In a column for the New York Times, Nobel Prize-winning economist Paul Krugman claimed that an unfettered Donald Trump is setting the stage for a second Great Depression — only this one will be much worse.
Noting that Trump’s plan to slam Mexico with tariffs “will reduce the living standards of most Americans, destroy many jobs in U.S. manufacturing, and hurt farmers,” Krugman said that is the least of our problems.
“Trump says that ‘TARIFF is a beautiful word indeed,’ but the actual history of U.S. tariffs isn’t pretty — and not just because tariffs, whatever the tweeter in chief says, are in practice taxes on Americans, not foreigners. In fact, it’s now a good bet that Trump’s tariffs will more than wipe out whatever breaks middle-class Americans got from the 2017 tax cut,” Krugman wrote.
Using not-too-distant history as his guide, the economist made the case that Trump’s heedless actions may cause another worldwide economic meltdown.
“By deploying tariffs as a bludgeon against whatever he doesn’t like, Trump is returning America to the kind of irresponsibility it displayed after World War I — irresponsibility that, while obviously not the sole or even the main cause of the Great Depression, the rise of fascism and the eventual coming of World War II, helped create the environment for these disasters,” he wrote, adding, “Part of the problem was that U.S. tariffs were met with retaliation; even before the Depression struck, the world was engaged in a gradually escalating trade war.”
“So am I saying that Trump is repeating the policy errors America made a century ago? No. This time it’s much worse,” he explained. “While Warren Harding wasn’t a very good president, he didn’t routinely abrogate international agreements in a fit of pique. While America in the 1920s failed to help build international institutions, it didn’t do a Trump and actively try to undermine them.”
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