepreneurialism, more and better jobs and opportunity.
More Big Brother = More restraints on capital = Worse for the economy. Markets work. If liberal fools, political hacks and populist idiocies can somehow, seemingly impossibly be kept at bay.
@MinnRick: "government should underwrite, or at least guarantee, home loans for even the least qualified of applicants because, well, it's the 'right' thing to do." That was a Republican, specifically Bush-2 idea, not the leftists. And banks were only too ready to comply.
1
“why did George W. Bush’s tax-cutting presidency end not with a boom, but with the worst economic slump since the Great Depression?” — That explains the illness.
“brief sugar high from $2 trillion in borrowing. . . .” — That’s not a very good cure.
Oh, woe is us. :(
1
The message of the chief of the federal reserve may be that it favors the middle class or large corporations. If interest rates go down, it won't favor the middle class or the big corporations, considering the economic context that seems to lead to a recession. 😟😟😟 in fact, in a situation of recession, state intervention is necessary🇺🇸🇺🇸🇺🇸
1
The "Unemployment Rate" may be a good figure for Trump's media hype on how good the "king of Israel" is running (sp? ruining) the U.S. Economy, but it is not a measure of true socioeconomics at the family level. I recently cared for a substitute teacher in the emergency room who works 3 jobs, making $25,000 total a year. When I told her she needed emergency surgery she started crying, as her health insurance deductible was $25,000. Her subsequent hospitalization cost was over $25,000. We'll all be crying with her if the self-proclaimed INRI (IESVS NAZARENVS REX IVDÆORVM) gets re-elected.
3
Would you please increase the marginal benefit of your opinion piece on the economy, such as this, by talking about expectations? Rational or otherwise, heh heh!
https://www.federalreserve.gov/pubs/bulletin/1997/199704lead.pdf
George HW Bush was the last presidency under which we had a luxury tax. The rich got to pay 10% federal tax on their various toys -- yachts, art, fine clothing, etc. The same guy who deregulated Wall Street the pretend Democrat WJ Clinton got rid of the luxury tax because the rich weren 't buying enough yachts in CT. Obama made various gifts to banksters -- try moving your IRAs more than one per year to another institution and you will find out who your money belongs to! (Who made the ruling on student loans which cannot be discharged via bankruptcy??
Give me a break_- on interest rates which were about 3% for consumers for decades. Why is Wall St. the only game in town?
Shouldn't Joe Citizen be allowed to keep his money safe? and get some return? (I cannot believe Krugman.) 15$ an hour minimnum wage translates to 28$ an hour for domestic workers supplied by an agency - middle men.. a bit like ACA. Frankly, IMO there are few if any truths in what might best be termed predatory capitalism. Amazon not only has taken over consumer markets for nearly everything but is controlling the computer system via the Cloud for the DOD -- super dangerous in my book. The Trump election meant there would be deregulation (e.g. environmental) and tax cuts.. Whopee. The market soared. Winners, losers... competition not so much. the luxury tax to balance... nope. etc.
Ya got one thing wrong, Krugman. You're trying to seriously address what this president is doing. Either that, or you're just exposing the lunacy of it.
1
If a few modest rate cuts and Democratic “bad juju” can derail the tax cuts, might we call Trump’s tax cut a “snowflake stimulus?”
2
Trump's tax cut was only intended to curry favor with the 1%, not a lasting lift to the economy. He's scrambling to avoid recession long enough to win the election next year.
In the meantime the rest of us are trying to return to the Paris accords with a Green New Deal to save our planet, return to the Iran nuclear deal to save us from another devastating war in the middle east, and at the same time make affordable healthcare and education available to all.
In other words let's make our economy work for us. It has been working for them way too long.
7
Call me wicked if you want, but if it's possible to tank the economy by thinking "bad thoughts, so long as the resulting recession drives Trump out, then I'm all for it.
5
Money talks. Elected officials have always given lip service and promises to their constituents but legislation is written for special interest groups who fund campaigns. There is a reason why campaign finance laws are so weak. Transparency is even more convoluted. You ever wonder why huge majorities of voters favor plans like affordable Healthcare, gun regulation, etc. and nothing gets passed? Follow the money.
4
The country needs a tutorial on how and why taxes work. Most people think that the government collects taxes so it can pay for stuff. This is clearly false. Just think back to the very first year the IRS collected Americans' taxes. Were did those dollars come from? The government injected money into the economy, and then clawed all of it (that is, a balanced budget) or most of it (a budget deficit) back via taxation. The government doesn't need your money in order to spend it. It needs your money so YOU can't spend. Fighting inflation is one of the two main purposes of taxation. Selling bonds to "mop up" excess currency reserves in the US banking system is the government's other anti-inflation tool.
The other function of taxation is simply to make the dollar valuable. The government can put you in jail for non-payment of taxes, and the only form of payment the IRS will accept is the US dollar. The threat of jail time concentrates the mind and causes us to crave the US dollar. Imagine the havoc created in our economy if you had the option of paying your taxes in euros or the Chinese yuan.
The payroll tax places an unfair onus on working people to fight inflation. Americans could use a healthy debate on the wisdom of this approach.
@WDG
"Most people think that the government collects taxes so it can pay for stuff. This is clearly false." "The government doesn't need your money in order to spend it. It needs your money so YOU can't spend."
Wow! And all this time, I thought consumer spending was the backbone of our economy. Now, thanks to WDG, I know the government collects taxes so that we don't have that money to spend on goods.
1
@WDG
You are aware of what the payroll tax is for? Aren’t you?
1
@Michael Banks And you should thank the government for taxing you. Our government is a sovereign entity issuing its own fiat currency. It is capable of buying whatever is for sale in dollars. But if it never clawed back most of these spent dollars in the form of taxes, within a few years the dollar would be worthless. Citizens need to understand that taxation is one of the government's best and absolutely essential anti-inflation devices. The real debate revolves around who should bear the burden of keeping inflation under control. In other words, the rich should pay far more in taxes to take the pressure off our citizens who are not so financially well endowed.
A cut in "payroll taxes" is not a tax break for ordinary workers. So-called payroll taxes are what fund the Social Security and Medicare systems. Reducing the payroll taxes translates: "Reduce funding for Social Security and Medicare", which are always in the rifle sights of the GOP anyway.
It's like raiding your retirement fund to pay off your credit card debt. In the short term, you feel better. But when you retire, you're going to suffer for it.
So please, let's stop calling them "payroll taxes" and just call them what they are: "individual contributions to Social Security and Medicare". And while we're at it, let's stop labeling Social Security and Medicare as "safety net" systems. Everyone who reads this will draw on Social Security when the time comes, and everyone who reads this will use Medicare. Because we all grow old and we all become frail.
My mother, bless her heart, grew up in a household vehemently opposed to FDR and his social programs. To her, Social Security and Medicare were creeping socialism.
But as she aged, her Social Security allowed her to move into a comfortable progressive-support retirement community. As she became demented, Medicare paid for her movement into a special ward, where the staff adored her. She died shortly before her Medicare benefits were exhausted; had she lived on, she would have moved to an adequate but less-private ward and Medicaid would have picked up the bill.
I don't call that a "safety net"; it's "basic decency".
18
In an odd and perverted logic (how else could anyone make sense of any DJT action or utterance?) the notion that Democrats can tank the economy by wishing for a recession is the flip side of Republicans wishing for supply-side revenue to exceed tax cuts.
512
It feels like the economy is replacing the Mueller report as the opposition’s great hope for bringing down Trump. Don’t get me wrong, I can’t stand the guy, but let’s not start connecting recessions dots the way we connected collusion dots only to have it end up with nothing, it terms of negative impact on Trump.
1
@Ker
Once again, I feel the need to point out that when a commenter writes about Trump: "I can't stand the guy, but ….", be aware that the commenter is a Trumper. I won't re-argue the details of the Muellar Report, except to say that there was copious evidence that Russia interfered to help Trump get elected, and Trump and his campaign knew and did nothing about it (and even made inept efforts to collude which failed - e.g. the Trump Tower Meeting). Muellar didn't say they didn't collude; he said there was not enough evidence to prosecute. Very different. Also, there was plenty of evidence of obstruction, but the Dictator Protection Rule of the DOJ does not allow prosecution of a sitting President. It is almost comical that @Ker sees the behavior investigated by Muellar, as well as the slowing economy caused in large part by typical Republican tax policy, de-regulation and Trump's tariff wars simply as dots to be connected by critics of Trump. No matter that economists and recent history predicted that tax cuts for the wealthy and corporations would increase the deficit and national debt, and slow the economy. No matter that Robert Muellar, when testifying before Congress, stated that the Russians are attacking our Democracy again "right now, as we speak." Maybe @Ker should listen to expert predictions, rather than adopting the Fox News view, seeing dots to be connected by critics of Trump, rather than serious warnings to be heeded by all of us.
@Michael Banks I’m not a Trumper! It’s just that I pinned my hopes on the Mueller report for so long, and regardless of its findings it basically had zero impact. As for the economy, I watch MSNBC and CNN, not Fox, and they keep hyping every bit of bad economic news, and I think they’re overdoing it.
Anyway, I will be careful in my comments because it makes my skin crawl to be viewed as pro-Trump.
The Republicans are running up federal debt, and then will present us with the choice of cutting Social Security, Medicare and social welfare spending, or raising payroll taxes on working people. They have no problem with mismanaging the government, because it proves their thesis that government is incompetent and private enterprise is the solution to everything. The Republican Party is playing a very long game with substantial support from enormously wealthy right wingers. They control the Presidency, Senate and the federal courts now. Those who oppose this cynical agenda need to pull together and start playing a long game to consign the Republican Party to the ashbin of history where it belongs. Retaking the Senate is at least as important as defeating Trump.
2316
@MVonKorff
And maintaining the House.
And flipping some of those governorships in various states.
151
@Mvonkorff novel alternative to slashing the usual suspects: cut the Pentagon budget and invest in infrastructure repairs and development to boost the economy.
141
@MVonKorff
But is Biden the candidate to deliver a Dem landslide in 2020? I have my doubts...
45
Trump is desperate. He is flailing away at every conceivable and even imaginary foe to his self purported greatness. He is supposed to be the greatest businessman ever and many voted for him for his perceived money making acumin. They continue to support him in spite of his horrible behavior.
Well that con is rapidly wearing off. A person can drink the magic elixir and believe that the potion is curing their rheumatism, but it's pretty hard to imagine away having less money or not being able to pay the bills. So Trump blames the evil mind control villains.
I can't understand how we can simultaneously have the greatest economy ever, the greatest growth ever and yet Trump claims it is necessary to use extreme methods of stimulation, like a payroll tax cut, and of course the always counted on capital gains tax cut to save us from imminent despair. So which is it? Are we having the greatest economy ever or are we about to fall off a cliff?
The real issue here is Trump getting reelected. He understands that the only way he can possibly win in 2020 is if there is a booming economy. So he will be as reckless as possible to the point of calling out evil spirits who he claims are out to get him. The real foe he is afraid of is the Southern District of New York who can prosecute him as soon as he is out of office. For Trump, wrecking the economy is a price worth paying to keep the prosecutors away.
1113
@Bruce Rozenblit
How do you get rid of a con man? By blowing up his house of cards. Trump is desperate all right, he knows he has to protect the wealthy in America. And where has the wealthy parked their money? In the markets. We don’t need a recession to rid the country of this imposter - just a 20% correction in the markets. Trump’s collapse begins then.
45
@Bruce Rozenblit -
We need money money to buy and sell goods and services.
As the economy grows, we need more and more money to do this. This is especially true when the economy is strong.
But to keep the economy running well, the money has to go to the people who need it and will spend it, not to the people who do not need it and will use it to speculate. The tax cut did NOT do this.
Austerity at the Treasury is always bad, both in the boom and in the slump. All 6 times we have had austerity when things were good and paid down the national debt significantly, we have fallen into a terrible depression, e.g. the "roaring 20's."
35
@Rick Morris
I just retired. I'm not wealthy. But, I was fortunate and industrious enough to save money and watch it grow in the market. I want to get rid of Trump, but let's find a more rational solution than crashing my retirement funds, please.
40
He is the chosen one of course and I believe he has been selected to play the part of Herbert Hoover as he leads the American economy to both fiscal bankruptcy and economic depression after inheriting a relatively strong economy from President Obama.
He and his team are not only incompetent but they avoid facts and economic analysis in crafting an economic policy based on fantasy, hokum, and political demagoguery.
482
@IN Bravo ! Much appreciated comment!
12
@IN Agreed, though I would say the Republican party abandoned fact based governing long before Trump. Trump is the apotheosis of it, and now we have an administration that is effectively hogtied by reality vs Republican wishful thinking vs Donald Trump's psychosis, and so far Trump's insanity has won every round.
18
@IN
Interesting. The economic policy of Herbert Hoover was based on the magical thinking of the Republican investor class of that day. They believed that they could borrow money forever to buy stocks that would only be driven up. After the crash they believed that the magic invisible hand would cure the economy so that they could go back to stealing from it.
In many ways that belief system is still intact if one substitutes the "invisible hand" for the Democrats who willingly do the hard work of rebuilding economies wrecked by Republican speculation. Once the economy is fixed the next Republican administration always knows how to steal from the peoples treasury and crash it again. In recent times we have seen this endless cycle play out with Bush W. and Obama. We are now seeing it play out with Trump and the unknown Democratic cleanup crew who will follow it. The only Republican risk in this pattern is the possibility that a Republican may break the economy so bad that it can't be fixed. That is what Hoover did and such destruction invites socialism in as the only solution powerful enough to fix deep Republican destruction. Trump is now signaling that he might be another Hoover which signals that there might be another era of necessary socialism coming to fix this mess. And this time there might not be a world war that allows Republicans to again take the drivers seat. They might have to live with socialism for a long time but they are still too afraid to take action now.
4
What tax cut? Everyone that I know may have received a weekly increase in pay in the NY Metro area, but all owed money to the IRS come tax time. Many for the first time. In my case, I am willing to sacrifice and contribute if the result was lower national debt. The juggernaut Amazon pays nothing and the middle class gets creamed? I can’t wit till the non tax cut for individuals expires in 2025. Congrats to Amazon. Their tax cut is permanent.
366
@Ira Allen. They probably owed money come tax time because the government unilaterally and without explanation reduced the withholding amounts in 2018. My own withholding was reduced about $150 a month, but then tax time came and my big tax cut was only $10 per month, so I ended up owing the feds the difference (about $1500) when I did my taxes in April 2019. Smoke and mirrors and a big con to make us think we got a big cut. Big surprise. I for one saw it coming and saved up to pay the tax bill.
43
@Brookhawk
Good for you on saving up.It took me three payments to get even with the IRS.
17
@Ira Allen
Not to worry, you could always go work for Amazon.
They're generously bestowing the 10s of billions of tax saving on their workers - in the form of $15 per hour.
12
Voodoo anything is so much simpler for a guy like Trump to grasp than actually doing the heavy intellectual lifting required to consider substantive and detailed policy proposals. Voodoo is wholly consistent with his hair-trigger propensity to figuratively and verbally stick pins in anyone who disagrees with him.
That's bad enough. What I'm worried about is the possibility that Trump is relying on a Ouija board to make important decisions. On the other hand, he would have to be capable of patiently sitting still long enough to get its answer.
4
"Voodoo Economics" persists despite 40 years of evidence that it doesn't work because the small economic elite that controls (buys) policy in Washington wants it that way. Until the U.S. frees itself from the grip of money in politics, its politics will remain those of a banana republic - a few wealthy corporations and individuals owning and running the country with enormous inequality and very little "democracy."
7
Art Laffer getting the Presidential Medal of Freedom, is like a Major League Baseball player with a lifetime batting average of .180 getting into Cooperstown. I mean seriously, any previous recipient of the Medal of Freedom must now be thinking “man, this award is truly meaninglessness “.
14
See, they think it works because when Obama was President it was all media outlets like CNBC and Fox would talk about when even the slightest hint of a slowdown in the recovery was occurring. "See", they'd say, "this happening because business can't grow with 'uncertainity', regulations, and taxes." Anyone remeber Larry Kudlow's hyperbolic meltdown live on TV in January 2009 right after President Obama's inauguration? So, naturally, they assume everyone does it.
4
I predict that the success or failure of The Donald's economic and trade policies will have little effect on his standing in the polls.
That is because many of the trump faithful support The Donald for reasons that have nothing to do with economic or trade policy. His supporters like his stand on race, immigration, protectionism, liberals, readers of the NYT, etc. It is mostly that he hates the same people that they hate. They eat it up when the government makes it tough on migrant kids and deports cooks and gardeners.
Fox, Rush, Hannity, Coulter, and company tell their viewers that the economy is booming and that everyone is just given out from all of the winning. If there are any problems with the economy it is all President Obama's fault.
9
Reading your column theme brought a smile and an occasional laugh as your accurate description of the policy theater unfolds. The policy events and the President's narrative that you transcribe has created an absurd theatrical quality that will not be lost to history.
Contrasting the projected economic outcome of the GOP's fiscal initiatives with the realities of what the Congressional Budget Office recently projected, create a tragedy that can only be eased by the comic relief of the President's childlike imagination that can creatively conjure up scapegoats to blame. For example, his criticism of the economic elites at the Fed and certain media outlets who report the real performance of his policies are throwing a wet blanket on the President's fiery genius for defending his personal self-absorbed presence that has created his ultimate delusion that he is the chosen one.
Keep writing the truth eventually the American Ship of State will get back on course.
1
Forty plus percent of voters, most of whom recognized Trump University as a scam and would not have given Trump their money, were willing to give him their more precious vote.
What did they expect? Trump can't make money. He goes into debt and now takes the country on his familiar path with no possible way to pay back the debt now compounding at a trillion dollars a year. The liablity for infrastructure repair, "deferred maintenance," is an additional cost of hundreds of millions a year that is not recognized or measured, but is real.
McConnell sabotaged our recovery and now invites Russia to interfere on behalf of Repubs. Our planet, our economy, our integrity and our democracy are being shredded.
Had enough? Don't vote for 3rd parties in 2020 & Repubs will lose.
14
It's obvious to everyone by now that Republicans are not interested in shared governance - they take whatever they can get away with that fits their shopping list: tax cuts, conservative judges, de-regulation, privatization, etc. The buffoon in the WH is just there to sign the papers, and lead pep rallys.
So, Democrats need to decide on their own agenda and get busy making it happen. A surefire winner with a lot of voters would be a five percent increase in monthly Social Security benefits.
It would be like rocket fuel for the economy! Ordinary people would have lots more money in their pockets, so they would spend, spend, spend, creating a bonanza for everyone! The increased expense for the government would pay for itself within five years. Besides, deficits don't matter, Dick Cheney and Art Laffer said so, along with many, many notable economists and commentators.
Next we could start repairing those bridges and building that high-speed rail....
4
Krugman writes this as an inictment of Trump's economic policies. Unfortunately, Krugman's personal animus towards Trump clouds all judgement and effects every word of this piece. Krugman predicted a market and economic collapse if Trump was elected. He then predicted the same when Trump was elected. Now (surprise!) Krugman predicts an imminent economic collapse. I suppose when Trump is reelected, we might eventually have a recession and then Krugman will declare victory. Even a clock is right once (or twice) a day.
They are now readjusting the recent jobs numbers. Perhaps they were inflated. Perhaps the perpetrators see the end of the presidency coming and want to he ahead of the said exposure. I don't know of course but that is how it looks
2
The fight with China, ineptly handled as it has been, is a necessary fight. Others should be standing with us, but 75 years of quivering cowardice and avarice (with a few exceptions) don't change overnight. We can fight China now, while we still have a good chance of prevailing, or we can follow the Chamberlain approach favored by Democrats and academics, none of whom will bear the inevitable cost of keeping the sea lanes of the South China Sea open and safe. The current world situation is as far outside the grasp of economists as was Gettysburg, Normandy, and Okinawa. All frightful misallocations of resources, eh?
1
@Charles Becker. We would have been much better off with our problems with China if we would have stayed in the TPC and not started trade wars with our allies. Then we could have put forth a united front against China.
5
You think Trump’s working to “keep the sea lanes of the South China Sea open and safe?”
Good grief.
By the way, those battles you mention? Those happened largely because of a) what Marx described as a clash between an obsolete and racist economic model called slavery and actual capitalism, b) the reasons Keynes discusses in “The Economic Consequences of the Peace,” and c) American isolationism, coupled with an absurd regime of tariffs, in the face of the Greater Co-East Prosperity Sphere.
You know...economics?
1
@Tom W,
You are correct, but that's water under the bridge. The world has changed, we need to work with today's reality. That's not to say that Trump getting the boot won't be glorious, but I still love America more than I hate Trump.
1
Judging from yesterday's "press moment" Trump's at the stage of mumbling to himself "so tired of being great...tired of so much winning."
Trump jumped at a Greenland deal when he was told it would be underwater soon enough. Now Trump, real estate Rembrandt, knows underwater property is heavenly manna for a property speculator.
He did the numbers on a napkin and guessed the Danes are out $700 million after unpaid rent is packaged and sold as a collateralized debt obligation. Add upkeep, gratuities, lawn fertilizer, greens fees, clubhouse, cart rental minus a token fee for Trump and airfare for NFL cheerleaders and you've got something you can flip. Even Vlad wants in.
OK, Trump doesn't do numbers on the back of envelopes (he prefers using his fingers). It's Art Laffer who doodled supply side on a restaurant napkin (because his card was rejected and he was trying to weasel out of washing dishes by insisting that eating lunch is economically more significant than actually paying for it.)
We're more than a year out from the election and his blathering has gone Code Red. When GOP Sen Tom Cotton claimed credit for giving Trump the idea about Greenland, Trump had a cow and slapped heavy tariffs on US cotton exports and ordered Chinese polyester for all military uniforms.
He told Sen. Cotton to just go back to whatever cesspool of corruption he came from.
At least that part Trump got right.
5
I'm one of those thinking bad thoughts. If the economy might keep Trump in office, I find myself hoping that something might happen to the economy that would burst the bubble of those who say, "I don't like how he talks, but he's done good things for the country."
The other part of me, the rational part, says that a bad recession would do even more damage. There are creatures out there even worse than Trump who would come forward to take advantage of misery.
A Republican Party that has trafficked in hate and fear cannot be trusted to address the troubles of those who lose jobs and savings. Some, and, of course, not all of them are Republican, even make money out of the damages wreaked on the masses.
I never expected someone like Trump could win an election and become president. Very few did. Now that we know what can happen, is there any way we can prevent further damage?
Hoping for a recession isn't the answer. The economy is so complicated that even a crazy president has limited effect, although even those supporters ought to be able to see that he's making things worse.
3
"Can opposition politicians really cause a recession with negative thinking? This goes beyond voodoo economics; maybe we should call it evil-eye economics."
Erdogan of Turkey (surely someone admired by Trump) once had an economics advisor who thought Erdogan's enemies were trying to harm him using telekinesis. Erdogan seems to be okay, but the Turkish economy is in the dumpsters, so who knows, maybe there is something to that "evil-eye" thing.
Sorry, too late, game over. There will be no acceptable future. Americans are not mature enough to recognize their own self interest.
It’s very sad. Humans just weren’t intelligent enough to surmount this evolutionary challenge
1
There is good news in all this: Sarah Huckabee Sanders has joined Fox News as a "contributor." Talk about someone with an evil eye!
Her mastery of communication skills will now be put to use to explain why Trump's failed economic policies are, instead, producing the greatest, strongest, most sustained economic miracle since, since, well, ever.
1
I thought that Plan B was to buy Greenland.
2
I fear that trump might think that the only way to stimulate the economy (or at least distract from a failing economy) is to boost the war machine and/or start a conflict. There is nothing that a little external war cannot fix: it is the ultimate distraction, it reinforces the nationalist sentiment, it definitely gets presidents reelected, it pleases the gun and armament lobbies, it gives the government all sorts of extra emergency powers, etc. What is not to like there? It is just a matter of choosing a containable conflict in a far enough place. Trump might even be able to give himself some medals as commander in chief, like any banana republic dictator worth his salt.
I would suggest (in jest) to invade Greenland, in response to these truly insulting words by this nasty woman. May be safer than provoking Iran until they can take it no more.
73 year old men don’t change lifetime habits: Donald Trump squanders his Presidency the same way private citizen Donald Trump squandered his inherited fortune, lost 3 gambling casinos and racked up $1 Billion in debt due to multiple business failures and financial mismanagement.
3
Trump really has no clue as can be attested to by the many business ventures he ran into the ground, blamed other people, hung the investors out to dry and ran away with full pockets. As a retired middle class person who worked 45 years I paid 30% more taxes under trumps tax cut than before, thanks Donnie!! I believe its worth a recession to get rid of trump so I support the hex!!
2
There was never a Trump boom! The same people who underreported performance when Obama was in office have been over reporting it for Trump, Trump’s performance will be reassessed downwards like Obama”s was reassessed upwards. Why the people providing these measurements are not jailed for manipulating the markets is the real fraud.
The average American will not understand the voodoo economic aspects of the laughable Laffer curve until their Social Security checks stop coming. MAGA hats are fantasy bonnets.
1
Trump might get better media coverage if he said all we have to fear is fear itself.
We’re lost, but the 1% are making good time!
2
Republicans, with their never ending excuses for why their fairy tale economic strategies never play out as they predict, remind me of petulant children pointing fingers at others to deflect blame.
This sort of behavior is to be expected in children.
A trillion. I cannot even wrap my mind around that. So what if America goes bankrupt, and simply says: “Goodbye to your money everyone.” And uses that grossly oversized military to make the rest of the world shut up? That’s what I am starting to worry about. But I have to admit that I do not understand why institutions keep lending the US money in the first place. The fact that they do makes me think there is an angle to all of this that eludes me.
I didn't think the age of enlightenment would end this way. You’re a credentialled expert from no less than your peers in addition to a Noble prize. A wolf crying in the wilderness is not where I thought expertise would be in the 21st century.
1
"The truth is that Trump doesn’t have a Plan B, ..."
Good Lord. He seldom has a plan A.
Nothing goes to the heart of the coward's mis-guided grasp of money, monetary policy and the economy like his personal money management history.....what can we expect from a "genius" "businessman" whose money management has ended in SIX bankruptcies. Most people would feel shamed by just 1 bankruptcy, what are we to take from trump's lack of ability, competence and understanding?
Mince he throws the country into bankruptcy he’ll offer the building to the investors - lock, stock and Grand Canyon. LBO play book - siphon off the cash and sell it for parts. Someone needs to tell Lisa Murkowski she’ll need to find a new job because her mailing address will soon be in Russia.
Bad thoughts? It's official. We've landed in the trenches of a Kurt Vonnegut novel.
John~
American Net'Zen
Trump-Reagan economics, fathered by the Laughable Laffer curve, is zombie voodoo economics - a recurring notion that paying less to government will generate more and better services from government (which a majority of people demand). It never worked (but for short term pump-and-dump exploitation) and never will - how could it? Reagan's, Brownback's, and now Trump's economies have illustrated this (as has Clinton's in the other direction).
Further, it reminds me a lot of the notions of heaven (pick your religion), another voodoo-ish zombie idea that has persisted for millennia. Human's seem to be predisposed to look for guarantees about the future - behaviors (or beliefs) that they engage in now that insure something ideal (fanciful?) in the future. E.g., recent politically divisive enthusiasm for supporting Israel with the idea that the kingdom of heaven on Earth will hasten its appearance. None of it makes any sense.
Nonetheless our "chosen one" persists at raising the dead - won't he be surprised when those skeletal zombies start gnawing on his shin bones and heaven turns out to be oblivion for our nation's economy, culture, and moral spirit?
1
Prof. Krugman is exactly right. Sadly the economy or the country doesn't matter to many of his supporters who vote for him for his racism, anti-semitism, promotion of conservative judges, and boorish behavior on the world scene which seem to give them a high.
1
Malice and hatred is what drives Trump, all he cares about is himself, his supporters are the same type of people with a percentage of them voting on sheer fear that their neighbors might find out they are actually normal.
Art Laffer is certainly well named. Awarding him the Medal of Freedom is an exercise in devaluation in synch with Trump's devaluation of America's word and credibility.
America is no longer known for championing democracy & human rights. We are known for our policy- policy- of harming children to dissuade poor refugees from seeking asylum and protection.
If the president is not mentally ill, he acts mentally ill. If he is not a racist, his acts are racist and racists claim him. The world watches in disbelief as we normalize and cover our leader's mentally ill behavior. He daily hurts and belittles people & acts sadisticly. He seems to enjoy others' pain. Doesn't anyone notice?
2
The American right is brainwashed. Everything wrong with our once beloved country happen under Obama. That’s their mantra. My Republican brother-in-law thinks the reverse mortgage, which has ruined so many lives was born under the Obama administration. Try 1961. It was made safer, but still a dangerous financial instrument under Obama.
1
The world is run by old white men and I often wonder if we understand the world we grew up in no longer exists. The highest fertility rate in Europe is Ireland at 1.98 still below the 2.1 threshold of population maintenance. I just checked the 2019 world fertility index and I continue to wonder why we want to grow our already too big economy.
Growth seems to me nothing if not a major fail in reasoning.
http://worldpopulationreview.com/countries/total-fertility-rate/
1
I'm a Democrat. I read Farhad Manjoo's column "CEOs Should Fear a Recession. It Could Mean a Revolution". Now I, too, am an evil-eye Democrat. I am praying for a recession.
My God complex and general transcendence of earthly details is all due to the ascension of the Trump baby balloon. If I'm not divine then what am I doing up in the sky like that?
Yes Paul Democrats / media (same thing) are vexing the boom. By election day the Dems / media will have cooked up a fake recession even if there isn't one. They created the fake Trump / Russia collusion hoax for two years. I'm sure that they could whip up a fake recession.
His only option now is to start a war. If it is a massive effort, it will increase spending and heat up the economy.
2
The key word in today's economy is 'uncertainty'. It races up and down the economic ladder. How does one plan for anything if it is impossible to predict the future or the outcomes of certain decisions.
Trump and his team is inadequate to the task. So, each day more uncertainty is introduced into the economy. When people stop buying cars and other goods the hammer will fall on all of us.
6
The long-term objective of the Republican Party is to convert our system of government from a representative democracy to a plutocracy. The steady transfer of wealth from the middle class to the wealthy and the growing income inequality driven by their policies are clear evidence of their success in furthering that objective. The fact that Republican voters continue to support their party’s objective tells me that they have what I believe to be a misguided expectation of a benevolent aristocracy.
13
@Dlsteinb It's something akin to willing suspension of disbelief. They don't have knowledge of objective facts outside of the Fox fantasy world.
1
"But such action seems unlikely, among other things because top administration officials denounced this policy idea when Obama proposed it."
Now wait. I thought we determined denouncement of a policy when Obama was in office did not preclude praising it when trump is in office.
7
I believe that in the final analysis the military/industrial complex Eisenhower warned of will fight tooth and nail to maintain the GOP program that Professor Krugman outlines here.
We are in much deeper trouble than we think. The bad guys with guns are winning !
Only hope is a massive Dem tide in 2020, Federal and State. Campaign, demonstrate, vote.
9
@Bill Wilson So, tell us of the accomplishments of the last "massive Dem tide" in 2009-10. The flood of corporate welfare rebranded as the Affordable Care Act does not qualify as a benefit to anyone but the healthcare grift currently operating in the US. You cannot vote your way out of plutocracy, the rich own both parties.
Yes, there are those of us who want Trump to fail. Why play all nice and centrist about it? We still remember all the Obama-must-fail talk from the moment he was inaugurated, so why shouldn't the shoe be placed on the other foot?
12
The truth is that Trump didn't even have a Plan A. It is the GOP's plan, the Tax Reform Bill. Let's give credit where credit is due.
This is the most destructive Administration and Congressional Republicans are the real culprits . Trump is notorious for other reasons. Too many to list.
31
Paul, don't sell "the chosen one" short. Remember, not only is he desperate, so is his Cage-Children Party. "Desperate" is too mild a term. Do-it-or-die more fittingly describes "the chosen one" and the Cage-Children Party, from McConnell to Collins.
They are capable of anything to preserve their power. Laws, courts, the Constitution, the suffering of the American people will not stop them from ginning up the economy until after the 2020 election all the while finding scapegoats to blame for why farmers, coalminers and laborers aren't feeling the wealth.
35
Republican economics -- from Arthur Laffer to Navarro, Kudlow, and Mulvaney.
It took 8 years during the Obama administration to repair the damage of Bush II with the Republicans fighting him at every step.
Trump inherits a good (if not booming) economy and tanks it in less than 3 years.
Remind me again why 63 million Americans voted for this wrecking crew.
53
Ah, yes. If Democrats could think change to the economy, surely we all would be able to think Trump out of the presidency.
38
I love that Dr. Krugman continues to illustrate the inadequacy of GOP policies. The GOP, despite the joke it has become, has to be treated as a real party by the Dems since it is in power and millions of people take the GOP seriously. Ultimately, the Trump Administration is a joke and very little it does has any basis in evidence.
25
Wow, the Democrats must be really powerful if they can cause a tailspin in the economy simply by thinking negative thoughts. I wonder why they didn't use that power to win the last election? More to the point, Trump is the master of negativity. No enemy and lots of former allies have not been spared the seething vitriol practiced by 45. Maybe if HE dials it back, things will improve all around.
20
@Susan
No, not if he dials back. Only if he ceases to be president.
1
Trump gave out the largest corporate tax cuts ever during a growth period. We saw a drop in corporate taxation of 33%, the largest since 1935. How then was it a mistake for the FED to raise interest rates? They really had no choice considering we are obviously going to have to raise taxes eventually and we will really need to be able to cut rates when we do. The FED had no choice and until Trump or someone ekse repeals the corporate handouts they shouldn't consider any rate cuts.
12
Nearly 40 years of voodoo economics has left the infrastructure, public education, the environment, and many of our public institutions in a shambles. There is every reason to believe people want more voodoo.
Now, with an aging population, how do we fix it?
22
@goofnoff
We don't, because many Americans, most notably Republicans, want a free ride. The electorate will scream bloody murder if anyone proposes rising taxes, despite the fact that we're one of the lowest taxed nations in the developed world. It would take untold trillions to fix our infrastructure, and that ain't happening. So be prepared for further deterioration, and more bandaids. Because that is all the electorate will allow.
3
@goofnoff I believe the decimation of all those things and more is part of the GOP grand scheme.
Next, we will be so bankrupt there will be ‘no choice’ say the powers that be but to cut social security, Medicare, the government and what else remains for the average person.
Which is why the only hope is to vote out EVERY Republican in Every election and then to remember to be supportive as Democrats begin the long tedious work of digging us out of this hole.
It takes a little time to destroy. It takes much longer and requires more real work to recover and build.
3
"because protectionism is right up there with racism as a core Trump value."
Protectionism??
Dr. Krugman is forgetting the fact that here too, candidate Trump has always claimed that the GOAL of his trade war is NOT to increase tariffs. That's only a TOOL. His goal is to use higher tariffs on imported products as a way to force America's trade partners to LOWER their tariffs on US imports.
That's a crucial difference, because it means that he's not asking the GOP to flip-flop on free trade (at least their version of it), he has merely told them that he knows HOW to get there, and the strategy employed is his trade war: increase tariffs step by step, until your trade partner can't take it anymore and is willing to do no matter what, even no longer protecting his own people and dramatically lowering his tariffs, and THEN we too will lower tariffs for their exports.
This is the very OPPOSITE of protectionism. It means wanting to force both Chinese and American workers to accept LESS protection.
Who benefits from less protection of ordinary citizens?
The wealthiest, of course.
It's also why the GOP refuses to pass e-verify, which would penalize Americans (like Trump himself) who employ illegals.
Conclusion: neither protectionism nor racism are "values" here. They're mere TWEETS, rhetoric needed to fire up the GOP base and vote for this utterly cynical conception of how to use political power in DC anyhow, even though bill after bill, the GOP attacks its own base.
15
An old adage: Believing is seeing. "Believing" that tax cuts for the wealthy is all it takes to "see" massive benefits. "Believing" gives one license to "see/invent" explanations as to why the benefits don't materialize. "Believing" that lining the pockets of your donor class will line your own (Mitch McConnell, Lindsey Graham et. al.) enables "seeing" that these tax cuts are good policy.
16
It seems to me that it isn't the republicans fault for stealing the people money its their nature. The blame belongs in the education of all of us by out parents and teachers for not explaining the basic of economics.
6
1. I agree with a "no blame" approach, because blame isn't the best education tool, especially not if you're trying to educate adults.
2. That doesn't mean that we don't have to act, and act now though. Stealing money is a bad thing. So we should massively vote out any Republican who votes for a $2 trillion tax cuts for the wealthiest bill. That's the ONLY way to stop this.
3. I don't think that this is an "economics" problem. It's a moral problem.
Only people who weren't taught how to deal with their own negative emotions in a loving way, cultivating acceptance AND the awareness of something much nobler that is already in their very nature too, start imagining that that negative emotions (greed, jealousy, ...) is all there is in life, so you can better try to grab what you can, because win-win situations simply don't exist.
This is the utterly cynical conception of humanity that underlies Fox News' "message" and 99% of the GOP's rhetoric. It's also what its own base grew up with ...
Just look as what kind of VP we have today: in the 21st century, the wealthiest and greatest country on earth is led by ... a man who refuses to have a business lunch with a woman when his own wife can't be present too. So this is a man who actively condones workfloor discrimination against women, ONLY because his moral imagination is too small to realize that you CAN learn to do something constructive with a desire to have sex.
So what we need IS a "spiritual revolution"
1
Trump's borrow and spend approach appears to have reached its culmination. Nothing lasting will be left as a legacy to be undone by the next president after Trump has concluded his term in office. However, evolution is a dynamic dialectical process. Trump has already inspired hundreds of inspired people to enter political life to counter what Trump has initiated. This can lead to sound economic and international policies that can better address challenges like climate change that demand action now.
15
If the economy is demand driven, then we go into a recession when demand slips.
Some people might be influenced by the "what if" of a Democratic party win, but most are influenced by their own bank accounts.
If, despite the claim that inflation is low, people are seeing more of their paycheck disappear on necessities like food, healthcare and education, it won't matter that a TV is a bit cheaper, because they won't be in the market for a TV. No demand. "Low inflation" on goods they don't need is useless.
If despite the claim that wages are higher, a family continues to need to spend on infinitely increasing necessities like medication, and their vast and glorious rising wages don't cover more than mortgage or rent, transportation and taxes and healthcare, demand softens.
If the family is always assuming that today may be the last day before being laid off, demand drops.
Increase the safety net, distribute wealth to the worker in wages, resolve the fundamental crippling problems of education and healthcare, and watch the economy prosper.
Having one percent of the population ecstatic and satisfied doesn't drive prosperity.
42
The country was founded on the belief that it was exceptional. It has taken a wackadoodle president to reveal that our ideals are fading. For too long we have watched the Republican party steal US democracy because the citizenry believed the messaging that all a person needed was a good work ethic to succeed. Failure to succeed was a sign that they were undeserving. Long before voodoo economics, there was the voodoo religion of "In God We Trust". Trump's presidency is forcing some of us to ask ourselves do we want a democracy of we the people or a protections racket run by Mitch, his party, his funders and the likes of Stephen Miller, white nationalist of unholy conceit.
39
The economy is one more area where the lack of competent advisors who could tell truth to power is missing in the White House. As Mr. Krugman has pointed out before, there are competent economists on the right, but they might tell Trump things he doesn't want to hear. Instead, Trump is surrounded by sycophants and economic quacks like Larry Kudlow and Peter Navarro who. As a result, no one at the White House can formulate a competent response to the slowing economy.
28
If you want to know how Trump's tax giveaway to the 1% worked, just ask anyone in the middle-class, working class or working-poor if we got anything more than less income tax returns.
22
@kladinvt
My husband and I are pretty solidly middle class. We make just about the median family income. Our federal tax bill was $1,200 less for 2018. So, yes, we did get a cut, but we also got a lot of increases in local taxes, food, and, significantly, the cost of our Medicare supplement.
I'm not really sure whether we are ahead or not, but that's not really the point. The country is less secure. Other Americans are suffering because the safety net continues to come apart. The very rich are getting richer and richer and richer.
When it's so bad that Jamie Dimon says the billionaire business moguls have to make some changes, you ought to see that it's reaching a tipping point. Things usually go badly when that happens.
722
Scary thought: the economy’s tipping point can effectively be recalibrated by a war. The NRA wants one, and trump is all in for the NRA’s devices and desires.
7
@Betsy S And remember- the tax cut goes away in coming years.
2
What Trump didn't bet on was that the further divided congress would ultimately scare businesses into a protective position. This was the so called Voodoo. So although some of the money from the tax cuts did trickle down to increase wages, lots of it also went into savings in preparation for a government freeze, and possible democratic takeover that may increase taxes to 70%, so you better get the cash out now or horde resulted. The only thing I can think of to get the cash flowing again and moral up would be to make the opportunity zone program too temping to not take advantage of immediately.
1
The Fed waited too long after the Great Recession to start raising rates. They should have started raising rates two years earlier and done so at a slower pace.
True, the final part of the recovery would have occurred more slowly, but we would have avoided our current situation of feeling glum while sitting at record unemployment while interest rates are still quite low. We would have had slightly higher unemployment, closer to the historical norm of 5%, and higher interest rates and thus had room for the Fed to maneuver if things took a downswing.
Instead we had the Trump Bump starting the day after he was elected and the pointless tax cut, the combination of which have left us with a "sugar high" which is unsustainable - especially in the face of constant blame and inconsistent messages from our leader and his unpredictable tariff wars.
Can unemployment be too low? Yes, for two reasons. One - there is always some unemployment due to people changing jobs, as well as companies coming and going as tastes and technology change. Two - there are people who you just don't want to have working for you, they are unproductive and instead you would rather have them working for your competition.
5
Will DJT bully the Fed into a rate cut/s, then announce he’s ending his trade war with China (that he won of course), sending the stock market higher just in time for 2020 election?
Anyone paying attention must by now know and accept the fact that republicans will never own up to any mistake. Moral Certainty is part of their DNA. Bad results from their policies will always and forever be the fault of everyone else, most specifically those "Tax and Spend" democrats. The only people who believe them, a surprisingly large percentage of the electorate, are their fellow conservatives. You can show them historical and mathematical evidence, but you can't make them admit to it or believe it. It's faith-based, ideological dogma. We need to stop being amazed, surprised, or disgusted by it, but I'm at a loss as how to deal with the constant negative results.
51
@JP The solution is for Democrats to register and vote in massive numbers. What action are you taking to help facilitate this?
1
I have a confession. I think bad thoughts about the Trump economy most every day. Mostly, they're about how to protect my family's savings from the inevitable Trump economic collapse. Bush Jr gave us a near historic fall, so I expect Trump's downturn to be epic. I'm trying to be somewhat optimistic, but only to the extent we hopefully avoid a nuclear war, a global pandemic, or a major San Andreas earthquake.
While I do spend a lot more time than I'd like worrying about my own finances, I also worry about potential Democratic policies and their effects on the economy. We have to start with abolishing most of the Trump tax cuts. Then we have to bring aggregate medical costs down while ensuring a reasonable baseline for universal care.
We also need to invest heavily in infrastructure, clean energy, education, and R&D. The latter should pay for themselves over time, but the benefits of a good economy need to be shared both geographically and across all income levels.
The world also needs to accept that excessive military spending will cripple our collective response to global warming and overpopulation. All the money in the world will be useless if the planet dies.
Oh, and we have to figure out a way to claw back a good portion of the revenue frittered away by near five decades of trickle down nonsense.
80
@Michael Tyndall
Infrastructure? That's what Trump promised, but where will the work-force come from?
6
@Jeremy from a lot of people who are working poorly paid jobs with no benefits, hopefully making their last employer raise their pay and benefits. Maybe make some progress in the lower middle class work force.
6
@Jeremy
It really doesn't matter about the workforce. Even if we hire immigrants to do the labor, and we have a lot of legal immigrants entering the economy, the benefits will still be there. And there could be more immigrants, if we stop trying to keep them out.
1
The mention that Arthur Laffer blames the Great Recession on Obama frightening the Confidence Fairy reminds me of the actual course of events in 2007-2008. In early December 2008, the NBER announced that the nation had, in fact, been in recession since December 2007. For most of that period the NBER was led by career Republican hack Martin Feldstein, who conveniently suppressed the announcement to support the Republican ticket in 2008.
In the pantheon of crackpot Republican economics, it is worth remembering Jude Wanniski's "Two Santa Clauses Theory". This goes a long way to explaining the Republican transition from Deficit Hysteria under Obama to Fiscal Mania under Trump.
As I consider my current financial position, I plan to invest my
fortune in the government bonds of countries that actually tax their wealthiest citizens. Though the interest rate might be slightly negative, that is a far better play than the major collapse I foresee when Trump's encouragement of economic crime manifests itself in widespread bankruptcy. Indeed, I strongly suspect that Henry Markopolos' report on accounting fraud at General Electric is a mere tip of the iceberg.
48
Trump's erratic economic policies during his first year, and the lack of a market response, proved "the confidence fairy" was yet another economic myth conservatives had sold us. Like "towering destructive deficits", these myths only apply when a Democrat is in the White House.
15
@Michael Epton Your money is most welcome here in The Netherlands.
Our government has just decided to borrow 50 billion Euro for an infrastructure-fund. Someone must have been reading Paul Krugmans message to Germany last week!
Downside is that at present the real interest is -0,511 %.
3
@Michael Epton You offer an astute observation with respect to Martin Feldstein and the NBER dating of the Great Recession. The electorate spent nearly all of 2008 unaware that the economy was in an official recession. By the time Lehman collapsed in September, 2008, most voters understood that something was amiss. Still, nearly three years into his administration, Donald Trump blames the prior president for his own problems, and Art Laffer manages to keep his name in the news by pandering to the needs of a Republican administration.
11
Spread the wealth at the top so that it can flow down to the rest of us, the Republican Party’s economic fantasy that a big chunk of Americans keep buying into, even after decades of middle class stagnation. Why?
40
Jgrau
That big chunk of Americans has no idea how the other 0.001% lives. They believe that those rich folks will spend their increased wealth on buying more "stuff" thus putting more money into circulation but perversely the rich refuse to live like the poor. They already have more and better stuff than the poor could ever imagine and they rarely want anything.
2
The core elements of Trump's economic "plan" have been:
1. Tax cuts to put more money in the hands of the 1%, despite 40 years of data showing that Laffer's trickle-down nonsense is a failed theory. His 2017 cuts have led to an explosion of the budget deficit.
2. A trade war with China
3. Tariffs on various goods
4. Killing the TPP and entry into a NAFTA replacement treaty that changed very little in any significant way
5. Tweeting at the Fed and blaming Jerome Powell and Obama for anything and everything
6. Taking credit for any new factory or expansion, even if they were announced long before he took office
7. Hiring discredited Fox News economics commentators (Kudlow, Navarro), past-their-prime businessmen (Ross) and
middling investment bankers (Mnuchin) as his economics team.
For decades, he left a trail of failed businesses, worked-out loans, bankruptcies and thousands of lawsuits in his wake. His persistent personal cash flow issues were eased not through business successes, but through the wholly unexpected success of his TV show, The Apprentice.
Nothing whatsoever in his personal history would suggest he knows anything about macroeconomics or implementing a successful economic strategy. His woeful performance in managing the economy is simply a repeat of his decades of chaotic business operation and failure.
112
@Jack Sonville
You are completely correct. The fact that Trump has gotten away with all of these shenanigans for decades has convinced him that is is, in fact, a stable genius. The only corrective I can see is for his long-overdue punishment for these misdeeds to finally arrive. Perhaps in the next election?
1
Paul Krugman is a Nobel prize winner but even he will honestly admit to making mistakes at times.
No one expects perfection and I have learned much from reading his commentary over the years, but I have to bring this point out once again:
THERE IS NO TRUMP BOOM. IT'S A MYTH.
Now, the reason I feel strongly about this is because of my deep dislike for the tRump presidency, and because I fully understand he has but 2 things to run on next year:
1. Fomenting hatred and division in various forms
2. The economy
So let me address some numbers which hopefully will help to put the idea of there being a tRump economic boom to rest:
GDP: The economy grew 2.5% in 2018 and is growing 2.1% (annualized) thru June. Those are similar numbers to what President Obama had, except that all I used to read from the economic pundents was how the numbers reflected the 'new normal' of below trend economic growth.
Jobs: President Obama averaged about 216,000 jobs per month during his last 2.5 years, while tRump is averaging about 191,000. And that's BEFORE the recent downward revision, which showed the economy actually generated 500,00 less jobs in the 12 months to last March.
Stocks: From the bottom in March 2009 until tRump's election, the S&P 500 averaged 1.8% of growth per month. Since then, the average is 1.2%. And the trend is slowing, because since Jan 2018 it's just 0.4%.
And remember, the republicans forced Obama to cut the deficit in HALF while tRump has worsened it by over 60%.
185
@Chris Manjaro
The one caveat is that the stronger economy really started in Q2 2014 when Republicans finally exerted their power. So Obama does get credit for saving the economy in 2009 but 2011-2013 probably could have been better if unemployment and SNAP were not extended by Democrats.
1
@Sebastian Cremmington
How would extending unemployment and SNAP make the economy worse, when all the money given would be spent immediately by recipients?
Those disbursements helped stoke demand.
81
@Sebastian Cremmington yes, do not extend benefits to the poor. Let the rich instead get their tax cuts. I'm not saying that your comment advocates that, but I'd rather define "better" differently. A "better" economy would mean all boats lifting, not just the elite of our fiancialized, phantasmal economy.
38
why don't economists ever write about climate change? because economics is based on the principle that prosperity requires continual population growth ... forever. the principle starts with adam smith and remains a tenet of contemporary economic theory (it's called "job growth" instead). but climate change is also driven by population growth. so economists write about black magic economics instead. much easier.
22
@drollere
There have been tons of articles written by economists for years (both in research journals and general) on climate change (and before on natural resources). Stern, from the UK, with his 2006 700-page review was probably one of the easiest reads for non-economists whilst still attempting to be accurate. It is accessible all over the internet and there is lots of debate about his use of a discount rate
15
@drollere it is not economists who look for pop growth. The culprit is capitalism. It creates fake perception of increasing rich-ness.
1
@drollere
Continual population growth is the unstoppable world wide Ponzi Scheme. As with all Ponzi schemes the later comers are the ones who really lose out - including, this time, world wide ecological health.
1
I think the US is entering a maturation phase of economic growth where 2% will be normal "good". We do not have the pent up demand that we had post-WWII in the 20th century like the fastest growing economies such as China and Brazil have (and even their growth is slowing as slack is taken out of their pent up consumer and capital demand).
That's not necessary a bad thing - we are just incredibly efficient at anticipating and meeting demand for goods and services. Additionally, there have been fewer major technological advancements requiring huge capital investment in all sectors since the introduction of the desktop computer (yes, there have been advancements, but I'm still typing this on a computer than is essentially the same as the one I first used for the "web" in 1993, it's just lighter, smaller and running off a battery; it's impact on my productivity is pretty much the same).
In one way, this could be a good thing- it would mean that busts are not as big and bad as they have been. It also means that booms are tepid compared to the 90's and before. But that is only the case if we manage things rationally. Since we are pumping more juice into an already charged (but note, 2.1% growth) economy, I have no faith that we are managing things very well. We can transition like Germany, or we can transition like Japan.
15
@CB the writer has a point about tech. For example, i just read today that the gain from 5G is the use of a bandwidth that is not being used. That is, stuff like video already comes at a speed that is ample, but with additional bandwidth media companies will be able to throw more of this stuff at you, but the extra speed won't be noticeable. And the shorter bandwidth will mean twice the towers--they're busy building--and more likely interruptions, rain being one of them.
4
It is easy to figure out why the tax cut did not give the economy much juice. Instead of taking those millions and expanding operations, hiring R&D, building factories, hiring workers and giving RAISES they just bought back their own stock and parked a bunch of money away from masses.
59
@Allright Everything you wrote is correct. Should add that the reason that companies bought back their own stock is that they had no better way to spend the money. I do not fault them for that, they acted rationally given their situations. If there was more money to be made by expanding their business, they would have done so. This point is extremely important because it is the market's way of saying that growth is at its maximum limit.
7
It’s the CEO and the board’s way of saying they are not thinking of long term growth of the company in 10, 20, 50 years but how much they can put in their pocket this year before the next downturn or they leave this job. It is their way of saying the old days of American stewardship and responsibility CEOs had to their customers, their communities, their country and their employees is over.
2
I am not an economist and I don't know when during the Obama administration I started commenting on negative interest but decreasing population in all of the western democracies and all industrial developed nations. I had queried when do we stop calling it capitalism when negative interest is the only way to get investment. Demand will never again catch up to supply and short of catastrophe the current system will mean more and more production and less and less consumption. Isn't it time we stopped talking about which economic policy is less worse.
We need an economic philosophy that will take us into the future. What am I missing? When are the demographers going to sit down with the economists? We may be as little as 20 years from maximum population although 50 years seems more likely for maximum world population.
16
In earlier articles, Dr. Krugman argued that the impact of new tariffs would be small. However, he now seems to suggest that tariffs have been a significant factor in slowing down the economy. It would be nice if he addressed this change of position in another piece.
11
@Aspartic
Professor Krugman addressed the issue last week in another excellent column. It's less the tariffs effecting the economy than it is Trump changing positions every other tweet. Businesses can invest for tariffs, or for no tariffs, but they cannot do both. So the result is they are not investing at all.
28
@ - Goofnoff- So, Krugman wins either way. I was wrong but...
@Aspartic . . . Are you calling 20% small! . . . . Moreover, it seems to me that Krugman is more pointing the finger at yet another round of failure from Republican tax-cuts.
So much from voodoo economics — the voodoo houngan.
"Voodoo Economics," "Trickle-Down Economics," the most common labels for Republican party monetary giveaways to it's one and only constituency...the richest and therefore most influential are a win-win for both the GOP's short and long term goals. The short term obviously is transference of more wealth to the wealthy while encumbering the Nation with higher and higher deficits. The long term goal is those deficits will be the ruse to explain why social safety net programs will have to be cut back or eliminated altogether. The GOP has already achieved the first goal so successfully that the deficit will be a trillion dollars soon. The second goal will be coming fast and furious if Trump is re-elected a second term.
37
"The latest estimates by the Congressional Bud-get Office (CBO) indicate that the federal bud-get is likely to be essentially balanced for thenext 10 years if current policies remain unchanged.CBO now projects single-digit deficits for fiscal years1998, 1999, and 2000, followed by a small surplus in2001 and growing surpluses through 2008."
With the news about the latest projections for Trump's deficits going forward, I had to take us back to 1998. Remember this? When that "free spending" Democrat, Bill Clinton, was ruining the economy by 'giving away everything' to the undeserving poor?
Sure is a good thing George W. Bush came along and fixed it. Two unfunded wars of choice, unfunded tax cuts pitched mostly to the already wealthy, and voila, here we are: $1,000,000,000,000 deficits for years going forward.
Guess we need to elect another free-spending, job-killing Democrat to fix the economy again.
84
@Jim Brokaw
Jim your misunderstanding of what the CBO stated is breath-taking, they actually stated that the deficit will grow to more than 1 trillion dollars. The facts are that the magical tax cuts are producing far less revenue, so less money to pay for our expenses. I really thought that California did a better job on public education.
How come we can not simply have a flat tax rate like 10%? Everyone pays a share, even those on the welfare train. The tax laws are always so complicated and at the moment very UNFAIR to the middle class worker bees.
3
@Pinkie-doo-da
1) Because a 10% flat tax would barely cover half of our current federal budget. You need something closer to 18% if that is how you choose to go (more if you don't want to run massive deficits).
2) Because anyone who has walked out of an introductory economics class understands marginal utility and why progressive taxation came about in the first place.
3) Because people should stop complaining about the taxes that fund the infrastructure (legal and physical), that allows one to accumulate vast sums of wealth in a single lifetime.
4) Because income taxes are at their lowest nominal rates since the end of WWII (despite wars we are still fighting and not paying for).
50
@Pinkie-doo-da It seems to me that wealthy people are often very good at paying less than they should. Think of the tax rebate. Everyone gets $1000 or so back at the end of the year. What this really is, is not a "now we get to buy XYZ", it's an interest-free loan to the government. The wealthy understand this, and hire an accountant to make sure they pay a little bit at the end of the year.
Joe Sixpack has given the US government an interest-free loan, disguised as a year-end gift. Richie Rich has not. Money moves uphill, because Richie's better at accumulating it than Joe is.
A progressive tax takes this into account, moving money back down where it can be spent on things like infrastructure, health insurance for the working poor (Medicaid and emergency room medical care), schools so that there's secretaries and accountants and engineers and other stuff.
Of course, Mr. Rich isn't too fond of this idea - a sense of entitlement is part of why he's rich in the first place.
Let them eat cake.
8
@Pinkie-doo-da 10% income tax would be not sufficient to fund government. But a 20% rate and a significant Land Value Tax would, as Adam Smith predicted, provide a prosperous, fair, equal and accessible society.
The greatest problem facing America and the world today is the concentration of too much property in too few pairs of hands. The tax laws could be massively simplified and the LVT would be impossible to evade. Government would be fully funded and people could afford to buy homes where they worked.
3
Is evil-eye economics as crazy as it sounds? I’d really like to hear more on this.
I take it the idea goes like this: investor confidence is influenced by public perception. If public perception hampers investor confidence, this can reduce investment and hurt growth. So, if everyone thinks a recession is coming, they’re too afraid to invest, and the fear of a recession turns into a self-fulfilling prophecy.
So far it doesn’t sound all that far-fetched. But the problem is that republicans raise it to the level of a conspiracy theory with democrats and the ‘liberal media’ pulling the strings.
They are wrong for (at least) two reasons: (1) Almost every day there is another article about how great the economy is. Commentators frequently marvel over the length of the recovery and its acceleration under Trump. Even the politics section is filled with think-pieces fretting over how to beat Trump, given the current state of the economy. Republicans are simply wrong To think dems and the mainstream media refuse to talk about the economy.
(2) Investor anxiety is natural, given the extraordinary length of the recovery. In ‘08 workers watched their 401k’s go into a free fall, and after over a decade of rebuilding, they are afraid it will happen again. No matter who’s in charge, investor anxiety would be on the rise. Past performance is not proof of future results, but recessions do happen. And after over a decade, its hard to shake the feeling that we’re due.
8
There's no mystery here. Politicians can't bite the hand that pays for their campaigns, and the only alternative to supply-side will also mean higher taxes for a lot of people who aren't rich.
Can you say "denial" anyone?
6
Of course Trump's "Tax Reform" giveaway to the rich and corporations wouldn't "pay for itself". Of course we're all still waiting for our big raises "$4000 to $9000".
Trump lied. Republicans lied. It's what they do. There is no way that any rational thinking person will believe that Trump and Republicans did not *know*, in advance, -while- they were saying it, that their tax cuts would NOT "pay for themselves". They flat out, baldly, without even a blink lied.
It's up to voters to make them pay for it. As an ordinary taxpayer, my taxes are not lower than they were before Trump's "Tax Reform". The deficit is hugely higher. Corporation's share of federal tax revenue is down significantly. All these facts directly contradict the promises Trump and his Republican boot-lickers made when pushing Trump's "Tax Reform" through the Congress.
Trump lied. Make him pay in 2020. Congressional Republicans lied. Make them pay in 2020. Vote them -all- out.
77
Voodoo Econ could work but it will never do so in the hands of McDonnell/Trump Republicans. How? If the cuts went entirely to the working class and middle class, the ones impoverished by 50 years of bad government policies and bad business practices, it would work. It would work because they would spend the tax savings buying and/or climbing out from under mountains of debt they have built up which limit their purchasing power. That spending would drive production to replace purchased goods and services, immediately stimulating the economy.
Instead we cut taxes in ways that favor the rich and corporations. The rich save it or invest and spend it off-shore. Corporations do not invest or cut prices, they buy back stock. The voodoo fails because Republicans keep giving the money to people who don't need it. The rich get rich and the poor bear the deficit. Ain't we got fun.
16
@Speakin4Myself
There is something to this, I believe. But it might also have worked originally, back in the 1980s, if Reagan had not also embarked on massive new military spending at the same time he was cutting taxes. That pattern of increasing spending along with tax cuts has continued--first under Bush 43, and now under Trump.
5
While we're talking about horror movies, how about the 1950s sci fi classic "Forbidden Planet" as an analogy to what is happening to the country?
That is the one where "monsters from the id" come to life and terrorize everybody. The monsters that are terrorizing the country, though, are from Donald Trump's id.
The trade war with China is a prime example. It was something that should not have come into existence.
8
Permanent tax cuts for corporations that went from 35% down to 21% has to have an effect on the economy, as well as tax cuts for the wealthiest among us.
Trump's almost 3 years in office has done nothing to boost our economy; the trickle down theory has been debunked years ago. Instead of the man in the WH each and every day flapping at imaginary windmills, tweeting nonsense, and picking fights with our allies, he has missed the one thing that would have made a real difference in all our lives. Infrastructure. Simple. Obama wanted to do it, but Boehner wouldn't put it up for a vote. This nation could do with a massive renovation, including the White House.
35
There is no economic explanation for the voodoo economics you so often have occasion to write about, so I suggest we stop trying to find one.
Tax cuts for the rich were never about stimulating the economy or distributing wealth more fairly. They have always been a heist, pure and simple, perpetrated by the people most able to pay their own way and least willing to do so.
As long as most of our politicians are beholden to the wealthy for the positions they hold they have little choice but to do their bidding--and their bidding as a general rule is lower taxes.
We have a poisonous political system in cohoots with an economic system rigged for the wealthy and against the middle and lower classes. *
And as wealth distribution becomes ever more skewed upward (a trend that began in the 1980's and has only accelerated since) and the wealthy accumulate ever more power to exert influence and get what they want, democracy, which is based on the disappearing ideal of equal representation, becomes just another empty promise.
What is happening to us has everything to do with money, but nothing at all to do with economics.
*One political party wholly fine with the arrangement; the other, struggling and a bit bi-polar.
29
"What about calling off the trade war that has been depressing business investment?"
Because to do so, would be an admission by Trump that he was wrong. That will never happen.
25
After Trumpie has gone, we’ll still have the irrational propaganda of the GOP working it's voodoo:
That trickle down works, tax cuts and lax regulation will make jobs, and benefit us all.
Any policies to protect us from abuse by power elites are really big govt interference in our freedoms leading to tyranny.
That no self respecting, self reliant true American will become 'dependent' on big govt regulations that interfere with the capitalism’s great achievement---economic ‘growth’.
So why are we ruled by political norms that label reforms as left wing, transferring our national productivity up to the 1%?
In a lie worthy of Trump, the S. Court said limits on mega donor money in elections deny 1st Amendment Free Speech. Mitch McConnell loves Citizens United. He thinks the wealthy & corporations were previously blocked from justified political expression.
But without reversing CU, reforms we need will be blocked. Or we'll get watered-down, 'moderate reforms', sold to us as ‘change’, but staying within the limits the wealthy donors set for their gain & our loss.
Sure we'll dump Trump, then other swamp creatures will emerge to take power.
Cause and effect: Why are we the only modern country still lacking health care for all, and sensible gun laws to protect public safety that are normal in dozens of nations?
Can Krugman ever devote even ½ a column to this major underlying cause of most of the problems he writes about? We have to ask why he avoids it.
11
Employees can no longer deduct unreimbursed business expenses. At least my company is saving on corporate taxes...
6
@Florence
Do not stress. The end of the regime is nigh. The mad emperor is stark naked (metaphorically, thankfully). The entire presidency is a scoundrel -infested scam. As soon as he is gone the market will recover, with an end to impulsive tariffs. As America's poet laureate Nobel Prize winner once sang
"Ain't it hard when you discover that
He really wasn't where it's at
After he's taken everything he could steal?"
Poor America. But it will take a decade to recover.
1
My taxes went up thanks to the Trump Tax Plan and doing away with mortgage interest and property tax-related deductions. Lowering the payroll tax would’t change that much. Oh and I lost the child credit for my 17-year-old son. Trump has been an economic disaster for my family. Did I mention I can’t sell my house?
61
@Kate
I thought Democrats were for higher taxes?
Whats the problem?
Youd prefer lower taxes?
What political part advocates for higher taxes?
Which one advocates for lower taxes?
@Sports Medicine
And who advocates for better spending the money we give in taxes?
The simple split- one side more taxes/ one side lower taxes is a false dichotomy- this split does us no good when the lower taxes side continues to spend regardless - ballooning the debt - a terrible gift to our children- and the more taxes side (if there is one) doesn't seriously consider reducing wasteful government spending. It does us no good to keep putting out there us versus them scenarios that don't fix our tax system or how the government spends money.
13
@Sports Medicine
I vote Democrat, and I'm for higher taxes. On me. Not because I wouldn't "prefer" higher taxes, but because they are NEEDED.
The reason no party advocates for them is that we as nation won't accept this basic fact--going on 39 years and counting.
20
Thanks for the evil eye economics remark. It is so true.
I always thought that it was funny that people will criticize others for "wishing for a recession" as if wishing for something will make it come true. What is going to happen will happen whether you wish for a recession, for a boom, or for leprechauns.
17
We should give the tax cuts more time to work. If tax cuts alone don't work, then we should try tax cuts coupled with human sacrifices. If that doesn't work, then perhaps we should add canabalism to the mix. After all, why should we deviate from a plan that that has the potential for so much success, when all it takes are slight adjustments? Oh, and have we considered that thing about doing you know what to the first born? That should go over well with evangelicals. Any way, the point is tax cuts work! They have always worked and they will continue to work for the benefit of those who matter -- i.e., the ruling class, their servants and their servants' bridge partners.
82
@Joe Sorry to say this, but we're already doing the human sacrifice. Have been for a long time.
12
@Joe
I love your comment! We Dems are just sooooo impatient!
Voodoo Economics is rooted in "trickle down".
Trickle (Merriam Webster): to issue or fall in drops
Clearly we can begin to see the full impact of the Reagan tax cuts in another decade or so, some 40 years later the full impact of GW's tax cuts, and finally the full impact of Trump's tax cuts some 15-20 years later. By around 2100, we will certainly be awash in cash with a booming economy. Too bad I won't be around to revel in the abundance! :)
4
A small error in logic, professor. An absence of a plan b would seem to imply that there was a plan a.
194
It should also be pointed out that Trump got rid of Janet Yellen as Fed chair. Yellen may have been the biggest dove the Fed has ever seen.
But she ran up against another of Trump's few core principles: his hatred of intelligent, competent women.
349
@Matt Donnolly - We don't need doves or hawks. We need owls like Stephanie Kelton. See
http://www.slideshare.net/MitchGreen/its-what-you-know-for-sure-that-just-aint-so-11872791
3
Republicans have been often blessed in recent decades in unv]believable ways.
They keep trying a few things that have never sailed but they continue on like zombies - or is it their zombi supporters making them do it - like big business and the 1%.?
The Business Roundtable has now learned fear.
80% plus of the country can come out to get them by how they spend, the 1 % and big business have learned to fear.
2
Chosen one, 0h chosen one. Wherefore art thou chosen one?
Our dear emperor , wears no clothes.
His economy needs no rules.
It over performs, even for fools.
When the piper needs to be paid
Declare bankruptcy and run away.
36
I thought it was Hillary Clinton’s fault?
26
And I really have been trying to "will" the Democrats to impeach him and nothing yet. Let's hope the evil-eye will work.
33
@sapere aude
Someone has read Kant! Nice.
Dr K is spot on in his assessment of trickle-down economics being a zombie that will not die, but I think a blood-sucking vampire is a much better metaphor:
https://userctl.com/BlueVsRed/019.png
I am currently 60 and was alive when Ronald Reagan sold the country on the pig in a poke that Bush the Elder correctly termed "voodoo economics".
Those of us Americans in the 99% are still waiting for the trickle-down to commence, I think 40 years is enough time to conclude that the trickle-down will NEVER happen.
Just goes to show you that the GOP's "magical thinking" when it comes to economics did not start with President Bone Spurs!
39
@El Chicano There sure is something trickling down, but it isn't prosperity.
2
Heck yeah! If "hexing the economy" is what it takes to get rid of Trump, let the hexing begin. Every morning and evening, visualize economic disaster starting in, say, about May next year and lasting until after the election in 2020. Then we can reverse course and visualize an economic recovery. Call it the "Laugher Curve".
34
Funny, and sad. trump will crash the economy, then the middle class and Dems will struggle a decade to fix it. The rich will have gotten another windfall. Repeat, flush again.
45
As usual, Mr Krugman is far too kind to Trump and his captive Republicans. But I do admire his acknowledgment that economics really is all about fantastic stories and mythical powers.
8
"Who needs competent policy when you’re the chosen one and the king of Israel?"
Democrats flipped the US House last year by a substantial margin. Let's hope that momentum holds up through the election next year.
And maybe the voters who helped put Trump over the top in 2016 have at least started to realize that he will never actually "become presidential"?
Trump will destroy the US economy just like he has bankrupted his own businesses. The rapid stock market gains are not sustainable. The unemployment numbers are not sustainable. The artificial consumer confidence we are seeing is not sustainable. The tariff war is not sustainable. Trump's racism is not sustainable. And Trump has nothing else to offer us.
We need to remember that Trump only needs the economy to hold for another year. He does not care about the long-term consequences of his "policies" beyond that, for America or for the world. He simply wants to garner more power and more riches and avoid jail at all costs. Let's face it: Trump never really thought he would win the presidency. He just wanted to improve his brand. Maybe he thought he would start his own Trump TV in concert with his pals over at Fox?
Trump is giving us all a one-way ticket over the edge. America needs to wake up before it's too late.
43
Sometimes the magic works, sometimes it doesn’t.
In any case it is pretty bad to see Democrats cheering on a potential economic downturn that will harm millions of American workers and their kids and spouses.
2
@Frank Like Dr. Krugman said: What will happen will happen and wishing makes zero difference. On the other hand, tariffs and tax cuts for billionaires does a lot of damage, so save your crocodile tears for someone else.
41
@Frank ...when has it really worked? If tax cuts for the wealthy really worked, then historically, they should have some staying power that we can point to. But there isn't any, as Krugman points out.
If there's no evidence of it working, why do people support it at all? Because it fits their common sense of how the wealthy impact the economy? That's a weak reason.
I do agree that it's bad taste for Democrats to have schadenfreude over the economic downturn. But it's understandable, given how polarized the country is, and how unpopular the tax cuts were to begin with.
8
@Frank, I don't hear Democrats cheering on a recession. I hear plenty of economists warning that Trump's trade war with China is slowing the economy.
IHS Markit's August report shows the manufacturing sector shrinking for the first time in nine years due to rising tariffs making materials more expensive. New business growth fell to its lowest point since September 2009.
Add all of this to the sharp losses in agriculture.
4
With approval rating at 36 percent Trump needs to call Putin and start plans for Trump Moscow Tower with penthouses for him,Ivanka and Putin. There is no extradition treaty with Russia so if Jared snared billions from the Middle East Princes the US Govt cannot claw back taxes owed. Republicans will start to slow walk away from Trump has he continues to unravel in public perhaps trying to give back Alaska to Putin as a token of his gratitude.
10
Through the eyes of a recognized economist the Trump blunders are surely blinding and dizzying. Dr. Krugman, tries to explain, yet the explanations fall on the deaf ears of a populace whose only recognition of a disaster is a smoking wasteland. Anything less can be explained away and blamed on Democrats, Obama, or the Fed.
It takes several years to devastate a healthy economy. That's particularly true of an economy that has unlimited borrowing power and a Republican Senate that doesn't care as long as it furthers their libertarian goals.
Trump hasn't quite had enough time. Give him until 2020 or 2021. Then we'll need a Democrat to bail out the economy like Obama did for "W".
Remember, the Kansas experiment, "Real live experiment in trickle down tax cuts" took about 5 years to devastate the economy of Kansas! In exasperation, the legislature had to roll back tax cuts over the veto of the governor. Gov. Brownback got thrown out of office at the next election. And that was in a US State where deficit spending to cover the massive mistake was not allowed. State spending on ordinary projects had been cut to the bone. And, finally, the good citizens of Kansas and their legislature noticed that there was a problem.
Five years of financial devastation to wake up the voters. It is surely painful for someone like Dr. Krugman to watch Kansas and the US go into meltdown largely because the voters don't pay attention nor heed experienced advice.
96
@DGP It is painful to me too.The sacrifice is not required just change course and avoid the train wreck...
2
@DGP - and yet, I'm pretty sure Kansas will vote so overwhelmingly 'red' in 2020, the media will call it for trump by 9 a.m. CST on election Tuesday.
4
@DGP You re not taking into account he American manra: My ignorance is as good as your knowledge, That's freedom!
2
I think Trump is great. Definitely the best president in last centuries, aside Reagan. He is the chosen one and his many disciples will re-elect him for a second, and maybe, a third term. God bless America.
4
@lieberma Why stop at the third term? Go for dictator for life!
6
@lieberma
Re-elect? How about coronate him as our first king?
5
@lieberma
Why only three terms? Appoint him President for life right now! America needs all the Trump it can get.
2
My only catch during a dismal fishing trip in northern Saskatchewan this summer was a copy of Krugman's Peddling Prosperity that I found in a thrift store.
It was a very insightful and enjoyable read, as I'm sure many of you know, but I was struck at how prescient and applicable the lampooning of supply-side economics and ridiculing of the laughable Laffer Curve to our current economic situation.
I've been struggling since to reconcile the absence of inflation and the apparent vitality of the US economy. There are hints in the book that the lack of inflation is due to import substitution and the relative strength of the USD, and the new natural interest rate is a consequence of massive wealth sequestered in savings that is not likely ever, and certainly not in the near term, to be expended in investments.
There are some interesting and ironic points also about the neutrality of international competition, and related discussions about what a fully employed work force spend its income on. Services mainly, not domestically manufactured goods.
All this is to say that the economy is like Wiley Coyote sprinting off a cliff edge with reckless abandon before noticing there is no support any more.
It strikes me as remarkable that Dr. Krugman should have to reiterate the articulate arguments he presented a quarter century ago. I wonder if he finds it frustrating or just looks at it philosophically as easy money?
28
@Econ John.....did PK ever expand his arguments to include 2 crucial factors destroying our economy for millions of citizens in recent decades?
The offshoring of millions of jobs to low wage countries that our congress allowed. The resulting loss of job income, and employer health care and pension benefits. The resulting loss of support businesses when thousands of factories closed in many towns.
And then the sharing of the increased corporate profits from paying lower wages, in the form of ever higher campaign donations to cooperative politicians. Result, lower taxes, less regulation for mega donors.
Our campaign finance system simply blocks any reforms that Krugman might idealistically propose. But he never connects cause and effect. Too left wing, or what?
2
@Meredith
All good questions, and yes they were addressed. Krugman's argument was quite comprehensive.
On the matter of global trade and competition, the effect on employment is negligible. It was negligible then, probably even less now. Americans buy more services than manufactured goods. So much so that the amount of production and labour displaced by imports is actually trivial.
Your second question about the centralization of economic and political power is addressed by Adam Smith so Kerrigan wouldn't have much to add to that other than lament the consequential threat to democracy.
Your last question is covered by public choice theory. Krugman has a lot of good suggestions. They are only left wing to those who are slightly to the right of Ghengis Khan. But it comes back to zombie economics lurching through time eating the brains of your Republicans and our Conservatives.
Only when we get serious about protecting the precious and fragile treasure we have in democracy itself, will we enjoy the promise of competitive private markets.
4
& Econ John - If Krugman has such straightforward and simple solutions for complex problems why doesn’t he throw his hat into the ring? I wonder.
1
Exactly, yes, I’ve been looking at my retirement account and saying, “crash, comon, crash! Give it to me.” That’s right I’ve really been doing that. Weird huh?
16
Art Laffler's Presidential Medal of Freedom should have been renamed as the Presidential Medal of Freedom from Reality.
58
Can’t teach an old elephant new tricks.
10
@db2 You can, if they are real elephants. But no, no teaching the GOP elephant.
14
Do tax cuts for the rich help an economy ?
In France, President Macron’s first step was to lower the taxes on the rich (the previous President tried a 75% tax)
Here is Picketty’s (author of Capital in the 20th Century)
"Now, here is what Macron has proposed in France. The rate of corporation tax will gradually be reduced from 33% to 25%; a lower rate of 30% will be introduced for dividends and interest (as an alternative to the 55% income tax rate applicable to the highest salaries); the wealth tax will be abolished for the largest financial and business wealth holders holders (while the real estate tax has never been as high for the less wealthy).
LE BLOG DE THOMAS PIKETTY PUBLIÉ LE 12 DÉCEMBRE 2017
How has his worked out for the French Economy ?
GDP Growth. Latest. Annual 2018
Of the three largest EU economies (Germany, UK , France)
France + 1.7
Germany + 1.4
UK + 1.4
France beat beat both Germany and the UK
If you believe there is a link between taxing the rich and the GDP, than the numbers show that taxing the rich pays off
Personally, I do not believe in a link (unlike Mr. Krugman) between the tax rate on les plus rich and economic growth but if one exists then Mr. Krugman's claim is not held up by the numbers.
Data
https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?locations=EU
1
@Woof
I don't think the data you've given supports your conclusions. If you look at the trends in the data for France and Germany over the period from 2012 to 2018, you'll see that the data for France and Germany are very similar overall. But just before 2018, France's GDP growth rate appears to be increasing (unlike Germany's). But in 2018, France's GDP growth rate decreases (just like Germany's). Does that mean Macron's tax cuts derailed France's growth? Don't know. Not enough data; for me, and for you.
Why are you trying to argue that Krugman is wrong with just a single data point, when Krugman's argument is based on the lifetime performance of voodoo economics?
You'll notice that Krugman acknowledges that the Trump tax cuts produced a temporary benefit ("a brief sugar high") to the U.S. economy. The problem he's pointing out is that it doesn't last -- it's just a giveaway to the wealthy that doesn't produce enough benefit to the economy. That's probably the case for France as well.
As it stands, your counterargument isn't at all convincing. But who knows? Maybe France will continue to outperform Germany and the U.K. year after year for the next 5 years. In that case we might attribute that to Macron's tax cuts, but as this article discusses, that would be a first in the history of voodoo economics.
15
@Woof Sure it is easy to cherry pick but most of the time tax cuts don't work.
6
@Woof ... compare apples to apples. When a high performing German economy performs a bit sluggishly, then of course comparing growth of more chronic lesser-performers will look like what you quote.
I sense a FOX here.
11
Trump does have a “Plan B”, Dr. Krugman, arrived at after in-depth consultations with his select panel of evangelical advisors. It’s called the Immaculate Recovery, powered by the pure force of concentrated group prayer led by the White House’s own, Pastor Pence. Miracles are possible, but only for the devout. Praise Be!
17
Why Mr. Trump’s incredible list of failures has little or no impact on his approval rating is a mystery. The president is dragging a dozen political, economic, diplomatic, ethical and humanitarian disasterous defeats behind him — and the GOP doesn’t seem to care. Their silence seems, at times, to reflect the possibility that they don’t even notice.
As their fearless leader reacts to failure with irrationality, “Economic troubles? Defecit too high? Let’s buy Greenland?”
Have the Republicans given up on having a future? A real credible future? After Trump.
20
Just review the history of the great empires of the past. The USA went to war to save the world; and we were respected and admired. The USA reached its apex in democracy, in civility, in leadership. We lost our desire to keep the country united. Education, healthcare, housing, clean air and water, our infrastructure: these are no longer supported by public policy. It is no longer the country of the people, but only the few. Trump was anointed at the right moment. Trump is teaching his followers, after failing (in business) like he has, how to game the system. Believe what you want, take no responsibility, rob thy neighbor, make rules for the others. He and his followers believe they are privileged and that the world order never changes.
7
Trump is acting just Charlie Sheen just before he was kicked off "Two and a Half Men"
8
"Who needs competent policy when you’re the chosen one and the king of Israel?"
When I heard today that the President of the United States of America, actually did mouth the words, "I'm the Chosen One", in front of our White House, which literally, as most of the world believes, is the seat of world power, my response was, "Please, not even Trump can be that crazy", but moments later I knew it really did occur.
What might he say, or do, tomorrow ??
At this point, I think we must surround him with minders, just in case he develops an urge to see what a MIRV, or an ICBM, or a Cruise Missile, looks like as it wings its way to a rendezvous with some prime minister or other who had the audacity to suggest he is not playing with a full deck, which I'm convinced is the reality.
In fact he is the Joker, and the rest of deck is shredded.
God, I'm so looking forward to election night 2020, when I expect him to concede defeat to the 46th President Elect, who will doubtless be a Democrat.
I will hoot and howl with joy.
30
@Mel Farrell
Trump may very well lose the 2020 election. But only a fool would expect him to actually concede defeat. He will need to be dragged out of the White House by the marines, kicking and screaming.
17
@A Cynic
I guess that's supposed to be a joke, but I think it's a real possibility. Except I wouldn't count on the Marines dragging him out. We might have to arm Antifa to get rid of him.
Why are rich people rich?
Because they have a lot of money.
How do they have a lot of money?
Because they spend less than they get.
So why would anyone think that giving them more money (i.e. tax breaks) will help the economy?
14
@Ken Johnson
I agree with the last point, but I spend way less money than I get and I'm not rich. Nor are most people I know rich who spend less than they get.
The rich are rich for additional reasons besides that.
HOWEVER, ultimately I don't believe it matters how they got rich, because the reason they should pay a higher percentage in taxes is that they're simply better able to pay than people of more modest means.
Conservatives always complain that taxing the rich punishes success, but placing the main tax burden on lower income people makes it harder for them to SURVIVE, which is an even worse punishment.
7
I would really like to hear when and to what level the Fed is allowed to raise interest rates. We are tolerating an investment market addicted to the "crack" of free money. At the same time financial institutions are paying between 1 and 3 percent and charging borrowers between 3 and 36 percent, we are subsidizing this addiction at tax payers expense.
4
Trump is completely unfit for the job of POTUS: this is
evident; because....he has a severe psychological disorder
according to ret. Harvard Professor of Psychiatry Lance M. Dodes…
reference: February 13, 2017 Letter to the NYT Editorial Dept.
from Professor Dodes which explains that Trump is a pathological sociopathic narcissist....
This letter was signed by 33 members of The American
Psychiatric Association.
So let us not ..pretend...Trump is sane; he is mentally ill.
and should be dismissed from office before he does more
harm.
Please print Dr. Dodes Letter...it explains why Trump is
behaving so erratically...and is a warning to journalists who
should print the TRUTH about Trump' s very dangerious
mental health;
Amendment 25: Section 4 should be what Professor Krugman should talk about...and not pretend that Trump's
words or actions make any sense whatsoever...Print Dr.
Dodes Letter Please !!!!
9
Be careful, Dr. Krugman, it is sacrilegious to malign the king, the chosen one. But our king never errs, so if you think the rich man's tax cut exacerbated the deficit, you are wrong. Period. And if the unbearable hot weather tells you the climate is warming. Forget it. The chosen one knows better. All a hoax that fools others but not the king. And so with all the hoaxes and fake news items---they are all wrong . Look not to your eyes and ears for truth. Look rather at Fox News.
3
Trump is 100% correct.
I have been hexing the stock market since we took our profits out when the S&P was 3000.
And the hex is working.
I will be happy to give away the incantations that I chant on a daily basis just as the market opens and when it is about to close so everyone can join in.They also work on depressing the GDP, consumer confidence and the manufacturing index.
Like investing do not pay attention to the daily rise and fall but only consider the long term affect your hex has on the market and the economy.
I will stop on election day 2020.
8
What's that old saying? "The only people who can make a living by being consistently wrong are weather forecasters and economists."
11
Now that you mention it, Paul, I think it might be a good idea if every person in the US who wants to be rid of Trump and his Republican enablers makes a conscious decision to stop consuming to the greatest degree possible for the next couple of years. I'm willing. How about you? Living frugally for a couple of years is a very small price to pay for restoration of democracy.
31
@Enigma Variation.....your suggestion is very enigmatic. How would it work really? LIving frugally might be a high price to pay, as we might sacrifice for nothing, tho losing some weight, of course. But then the GOP will spin and distort the results in enigmatic ways that no one can understand.
"According to Laffer, blame rests with Barack Obama, even though the recession began more than a year before Obama took office."
I've also had arguments with some that wanted to blame Jimmy Carter for the Community Reinvestment Act of 1977 as the major cause of the 2008 debacle - despite three intervening republican presidents.
13
Republicans know that raising the deficit is bad when Democrats do it but good when Republicans do it.
19
@ted
All due respect, ted. More explanation is needed.
1
Trump and the Republicans will hammer away against Socialism in the coming campaign, stating that there is no historical evidence that it works, which is true. The Democrats should counter w/ the argument that Reaganomics and the Laffer curve are also complete fairytales w/ now the third attempt, Reagan, W.,and Trump’s tax cuts, completely blowing up the budget. All 3 promised balanced budgets, and instead produced record deficits. This time the Dems. Shouldn’t bail them out. No tax increases w/o substantial Republican participation. In so doing, the GOP would be admitting the fallacy they put forth 39 years ago, and have been swearing by ever since.
9
My concern is what is the new President going to say at his/her inauguration that will even BEGIN to start the process of correcting Trump's disastrous tenure. With the outgoing President sitting three rows behind and listening. Must Watch TV, I'm sure.
"Let's begin with the deficit. One trillion dollars. We have a democratic Congress and me, a Democratic President. In four short years we will eliminate the deficit rather than pass it on to our children. You all know who we're going to tax to make that happen."
12
"Trump has also suggested using executive authority to reduce taxes on capital gains (which are overwhelmingly paid by the wealthy). This move would have the distinction of being both ineffectual and illegal."
But this move would have the distinction of making the already rich very, very happy. So it's quite likely the "administration" will go ahead with it, illegal or not. When has illegal every stopped them?
30
So a few Russians on their computers in Moscow can make Americans swing an election from the Amazing Hillary to the Deplorable Donald. But—just as the 2020 election is heating up, thousands of liberal journalists cannot persuade the American public that we are going to have a recession and shift the election the the Dems? Please.
4
@ehillesum
Not even close to being the same thing. Please indeed.
4
@ehillesum Of course they can. This all media wars... with some chaos thrown in. It's two media conglomerate sides fighting each other. This is why Fox news and talk radio sprang up. Nature abhors a vaccum.
@ehillesum
Its ECONOMISTS who are given warning signs of a coming recessions, NOT "liberal journalists".
2
GOP = "Greedy Old Party"
10
Susan Collins, in the link in Krugman's piece, cites Glenn Hubbard, Larry Lindsey, and Doug Holtz-Eakin as economists who argue that tax cuts will pay for themselves. These three economists, among many others, have made a handsome living providing ostensible justification for tax cuts that favor higher income taxpayers. The fact that the evidence goes wildly against them does not seem to undermine their position within the policy world or the economics profession. Shame on the politician Susan Collins, and shame on the economics profession that continues to provide an honorable home for purveyors of bad faith policy advice.
17
How many trees grow in an area, is easy to spot if you're in a rural or urban area. Trees in places like rich areas happen to survive longer. Trees in poorer areas happen to have a short and unhappy life. When traveling into richer cities they have more vegetation, trees, flowers, shrubs, and much more. It helps when you want to see beautiful scenery, or cooler temperatures outside. When trees are able to give you shade, and blow breezes it makes it nicer to want to enjoy our summer time. When it's just flat out hot, you don't want to spend your time outside. You're going to want to be where its cooler, and feels better. Also the heat can also make certain people sick, so when they dont have the option to hide by shade, or get a nice breeze it ruins their chances of wanting to go outside. I don't think the richer areas deserve to look better just because they have more money. Everyone deserves to have their place called home look nice. Money shouldn't determine how many trees you have.
4
Trump and Caligula, two sweethearts who metamorphosed into gods.
Reductio ad absurdum does not seem to have an effect on 40% of the nation.
28
"To be fair, the claim that . . . "
Why do you use terms like that, Professor K? I don't care about being "fair." I want you to be truthful in your interpretation of the evidence and its subsequent presentation.
For me, "To be fair" is an example of the "false equivalence" that you often deride.
"But" or "However," would have much better stood for "To be fair" in this instance.
Perhaps I am getting too critical. I grow weary.
9
Try to imagine that a true Manchurian candidate won the last presidential election. What might he/she have done differently to wreak more havoc than Trump on American principles and values?
54
@Mark And now proposing to let Putin’s Russia back into the G8 for dessert.
17
@Mark
Imagine ? Are you kidding ?
It's real; this crazed charlatan seems fixated on disrupting all things normal.
Why Congress is unwilling to stop him is more troubling than his obvious lunacy.
17
@Mel Farrell, because through the NRA, they are bought and paid for, too. Lindsay Graham saw the future writing on the wall when his criticism of Trump turned into flattering praise.
1
Trump is Sarah Palin without the winks and heels. As soon as China decides to sell all their treasuries, we’re toast.
20
Yes, as always, it's the Democrats' fault for the GOP messes.
Also, in other fiction, GOP is the Party Of Personal Responsibility and Fiscal Stewardship (TM), Tax Cuts For The Wealthy and Corporations Pay For Themselves (R), Trump is a good businessman and stable/smart enough to be President, Mitch McConnell has America's interests at heart, Sarah Huckabee Sanders and Spicey told us the truth, Russian interference in our elections is a hoax, Clinton lost the election, Obama was a Muslim not born in America, Jesus likes assault rifles and people dying/going bankrupt due to lousy healthcare access/costs in the US, etc...I mean, get real. There is NO credibility left on the right in America. NONE. Let's start calling it like it is, please.
If you still don't see Trump and the GOP's con, you're the mark. And at this point, you deserve what you get.
74
@Americanitis, the only problem with your last sentence is that the rest of us are getting it too. I'm much more concerned with this country's survival if he's re-elected in 2020. And even more if McConnell wins re-election. Between them they will destroy America or leave it unrecognizable.
26
Of course, the real point of voodoo economics is to give tax breaks to really rich people who—whatever the economy does—get to accumulate ever more cash to buy ever more vacation homes and yachts. This explains why the voodoo policies are zombies. They work for the people the government really works for.
19
"Voodoo economics isn’t just a doctrine based on magical thinking." No, it is economics based on greed. And giving money to "ordinary workers" or the majority of consumers requires admitting that too much greed is harmful to everyone. But, of course, it is easier when practicing voodoo to provide explanations that blame any force (the Fed, Democrats giving bad thoughts, etc.) rather than accept too much money in the hands of too few ruins the economy for all.
26
@Rev Wayne
You are really onto something here. If anyone on the right ever had to admit that too much individual greed was bad for the rest of us, free-market capitalism itself would be on trial, or at least the way THEY understand free-market capitalism. This is why the New Deal had so many enemies back in the thirties.
But some limits have to be placed on the greed of the super-rich, not because we want to become Marxists, but because too much inequality can lead to unrest and violent revolution. But try telling this to a free market conservative!
1
"Even Susan Collins"?
No need for the "even". She's a player, though dim, and an utterly predictable weathervane -- going where the Republican wind blows. In other words, her insistence that the 2017 tax cut would actually reduce the deficit is, in fact, a foregone conclusion. She is not rabid, like many other Republicans, but she is spineless, ignorant, and totally self-serving like all of them.
387
Amen. Her vote for the incompetent hack Kavanaugh the Chaste, and her resulting "explanation" should sink her re-election.
22
@Dominic Holland
Thank you, from making me write a comment. Susan Collins is a lockstep Republican and has voted for every onerous anti-democratic Republican effort. It is a tribute to her politic acumen that she has the reputation as the Republican moderate. But, at a time of critical vote she always snatches the ball away and disappoints. Always!
5
I hope I AM hexing him!
19
@AT
Yes, and if Marianne Williamson does nothing else with her candidacy, perhaps she could help.
12
When is Joe and Jane Republican going to be on to the fact that their party leaders simply don't know how to make the economy work for anyone but the top 1%? How many times do we need to go through Republican buffoonery, eviscerating hard-earned progress crafted by their Democrat predecessor, just to be worse off for another Democrat administration to spend 2-terms repairing the damage? If we can have 2 successive 2-term Democratic administrations...we just might be able to start going forward long enough to withstand the occasional Republican backslider.
54
@David
They won't ever be "on to the fact". And the reason why is they think that government playing ANY role in the economy means some undeserving person is getting a "free ride" while they have to work.
Talk to Trump supporters, and that's what they will tell you. That all government intervention--all government activism of any kind really--is somehow taking what they earned and giving it to some loafer.
8
@Bryan
Yes. Remember his struggling yet racist base sticking by him even though "he is hurting the wrong people."
4
@Bryan
Yes, that is VERY true and I have indeed spoken to some of those types of folk. But it's terribly unfortunate they don't understand the Republican way serves them even less, assuming of course they aren't a member of the top 1%, not to mention imperils the on-going concern of this nation through their reckless governance.
3
“The Democrats are trying to ‘will’ the Economy to be bad for purposes of the 2020 Election.”
He is right. Each day I sit and meditate on the lovely three-dimensional yield curve that the NYT had several days ago.
https://www.nytimes.com/2019/08/15/upshot/inverted-yield-curve-bonds-football-analogy.html
14
Trump should be extremely concerned about such negative thoughts, especially when Mercury is in retrograde.
27
Trump's total insanity is not new, just finally, totally revealed.
But his Kookenomics is what it has always been: Lie like crazy to wantonly borrow and spend other people's money without any consideration if it was a good investment or not, but being sure to pocket a bunch of it.
6 bankruptcies and multiple failed businesses, as well as fallout that took down other people's businesses as well, like the USFL and Atlantic City, where the Trump Taj Mahal is now a derelict.
All of his businesses were fake, with jacked-up prices and faked tax assessments (Trump Westchester International, in Briarcliff, claims it's only worth about 1.5 million--I grew up near that area, and that club's acreage alone is worth 50x that).
Trump gets an idea in his head and never changes. For political reasons he waffled on whether Obama was born in Kenya as a secret plot in 1961 to "usurp" the Presidency, but he still believes it.
Trump called for the Central Park 5 to be executed and STILL believes they should be despite being totally exonerated and the perpetrator convicted.
So why is it a surprise that Trump plays with the nation's money with the same reckless abandon of his irrational actions as he did for the last 45 years? And with the same results?
Trump may be the first POTUS to have the USA default, which has NEVER happened and is forbidden by the 14th Amendment. And it all could have been stopped by the man who bleated today on this page to save the filibuster after overriding it!
36
This has been said before, but it bears repeating: there is simply no way for the economy to grow by the magical numbers Trump talks about, say a five percent increase in GDP. Many economists have pointed out that we don’t have a large enough, very skilled, workforce to make that possible. Even with an increase in labor necessary to provide the change in the economy that Bernie Sanders and others talk about, with a New Green Deal, it would take a decade to ramp that up. Trump hates those ideas.
Merely giving chicken-feed tax cuts to the mostly service workers and low skilled will accomplish very little. Oh, wait. How about some more tax cuts for the rich!
14