All posts tagged "paul krugman"

Nobel winner sounds alarm over Hegseth's 'loyalty tests': 'Should terrify every American'

Pete Hegseth's new directives for US military personnel are undermining the standard set by previous administrations, a Nobel Prize winner has argued.

Hegseth has implemented a contentious grooming standards directive that authorizes military members to receive government-funded laser hair removal treatments while restricting eyelash extensions and certain nail polishes, justified "in support of Army readiness."

Hegseth announced a ban on military personnel attending graduate programs at nearly two dozen elite universities including Harvard, MIT, Princeton, Yale, and Georgetown, which he characterized as bastions of "wokeness" and "wicked ideologies" in February.

More recently, Hegseth ruled that military personnel would be allowed the right to refuse a flu vaccine, a decision which has been criticized by Nobel Prize winner Paul Krugman.

Krugman believes these recent directives have undermined the US military standards and that they instead provide a service to President Donald Trump and, by extension, Hegseth.

Krugman wrote in his Substack, "This isn’t simply about vaccines and facial hair. These directives are part of a larger project, another step in Hegseth’s drive to cultify the US military. What do I mean by cultifying the military? I mean creating an environment in which professional integrity, military discipline, and historical precedent are destroyed in service to the personality cult of Donald Trump and his enforcer, Pete Hegseth.

"Think of these directives as loyalty tests. Hegseth can indulge his faux concerns about liberty while aligning himself with the science-hating right. If you are an officer concerned about the welfare of your troops and voice your concerns, you are out. Mention that the directive against beards is nonsensical and disproportionately harms black male soldiers with a common skin condition, then you are a woke weakling and are sent packing.

"If you are a general in possession of critical skills and hard-won experience, but served during the Biden administration, you will be unceremoniously fired.

"Simply put, the method in Hegseth’s apparent madness is to destroy the integrity of the professional military corps through destructive and despotic behavior that drives out those – like Admiral Holsey – who hold to their principles.

"And this should terrify every American. A powerful military always poses a potential threat to democracy. To keep that threat in check, the military must be presided over by an officer corps that understands that its duty is not to any one person, but to the Constitution and the rule of law. The U.S. military has been largely insulated from political influence since the nation’s founding. But Hegseth is trying to subvert that."

Trump 'incapable' of accepting US has lost the war with Iran: Nobel laureate

President Donald Trump has lost the war with Iran but is refusing to accept it, according to a Nobel Prize winner.

Paul Krugman believes that Trump is flat out unable to deal with the fallout of the war in Iran, and that it has not yet set in that the United States' intervention in the Middle East has failed. Writing in his Substack earlier Saturday, Krugman claimed, "It’s been clear for a while that the United States has basically lost this war.

"The goal was to achieve regime change, possibly to take Iran’s uranium. Neither of those is going to happen. The Iranian regime is a harder line than it was before. Iran has ended up strengthened because it’s demonstrated its ability to shut off traffic through the Strait of Hormuz.

"Well, as best I can tell, and this is all speculation now, I don’t think that Trump has taken on board, maybe he’s emotionally incapable of taking on board the reality that he screwed up, that he took us to war and lost, that he, in his mind, still thinks that America has the upper hand and that the Iranians are cowering in fear over the might of the U.S. military, and that he doesn’t need to make any concessions."

The Strait of Hormuz had briefly been opened by Iran but was again closed over a US blockade. A new closure of the Strait of Hormuz was confirmed by Iranian military operational command, Khatam Al Anbiya, with a statement accusing the US of "maritime piracy and theft".

The statement reads, "For this reason, control of the Strait of Hormuz has reverted to its previous state, and this strategic waterway is under the strict management and control of the armed forces."

"Until the US restores the complete freedom of navigation for vessels from an Iranian origin to a destination, and from a destination back to Iran, the situation in the Strait of Hormuz will remain strictly controlled and in its previous state."

President Trump previously imposed a naval blockade of the Strait of Hormuz as part of his escalating Iran war strategy, declaring he would "immediately eliminate" Iranian Navy vessels attempting to breach it.

Trump sabotaged America and handed its enemy a massive gift: Nobel-winning economist

Nobel laureate and economist Paul Krugman described on Tuesday how President Donald Trump's move to pursue the Iran war at the expense of Americans who now face rising oil prices has made China the real winner.

Krugman wrote in his Substack that Trump's decision could put potential oil and gas shortages on the horizon that ultimately benefit Chinese electrotech.

"Donald Trump wants to stop the renewable energy revolution. But he can’t — it will continue to advance around the world because the economics and the science are compelling," Krugman wrote. "Trump can, however, ensure that the revolution passes us by. And the big geopolitical winner from Trump’s hostility to the energy revolution will be China, which dominates the production of renewable-energy infrastructure."

Instead of pushing the U.S. closer to embracing renewable energy, Trump has done the opposite.

"Furthermore, the China-led energy future will arrive ahead of schedule thanks to the debacle in Iran," Krugman explained.

China has made major investments in renewables, and its notable "green industrial complex" outpaces the U.S. and the Trump administration's climate denialists who don't seem to see how much things have changed — even with March marking the hottest month on record. As the Strait of Hormuz remains closed, it leaves the U.S. particularly vulnerable to falling behind, with the "perception that relying on U.S. oil and LNG, which is what countries will have to do if they don’t turn to solar and wind, isn’t safe."

"So Trump’s adventurism in Iran has sparked a global rush to invest in solar power, wind power, and the batteries that make renewable energy work 24/7," Krugman added. "And where will the world procure most of the renewable energy equipment it seeks? From China. China is the workshop of the world. Its manufacturing sector is larger than those of the U.S., Japan, Germany and South Korea combined."

As the world shifts from fossil fuel use amid rapid climate change, the U.S. could fall further behind.

"Yet it’s sad to watch this country sabotage itself and cede the most important industry of the future to China," Krugman wrote. "In doing so, we make ourselves poorer, technologically backward, and less influential in a world that is speeding towards the energy revolution. In the end, we aren’t just burning fossil fuels; we’re also burning our future."

Nobel winner says Trump just made 'America's weakness' clear with one foolish move

Donald Trump's recent comments on Truth Social and during a speech addressing the war with Iran have made the United States look foolish, a Nobel Prize winner claimed.

Paul Krugman believes the president has made America look like a laughing stock in recent weeks. But the long-term damage of doing so makes Trump's administration an unreliable ally to world leaders who would previously be reassured by the US as an ally. Not anymore, according to the veteran economist, who says the recent statements made by Trump have undermined America's world standing.

Writing in his Substack, Krugman suggested Trump's rhetoric has not only severed close ties with friendly nations but emboldened other, more aggressive countries to take action.

"Think about Gulf states that relied on America to protect them and preserve their access to world markets," he wrote. "Now they know that we can’t and won’t, while Iran holds a knife at their throats."

"They’re now looking to themselves for security — and starting to buy equipment and technology from Ukraine, which has learned the hard way how to fight a modern war.

"Think about Asian and European nations that have swallowed Trump’s many insults, and mostly avoided retaliating against his tariffs, because they feared both U.S. power and the loss of U.S. support. Now America’s weakness and unreliability have been laid bare."

Krugman went on to suggest previous statements made by Trump, and Secretary of Defense Pete Hegseth, had worsened the war. Trump's comments on the importance of oil have only made it harder for his administration, the veteran economist suggested.

"In Trump’s mind, control over fossil fuels is the essence of national greatness," Krugman wrote. "In his inaugural address, Trump declared that 'We will drill, baby, drill … We will be a rich nation again, and it is that liquid gold under our feet that will help to do it.'"

"But this was obvious nonsense. For one thing, the narrative that woke environmentalists had hobbled U.S. fossil fuel production was at odds with the reality that fracking had in fact caused a boom in oil and gas production that began under Obama and continued under Republican and Democratic administrations alike."

"Trump has been doing all he can to block development of wind and solar power, in the apparent belief that this will empower America. But what it actually does is empower regimes that are in a position to disrupt world oil supply, while having little to lose from chaos in the world economy. Which means, above all, Iran."

Nobel-winning expert drops major warning about metric that 'has come to a screeching halt'

The economy could be set for a harsh reality check because of one issue highlighted by a Nobel Prize winner.

Paul Krugman suggests that while the unemployment figures under Donald Trump's administration remained relatively typical, the anti-immigration policies of his team will cause a rupture further down the line. The economist, writing in his Substack, suggested the policy of barring immigration to open up jobs for native-born Americans had failed.

He wrote, "One way to think about what is happening is that we’ve stopped gaining jobs, but we’ve also stopped adding workers, so unemployment hasn’t risen a lot. But one can also turn this around and say that as a result of anti-immigrant policies we’ve stopped adding workers, but we have also stopped gaining jobs."

"This is bad news for anyone who believed the predictions of immigration opponents. They claimed that cracking down on immigration would open up more jobs for native-born Americans, but this hasn’t happened. In fact, the unemployment rate for native-born workers has gone up under Trump, although not drastically."

"There’s also another way in which the plunge in breakeven employment growth is bad news: It makes America’s already problematic fiscal outlook considerably worse, because future tax receipts depend on future economic growth — and economic growth will be much slower with zero growth in the labor force than it would have been with growing labor supply."

Krugman went on to suggest the aims of the administration were strained further by a poor economy, which Trump's team has turned a blind eye to.

"One point in particular that’s relevant given where we are politically: Donald Trump, Pete Hegseth and others envision a world of perpetual U.S. military dominance," he wrote. "But how can we maintain that dominance if, as the plunge in breakeven job growth suggests, we’ve entered an era of basically zero growth in our workforce?

"So when it comes to jobs, the bad news is that job growth has come to a screeching halt. The good news is that this hasn’t caused surging unemployment."

"But the bad news within the good news is that the disconnect between job growth and unemployment reflects a collapse in the inflow of immigrants, which is really bad for economic growth and America’s position in the world."

Nobel winner says Trump's new 'motive' admission will make war crimes trial 'no problem'

Economist and Nobel laureate Paul Krugman warned that President Donald Trump's serious threat that "a whole civilization will die tonight" in his latest escalation of the Iran war would lead to lasting damage for the United States.

In his Substack on Tuesday, Krugman suggested "the civilization we destroy may be our own" and that Trump had made a major admission with his comments. He called it America's "darkest hour" yet.

"Not going to be a problem if we ever do get the war crimes trial that all of this deserves. A statement of motive, intent is completely clear," Krugman wrote, describing how Trump's words could be used to prosecute him in the future if he does what he has threatened to do.

He also argued that Trump administration officials and military service members should be ready to make a decision.

"First of all, any military commander given orders to start destroying civilian infrastructure in Iran should disobey that order, should say it, should not even quietly resign," Krugman wrote. "This is a time to stand up and make it clear that this is totally unacceptable. This is a violation of everything that the military stands for. It’s a violation of everything that America stands for."

"Second, any member of the Trump administration: to continue in your position doing your job as Trump takes America on the course of becoming a criminal nation, a criminal terrorist nation, you cannot continue in good conscience," he added.

Krugman suggested that Trump's ultimatum has left only questions.

"Damned if I know what’s going to happen," Krugman wrote. "I mean, at some level, I think that the civilization that may be destroyed tonight is our own. I mean, are we civilized if we do this kind of thing? If America as a nation doesn’t stand up against this, what are we?"

"So, God help us. Normal life will continue. It’s going to be a really weird thing to be out there, you know, grocery shopping and taking the subway and all of those things. But this is, in a way, the defining moment. The fate of the whole American idea is on the line. I have no idea how this ends."

Nobel winner warns Trump planning 'truly awful' act — and demands his immediate removal

A Nobel Prize-winner has called for the 25th Amendment to be invoked against Donald Trump following a series of failures.

Paul Krugman suggested Trump knows the war in Iran is now a lost cause, but that the president would not pull out of the conflict. Speaking in a post published to his Substack, Krugman suggested the only way out may be to invoke the 25th Amendment. That would force Trump from office and pass presidential powers and duties to Vice President JD Vance.

Krugman said, "This is really bad. It’s hard to see what happens in 48 hours. It’s clear that Trump, for all his pretense of, 'I’m always winning,' is aware of how completely he screwed things up, that he’s aware that he has basically led America into an epic strategic defeat.

"I don’t think he cares about that from the point of view of America, but he is realizing what this has done to him — that he will probably quite rapidly lose his grip on U.S. politics, and certainly to the extent that he cares about his legacy, it’s not going to be his wonderful ballroom.

"It’s going to be that he’s the man who single-handedly led America to one of its greatest defeats ever. But now what? It would be one thing if he just kind of slunk away into the night, which is what we would have hoped would happen, but instead it sounds like he’s unable to accept it and that he is going to try and do something truly awful in an attempt to somehow redeem himself and the situation.

"If we had a functioning democracy, this would be 25th Amendment time. This guy should not have any authority at all. Finger on the button, although I don’t think we’re talking about nukes, but he shouldn’t have any authority on matters of state violence when this is the kind of mood he’s in.

"Just in general, although religiosity is often expected of American leaders, saying glory be to God before you unleash violence, that is not what used to be the American way."

Krugman went on to warn against Trump's current tone and his lackluster speeches. "On Wednesday, Trump gave a speech, which was... pretty depressing. He was low energy, listless, and seemed to be disconnected from reality, insisting that everything is going great in this war and everything is going great across the board.

"Anyway, I’m scared. I wonder very much what the next few days will bring because this is looking like basically a president who is losing it and unfortunately losing it in a way that can really make the world a much worse place very fast."

'Whiff of 2008': Nobel laureate pinpoints overlooked economic problem brewing

An economic issue which has so far gone unnoticed could be the makings of a 2008-level crisis, a Nobel Prize winner has warned.

Paul Krugman believes that, while there is no immediate danger of an economic collapse, there is an issue present that has not yet been addressed by Donald Trump's administration. In his latest Substack, where he noted a "whiff of 2008 in the air," the economist highlighted private credit loans as a future problem for the United States.

He wrote, "What happens with private credit is that investors entrust their money to managers who promise to lend it out in smart ways — typically loans to private businesses, that is, businesses that aren’t listed on the stock market.

"Such lending is effectively hidden from public view. Unlike banks, private credit companies don’t have to disclose their loans. Unlike listed companies, privately owned firms don’t have to disclose their finances. And unlike bonds, private loans don’t have to be disclosed to the Securities and Exchange Commission.

"In effect, private loans are treated as interactions between consenting adults. The rest of us have no legal right, and, presumably, no need to know what took place.

"Indeed, there are no official numbers on the size of private credit, although industry sources put it at something like $1.5 trillion. What’s clear is that it has grown explosively in recent years."

The trouble with private credit companies, Krugman says, is where said companies get their money from. Though the collapse of private credit alone would not be enough to cause a crash, compounded with other economic issues, it could be enough to trigger a crash, the veteran economist suggested.

"...private credit companies have in fact borrowed large sums from banks, mostly in the form of revolving credit lines," he wrote. "This means that banks might suffer losses if private credit companies fail.

"But these loans are generally senior to credit companies’ other obligations, so bank losses will be minor unless private credit suffers very badly.

"For those who remember 2008, arguments like the one I just made — that private credit may be troubled, but it’s not big enough to cause an overall financial crisis — sound a bit like famous last words. After all, similar arguments were made in 2007 about why we shouldn’t worry about the effects of the subprime crisis.

"While it’s important to get a handle on what is happening with private credit, it will only be truly destructive if problems with private credit are part of a broader story involving complacency and over-extension across financial markets. The question is, how big is the overall story of overreach? Or to put it another way, how many cockroaches are there?"

Nobel Prize winner pinpoints 'radically disappointing' moment that'll mark Trump's legacy

Donald Trump has tainted his own second term in the Oval Office with one move this year, a Nobel Prize winner has warned.

Paul Krugman believes the longer-term effects of the war with Iran will not just undermine the president's decision-making in future, but that his attitude toward NATO members and allied nations has destroyed what little legacy the president could cling to. Speaking in a video uploaded to his Substack, the award-winning economist noted the problem with the Iran war is not just the war itself, but the ongoing economic impact and erosion of relations with the United States' allies.

"So this is going to be really bad," Krugman said. "But anyway, it was radically disappointing even to people who are, you know, the markets and a lot of people in the world were actually hoping that the United States would give up.

"I mean, it’ll be terrible. We really don’t want a medievalist theocracy empowered. But since this is heading nowhere except for, again, massive war crimes, better to end it. But we’re not getting that.

"We have Trump lecturing the world and saying, why are you cowards? Why don’t you come in and help us in this ill-conceived, disastrous war that we started without checking with you?

"But the reality is that the world is looking and saying, my God, what is wrong with America? They may still have a lot of bombs — although not as many as we started with — but it’s not a country anybody can trust for anything. And that, even more than the price of oil, is going to be the legacy of this war."

Krugman went on to suggest that Trump had made the situation with Iran worse than before the strikes were approved.

He wrote, "One of the moments that really struck me in the speech was him declaring that the whole world was extremely impressed by what happened. He said, 'The whole world is watching and they can't believe the power, strength, and brilliance. They just can't believe what they're seeing. The world can't believe what it's seeing.'

"What it’s seeing is that the world’s greatest military power took on a fourth-rate power. Again, as I said the other day, Iran’s military budget is a rounding error in our military budget. And we lost. For all practical purposes, we’ve left ourselves in a much weaker position and Iran in a stronger position than it was before."

Nobel Prize-winning economist pinpoints major flaw in Trump's 'nervous' Iran war ploy

Donald Trump's plan for the war with Iran could cause even further trouble for taxpayers across the country, according to a Nobel Prize winner.

Paul Krugman has warned that the president's current task in Iran is to reopen the Strait of Hormuz. Crude oil prices reached a staggering $100 a barrel earlier this week, and the veteran economist does not see the price improving any time soon. Even though the United States' own oil exporters profited from the Strait of Hormuz closure, Krugman claims there is no way this will help the average citizen.

Writing in his Substack, he explained, "Now, America produces a lot of oil, and the domestic oil industry will be earning large windfall profits even as U.S. consumers suffer. But so what?

"We don’t have any mechanism in place to capture and redistribute those windfall gains, so ordinary U.S. families will bear the full brunt of the global oil shock even though America is a net oil exporter."

"The Fed could, in principle, try to look through the effects of the Strait crisis on business costs as well as direct effects on consumer prices. But given how nervous everyone is about the risk of 70s-type stagflation, it probably won’t."

Krugman went on to suggest the reaction of the Federal Reserve could be a cause for concern. "There’s an additional, technical but important reason to be even more worried about soaring prices for diesel, jet fuel and industrial materials than about gasoline prices," he wrote. "It involves how the Federal Reserve is likely to react.

"The Fed normally bases its decisions about whether to reduce or increase interest rates on 'core' inflation — inflation excluding food and energy prices. The reason it does this is that food and energy prices are highly volatile and are usually a poor indicator of what inflation will be over the next few years."

"So the Fed tries to 'look through' inflation fluctuations driven mainly by the prices of groceries and gasoline. For example, it didn’t raise rates in 2011, when there was a temporary uptick in inflation driven entirely by oil prices."