# Paul Krugman on Trump‘s budgetary “cruelty” and more

An episode of [Paul Krugman Podcast](https://invisiblenetwork.ai/podcast/1877144831), 19 May 2025, 52 min.

Audio: https://api.substack.com/feed/podcast/163942158/2e83ccfef0ed034fe229e196f372b16f.mp3

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## Transcript

[0:00] SPEAKER_00: Okay, we are live.
[0:00] SPEAKER_00: Welcome back to the Inc.
[0:01] SPEAKER_00: Live.
[0:02] Very happy to be joined today by the economist and Nobel
[0:06] laureate Paul Krugman,
[0:08] former columnist for the New York Times for a long time and now
[0:10] a substacker.
[0:12] SPEAKER_00: Paul, it's really good to see you.
[0:13] SPEAKER_00: Thank you so much for joining us.
[0:16] SPEAKER_01: Good to be on.
[0:18] SPEAKER_00: Here we are.
[0:19] SPEAKER_00: Here we are.
[0:20] SPEAKER_00: Here we are is the truth of the moment.
[0:24] SPEAKER_00: I wanted to ask you,
[0:24] SPEAKER_00: there's so many things I want to get to,
[0:25] but I want to ask you about this Trump budget proposal that you
[0:28] wrote about today.
[0:30] SPEAKER_00: And you had a very striking line.
[0:32] You've been a critic of cruel and mean-spirited Republican
[0:37] budget proposals for some time now.
[0:39] But you write that this is different in both degree and kind
[0:42] from what we've seen before.
[0:43] SPEAKER_00: Its cruelty is exceptional, even by recent right wing standards.
[0:48] And it's hard to avoid the sense that the counterproductive
[0:51] viciousness is actually the point.
[0:53] SPEAKER_00: Think of what we're seeing as the attack of the sadistic zombies.
[0:57] Can you explain in very simple terms to Americans who don't
[1:00] follow this closely,
[1:01] SPEAKER_00: who are not economists,
[1:02] SPEAKER_00: what would this budget proposal do to America and to them?
[1:06] Okay,
[1:07] so it's big tax cuts for the rich,
[1:12] which is standard Republican practice.
[1:16] And it is attempts to weaken the social safety net,
[1:22] which is par for Republican standards.
[1:25] But the extent of the cuts to programs that people depend on is
[1:31] just amazing.
[1:33] SPEAKER_01: This is...
[1:37] SPEAKER_01: Medicaid, mostly it's cuts to Medicaid.
[1:42] SPEAKER_01: There are other things, too.
[1:43] There's stuff on food stamps and some other issues,
[1:46] but the core of it is Medicaid.
[1:48] Medicaid is around 70 million Americans depend on Medicaid for
[1:56] their health care.
[1:57] SPEAKER_01: They really don't have an alternative.
[2:00] SPEAKER_01: It's a means-tested program.
[2:02] SPEAKER_01: It's for people with relatively low incomes, which means that
[2:07] They're the kind of people who are they're not going to get
[2:11] jobs that come with
[2:12] SPEAKER_01: health insurance.
[2:13] They're not going to be able to afford health insurance even
[2:19] even under the Affordable Care Act.
[2:22] SPEAKER_01: So this is how they get health care.
[2:24] SPEAKER_01: It's the backstop of the backstop.
[2:26] SPEAKER_01: Yeah, it is.
[2:28] SPEAKER_01: And it's,
[2:28] SPEAKER_01: you know,
[2:29] SPEAKER_01: this is not,
[2:30] SPEAKER_01: this is not,
[2:31] SPEAKER_01: I think some people still think that Medicaid is like a,
[2:34] SPEAKER_01: you know,
[2:35] SPEAKER_01: basically a few people of color in inner cities,
[2:37] SPEAKER_01: right?
[2:38] SPEAKER_01: It's not.
[2:39] It's 70 million people,
[2:43] 40% of children in America get their coverage from Medicaid.
[2:47] Um,
[2:48] it is the main thing and it's,
[2:51] you know,
[2:52] it's,
[2:52] it's a,
[2:53] um,
[2:54] thinly funded program.
[2:56] SPEAKER_01: Uh, not every doctor will take it, but it's okay.
[3:00] And it's a whole lot better than nothing,
[3:02] but they're trying to find,
[3:04] uh,
[3:05] hundreds of billions.
[3:07] SPEAKER_01: Uh, last number I saw was 800 billion, though that number keeps changing.
[3:10] SPEAKER_01: $800 billion in savings from Medicaid.
[3:14] which is impossible to do without throwing a lot of people off
[3:20] healthcare with no backup.
[3:23] SPEAKER_01: So this is just massive.
[3:28] I don't think the money quite captures the full extent of it,
[3:31] but for what it's worth,
[3:32] SPEAKER_01: When you do an analysis of this,
[3:34] this is going to reduce the effective income of the bottom
[3:40] fifth of the U.S.
[3:41] SPEAKER_01: population by more than 10 percent.
[3:44] SPEAKER_01: Just wham.
[3:45] SPEAKER_00: Can you explain that?
[3:47] SPEAKER_00: What do you mean by the effective income?
[3:49] SPEAKER_00: Explain how that would actually hit a household you're talking about.
[3:52] Income after taxes plus transfers from the government,
[3:58] which Medicaid counts as.
[3:59] So particularly near the bottom of the income distribution,
[4:02] people do not pay.
[4:05] Well,
[4:05] they do pay a significant amount of things like sales taxes and
[4:08] so on.
[4:08] SPEAKER_01: They don't pay a lot of income taxes.
[4:10] SPEAKER_01: They do receive substantial aid from the federal government,
[4:13] SPEAKER_01: especially for health care,
[4:15] SPEAKER_01: though there are other things like food stamps again.
[4:19] SPEAKER_01: This is just taking basically their purchasing power,
[4:22] SPEAKER_01: the amount of money they have to spend on everything by more than 10%.
[4:27] SPEAKER_01: And we're talking about people who are living close to the edge anyway.
[4:33] SPEAKER_01: So this is just an incredible piece of cruelty.
[4:36] SPEAKER_01: And then when you look at how it's being done,
[4:39] SPEAKER_01: some of it is,
[4:40] SPEAKER_01: well,
[4:40] we're just going to cut the amounts and we're going to offload
[4:43] it onto the states,
[4:43] SPEAKER_01: which won't be able to afford to cover the gap.
[4:47] SPEAKER_01: But a lot of it is we're going to have work requirements.
[4:52] SPEAKER_01: We're going to say that to receive Medicaid,
[4:54] SPEAKER_01: you must be working,
[4:58] SPEAKER_01: which is essentially fraudulent.
[5:01] SPEAKER_01: To a first approximation, there are no able-bodied
[5:06] SPEAKER_01: Medicaid recipients who are not working.
[5:10] SPEAKER_01: There are a lot of people who are disabled.
[5:15] There are a lot of people who are elderly because some people
[5:17] have both Medicaid and Medicare.
[5:19] SPEAKER_01: There's a lot of children, like I said, 40% of kids.
[5:22] If you look for able-bodied adults,
[5:26] almost all of them either are working or are between jobs.
[5:30] SPEAKER_01: They're definitely in the paid labor force, but
[5:34] they're probably,
[5:36] many of them will not be able to prove to the satisfaction.
[5:40] SPEAKER_01: We're creating a lot of bureaucracy here,
[5:42] SPEAKER_01: a lot of difficult paperwork hurdles that they won't be able to cross.
[5:49] Sometimes I run into people who think that gig work is
[5:57] something that Uber invented.
[5:58] SPEAKER_01: But
[6:01] I spent a long time living in New Jersey and occasionally go to
[6:05] Trenton early in the morning.
[6:06] And there are street corners where there's guys lined up to
[6:11] waiting and hoping that
[6:12] SPEAKER_01: somebody with a van will come by and pick them up.
[6:15] SPEAKER_01: That's what a lot of work for lower-income Americans is like that.
[6:20] SPEAKER_01: It's occasional.
[6:20] SPEAKER_01: It's intermittent.
[6:21] SPEAKER_01: It's informal.
[6:22] SPEAKER_01: It's informal.
[6:23] SPEAKER_01: That doesn't mean they're not working.
[6:24] SPEAKER_01: They're working desperately to keep food on the table.
[6:27] SPEAKER_01: But do they have the paperwork that they can use to prove to hostile
[6:33] SPEAKER_01: Trump-appointed bureaucrats that they're actually working and they don't?
[6:36] SPEAKER_01: So this is an incredibly cruel thing.
[6:39] SPEAKER_01: And, of course, they're also – they don't have college degrees.
[6:42] They don't have the – they're not good at navigating – I mean,
[6:47] trying to deal with –
[6:52] SPEAKER_01: Well,
[6:52] SPEAKER_01: you know,
[6:54] SPEAKER_01: with a lot of government programs,
[6:57] SPEAKER_01: government's a lot better than people think it is,
[6:58] SPEAKER_01: but even so,
[7:00] we're taking exactly the people who are least able to negotiate
[7:04] a bureaucratic
[7:05] SPEAKER_01: minefield and putting them into that in ways that will just plain...
[7:13] SPEAKER_01: take away their ability to pay for healthcare,
[7:15] SPEAKER_01: take away their ability to feed their kids,
[7:19] SPEAKER_01: and in a random,
[7:22] SPEAKER_01: cruel way,
[7:24] SPEAKER_01: all for the sake of,
[7:26] SPEAKER_01: well,
[7:27] SPEAKER_01: as I argued on my substack,
[7:30] some of it is about saving money so you can give tax cuts to
[7:33] millionaires,
[7:34] SPEAKER_01: but a lot of it is just plain cruelty is what it's all about.
[7:38] So you talk about obviously the billionaire giveaway that's at
[7:41] the heart of it.
[7:42] You talk about the motive of sadism specifically as it relates
[7:46] to a perception on
[7:48] SPEAKER_00: the right that we're talking about poor people of color,
[7:52] SPEAKER_00: even though,
[7:53] SPEAKER_00: as you say,
[7:53] Medicaid is very important for rural health infrastructure in
[7:57] this country,
[7:58] SPEAKER_00: nursing homes,
[7:59] SPEAKER_00: all kinds of things that touch everybody.
[8:03] SPEAKER_00: But I wonder,
[8:05] How do you even understand their project with something like
[8:08] this on their terms?
[8:10] SPEAKER_00: What is their vision of a kind of America that they're trying to create?
[8:14] SPEAKER_00: Are they trying to eliminate a culture of dependency,
[8:18] SPEAKER_00: these kind of phrases that the right has used for years?
[8:21] What is the actual project as they would conceive of it,
[8:26] as best you understand it?
[8:27] SPEAKER_01: Well, okay.
[8:29] Now,
[8:30] they will say we're worried about dependency,
[8:33] except of course it isn't.
[8:34] SPEAKER_01: There are, you know, the, the, uh, the, um,
[8:38] SPEAKER_01: The welfare queen driving a Cadillac never existed,
[8:40] and the layabout lazy people who don't bother to work because
[8:46] they're getting
[8:47] SPEAKER_01: government aid basically don't exist in America.
[8:51] Our safety net is just set too close to the ground for anyone
[8:53] to live that way.
[8:56] SPEAKER_01: But they have an image.
[9:00] SPEAKER_01: They just hate the idea of helping people who are in need.
[9:06] I mean,
[9:07] Elon Musk said that empathy is going to destroy Western
[9:10] civilization.
[9:10] There's this general feeling that somehow you show that you're
[9:14] tough or basically
[9:17] you show your power by denying the essentials of life to people
[9:20] who can't defend
[9:21] SPEAKER_01: themselves.
[9:23] SPEAKER_01: I hate to psychoanalyze here, but look, we saw
[9:29] SPEAKER_01: When Obamacare went into effect,
[9:32] SPEAKER_01: it included an expansion of Medicaid,
[9:34] SPEAKER_01: a federally financed expansion of Medicaid.
[9:36] States could bring a lot of people who were previously without
[9:40] health insurance
[9:42] SPEAKER_01: into Medicaid,
[9:43] SPEAKER_01: into health insurance.
[9:44] SPEAKER_01: with the federal government paying almost all of the bill.
[9:47] SPEAKER_01: So this was, from the point of view of a state, free money.
[9:51] It was actually more than free money because more money in the
[9:55] hands of paying for
[9:56] SPEAKER_01: health care generates jobs for hospitals.
[9:59] SPEAKER_01: It pumps money into local economies.
[10:01] SPEAKER_01: So this was a pure win-win thing.
[10:04] SPEAKER_01: for states,
[10:05] SPEAKER_01: and yet initially almost half the states,
[10:09] SPEAKER_01: all of them Republican-controlled,
[10:11] SPEAKER_01: refused to take the money.
[10:12] They actually made it clear that they were willing to pay a
[10:16] price to keep poor people suffering.
[10:20] SPEAKER_00: And that's what I think is going on right now.
[10:23] SPEAKER_00: How do you understand this politically?
[10:25] SPEAKER_00: Because you could have,
[10:25] SPEAKER_00: you know,
[10:25] one of the things we've been talking with lots of people about
[10:28] is if you look at
[10:29] SPEAKER_00: the action since January,
[10:31] SPEAKER_00: this,
[10:31] SPEAKER_00: the Trump regime,
[10:33] there's a handful of things like going after undocumented
[10:36] migrants where it may be
[10:39] SPEAKER_00: unlawful,
[10:40] SPEAKER_00: maybe unconstitutional,
[10:41] SPEAKER_00: but you might think you have a lot of the public on your side,
[10:44] SPEAKER_00: right?
[10:44] SPEAKER_00: A lot of people,
[10:45] SPEAKER_00: you know,
[10:46] SPEAKER_00: you,
[10:46] SPEAKER_00: you can get majority to people to,
[10:48] SPEAKER_00: to,
[10:48] SPEAKER_00: to thirst for unconstitutional things.
[10:50] SPEAKER_00: Um,
[10:52] SPEAKER_00: But some of this other stuff,
[10:53] SPEAKER_00: like what you're talking about,
[10:55] SPEAKER_00: it feels like a kind of cruelty that is electorally stupid.
[11:01] I mean,
[11:01] these Medicaid cuts,
[11:02] as you're laying out,
[11:03] will hurt huge numbers of Trump's voters.
[11:06] The tariff stuff,
[11:07] you know,
[11:08] hurt a huge number of his supporters' portfolios.
[11:11] SPEAKER_00: How do you understand the stupidity of the cruelty?
[11:16] SPEAKER_01: Well, the first thing to say is that they are really trying to get it
[11:20] SPEAKER_01: through before people notice what's happening.
[11:24] SPEAKER_01: How many hours of hearings?
[11:25] SPEAKER_01: This is a massive restructuring of the whole way America works.
[11:29] How many hours of hearings has the House of Representatives
[11:32] held on the legislation?
[11:35] SPEAKER_01: How many expert witnesses have they brought in to describe its effects?
[11:39] SPEAKER_01: Zero.
[11:40] SPEAKER_01: Nothing.
[11:41] SPEAKER_01: No debate.
[11:41] They're just trying to rush this through,
[11:43] a bum's rush,
[11:44] a legislation that
[11:47] SPEAKER_01: that nobody will have read,
[11:48] that will certainly not have been covered really in the places
[11:52] where most people
[11:53] SPEAKER_01: get their news.
[11:54] So this is supposed to all happen before anybody has a chance
[11:58] even to say,
[11:58] SPEAKER_01: hey,
[11:58] SPEAKER_01: wait,
[11:58] SPEAKER_01: that's not what I thought I was voting for.
[12:01] SPEAKER_01: So it's a real bums rush on all this stuff.
[12:07] SPEAKER_01: What do they think is going to happen?
[12:10] SPEAKER_01: My guess is that they believe that people will not...
[12:15] SPEAKER_01: traces to the source that enough voters will think,
[12:20] SPEAKER_01: well,
[12:21] SPEAKER_01: I don't know,
[12:22] something bad happened or maybe this was somehow Joe Biden's
[12:25] fault or something
[12:28] SPEAKER_01: that it will just be,
[12:30] SPEAKER_01: that cause and effect will not be linked.
[12:33] SPEAKER_01: And they may also just plain,
[12:34] we're seeing an increasing tendency on the part of the
[12:40] Trumpists to just plain say,
[12:42] SPEAKER_01: who are you going to believe me or your lying eyes?
[12:45] SPEAKER_01: I mean,
[12:47] SPEAKER_01: different topic,
[12:47] but yesterday the Treasury Secretary went on Meet the Press and
[12:54] said that gasoline
[12:55] SPEAKER_01: prices have collapsed under President Trump.
[12:59] SPEAKER_01: Well, that's not true.
[13:00] SPEAKER_01: Not true at all.
[13:01] SPEAKER_01: There's up slightly.
[13:03] SPEAKER_01: And who, you know, there's one price that everybody sees.
[13:07] SPEAKER_01: It's the gasoline prices, which are on big signs above every gas station.
[13:11] So everybody has to know from their personal experience that
[13:16] gas prices have not collapsed.
[13:18] SPEAKER_01: But they apparently believe that they have enough,
[13:21] SPEAKER_01: you know,
[13:21] SPEAKER_01: that they have that people are sufficiently willing to believe what
[13:27] The leader says that they can be convinced that gas prices are
[13:30] way down even though it's not.
[13:34] SPEAKER_01: So to have people believe that,
[13:36] SPEAKER_01: oh,
[13:37] SPEAKER_01: nobody really has lost health coverage or if you have,
[13:40] SPEAKER_01: it's all because of evil liberals,
[13:44] SPEAKER_01: they probably believe they can get away with that.
[13:48] SPEAKER_01: I wish I was sure that they were wrong.
[13:51] SPEAKER_00: I mean,
[13:51] SPEAKER_00: it also,
[13:51] SPEAKER_00: by the way,
[13:52] SPEAKER_00: and I want to get to this a little later,
[13:54] it speaks to the quality of the opposition that these lies are
[13:58] able to run
[14:01] SPEAKER_00: unopposed,
[14:02] SPEAKER_00: isn't it?
[14:03] SPEAKER_01: Well, to some extent, except exactly how.
[14:05] SPEAKER_01: I mean, it's not as if
[14:08] Chris Murphy or AOC or whatever aren't out there saying what a
[14:13] terrible thing.
[14:14] SPEAKER_01: But if you,
[14:15] SPEAKER_01: I mean,
[14:15] SPEAKER_01: I don't,
[14:16] SPEAKER_01: but I know people who do,
[14:17] SPEAKER_01: if you actually were watching network news,
[14:22] SPEAKER_01: watching the Sunday talk shows,
[14:24] you would think that the biggest issue facing America is that
[14:27] Joe Biden is old.
[14:29] SPEAKER_01: You know, there's a real problem of getting this through to people.
[14:32] SPEAKER_00: Yes.
[14:32] And I want to come back to that media thing as well and your
[14:35] own experience leaving The Times.
[14:37] SPEAKER_00: But first,
[14:38] SPEAKER_00: I want to ask you about the tariffs and trade stuff,
[14:41] which was the big economic drama right before the current one
[14:45] we started with.
[14:46] SPEAKER_00: And you spent so much of your career writing and thinking about trade.
[14:52] SPEAKER_00: I think something that has,
[14:53] that we've explored a bunch at the Inc is the way in which
[14:57] Trump on several issues,
[14:59] SPEAKER_00: trade being one of them,
[15:00] SPEAKER_00: government efficiency being another,
[15:02] SPEAKER_00: seized on areas where maybe the public was
[15:07] underserved by a kind of elite consensus that that ignored how
[15:11] lots of people were feeling.
[15:12] SPEAKER_00: And he was,
[15:13] SPEAKER_00: you know,
[15:14] insightful enough to notice that and then just rampages through
[15:17] it with things that
[15:18] SPEAKER_00: don't solve it and make things worse.
[15:21] But you can talk about trade as something where a lot of the
[15:24] elite consensus in
[15:25] SPEAKER_00: American life,
[15:26] SPEAKER_00: both parties,
[15:28] SPEAKER_00: fancy think tanks,
[15:29] SPEAKER_00: et cetera,
[15:30] SPEAKER_00: was very,
[15:31] SPEAKER_00: very disconnected from what lots and lots of people were seeing,
[15:34] SPEAKER_00: experiencing,
[15:35] SPEAKER_00: feeling
[15:37] SPEAKER_00: How do you think about what that elite consensus was,
[15:41] SPEAKER_00: uh,
[15:42] SPEAKER_00: and what it got wrong,
[15:43] SPEAKER_00: uh,
[15:44] and how that might've created an opening for a kind of very
[15:47] dangerous approach to
[15:48] SPEAKER_00: trade we're seeing now?
[15:50] SPEAKER_01: Well, okay.
[15:51] SPEAKER_01: Um,
[15:52] SPEAKER_01: yeah,
[15:52] SPEAKER_01: certainly there is an elite consensus or there was,
[15:55] SPEAKER_01: uh,
[15:56] SPEAKER_01: uh,
[15:56] SPEAKER_01: you know,
[15:57] SPEAKER_01: globalization is great.
[15:59] SPEAKER_01: Um, which is not, uh,
[16:04] SPEAKER_01: It was overstated,
[16:05] SPEAKER_01: but there's a lot of good things about globalization,
[16:07] SPEAKER_01: although the biggest beneficiaries tend to be emerging markets,
[16:13] which Bangladesh literally keeps its head above water only
[16:18] thanks to its ability to
[16:20] SPEAKER_01: sell clothing on world markets.
[16:23] there was a tendency to minimize the,
[16:28] a little bit of a tendency to minimize the downsides.
[16:32] SPEAKER_01: Although, as somebody who's worked in this field
[16:36] SPEAKER_01: basically my whole adult life,
[16:38] if you think that international economists ignored the
[16:41] possibility that trade could
[16:44] SPEAKER_01: sometimes hurt workers' wages,
[16:48] SPEAKER_01: you weren't—obviously,
[16:49] SPEAKER_01: you weren't reading the journal articles,
[16:51] SPEAKER_01: but my god,
[16:51] SPEAKER_01: we've been—I spent
[16:54] I wrote probably dozens of papers trying to analyze the impact
[16:58] of rising exports
[17:00] from developing countries on wages in the United States and did
[17:03] find that it was
[17:04] SPEAKER_01: negative,
[17:05] although probably a much smaller factor than other things that
[17:09] were going on.
[17:10] SPEAKER_01: But it was there.
[17:12] SPEAKER_01: We did miss, and I think this is an important thing, we did miss the...
[17:17] SPEAKER_01: communities aspect.
[17:18] SPEAKER_01: One of the things that really was,
[17:20] SPEAKER_01: I blame myself for not seeing,
[17:23] SPEAKER_01: was that you get something,
[17:25] SPEAKER_01: my favorite example is furniture.
[17:27] SPEAKER_01: It used to be that furniture was hardly traded at all.
[17:30] SPEAKER_01: And then we started importing quite a lot of furniture,
[17:33] SPEAKER_01: especially from China,
[17:35] SPEAKER_01: which displaced a few hundred thousand workers.
[17:38] SPEAKER_01: And at one level, okay,
[17:41] SPEAKER_01: To America, it's dynamic.
[17:43] SPEAKER_01: A million and a half workers are fired every month.
[17:47] So a few hundred thousand workers over the course of a decade
[17:51] shouldn't be a big
[17:52] deal except that those workers were not uniformly distributed
[17:56] across America.
[17:57] SPEAKER_01: They were for the most part in the Piedmont area of North Carolina.
[18:01] SPEAKER_01: And so what from a national point of view is not a big deal is absolutely
[18:07] SPEAKER_01: devastating to the economy of Hickory,
[18:09] SPEAKER_01: North Carolina.
[18:10] SPEAKER_01: That's the kind of thing that we did miss and should have pointed to.
[18:15] But what I actually think is more the point is that there
[18:18] really has been a
[18:19] SPEAKER_01: tendency for the elite,
[18:21] SPEAKER_01: many in the elite,
[18:22] SPEAKER_01: not me,
[18:23] SPEAKER_01: I think I can claim innocence here,
[18:25] SPEAKER_01: but to ignore them.
[18:27] the downsides,
[18:29] the insecurity,
[18:30] and the increasing inequality of American life.
[18:35] SPEAKER_01: And there are a bunch of reasons why that's happened,
[18:38] SPEAKER_01: of which I think the most important are political.
[18:41] When we talk about in the good old days,
[18:43] we had manufacturing jobs that paid well.
[18:45] It wasn't because they were manufacturing jobs,
[18:47] it was because they were union jobs.
[18:49] SPEAKER_01: And we allowed the destruction of the American union movement.
[18:53] SPEAKER_01: But people attribute
[18:56] SPEAKER_01: International trade is an easy villain.
[18:59] SPEAKER_01: Foreign competitors are an easy villain.
[19:02] SPEAKER_01: Sometimes they really are villains.
[19:04] SPEAKER_01: Well, mostly not.
[19:05] But American CEOs and politicians who destroyed the bargaining
[19:11] power of workers are
[19:13] SPEAKER_01: much bigger villains,
[19:14] but a lot easier to sort of go and say it's all because of the
[19:20] Japanese or the
[19:20] SPEAKER_01: Chinese or whatever.
[19:22] SPEAKER_01: And at that, we did not.
[19:27] SPEAKER_01: Well, a lot, not me.
[19:29] SPEAKER_01: What do you mean we, white man?
[19:30] SPEAKER_01: But a lot of people in public life just downplayed that.
[19:37] SPEAKER_01: And that's a failing.
[19:41] SPEAKER_01: And even though somebody like Trump is going to make it much worse,
[19:45] SPEAKER_01: he certainly did tap into the feeling of many people that their concerns,
[19:51] SPEAKER_01: what was happening in their lives wasn't being honored.
[19:55] SPEAKER_00: I'm going to,
[19:56] SPEAKER_00: once again,
[19:57] SPEAKER_00: just be the last one,
[19:58] allow you to exempt yourself from other economists on this one
[20:01] because you've been
[20:02] SPEAKER_00: a leader on this topic of inequality.
[20:05] SPEAKER_00: But I wonder if you look at your field as a whole,
[20:08] a field in which you won a prize that establishes you as one of
[20:11] the eminences of
[20:12] SPEAKER_00: that field.
[20:13] SPEAKER_00: If you look at the economist field as a whole over the last generation,
[20:17] SPEAKER_00: I think there's a lot of people who say now that a lot of the basic
[20:24] uh not just findings but the kind of basic mental habits of the
[20:27] profession caused a
[20:29] lot to be missed caused a caused a kind of you know a way of
[20:35] looking at life what's
[20:36] important what can be counted over things like you talked about
[20:39] like community life
[20:40] in hickory north carolina that that wasn't an isolated thing
[20:43] that is a profession
[20:44] with that with a way of looking at life that became very very
[20:47] influential in our
[20:50] SPEAKER_00: It lasts 30, 40 years.
[20:53] SPEAKER_00: And that a lot of what you talked about at the beginning,
[20:55] a lot of the cruelty was possible once that way of looking at
[20:59] life rose to the fore
[21:01] SPEAKER_00: and other ways of looking at life,
[21:03] SPEAKER_00: such as what's happening in a community or what's happening with...
[21:07] SPEAKER_00: you know,
[21:07] SPEAKER_00: people's sense of themselves if coal is phased out in West Virginia,
[21:11] that those kind of ways of looking at life didn't quite survive
[21:15] the economists'
[21:16] SPEAKER_00: takeover.
[21:16] SPEAKER_00: Do you think that's a fair critique?
[21:19] SPEAKER_00: Not entirely.
[21:20] SPEAKER_01: I mean, I have, uh,
[21:23] SPEAKER_01: I can say a lot of negative things about academic economics,
[21:28] but they mostly have to do with just plain disconnect from
[21:34] things that matter to
[21:35] SPEAKER_01: people.
[21:38] By the way,
[21:38] it's better than it used to be,
[21:40] but certainly when I was young and
[21:44] SPEAKER_01: and ambitious and hungry,
[21:47] there was a really big emphasis on doing clever mathematical
[21:51] things and on fancy
[21:55] SPEAKER_01: stuff.
[21:58] SPEAKER_01: I've also been in the world of public affairs some,
[22:04] SPEAKER_01: mostly as a commentator,
[22:05] SPEAKER_01: but I haven't spent a year in the U.S.
[22:07] SPEAKER_01: government.
[22:07] SPEAKER_01: And the one thing that you really learn is that
[22:13] economics as an intellectual field has way less impact on
[22:18] actual policy than we'd
[22:21] SPEAKER_01: like to imagine.
[22:23] It has way less impact even on discussion of economic issues
[22:30] among people who
[22:31] SPEAKER_01: matter than you might think.
[22:33] SPEAKER_01: So if you say the belief that cutting taxes on rich people
[22:38] SPEAKER_01: is the key to prosperity, very widely held.
[22:43] SPEAKER_01: How many... Is that in the economics textbooks?
[22:47] SPEAKER_01: No, it's not.
[22:48] SPEAKER_01: Is it something that's being taught in graduate school?
[22:50] SPEAKER_01: No, it's not.
[22:51] That's all coming from people,
[22:53] some of whom,
[22:54] there's no licensing requirement for economists.
[22:57] SPEAKER_01: Lots of people who call themselves economists,
[22:58] SPEAKER_01: but who are in fact political hacks,
[23:01] SPEAKER_01: who get to say that.
[23:03] SPEAKER_01: And you can have whole...
[23:06] SPEAKER_01: whole areas where there's complete economic orthodoxy in the real world,
[23:11] the real world of policy that is not grounded at all in
[23:16] academic research.
[23:17] SPEAKER_01: Now,
[23:18] SPEAKER_01: probably academics should be trying,
[23:20] SPEAKER_01: making more of an effort to engage with reality,
[23:23] SPEAKER_01: but I think that's the bigger problem.
[23:25] SPEAKER_01: We did not get
[23:28] to this neoliberal free markets,
[23:34] low taxes,
[23:35] low regulation,
[23:36] that whole thing.
[23:36] We did not get there because that's what academic research said
[23:41] we should do.
[23:41] SPEAKER_01: We got there because of the sociological dynamics,
[23:46] SPEAKER_01: the political dynamics,
[23:47] SPEAKER_01: and ultimately a pretty big issue of who pays.
[23:57] SPEAKER_01: It's one of those things,
[23:58] SPEAKER_01: if you ask,
[24:00] SPEAKER_01: it's a little bit like,
[24:01] SPEAKER_01: you know,
[24:02] SPEAKER_01: there was a study on climate change.
[24:04] How many papers that were skeptical about climate change were
[24:07] essentially funded by fossil fuel?
[24:10] SPEAKER_01: And the answer is all of them.
[24:12] If you ask how many economists saying that cutting taxes on
[24:17] rich people and
[24:18] SPEAKER_01: removing regulations on business are really,
[24:21] SPEAKER_01: really good things are at some level,
[24:24] SPEAKER_01: often a little bit subtle,
[24:25] SPEAKER_01: but at some level on the take,
[24:28] SPEAKER_01: the answer to a first approximation is all of them.
[24:32] SPEAKER_00: I wanted to ask you about billionaires,
[24:35] SPEAKER_00: oligarchs,
[24:38] SPEAKER_00: folks like you and certainly many elected Democrats,
[24:42] SPEAKER_00: people across the left for years have been talking about inequality,
[24:45] SPEAKER_00: have been talking about reigning in the power of the super rich.
[24:48] SPEAKER_00: But there was a kind of turn in the discourse
[24:51] circa 2018 2019 aoc was in there and suddenly the kind of
[24:55] abolish billionaires
[24:57] thing came on and and some people saying you know there was
[24:59] this line every
[25:00] billionaire is a policy failure we should not have billionaires
[25:03] at all which was
[25:04] kind of taking it a step further i was trying to remember i'm
[25:07] sure you did weigh in
[25:08] back then what was your view then when you kind of first
[25:11] encountered that do you
[25:12] kind of agree with the notion that there shouldn't be
[25:14] billionaires at all and i
[25:15] SPEAKER_00: wonder whether
[25:17] SPEAKER_00: the complete kind of capture of these billionaires,
[25:20] SPEAKER_00: uh,
[25:20] SPEAKER_00: of,
[25:21] SPEAKER_00: of president Trump and this kind of naked display of oligarchy right now,
[25:24] SPEAKER_00: Elon Musk,
[25:25] SPEAKER_00: et cetera,
[25:26] SPEAKER_00: has changed your view on that,
[25:28] SPEAKER_00: if at all.
[25:29] SPEAKER_01: Well, rigid limits have a problem.
[25:32] I mean,
[25:32] if you say,
[25:33] uh,
[25:33] uh,
[25:35] uh,
[25:36] you know,
[25:37] no,
[25:37] no more billionaires than,
[25:39] um,
[25:40] you're going to create some weird incentives for the guy who's
[25:43] got $999 million.
[25:46] SPEAKER_01: That sort of cliff doesn't work.
[25:49] SPEAKER_01: But if you interpret it more
[25:52] SPEAKER_01: broadly as saying that we should have high marginal tax rates,
[25:56] SPEAKER_01: that we should tax capital gains much more like,
[26:00] SPEAKER_01: you know,
[26:00] we shouldn't privilege capital gains over wages and the way we
[26:04] tax things,
[26:05] SPEAKER_01: and that the top marginal tax rates should be really high.
[26:11] SPEAKER_01: I'm all for that.
[26:12] SPEAKER_01: I mean, I guess we...
[26:15] Certainly inflation adjusted,
[26:17] we did have billionaires in the 50s and 60s.
[26:21] SPEAKER_01: There were some very rich people, but not remotely like there are now.
[26:26] That was not because there were no great ideas to make billions
[26:32] of dollars.
[26:32] SPEAKER_01: It wasn't also because there was an absolute ban on it.
[26:37] SPEAKER_01: It was because we had effective progressive taxation at the very top.
[26:45] SPEAKER_01: The economy did fine.
[26:47] The best 25 years of economic performance we have had in
[26:53] America is from roughly
[26:57] SPEAKER_01: 1947 to 1972,
[26:58] SPEAKER_01: a period during which the top tax rate much of the time was above 90%,
[27:04] SPEAKER_01: in which inheritance taxes were really large.
[27:08] SPEAKER_01: I don't want to say a billion dollars is
[27:15] is you're you're fine if you have 900 million and you're evil
[27:18] if you have 1.1
[27:19] billion but i want something that makes it a whole lot harder
[27:23] for somebody to
[27:24] accumulate that kind of money i think what i'm wondering is
[27:27] even if you made it
[27:28] harder you know there would be some people who still ended up
[27:32] with large fortunes
[27:33] and part of what we're seeing in this moment is i don't know it
[27:37] it feels to me like
[27:39] SPEAKER_00: even having that kind of money
[27:41] SPEAKER_00: is intrinsically dangerous to democracy at this point.
[27:44] That simply having people with this much power in a
[27:47] post-citizen united world to
[27:49] SPEAKER_00: exert influence in this way is inherently dangerous.
[27:54] SPEAKER_00: And I wonder whether you, do you agree with that?
[27:56] SPEAKER_00: Do you think as like we should,
[27:59] SPEAKER_00: yes,
[27:59] SPEAKER_00: there's guardrails,
[28:00] but part of me just thinks like the accumulation of that much
[28:03] money is an intrinsic
[28:04] SPEAKER_00: danger.
[28:05] SPEAKER_01: Yeah.
[28:05] One of the things that always amazes me is that that's
[28:08] something that our great
[28:10] SPEAKER_01: great grandfathers were willing to say.
[28:12] SPEAKER_01: Well, not my great great grandfather and probably not yours.
[28:15] SPEAKER_01: My great great grandfather was in Ukraine at the time.
[28:17] SPEAKER_01: But the but that, you know, early 20th century.
[28:22] It was quite common and acceptable for people to say extreme
[28:28] wealth endangers the
[28:30] SPEAKER_01: nation,
[28:31] SPEAKER_01: not just because they're taking too much of the money,
[28:33] SPEAKER_01: but because it undermines democracy.
[28:38] SPEAKER_01: I believe actually it's Woodrow Wilson,
[28:40] SPEAKER_01: of all people,
[28:41] SPEAKER_01: who's not a good guy in many ways,
[28:42] SPEAKER_01: but he said that if there are men big enough to own the government,
[28:46] SPEAKER_01: they will own the government.
[28:47] SPEAKER_01: And nobody, hardly anybody, dares say that now.
[28:52] SPEAKER_01: Or I guess we're getting back to it a little bit,
[28:54] SPEAKER_01: but for a long time,
[28:55] SPEAKER_01: that was regarded as unacceptable class warfare.
[28:59] SPEAKER_01: But it's very clearly the case.
[29:01] SPEAKER_01: I mean, if you had any doubts about it, you can
[29:06] SPEAKER_01: Answer those doubts with two words, Elon Musk.
[29:08] SPEAKER_01: I mean, just look at what is happening.
[29:11] SPEAKER_01: So,
[29:11] SPEAKER_01: yes,
[29:12] SPEAKER_01: I mean,
[29:12] extreme inequality is aside from the fact that if so much money
[29:17] goes to a handful
[29:19] SPEAKER_01: of people,
[29:19] SPEAKER_01: there's less for everyone else,
[29:21] SPEAKER_01: but also it just does subvert democracy.
[29:24] SPEAKER_01: And it does, by the way, it's not just campaign reform and so on.
[29:29] SPEAKER_01: One thing...
[29:30] I move enough in circles that go a little bit beyond your
[29:34] standard academic to get
[29:38] SPEAKER_01: some sense of the gravitational pull of extreme wealth.
[29:42] SPEAKER_01: Just the way in which people can become
[29:47] SPEAKER_01: in which public opinion can be manipulated,
[29:50] SPEAKER_01: in which journalists and,
[29:53] SPEAKER_01: yes,
[29:53] SPEAKER_01: academics,
[29:54] SPEAKER_01: but it's just everybody starts shading what they say.
[30:02] SPEAKER_01: They may not even admit it to themselves,
[30:03] SPEAKER_01: but you end up trying to curry favor with the billionaires among you.
[30:09] SPEAKER_00: I want to shift to the question of the Democrats now.
[30:12] I think we can all see coming in the distance of 2028 argument
[30:18] between more
[30:19] SPEAKER_00: progressive forces and more centrist forces.
[30:22] SPEAKER_00: And what's really struck me is
[30:26] SPEAKER_00: it feels like no one ever learns anything.
[30:29] SPEAKER_00: People repeat their mistakes.
[30:30] SPEAKER_00: Third way is putting out statements saying,
[30:32] what we need in this moment to fight fascism is centrist
[30:35] policies and progressively
[30:37] SPEAKER_00: doubling down on their ideas.
[30:38] SPEAKER_00: As you look at
[30:41] SPEAKER_00: the arguments out there among elected Democrats about these things.
[30:44] You look at what AOC and Bernie are talking about on the
[30:47] fighting oligarchy tour.
[30:49] You look at what more moderate folks like,
[30:51] let's say,
[30:52] Pete Buttigieg have been talking about.
[30:54] SPEAKER_00: I wonder what you make of it and what your advice would be for Democrats.
[31:00] SPEAKER_00: What kind of, how, let me put it this way, how progressive
[31:06] should Democrats attempt to be on economic issues to counter
[31:09] what Trump is doing?
[31:10] SPEAKER_00: Because you do hear both arguments,
[31:12] SPEAKER_00: that it's better to offer something real and strident,
[31:15] SPEAKER_00: but you also hear it's better to play it safe when he's being so crazy,
[31:18] SPEAKER_00: just be normal.
[31:18] SPEAKER_00: How do you think about that?
[31:20] SPEAKER_01: Okay, so I am...
[31:22] SPEAKER_01: I am not a political scientist, but I do talk to political scientists.
[31:26] SPEAKER_01: I try to not be one of those economists who imagines that we know it all.
[31:31] What the political scientists I know say is that ideological
[31:35] positioning matters a
[31:37] SPEAKER_01: whole lot less than people think,
[31:39] SPEAKER_01: that people don't even know.
[31:41] SPEAKER_01: People really didn't have a sense of how right-wing Trump was.
[31:49] If you have a Democrat with a regular guy manner,
[31:56] that person might be...
[32:00] might be actually advocating extremely progressive policies,
[32:04] but it probably won't get through.
[32:06] SPEAKER_01: And if anything,
[32:07] SPEAKER_01: the biggest problem,
[32:08] SPEAKER_01: the biggest reason to be worried,
[32:10] the biggest reason to nominate centrists is not that the public
[32:14] doesn't like
[32:16] SPEAKER_01: progressive ideas.
[32:17] It's that a lot of people in the news media don't like
[32:19] progressive ideas and will take it out.
[32:23] SPEAKER_01: And what strikes me also, and this is something I've noticed, I mean, I,
[32:30] Often,
[32:31] I don't really have a whole lot of problems with Bernie
[32:33] Sanders' ideas.
[32:35] SPEAKER_01: I do think that he exaggerates in a way how radical he is.
[32:42] SPEAKER_01: I think it's great.
[32:45] SPEAKER_01: We do need people like that.
[32:47] SPEAKER_01: What really struck me, I have followed AOC quite a lot.
[32:51] SPEAKER_01: And what strikes me is how actually extremely sensible she is on policy.
[33:02] SPEAKER_01: Say more about that.
[33:04] A few years back,
[33:05] she said that the top tax rate,
[33:10] the top income tax rate should be 70%.
[33:14] SPEAKER_01: And there was a lot of, oh, my God, she's crazy.
[33:17] SPEAKER_01: Who would say such a thing?
[33:18] SPEAKER_01: I actually happen to know where she got that.
[33:20] SPEAKER_01: She got that from talking to Joe Sticklitz,
[33:24] SPEAKER_01: my friend and colleague,
[33:26] SPEAKER_01: a great economist,
[33:28] SPEAKER_01: lives a little way up the road from me.
[33:31] SPEAKER_01: And Joe was getting it from the best academic literature.
[33:36] He was getting it from the Diamond Saez estimate of optimal top
[33:41] tax rates,
[33:42] SPEAKER_01: which actually came up with a number of 73%.
[33:43] SPEAKER_01: This is not a radical.
[33:47] This is solid peer-reviewed academic research that she was
[33:52] without saying so.
[33:54] SPEAKER_01: So it's actually a perfectly reasonable policy position.
[33:58] SPEAKER_01: And I think that's the...
[34:01] I think that it's probably the case that Democrats should
[34:05] nominate somebody who
[34:06] SPEAKER_01: comes across as a regular guy,
[34:09] SPEAKER_01: not a fire-breathing progressive.
[34:12] SPEAKER_01: I'm not even really that afraid of how voters will react,
[34:18] SPEAKER_01: as I am afraid of what Jake Tapper will do on TV.
[34:25] SPEAKER_01: But in terms of the actual policy stuff,
[34:27] I don't think there's much of a price for advocating serious
[34:31] policies that help
[34:32] SPEAKER_01: working class Americans.
[34:34] SPEAKER_00: Do you see her as someone who could be president?
[34:36] SPEAKER_00: I'm not asking as a political client as an economist, but as a citizen?
[34:40] SPEAKER_01: She's clearly smart, articulate.
[34:43] SPEAKER_01: She's a terrific communicator.
[34:45] SPEAKER_01: I got to say,
[34:47] SPEAKER_01: and this is a terrible thing,
[34:48] SPEAKER_01: that I am not sure that America is ready for a woman of color.
[34:53] SPEAKER_01: What can I say?
[34:55] SPEAKER_01: That's a horrible thing.
[34:57] SPEAKER_01: I hate that.
[35:00] SPEAKER_01: I have no problem with it.
[35:01] SPEAKER_01: Nobody that I'm friends with has problems with it.
[35:04] But I suspect that in some ways I think we may be the last
[35:10] advanced country to
[35:11] SPEAKER_01: actually have a female head of state.
[35:17] SPEAKER_01: Actually, we may cease being an advanced country before we get there.
[35:22] SPEAKER_00: When you listen to Democrats talking,
[35:24] do you hear any interesting out-of-the-box economic ideas right
[35:29] now beyond the
[35:30] SPEAKER_00: normal fare?
[35:32] SPEAKER_01: Not a lot, but...
[35:35] SPEAKER_01: But we don't need out of the box economic ideas.
[35:41] SPEAKER_01: We need to get back in the box.
[35:44] If you want to say what would it take to have a pretty decent
[35:50] society where there's
[35:54] SPEAKER_01: inequality,
[35:55] SPEAKER_01: where not everybody is happy,
[35:57] SPEAKER_01: but everybody has adequate health care,
[36:00] SPEAKER_01: everybody has enough to live on,
[36:04] SPEAKER_01: I'm not describing some utopian fantasy.
[36:08] SPEAKER_01: I'm describing Denmark.
[36:11] SPEAKER_01: Social democracy,
[36:12] SPEAKER_01: which is really kind of what the Democratic Party is,
[36:15] SPEAKER_01: which is a mostly market economy,
[36:17] but with some role for government and a lot of role for
[36:20] government in sanding off
[36:22] SPEAKER_01: the rough edges of capitalism.
[36:25] SPEAKER_01: It works.
[36:25] SPEAKER_01: It's a highly successful system.
[36:27] SPEAKER_01: It's the most decent form of society that humanity has ever had.
[36:31] SPEAKER_01: And we don't need to look for radical stuff.
[36:37] SPEAKER_01: Healthcare.
[36:38] SPEAKER_01: I spent a lot of time on healthcare.
[36:41] Now that it appears that the Affordable Care Act is likely to
[36:44] be de facto destroyed
[36:45] SPEAKER_01: and we're going to have to reconstruct it.
[36:48] But you don't need to look for deep,
[36:51] innovative,
[36:52] radical ideas about how to have
[36:55] SPEAKER_01: a healthcare system that basically works for everybody,
[36:59] SPEAKER_01: because everybody but the United States has one.
[37:04] SPEAKER_00: I want to ask you about your moving to Substack.
[37:07] SPEAKER_00: You spent, you know, until recently,
[37:10] SPEAKER_00: your career at big institutions,
[37:12] SPEAKER_00: Princeton University,
[37:13] SPEAKER_00: the New York Times,
[37:15] SPEAKER_00: uh,
[37:15] SPEAKER_00: for many years,
[37:17] SPEAKER_00: um,
[37:17] precisely the kind of institutions that have been durable and
[37:20] solid and big and
[37:21] SPEAKER_00: powerful.
[37:22] SPEAKER_00: And in recent years, I mean, recent months, um,
[37:28] these media and academic and other big institutions have
[37:31] actually seemed uniquely
[37:32] vulnerable and in some ways unable to quite adapt to or protect
[37:39] their people in the
[37:41] SPEAKER_00: environment we're in.
[37:42] Tell me about leaving the Times and joining Substack and kind
[37:48] of what you've
[37:48] SPEAKER_00: learned from the experience.
[37:50] SPEAKER_01: By the way, I'm not entirely divorced from big institutions.
[37:53] SPEAKER_01: I'm talking to you from my
[37:55] SPEAKER_01: office at the City University of New York Graduate Center,
[37:59] SPEAKER_01: which is a big,
[38:01] SPEAKER_01: wonderful institution operating on a shoestring budget.
[38:04] SPEAKER_01: But anyway, but the... All right.
[38:09] SPEAKER_01: So I had...
[38:12] SPEAKER_01: I had 24 good years at the New York Times, and it's still invaluable.
[38:17] SPEAKER_01: What newspapers,
[38:19] what media organizations do is there's a lot of legwork that
[38:23] has to be done,
[38:24] SPEAKER_01: and you do rely on them.
[38:28] SPEAKER_01: I still read the Times.
[38:32] second thing every morning after first going through my,
[38:35] uh,
[38:37] 500 hysterical abusive emails.
[38:39] SPEAKER_01: Um, and, um, you should flip the order.
[38:42] SPEAKER_01: What?
[38:43] SPEAKER_00: You should maybe flip the order of those two activities.
[38:47] SPEAKER_01: Anyway, what happened is two things.
[38:53] SPEAKER_01: I'm a crossover.
[38:54] SPEAKER_01: I'm an academic,
[38:56] SPEAKER_01: done a lot of research,
[38:58] SPEAKER_01: not doing a whole lot of cutting-edge research,
[39:00] SPEAKER_01: but still doing a lot of real economics.
[39:04] SPEAKER_01: Look, it's not going to work as an 800-word column.
[39:08] SPEAKER_01: I used to have a blog for the New York Times.
[39:11] SPEAKER_01: where I could put some of that stuff up.
[39:14] SPEAKER_01: They killed it.
[39:15] SPEAKER_01: Then I said, I need something.
[39:18] SPEAKER_01: And so they created a newsletter,
[39:19] SPEAKER_01: which was much more constrained,
[39:22] SPEAKER_01: and they killed it,
[39:23] SPEAKER_01: leaving me with no outlet for the kinds of things I wanted to do.
[39:26] SPEAKER_01: And then the column itself went from being pretty much...
[39:33] uh i could say whatever i i want that was you know obviously
[39:37] you didn't i i there
[39:39] SPEAKER_01: were language restrictions and so on but i was i even uh look i i was
[39:46] almost alone out there in being an opponent of the Iraq war and
[39:51] saying we're being
[39:52] SPEAKER_01: lied into this thing.
[39:53] SPEAKER_01: And the Times was not happy.
[39:55] SPEAKER_01: They did make it clear that they were really unhappy with where I was,
[39:59] SPEAKER_01: but they never tried to edit the columns.
[40:02] SPEAKER_01: I was able to say what I was saying.
[40:04] SPEAKER_01: They were saying, we wish you wouldn't do that.
[40:07] But in the last year...
[40:08] And sorry,
[40:08] what was it that they wish you didn't do?
[40:12] They said,
[40:13] well,
[40:13] we wish you would be writing about economics and business.
[40:18] SPEAKER_00: Stick to sports.
[40:21] SPEAKER_00: They often tell athletes who have political, stick to sports.
[40:25] SPEAKER_01: Stay in your lane.
[40:26] The Times was caught up in that whole march to war thing and
[40:32] certainly unwilling to
[40:33] SPEAKER_01: be too controversial.
[40:34] SPEAKER_01: Then they
[40:38] SPEAKER_01: changed their tune after it was clear that I,
[40:41] SPEAKER_01: in some ways,
[40:42] SPEAKER_01: helped save the paper's honor there.
[40:43] SPEAKER_01: But in the last year at the Times,
[40:47] SPEAKER_01: the editing,
[40:49] SPEAKER_01: which had really been minimal,
[40:52] SPEAKER_01: as it turns out,
[40:53] SPEAKER_01: I'm a...
[40:57] SPEAKER_01: I'm a,
[40:57] SPEAKER_01: I'm a very disciplined writer,
[40:59] SPEAKER_01: not,
[41:01] you'd never know that if you could see the rest of this office
[41:03] behind you,
[41:04] SPEAKER_01: it's not,
[41:04] SPEAKER_01: I'm not a disciplined person,
[41:06] SPEAKER_01: but the,
[41:06] SPEAKER_01: uh,
[41:07] SPEAKER_01: but I,
[41:07] SPEAKER_01: but I,
[41:08] SPEAKER_01: I come in at length,
[41:09] SPEAKER_01: um,
[41:11] SPEAKER_01: really not a whole lot of editing needed.
[41:13] But then I was getting lots of really intrusive editing that
[41:17] just not so much
[41:18] SPEAKER_01: changed what I said,
[41:19] SPEAKER_01: but flattened it.
[41:21] I just felt like I wasn't able to say in a way that would
[41:25] resonate with people what
[41:26] SPEAKER_01: I felt I needed to say.
[41:27] And it just be,
[41:28] I would,
[41:29] every day that I had a column due,
[41:31] I would send it in
[41:33] and then wait in dread to see what had happened in the editing
[41:36] and then would have
[41:37] SPEAKER_01: to fight almost word for word to at least undo some of the damage.
[41:42] SPEAKER_01: So basically it was, oh, the hell with this.
[41:45] I stuck it out through the election and then left pretty much
[41:48] immediately.
[41:49] SPEAKER_00: And before we get to what happened after that,
[41:52] SPEAKER_00: What do you think was on the other end of those edits?
[41:56] SPEAKER_00: You say a flattening.
[41:57] Was it just kind of like everything needs to be kind of more
[42:00] sober and tempered?
[42:01] Was it specifically about a kind of fear of being too much of
[42:05] an opposition to Trump?
[42:06] SPEAKER_00: What do you think was behind it?
[42:08] SPEAKER_01: The Times fears constantly being seen as a liberal New York newspaper.
[42:13] SPEAKER_01: Um,
[42:14] which is partly because it is a liberal New York newspaper and
[42:17] their readership
[42:17] SPEAKER_01: really is,
[42:18] SPEAKER_01: but they have this continual,
[42:20] SPEAKER_01: first,
[42:21] SPEAKER_01: a fear of offending people and,
[42:24] SPEAKER_01: um,
[42:25] I think they have this constant fantasy that they're really
[42:28] going to be national,
[42:29] SPEAKER_01: that people in Iowa are going to start reading the New York Times,
[42:34] SPEAKER_01: that conservatives in the Midwest are going to become Times subscribers,
[42:40] SPEAKER_01: which is not going to happen.
[42:44] SPEAKER_01: But it constantly colors and diminishes, my sense is.
[42:54] SPEAKER_01: I read—actually,
[42:57] SPEAKER_01: the basic reporting is often extremely,
[42:59] SPEAKER_01: extremely good,
[43:00] SPEAKER_01: although if you look at it,
[43:01] SPEAKER_01: there's a misleading headline that totally softens it,
[43:05] SPEAKER_01: and then if you read in,
[43:08] SPEAKER_01: it starts to become—actually,
[43:09] SPEAKER_01: this is tough-minded stuff,
[43:12] SPEAKER_01: but the stuff should be in the headline,
[43:16] SPEAKER_01: not in paragraph 13,
[43:18] SPEAKER_01: and that's gotten worse over time.
[43:21] SPEAKER_01: All right.
[43:22] SPEAKER_01: Maybe their business model is right.
[43:24] SPEAKER_01: They may be right about what works, but not for me.
[43:28] SPEAKER_01: I was starting to hate my job.
[43:31] SPEAKER_00: You're not necessarily the typical age for a new media reinvention,
[43:38] SPEAKER_00: and yet you did it,
[43:39] SPEAKER_00: and you've been so successful at it.
[43:40] SPEAKER_00: People have
[43:42] SPEAKER_00: gravitated to you in droves.
[43:43] This button,
[43:44] by the way,
[43:44] if you don't subscribe to Pulse,
[43:46] excellent Substack.
[43:47] SPEAKER_00: Press this button, one more button to subscribe to it.
[43:51] Hey,
[43:52] as this morning,
[43:54] as this morning,
[43:55] Substack says I'm number one rising in politics.
[43:57] SPEAKER_01: Yay.
[43:59] there we go there we go so how's it how's it been i mean
[44:01] reinvention is hard at any
[44:03] moment in life it's it's hard after you've been really really
[44:06] successful in
[44:07] something for a very long time and establish yourself in it how
[44:11] has it been for you
[44:12] to take on this entirely new thing that frankly like everyone
[44:17] is figuring out well
[44:18] in a lot of ways it's it's what i always gravitated towards
[44:23] anyway you know i'm an
[44:25] SPEAKER_01: academic
[44:26] SPEAKER_01: spent most of my adult life doing research,
[44:31] and so I'm still very comfortable with numbers and stuff and
[44:35] always pined for a
[44:36] SPEAKER_01: format where I could combine light analytics.
[44:41] SPEAKER_01: But I'm also, as people say, you write pretty well for an economist.
[44:48] SPEAKER_01: And, you know, so I can do that.
[44:50] SPEAKER_01: And I've also been
[44:52] SPEAKER_01: And I'm a fast writer, which does help, obviously, a lot in this.
[44:58] SPEAKER_01: And I think the best thing that I bring to this,
[45:04] SPEAKER_01: aside from maybe knowing some stuff and paying attention,
[45:10] SPEAKER_01: which is something I try to do,
[45:14] SPEAKER_01: but I think it does come kind of naturally,
[45:15] SPEAKER_01: is I listen to people.
[45:23] My wife and I are co-authors of a Principles of Economics
[45:27] textbook that does quite well.
[45:30] SPEAKER_01: We've been doing that all along behind everything else.
[45:35] SPEAKER_01: Lots of famous economists have written principles books.
[45:41] SPEAKER_01: Most of them fail.
[45:43] SPEAKER_01: The reason they fail is not because the guys don't know their stuff.
[45:46] SPEAKER_01: Not because there's anything fundamentally wrong,
[45:50] SPEAKER_01: but what we did,
[45:53] SPEAKER_01: with a lot of help from the publishers,
[45:54] SPEAKER_01: we went out to people who actually teach economics.
[45:57] And not teach economics at Harvard,
[46:00] but teach economics at Midwest Megastate.
[46:04] SPEAKER_01: And ask, what do you need?
[46:06] SPEAKER_01: What works for you?
[46:08] SPEAKER_01: And I try to do that now with my readers.
[46:10] SPEAKER_01: I try to listen to
[46:12] SPEAKER_01: And I think that's one of the really big things.
[46:14] SPEAKER_01: Yeah, you can do a sub stack.
[46:18] SPEAKER_01: That's an ego.
[46:20] SPEAKER_01: That's me, me, me.
[46:22] SPEAKER_01: Look at how great I am.
[46:24] SPEAKER_01: That's not doing anybody much good.
[46:26] You need to listen to people and find out what it is they want
[46:29] to know about.
[46:30] SPEAKER_01: What is it that they don't understand?
[46:33] SPEAKER_01: And you get a lot of rewards for doing that.
[46:39] SPEAKER_00: I love that.
[46:39] SPEAKER_00: So once again, press this button.
[46:41] If you if you are a subscriber to the Inc and you not subscribe
[46:44] to Paul's Substack,
[46:45] SPEAKER_00: press this button,
[46:46] SPEAKER_00: you can subscribe right now,
[46:48] SPEAKER_00: help him maintain that number one rising position.
[46:51] If you're a subscriber to Paul and new to the Inc,
[46:54] subscribe to the Inc,
[46:55] same way.
[46:57] SPEAKER_00: Before I let you go,
[46:59] SPEAKER_00: Paul,
[47:01] SPEAKER_00: to step back from all of this,
[47:04] SPEAKER_00: you know,
[47:04] SPEAKER_00: you're someone who's spent a long time trying to
[47:08] SPEAKER_00: call this country to be less cruel,
[47:11] SPEAKER_00: to call us to our better angels,
[47:15] to kind of ring alarm bells about what many people's lives were
[47:20] like and becoming
[47:21] SPEAKER_00: like in this country.
[47:22] SPEAKER_00: I wonder,
[47:24] after so much time spent doing that and doing it with great
[47:28] influence and great
[47:29] SPEAKER_00: reach,
[47:32] SPEAKER_00: how do you reflect on what happened to our country?
[47:36] SPEAKER_01: Oh, wow.
[47:37] SPEAKER_01: I mean, you do what you can do.
[47:43] SPEAKER_01: But always with an understanding that what any individual does,
[47:49] SPEAKER_01: unless they happen to be the president,
[47:51] SPEAKER_01: doesn't really matter that much.
[47:53] SPEAKER_01: At best, you can nudge things a little bit better.
[47:55] SPEAKER_01: And look, I'm terrified.
[48:00] SPEAKER_01: I'd say I'm the most scared I've ever been,
[48:04] SPEAKER_01: except I'm a little bit less scared than I was two months ago,
[48:06] because it feels to me like Trump is not quite steamrolling the
[48:13] way he was.
[48:14] But I've been really...
[48:17] The moment when I started to really worry that we could lose
[48:22] America...
[48:23] SPEAKER_01: was probably a lot earlier than anybody else.
[48:26] SPEAKER_01: When Newt Gingrich took control of Congress in 1995,
[48:30] SPEAKER_01: I immediately had this sense,
[48:33] SPEAKER_01: oh,
[48:34] SPEAKER_01: oh shit,
[48:35] SPEAKER_01: can I say that here?
[48:37] SPEAKER_01: That the authoritarian anti-democratic,
[48:41] SPEAKER_01: there's always been,
[48:43] SPEAKER_01: every country has that faction,
[48:45] SPEAKER_01: but it was gaining in America.
[48:48] SPEAKER_01: And there has been no point since then when I have felt at ease
[48:53] SPEAKER_01: that the America I want to live in is going to survive.
[48:59] SPEAKER_01: And we're very close to the edge right now.
[49:03] It would take only a little bit more timidity on the part of
[49:07] institutions,
[49:09] SPEAKER_01: a Reichstag fire equivalent,
[49:11] SPEAKER_01: something like that,
[49:12] SPEAKER_01: to push us totally over the edge.
[49:14] SPEAKER_01: And by the way, I have... Look, I have... I have...
[49:21] SPEAKER_01: people I know very well who are, as it happens, Hispanic, U.S.
[49:30] SPEAKER_01: citizens,
[49:31] but with Hispanic origin who in public may be caught speaking
[49:38] Spanish to their
[49:39] SPEAKER_01: relatives.
[49:41] SPEAKER_01: And they carry passport cards around now because
[49:45] SPEAKER_01: You never know now.
[49:46] SPEAKER_01: We're now a country where you might be...
[49:48] SPEAKER_01: Even the passport card might not help,
[49:50] but we are now a country where masked people claiming to be
[49:53] government agents
[49:54] SPEAKER_01: kidnap people off the street.
[49:57] If that doesn't terrify you,
[50:00] if you think it can't happen to you,
[50:02] then,
[50:04] you know,
[50:05] it can.
[50:06] SPEAKER_01: And if things go wrong, it will.
[50:09] SPEAKER_00: And the flip side of that...
[50:11] having studied the economies of so many societies over time
[50:15] that came to those
[50:16] SPEAKER_00: brinks,
[50:17] SPEAKER_00: political systems that came to those brinks and came back,
[50:22] SPEAKER_00: can you visualize a way in which we could come back from this brink?
[50:27] SPEAKER_01: Well, sure.
[50:27] SPEAKER_01: I mean,
[50:29] SPEAKER_01: I'm a much more internationalist,
[50:32] SPEAKER_01: I think,
[50:32] SPEAKER_01: than most US pundits just because international trade was my specialty.
[50:38] SPEAKER_01: I've always been.
[50:38] SPEAKER_01: So I pay more attention.
[50:41] SPEAKER_01: Poland has stepped a few feet back from the brink.
[50:45] SPEAKER_01: A couple of years ago, I thought Poland was going over into Hungary.
[50:49] SPEAKER_01: We just had a really big victory for democracy in Romania.
[50:56] SPEAKER_01: It is possible,
[50:57] SPEAKER_01: which was a really big victory,
[50:59] SPEAKER_01: I think,
[51:00] SPEAKER_01: for democracy and decency at the Vatican.
[51:04] SPEAKER_01: And at worst, look...
[51:12] SPEAKER_01: I don't even think I'm joking.
[51:14] SPEAKER_01: I think that if all else fails,
[51:16] SPEAKER_01: we eventually get our way out with a color revolution,
[51:21] SPEAKER_01: like the one that brought democracy to Ukraine.
[51:26] SPEAKER_01: There's always hope.
[51:29] SPEAKER_01: Nothing is permanent.
[51:30] Unfortunately,
[51:31] nothing good is permanent,
[51:32] but nothing bad is permanent either.
[51:34] So there is always a way out eventually,
[51:36] but I hope not to have to find the hard way through.
[51:42] SPEAKER_00: Paul Krugman, thank you so much for joining us today.
[51:45] SPEAKER_00: Subscribe to his Substack.
[51:47] Paul,
[51:47] it's so great to have you on this platform and sharing your
[51:51] wisdom with us.
[51:52] SPEAKER_00: Thank you.
[51:53] SPEAKER_01: Thank you.
[51:53] SPEAKER_01: Take care.
[51:54] SPEAKER_01: You too.

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