Nobel-winning economist Paul Krugman warns US faces Venezuela-style collapse under Trump

Nobel Prize-winning economist turned political commentator Paul Krugman tore into President Donald Trump on MSNBC for firing the nation's chief labor statistics analyst for reporting weak jobs numbers — and told anchor Ari Melber this is the same blueprint that ends up driving authoritarian countries into economic collapse.

This comes at the same time Trump is ramping up threats and attacks on Federal Reserve Chair Jerome Powell, an official he originally appointed, for not lowering interest rates because the administration's tariffs are undoing progress on inflation, sparking additional fears the president could derail independent monetary policy.

"We're not yet in recession territory, but we're definitely losing steam," Krugman, a frequent critic of Trump, said in response to the numbers. "And this is a not good picture. This is not what you want to see happening."

"[And] Trump sort of crashes out, shoots the messenger," replied Melber. "We don't have any modern precedent for that. It's reminiscent of bigger problems in controlled or autocratic countries and economies. Put that in context for us. And why would that affect — why would that be bad for, say, an average person in the economy?"

"Well, the thing to remember is that this agency, the Bureau of Labor Statistics, is not a household phrase, but it is absolutely critical," said Krugman. "Basically, everything that we know about what's happening to the economy in the last couple of months comes from the BLS. They do the surveys that tell us how many people are unemployed. They do the surveys that tell us how many jobs companies are creating. They produce the inflation numbers. So all of that comes from them. And it's — first of all, it's critical for, you know, for all of us to understand what's happening, but also how the government itself makes decisions. It's how the Federal Reserve makes decisions."

"If you start to corrupt those numbers, if you start to report those numbers as being what makes the president look good instead of what's actually happening, then bad things start happening," Krugman continued. "How does someplace like Venezuela get to hyperinflation? ... someplace like Argentina get hyperinflation? And an important part of that is that they start ordering the statistical agencies to, you know, report nothing but puppies and rainbows. And so they go plunging ahead. And by the time they finally start, if they ever do, to admit that maybe, maybe we have a problem here, you're up at 80 percent inflation, right?"

"This is the playbook," he added. "We've seen it many, many times. And now I have to say, faster even than I expected, it's come to America."

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