'Absurd' idea lies behind Trump's 'bellicose word salad': Paul Krugman

Nobel Prize-winning economist and New York Times columnist Paul Krugman on Tuesday decided to dissect some of former President Donald Trump's statements about international currency policy and concluded that the former president was pushing an "absurd" idea.

Writing in the Times, Krugman chastised members of the media for unnecessarily cleaning up Trump's words in their summaries of his remarks, and he instead delivered a full transcript for readers to see for themselves.

"Our cities are a mess, and they are very dangerous places," Trump said in the excerpt provided by Krugman. "We’re going to make them safe, clean and beautiful again, and we will keep the dollar as the world’s reserve currency, and it is currently under major siege. Many countries are leaving the dollar. You’re not going to leave the dollar with me. I’ll say, 'You leave the dollar, you’re not doing business with the United States, because we’re going to put 100 percent tariff on your goods, sir. We would like very much to get back to the dollar immediately. Thank you very much.' It’s so easy."

Krugman acknowledged that he "included the stuff about making cities 'safe' because it was part of a run-on sentence that somehow segued into the role of the dollar," thus demonstrating Trump's total inability to maintain a train of thought.

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He then dug into why Trump's ideas about countries abandoning the American dollar made no sense.

"I doubt that he really understands what he’s saying about the dollar as a reserve currency, but he’s probably conflating government holdings of U.S. debt with the dollar’s much wider international role," he speculated. "In that case, however, what is he proposing? Would he, say, punish Indonesia if some of its businesses invoiced their trade with China in renminbi rather than dollars? Would he punish Colombia if some of its drug lords started hoarding more 100-euro notes than $100 bills?"

Krugman then told readers that "if these suggestions sound absurd, that’s because they are."

"Trump’s bellicose word salad is hard to actually parse, but broadly speaking, any notion that America could use the threat of tariffs to force countries to keep using the dollar — which, again, mainly reflects private decisions — involves more than a bit of megalomania," Krugman added. "Our nation has a lot of economic power but not that much."

Read the whole column here.