'Banana republic type stuff': Nobel economist Paul Krugman blows up at Trump on CNN

A prominent economist bashed President Donald Trump's attempts to fire a Federal Reserve governor on Tuesday.

Paul Krugman, who won the Nobel Prize in 2008 for his work on trade theory, discussed Trump's efforts to fire Lisa Cook from the Federal Reserve with CNN's Jake Tapper on "The Lead." Krugman said Trump has presented "no evidence" that Cook did anything that would warrant her being removed from her job for cause, as he's claimed, and that the move itself is "completely insane."

Cook was appointed by former President Joe Biden and confirmed in a 50-50 Senate vote in 2022. She is the only Black woman to serve as a Federal Reserve governor in the body's history.

"It's banana republic type stuff," Krugman said.

Krugman added that the Federal Reserve system was built with checks and balances to prevent presidents like Trump from raising and lowering interest rates at will. Countries that allow their leaders to manipulate interest rates, such as Turkey, have seen their inflation rates skyrocket, he said.

"This is really awful," Krugman said. "It would be bad enough if he were simply pressuring the Fed or even managing to find some cause to fire somebody, but this is actually saying, 'If you, Federal Reserve official, get in my way or don't follow my orders, I will ruin your life.'"

"This is intimidation, personal intimidation," Krugman continued. "It's right out of the authoritarian playbook. There's a reason that we want the Federal Reserve to be insulated."

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