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Waking Up? Argentina Bailout Bares Trump's Contempt For Rural America

Waking Up? Argentina Bailout Bares Trump's Contempt For Rural America

Is rural America starting to fall out of love with Donald Trump?

Policy wonks like me have spent decades pointing out that if rural Americans voted based on their informed self-interest, they would be supporting Democrats, not Republicans. Republicans are constantly trying to eviscerate Democrat-supported programs that benefited rural states like Medicaid spending, SNAP (the supplementary nutrition program formerly known as food stamps), and school lunches. Trump is also cutting subsidies for green energy programs like solar farms and wind turbines – subsidies that disproportionately went to red states. Iowa gets 63 percent of its electricity from wind!

Moreover, these programs in effect subsidize rural areas with dollars earned in urban areas: because rural areas have lower incomes than urban areas, rural Americans pay relatively little of the taxes that finance these programs. So Democratic “big government” is highly beneficial to the heartland.

Yet economic self-interest has been swamped by “rural consciousness.” This consciousness rests on a belief that highly educated urban elites don’t understand or value rural culture and rural lives. And I will admit that this belief contains a grain of truth. Urban elites are unlikely to fully understand the attachment of rural Americans to a particular place and its time-worn rhythms of life. Ensconced in salaried jobs, urban dwellers are unfamiliar with the constant anxiety of being a farmer or a small business owner in the heartland.

Decades of being battered by the economic changes -- deindustrialization, farm consolidation and corporatization, depopulation, loss of community ties, along with the loss of jobs, particularly “male-coded” jobs – have left rural Americans feeling adrift, marginalized and resentful.

And this created an opening to be exploited by the right wing. Much like how Trump peddled fantasies of a manufacturing resurgence or the return of coal-mining jobs, MAGA leveraged the deep discontent within rural America to inculcate the belief that only Republicans, and Trump in particular, respect rural voters. But this is false: MAGA actually holds its most loyal voters in contempt.

And the reality of this contempt is starting to show through — not, at least so far, via the One Big Beautiful Bill’s savage cuts to health care, which will be especially devastating to rural areas, but via the Trump administration’s bizarre fixation on aiding President Javier Milei of Argentina.

The truth is that rural America is even more dependent than urban America on the programs now on the chopping block. The nonpartisan Economic Innovation Group has mapped out where in America people depend for a large share of their income on government transfers: the counties where a lot of income comes from government programs, indicated in yellow, are overwhelmingly in rural areas, while the places where such aid plays a relatively small role (light blue) mainly correspond to major metropolitan areas:

Why has rural America become increasingly dependent on government aid? The main answer is declining economic opportunity, which has led to an exodus of young people, leaving behind an older population that relies on Social Security and Medicare. Even younger rural residents have low incomes that make them eligible for mean-tested programs, above all Medicaid and food stamps.

There shouldn’t be any shame about the fact that rural America is subsidized by more affluent parts of the nation. That is, after all, what a national social safety net is supposed to do. But it should make rural voters oppose politicians who support Project 2025-type plans to rip up that safety net, which will deeply impoverish already poor regions and degrade life even for those not personally receiving aid — for example, by leading to the closure of many rural hospitals, making health care inaccessible even to those who still have health insurance.

Yet rural voters went overwhelmingly for Trump last year. Why?

Many clearly felt that educated urban elites don’t understand their lives and values — which is true. Most people in New York or Los Angeles don’t have a good sense of what life is like in rural America. But the reverse is also true: Many, perhaps most rural Americans imagine that the surprisingly safe and livable city where I’m writing this is a crime-ridden hellscape, that Chicago and Portland are “war zones,” and so on.

Rural voters may also have imagined that they would be protected from the harsh treatment being meted out to blue cities. After all, our political system gives rural voters disproportionate influence. Wyoming and the two Dakotas combined have roughly the same population as Brooklyn, yet they have six senators while Brooklyn has to share two senators with 16 million other New Yorkers.

For both reasons, rural voters either tuned out or refused to believe warnings that a Trump victory in 2024 would be catastrophic for the heartland, that crucial programs would be eviscerated and the agricultural economy would be devastated by Trump’s trade wars.

I thought that rural voters might finally start to realize that they have been taken for a ride when the cuts began kicking in. This will begin to happen next month, when the 22 million Americans, many of them in rural areas, who receive subsidies to help buy health insurance under the Affordable Care Act will see their premiums soar, on average by more than 100 percent. It will happen even more dramatically late next year (after the midterms), when the big cuts to Medicaid and food stamps kick in.

An aside: When I went to the relevant government page to look up food stamp data, I was confronted by this banner:

This is not how government for the people is supposed to work, and we shouldn’t lose our sense of outrage.

But back to a possible rural awakening: It may be starting ahead of schedule, thanks to, of all things, the Trump administration’s efforts to bail out Argentina’s Javier Milei.

The attempt by Trump and Scott Bessent, the Treasury secretary, to rush $20 billion to Argentina isn’t a big deal compared with the planned savage cuts to crucial programs. But it’s a graphic demonstration of the administration’s hypocrisy. After all the America First rhetoric, all the insistence that spending must be slashed, suddenly we’re sending lots of money to a foreign nation in which we have no real interest except for the fact that its president is a MAGA favorite. I don’t know how many voters are aware that these moves are in large part an attempt to bail out Bessent’s hedge-fund buddies, but I think the sense of something wrong and corrupt is leaking through.

Furthermore, from farmers’ point of view, Argentina is a rival — a big soybean exporter at a time when Trump’s trade war has locked our own farmers out of China’s market.

And as emphasized in a recent conversation between Greg Sargent and a rural Democratic activist, farmers have been shocked and outraged by Trump’s casual suggestion that he might start buying Argentine beef to sell in the U.S. market. That conveys the impression that Trump doesn’t care at all about his most loyal followers — an impression that is completely correct.

We shouldn’t expect rural America to suddenly do a 180 and abandon Trump. Sargent sends us to a lament from one rancher who calls the idea of buying Argentine beef an “absolute betrayal” — but begins by saying to Trump, “We love you and support you.” The sheer extent to which rural Americans have been hoodwinked will make it hard for them to admit their error.

But there are at least hints of a rural awakening. And for the sake of the nation urban and rural Americans share, it can’t come fast enough.

Paul Krugman is a Nobel Prize-winning economist and former professor at MIT and Princeton who now teaches at the City University of New York's Graduate Center. From 2000 to 2024, he wrote a column for The New York Times. Please consider subscribing to his Substack.

Reprinted with permission from Paul Krugman.

How Criminals' Most Favored Currency Became A 'Trump Trade'

How Criminals' Most Favored Currency Became A 'Trump Trade'

By now it’s obvious that Donald Trump suffers from CBS — Cowardly Bully Syndrome.

On Friday, Trump blasted China’s new export controls on rare earths, declaring them a “moral disgrace” which were “obviously a plan devised by them years ago.” And he threatened to impose 100 percent tariffs on China, on top of the already high existing tariffs.

Less than a day later he was groveling:

A screenshot of a social media post AI-generated content may be incorrect.

So it only took a few hours to go from “a plan devised by them years ago” to they “just had a bad moment,” from “moral disgrace” to “highly respected President Xi.” The Chinese must be having a good laugh: They took Trump’s measure and he came out looking very, very small.

But what caused this quick, abject retreat? I’d like to believe that economic experts within the administration took a sober look at the situation and concluded that China would have the upper hand in a trade war. But there are no economic experts in this administration, and anyway, who would dare to tell Trump anything he doesn’t want to hear?

No, Trump was almost certainly reacting to the markets. Stocks fell sharply Friday, but the really striking action came in crypto, where Bitcoin fell 20 percent and smaller, less liquid tokens fell even more. Here, to take an arbitrary example, is what happened to the value of the official Trump coin:

A graph of a stock market AI-generated content may be incorrect.


Also, it just so happens that Trump himself holds an estimated $870 million worth of Bitcoin, so he suffered large personal financial losses from the crypto crash.

This was the largest one-day crash crypto has experienced so far. My question, however, is why the prospect of an intensified trade war caused a crypto crash.

Oddly, I’ve seen almost no reporting about this issue. There has been a lot about the way the crypto crash was magnified by forced sales: Many crypto investors are highly leveraged, and there were many forced liquidations — with widespread speculation that one or more “whales,” that is, major players, may have imploded. But why did a threatened trade war cause crypto to fall in the first place?

The answer, I believe, has little to do with economics and everything to do with politics. These days crypto derives its value largely from the support of politicians and government officials — in particular, officials who can be bribed. As a result, at this point crypto is largely a Trump trade. And crypto fell because the backlash against the potential trade war threatened to weaken Trump politically.

A brief history of crypto: When Bitcoin, the original crypto asset, was introduced, enthusiasts predicted that it would displace conventional fiat money, that is, currency issued by governments. The blockchain, they claimed, would make transactions using cryptocurrency easier and cheaper than transactions using dollars. And cryptocurrencies would be safe from the ravages of the printing press: governments couldn’t debase your money through inflation.

That was more than 15 years ago, and crypto has completely failed to deliver on those promises. Almost nobody uses cryptocurrency as a means of payment. A recent research paper from the Federal Reserve Bank of Kansas City notes that

The share of U.S. consumers who report using cryptocurrency for payments—purchases, money transfers, or both—has been very small and has declined slightly in recent years.

Here’s the chart. The blue line at the top shows the percentage of consumers using crypto for any kind of payment:

A graph of a graph of the rate of payment AI-generated content may be incorrect.


Yet the public holds roughly $4 trillion in crypto assets. Why? Largely as a pure speculative investment. In addition, however, crypto has found real-world use as a convenient tool for criminal activity and money-laundering. In fact, that Kansas City Fed paper noted that the most important reason people gave for paying in crypto was “person or business receiving the money preferred cryptocurrency.” It’s not a stretch to imagine that the reason for that preference was often the desire to hide the payment from the authorities.

As for the vision of a private currency insulated from government, at this point the biggest factor supporting the prices of Bitcoin and other cryptocurrencies has become the belief that Donald Trump — whose family has made billions from crypto sales, and whose party received hundreds of millions in crypto campaign contributions — will promote the industry. No pesky regulations that might limit the financial risks from stablecoins. No serious efforts to limit the use of crypto to facilitate criminal activity.

And Trump has declared his intention to create a “strategic crypto reserve.” True, this reserve will supposedly come out of crypto seized from criminals. But it would still support crypto by keeping those tokens off the market.

The prospect of high-level political support is why the prices of Bitcoin and other tokens surged when Trump won in November. As I said, at this point Bitcoin is basically a Trump trade, since it’s hard to imagine Democrats being remotely as favorable to the industry.

In the past I’ve described the case for Bitcoin as being a combination of technobabble and libertarian derp. My view about the technobabble hasn’t changed. But I will amend the case against crypto by adding that the crypto industry is one of the prime beneficiaries from a new regime of crony capitalism, in which an industry’s success depends on its ability and willingness to bribe the right people.

So why did Trump’s threat of all-out trade war with China cause crypto prices to plunge? Not because the economic damage from such a war would reduce the use of crypto, because crypto basically doesn’t have any legitimate uses. But an intensified trade war, especially a trade war America would almost surely lose, would drive Trump’s public support into an even deeper hole. And this would reduce the ability of history’s most corrupt administration to keep showering favors on the industry that made Trump rich.

Paul Krugman is a Nobel Prize-winning economist and former professor at MIT and Princeton who now teaches at the City University of New York's Graduate Center. From 2000 to 2024, he wrote a column for The New York Times. Please consider subscribing to his Substack.

Reprinted with permission from Paul Krugman.

Ken Griffin Says Soaring Gold Is A Key Signal -- And He May Even Be Right

Ken Griffin Says Soaring Gold Is A Key Signal -- And He May Even Be Right

Here are two sentences I never expected to write:

1. Ken Griffin may be right.

2. The price of gold may be telling us something important.

Ken Griffin, for those who don’t know, is a hedge fund billionaire who was a big supporter of Donald Trump in the last election. That is, he was one of those ultra-rich Trump backers for whom being an insurrectionist-criminal convict-Epstein pal-scammer-serial bankrupt with clear autocratic tendencies didn’t matter. What mattered was “TAX CUTS!”, “DEREGULATION!”. But you often find that kind of self-serving myopia in wealthy and powerful men, who inhabit a gilded bubble that leaves them unable to see what is right in front of their faces.

A few weeks ago, however, Ken Griffin pronounced that he was shocked, shocked to discover that Trump isn’t a champion of free enterprise after all, and that he’s actually building a system of crony capitalism in which business success depends on your political connections. Well, I could have told Griffin that this was coming. In fact, I did.

Still, better late than never. Griffin deserves some credit for being willing to speak publicly about his current misgivings over Trump, rather than joining the nauseating chorus of praise for Dear Leader. So I found it interesting that he sees the soaring price of gold as an economic warning sign, an indication that Trump is causing the world to lose faith in America.

Here’s the price of gold over the past year. The price of gold is currently $4,037 per troy ounce, a record-setting price as it has skyrocketed in the past two months. It has risen over 54 percent since mid-November 2024:

Source: Macrotends Gold Price Last Ten Years

Normally I pay little attention to gold prices, but in this case I think Griffin has a point.

On gold: In general I’m with John Maynard Keynes, who called the fixation on gold a “barbarous relic.” You can’t use gold to make payments (other than the occasional bribe): Try buying a house with ingots. Some people seem to believe that gold will offer a refuge if society descends into chaos, but let’s be real: Do you really think gold bars would help you navigate a Fallout-type post-apocalyptic landscape?

Still, people continue to hold a lot of gold — around $27 trillion dollars’ worth. That’s more than 6 times the value of all crypto, despite the recent runup in Bitcoin etc. So in the words of Fallout’s Lucy MacLean, “okey dokey.”

So what drives gold’s price, and what do movements in that price tell us?

Some people believe that the price of gold reflects expectations of future inflation. There were many assertions to that effect in the early Obama years. Conservatives who insisted that Obama’s policies were inflationary pointed to the rising price of gold for support. Indeed, the real price of gold — the gold price divided by the overall level of consumer prices — rose significantly during Obama’s first few years in office:

Source: Macrotrends Gold Pirce 100 Year Historical Chart

These claims prompted me to write a wonky blog post — basically a short paper, but I hope fairly readable — arguing, in essence, that holding gold isn’t an alternative to holding currency. It is, instead, an alternative to holding bonds, which pay interest. And the driver of rising gold prices after the financial crisis was, I argued, a sharp fall in the real rate of interest — the interest rate minus expected inflation – due to the bursting of the housing bubble and the economy’s deep recession.

We can observe the real rate of interest directly, because the U.S. government issues TIPS, “Treasury inflation protected securities” — bonds whose future payouts are linked to the Consumer Price Index. The interest rate on TIPS basically is the real rate, while the spread between rates on TIPS and ordinary bonds measures market expectations of future inflation. And TIPS rates plunged after the global financial crisis, explaining the rise in gold prices even though inflation was low, not high:

A side issue that has been worrying me: TIPS are linked to the official Consumer Price Index. But the Bureau of Labor Statistics won’t be issuing new reports during the government shutdown, which means that it’s highly likely that the next CPI report, due Oct. 15, won’t come out on time if at all, and it’s anyone’s guess when we’ll get fresh data. How will Treasury handle that?

More broadly, if the Trump administration succeeds in politicizing the BLS, TIPS won’t be protected against inflation. They’ll only be protected against inflation the administration is willing to admit is happening. Have investors thought through the implications?

Back to my main theme. As Griffin says, gold prices have soared recently. Yet as you can see from my second chart, real interest rates are up, not down. What’s driving interest rates? Probably a combination of big budget deficits, made bigger by the One Big Beautiful Bill, and the AI boom, as well as the fear that Trump will politicize the Fed and stoke persistent inflation. But these higher real interest rates should drive gold prices down, not up.

So what’s happening? The most likely story, which seems consistent with what Griffin is saying, is that a growing number of investors — including, in particular, foreign central banks — are moving into gold because they no longer consider U.S. debt a safe asset.

Now it’s hard to pin down exactly what investors fear, perhaps because they aren’t sure themselves. But many previously inconceivable possibilities are now quite conceivable given the Trump administration’s radicalism. Runaway inflation hidden by rigged official statistics? Expropriation of the reserves of governments Trump doesn’t like? Forced conversion of foreign assets into 100-year bonds? Given the administration’s record so far, how confident are you that none of these things could possibly happen?

As I said at the top of this piece, I normally pay don’t pay much attention to gold, which doesn’t play an important role in the modern economy. But I believe that the recent runup in gold prices is telling us something — namely, that the world is losing faith in America.

And perhaps Ken Griffin’s warnings are also telling us that even ultra-rich hedge fund titans are starting to worry about the monster they helped create.

Paul Krugman is a Nobel Prize-winning economist and former professor at MIT and Princeton who now teaches at the City University of New York's Graduate Center. From 2000 to 2024, he wrote a column for The New York Times. Please consider subscribing to his Substack.

Reprinted with permission from Paul Krugman.

What's Behind Trump's Doomed Effort To Revive The Coal Industry?

What's Behind Trump's Doomed Effort To Revive The Coal Industry?

I’ve just gotten back from the Netherlands, which is famous for its picturesque windmills. But wind power in Holland is more than a historical curiosity. There are also modern wind turbines almost everywhere you look, both onshore and off. And the ground is covered with dead birds and whales.

OK, not really. Wind power is, in fact, far cleaner and safer than burning fossil fuels. And I personally like the sight of wind turbines. After all, I value the comforts of modern civilization and find it reassuring to see the power needed to provide those comforts generated without harmful emissions.

But Donald Trump, as everyone knows, hates wind power and loves coal. Both passions are deeply irrational. Yet they are shaping policy.

Trump is doing his best to kill wind power, going so far as to order work halted on a mostly completed wind farm off the coast of Rhode Island. (Orsted, the Danish company behind the project, has sued and gotten the stop-work order lifted.)

And the administration is trying to revive coal, opening federal land for mining, removing pollution limits and providing hundreds of millions of dollars in subsidies. But why?Administration officials would have you believe that coal mining is an economically viable industry that has been sabotaged by liberals. On Monday Chris Wright, the energy secretary, declared — in a weirdly dated culture war cliché — that coal is “out of fashion with the chardonnay set in San Francisco, Boulder, Colorado, and New York City.”

The truth, however, is that coal is a dying industry for very good reasons, and anti-wokeism is unlikely to revive it.

Coal stopped being a significant source of jobs decades ago:

At this point there are only around 40,000 coal miners left. In case you’re wondering, vineyards and wineries employ around 130,000 people, three times as many as the coal industry.

Where did all the coal jobs go? The answers may surprise you.

As you can see in the chart above, there was an epic decline in coal employment between 1950 and the 2000s, from half a million miners to around 80,000. But this employment decline didn’t reflect an economy turning away from coal. In fact, use of coal to generate electricity rose steadily over the whole period, peaking in 2008:

So what happened to all the coal jobs? Basically, workers were displaced first by giant power shovels (strip mining), then by explosives used to blow the tops off mountains, exposing the coal beneath. By using these techniques, in 2008 coal companies were able to produce twice as much coal as they did in 1950, while employing 80 percent fewer workers.

Coal consumption finally did start declining after 2008. But if you look at the chart above, you can see that until recently coal was mainly replaced, not by renewable energy, but by natural gas — which became cheap and abundant thanks to the rise of fracking.

Solar and wind power have finally become important sources of energy in recent years. But the reason they have grown rapidly while coal has declined isn’t that the chardonnay set considers coal unfashionable. It’s the simple fact that coal is no longer cost-competitive, while wind and solar are.

Needless to say, Trump and company aren’t going to acknowledge these facts. They may not even be aware of them. In his speech at the U.N. General Assembly, Trump declared that the Chinese sell a lot of wind turbines to the rest of the world, “but they barely use them.” Ahem:

For the rest of us, however, the important thing to understand is that none of the ostensible justifications for promoting coal make sense. It’s not about saving jobs: Coal mining as a way of life vanished decades ago, not because chardonnay-sipping liberals sneered at it, but because corporations replaced miners with machines and explosives. It’s not about reducing energy prices: Trying to keep coal alive will make energy more expensive, not less.

What it’s really about is culture war. Trying to bring back coal is all about owning the libs. And if it damages the environment, well, from MAGA’s point of view that’s a plus.

Reprinted with permission from Substack.

Kimmel's Triumph: A Sign That The Tide Is Turning Against Autocracy?

Kimmel's Triumph: A Sign That The Tide Is Turning Against Autocracy?

It’s irrefutable now: Trump is nakedly following the playbook of autocrats like Vladimir Putin and Viktor Orban. As his poll numbers fall, he is rushing to lock in permanent power by punishing his opponents and intimidating everyone else into submission. Craven congressional Republicans and a complicit Supreme Court have abetted Trump’s destruction of our democratic safeguards and norms.

Yet Trump has a significant problem that neither Putin nor Orban faced. When Putin and Orban were consolidating their autocratics, they were genuinely popular. They were perceived by the public as effective and competent leaders. Just nine months into his presidency, Trump, by contrast, is deeply unpopular. He is increasingly seen as chaotic and inept. As David Frum says, this means that he is in a race against time. Can he consolidate power before he loses his aura of inevitability? Will those who run major institutions – particularly corporate CEOs – understand that we are at a crucial juncture, and that by accommodating Trump they have more to lose than by standing up to him?

To put it bluntly, is the Jimmy Kimmel affair the harbinger of a failed Trumpian putsch?

Before I address that question, I want to offer some historical comparisons that illustrate how poorly Trump is doing compared with his role models, Putin and Orban. I wrote about this a couple of weeks ago, but I think the point deserves further elaboration.

First, Russia. Putin appears to have been extremely popular in the early 2000s, as he was consolidating power. His net approval — approval minus disapproval — was consistently above 50 percent.

Why was Putin so popular? Kitchen table issues. The Russian economy performed very badly for years after the fall of Communism, culminating in a devastating financial crisis in 1998. But Putin got to preside over a rapid economic recovery: Real GDP per capita doubled between 1998 and 2008:


Viktor Orban has never been as popular as Putin at his peak. Nonetheless, for most of the 2010s, as he consolidated power, his net approval was strongly positive, often by 10 points or more. Again, the main explanation was probably his perceived economic success. Orban took power at a time when Hungary’s economy was deeply depressed by austerity policies, and was able to preside over a large decline in unemployment:

Trump’s net approval, by contrast, turned negative within weeks after taking office and has just continued to fall:

As G. Elliott Morris points out, his position looks even worse when you consider intensity. Almost half the public disapproves “strongly,” twice the share with strong approval.

Some of the public’s disdain for Trump reflects alarm over his assault on democracy, the spectacle of abductions by masked secret police, his attacks on education and public health, his destruction of key agencies like the FBI, and more. Yet, as always, economics plays a key role in Trump’s cratering popularity.

People have not forgotten that Trump made big promises during the campaign: He would end inflation on day one, reduce the price of groceries, and cut electricity prices in half. None of that is remotely happening. Moreover, more economic pain is coming as the full inflationary impact of tariffs and deportations will soon be felt. Not surprisingly, consumer sentiment has plunged. It’s almost as low as it was in the summer of 2022, when Covid-induced supply-chain inflation was at its peak:


It’s clear that if Trump were subject to normal political constraints, obliged to follow the rule of law and accept election results, he would already be a political lame duck. His future influence and those of his minions would be greatly reduced by his unpopularity. But at this juncture he is a quasi-autocrat. He is the leader of a party that accommodates his every whim, backed by a corrupt Supreme Court prepared to validate whatever he does, no matter how clearly it violates the law.

As a result, Trump has been able to use the vast power of the federal government to deliver punishments and rewards in a completely unprecedented way. He has arbitrarily cut off funding to universities, refused to spend Congressionally-mandated funds, threatened to take away broadcast licenses, fired officials who are supposed to have job security, pardoned J6 insurrectionists, defied the lower courts, retaliated against those who have tried to hold him accountable, and enriched his family. This has created a climate of intimidation, with many institutions preemptively capitulating to Trump’s demands as if he already had total power.

But the fact is that Trump has not yet locked in his autocracy. Timid institutions are failing to understand not only how unpopular Trump is, but also how severe a backlash they are likely to face for surrendering without a fight.

They should understand, because some major corporations have already seen the costs of surrendering to Trump. Notably, Target’s decision to appease Trump by ending its commitment to DEI led to a large decline in sales and a falling stock price amid a rising market, and eventually cost the CEO his job. Law firms who have capitulated to Trump have lost clients and partners to law firms that stood up to him. And need we talk about the popularity of Tesla cars and Cybertrucks?

Yet Disney was evidently completely unprepared for the backlash caused by its decision to take Jimmy Kimmel off the air, a backlash so costly that the company reversed course after just five days — too late to avoid probably irreparable damage to its brand. And this time I hope and believe that other institutions will take notice.

It’s important to understand that Trump’s push to destroy democracy depends largely on creating a self-fulfilling prophecy. Behind closed doors, business leaders bemoan the destruction that Trump is wreaking on the economy. But they capitulate to his demands because they expect him to consolidate autocratic power — which, given his unpopularity, he can only do if businesses and other institutions continue to capitulate.

If this smoke-and-mirrors juggernaut starts to falter, the perception of inevitability will collapse and Trump’s autocracy putsch may very well fall apart.

So how can we make a Trump implosion more likely? The public can help by doing what Target’s customers and Disney’s audience did — make it clear that they will stop paying money to institutions that lend aid and comfort to the authoritarian project.

Like a schoolyard bully, Trump understands that effective intimidation relies upon picking off his opponents one-by-one. So institutions (such as law firms) can help by cooperating to resist Trump’s demands rather than simply looking out for their own interests. They should understand that there is no reward for appeasing MAGA with performative displays of cowardice.

And last but not least, Democrats should begin making it loud and clear that if and when MAGA is dethroned, those who broke the law, those who corrupted our democracy out of deference to Trump will be held accountable. For example, corporate mergers that hurt consumers but enriched Trump’s toadies can and will be re-examined by future Democratic administrations.

It’s ironic, but thanks in part to a late-night comedian, it’s becoming clear that America is not yet lost.

Paul Krugman is a Nobel Prize-winning economist and former professor at MIT and Princeton who now teaches at the City University of New York's Graduate Center. From 2000 to 2024, he wrote a column for The New York Times. Please consider subscribing to his Substack.

Reprinted with permission from Paul Krugman.

Treasury Chief Bessent's Sleazy Smear Of Federal Reserve

Treasury Chief Bessent's Sleazy Smear Of Federal Reserve

Donald Trump did learn something during his 1st term. He learned never to hire anyone who shows the least shred of integrity. You won’t find anyone like Gary Cohn or General Milley in Trump’s second administration. Now he knows to only hire people who are corrupt, bigoted, dishonest, or all three.

And Scott Bessent, the Treasury secretary, clearly satisfies Trump II’s requirements. His recent attacks on the Federal Reserve, part of Trump’s campaign to destroy the Fed’s independence, are vile, underhanded and sleazy. In a better world they would lead to his immediate removal as Treasury secretary.

But before I do a full dissection on Bessent, I want to talk for a minute about someone else: E.J. Antoni, the Heritage Foundation economist Trump plans to install as head of the Bureau of Labor Statistics.

You may recall that Trump fired Erika McEntarfer, the highly respected former BLS head, because he didn’t like the July jobs numbers, which he baselessly claimed were rigged. Since then the numbers have only gotten worse. When Trump chose Antoni as her successor, there were widespread and entirely valid complaints that Antoni was manifestly unqualified for the job.

Yet what we didn’t know was that Antoni has an interesting history on social media. Last week, building on reporting by Wired, CNN reported that

President Donald Trump’s nominee to lead the Bureau of Labor Statistics operated a since-deleted Twitter account that featured sexually degrading attacks on Kamala Harris, derogatory remarks about gay people, conspiracy theories, and crude insults aimed at critics of President Donald Trump.

What’s truly remarkable is that despite this report, betting markets give Antoni a roughly even chance of being confirmed.

Bessent, by contrast, was greeted with accolades when Trump announced his nomination as Treasury Secretary. Having been a somewhat successful money manager, and at one point having managed funds for George Soros, he was treated as the “adult in the room” who would be a safe steward of the financial markets and insulate them from Trump’s axe-swinging tactics. It helped that Bessent looked and performed with suave confidence in front of the cameras.

But now the mask has fallen as we can clearly see Bessent for what he is. Bessent’s recent smear campaign against the Fed shows that he is truly vile, like the rest of the Trump crew, despite the Wall Street polish.

Specifically, last week Bessent published an article titled “The Fed’s ‘Gain of Function’ Monetary Policy” in the Wall Street Journal. Here is how it begins:

As we saw during the Covid pandemic, lab-created experiments can wreak havoc when they escape their confines. Once released, they can’t easily be put back. The “extraordinary” monetary-policy tools unleashed after the 2008 financial crisis have similarly transformed the Federal Reserve’s policy regime, with unpredictable consequences.

The vileness is right there in the headline and the first sentence. It’s immaterial whether you believe that Covid was caused by a lab leak or by natural viral infection from animals. The point is that Bessent began his article by pandering to the conspiracy-theory right by taking a contentious proposition popular in those parts, presenting it as if it were established fact, and then — in a complete non sequitur — associating that theory with his criticism of the Federal Reserve.

Yes, the Fed took extraordinary measures after the financial crisis. It was, after all, responding to the worst economic slump since the Great Depression — a slump that persisted even after emergency policies had ended the initial period of financial free fall. In an attempt to boost the economy the Fed engaged in “quantitative easing” — buying large quantities of long-term U.S. government debt and debt backed by the U.S. government. This was a departure from its usual practice, in which it only buys short-term Treasuries. But it was clearly in pursuit of the Fed’s mission, which is to promote both price stability and full employment.

Bessent, however, would have you believe that the Fed’s attempt to do its job was a dangerous experiment inflicted on the country by power-mad officials, and which had dire consequences. And while some critics did predict dire consequences at the time, they were soon proved to be completely and embarrassingly wrong.

Why did the Fed engage in quantitative easing following the financial crisis?

The bursting of the housing bubble and the financial crisis in 2008 sent the U.S. economy into a deep slump followed by a sluggish recovery. Here’s one measure, the employed share of prime-working-age adults. The shaded area shows the official period of recession, but employment remained severely depressed even after the recession was formally over.

When the economy is depressed, the Fed normally cuts the Fed funds rate, the short-term rate that it controls, by buying short-term Treasuries and injecting liquidity into the banking system. And that’s what it did when America went into recession

But during this episode this strategy ran into limits, because there’s a “zero lower bound” on interest rates. That is, there is a limit to how far the Fed can reduce short-term rates because rates can’t go below zero: investors won’t buy Treasuries with negative yields and will instead just hold cash. The recession caused by the financial crisis was so deep that the Fed hit the zero lower bound in late 2008 and stayed there for years. The graph above shows that, from 2009 to 2016, the Fed funds rate was stuck at virtually zero.

Unfortunately, zero wasn’t low enough to restore anything close to full employment. So what were policymakers supposed to do, as the economy languished?

One answer would have been fiscal stimulus. But due to a combination of timidity and Republican opposition (along with cries about the size of the federal deficit!) the 2009 Obama stimulus was grossly inadequate — which I warned about at the time. Passage by Congress of another round of stimulus was clearly impossible. Given this reality, I guess the Fed could have thrown up its hands and simply accepted the prospect of years of mass unemployment.

Instead, however, it tried to do its job by expanding its toolbox, buying assets whose interest rates weren’t zero. Critics, overwhelmingly from the political right, harshly criticized the Fed. A widely circulated open letter to Ben Bernanke, the Fed chair, warned that asset purchases “risk currency debasement and inflation.” Among those signing the letter was Kevin Hassett, now Trump’s chief economist and possibly the next Fed chair.

But the inflation never came. Here’s the Fed’s preferred measure of underlying inflation since 2010

Inflation ran consistently below the Fed’s target rate of 2 percent until the post-Covid inflation spike, almost a dozen years after quantitative easing began.

So how does Bessent deal with the fact that the critics of quantitative easing were proved completely, decisively wrong? By pretending that the evils they wrongly predicted actually came to pass. Younger and less affluent households, he writes, were “hit hardest by inflation.” What inflation? Inflation didn’t spike until 2021-2022, and that was caused by Covid-induced supply bottlenecks. Bessent is clearly trying to rewrite history to smear the Fed.

There’s much, much more -- some of it positively Orwellian – in Bessent’s WSJ article. For example, Bessent claims that Fed policy “creates the perception that monetary policy is being used to accommodate fiscal needs,” which is pretty rich given that Bessent’s own boss has specifically demanded that the Fed cut rates to reduce the budget deficit.

Last but not least, Bessent claims that the Fed has jeopardized its credibility. Actually, as I’ve noted, the remarkable stability of long-run inflation expectations in the face of post-Covid turmoil shows that the Fed retains enormous credibility with the public.

Finally, this hit piece by Bessent shows why he is so valuable to Trump. In my opinion, unlike virtually all other Trump cabinet members, Bessent isn’t a fool. He’s highly intelligent and well-versed in his area of operation. He understands financial markets. Hence the fact that he willingly smears the Fed by invoking conspiracy-laden tropes and re-writing facts is a window into his character, showing that he isn’t, and never was, worthy of Americans’ trust.

Maybe we should be thankful that he is no longer in the running for Fed Chair.

Paul Krugman is a Nobel Prize-winning economist and former professor at MIT and Princeton who now teaches at the City University of New York's Graduate Center. From 2000 to 2024, he wrote a column for The New York Times. Please consider subscribing to his Substack.

Reprinted with permission from Substack.

Reprinted with permission from Paul Krugman

We Are All Lisa Cook: Trump's Weaponized Government Endangers Everyone

We Are All Lisa Cook: Trump's Weaponized Government Endangers Everyone

Donald Trump is threatening to fire Lisa Cook, a member of the Federal Reserve’s Board of Governors, over allegations that she made false claims on mortgage applications before she went to the Fed.

I am not going to lead with a discussion of what Cook may or may not have done. That would be playing Trump’s game. Clearly, he’s just looking for a pretext to fire someone who isn’t a loyalist — and who happens, surprise, to be a black woman. If you write about politics and imagine that Trump cares about mortgage fraud — or for that matter believe anything Trump officials say about the affair without independent confirmation — you should find a different profession. Maybe you should go into agricultural field work, to help offset the labor shortages created by Trump’s deportations.

The real story here isn’t about Cook, or mortgages. It’s about the way the Trump administration is weaponizing government against political opponents, critics, or anyone it finds inconvenient.

You should think about the attack on Cook in the same context as mortgage fraud accusations made against California Senator Adam Schiff and New York Attorney General Letitia James. Or you should look at the attacks on Jerome Powell, the Federal Reserve chair, over the cost of renovations at the Fed’s headquarters. Or the still mysterious raid on the house of John Bolton, who at one time was Trump’s national security adviser.

The message here clearly isn’t “Don’t commit fraud,” which would be laughable coming from Donald Trump, of all people. Nor, despite what some commentators have said, is it all about revenge — although Trump is, indeed, a remarkably vindictive person. But mainly it’s about intimidation: “If you get in our way we will ruin your life.”

As with individuals, so with institutions. Universities are being threatened with loss of research grants unless they take orders from the White House. Law firms are being threatened with loss of access unless they do pro-bono work on behalf of the administration. Corporations are being threatened with punitive tariffs unless they support administration policies — and, in the case of Intel, hand over part ownership of the company.

This newsletter usually focuses on economics, and I could go on at length about the ways rule by intimidation will hurt the economy. There’s a whole economics literature devoted to the costs when an economy is dominated by “rent-seeking” — when business success depends on political connections rather than producing things people want. I’ve been writing a series of primers on stagflation. One of the way things could go very badly wrong would be politicization of the Federal Reserve, with monetary policy dictated by Trump’s whims, and it would be even worse if Fed policy is driven by officials’ fear of what will happen if they don’t follow Trump’s orders.

It's also important to realize that the Fed does more than set interest rates. It’s also an important regulator of the financial system, a job that will be deeply compromised if Fed governors can be bullied by personal threats.

But there’s much more at stake here than the economy. What we’re witnessing is the authoritarian playbook in action. Tyrannies don’t always get their way by establishing a secret police force that arrests people at will — although we’re getting that too. Much of their power comes not from overt violence but from their ability to threaten people’s careers and livelihoods, up to and including trumped-up accusations of criminal behavior.

Which brings me, finally, to the accusations against Lisa Cook. According to Bill Pulte, the ultra-MAGA director of the Federal Housing Finance Agency, Cook applied for mortgages on two properties, claiming both as her primary residence. This isn’t allowed, because banks offer more favorable mortgage terms on your primary residence than on investment properties.

Borrowers do sometimes commit deliberate fraud, claiming multiple properties as their primary residence when they always intended to rent them out. For example, Ken Paxton, Texas’s Attorney General, claimed three houses as his primary residence, renting out two of them, and has also rented out at least two properties that he listed as vacation homes. Somehow, however, Pulte hasn’t highlighted his case, let alone threatened him with a 30-year prison sentence.

The truth is that even when clear mortgage fraud has taken place, it almost always leads to an out-of-court settlement, with fees paid to the lender, rather than a criminal case. In 2024, only 38 people in America were sentenced for mortgage fraud. No, I’m not missing some zeroes.

So did Cook say something false on her mortgage applications? Pulte says so, but I’d wait for verification. Also, false statements on mortgage applications are only a crime if they’re made knowingly, which is a high bar. And nothing at all about this story is relevant to Cook’s role at the Federal Reserve. If the administration thinks it has enough evidence to bring charges, it should bring charges, not demand that she quit her job.

The important thing to understand is that we are all Lisa Cook. You may imagine that your legal and financial history is so blameless that there’s no way MAGA can come after you. If you believe that, you’re living in a fantasy world. Criticize them or get in their way, and you will become a target.

Paul Krugman is a Nobel Prize-winning economist and former professor at MIT and Princeton who now teaches at the City University of New York's Graduate Center. From 2000 to 2024, he wrote a column for The New York Times. Please consider subscribing to his Substack.

Reprinted with permission from Substack.

AI Is Power-Hungry

The Limits Of AI: That Expensive And Power-Hungry Tech 'Miracle'

This is a post about AI, whose proponents are downright messianic in describing it as the technology of the future. Maybe. But much of their advocacy seems to ignore some mundane limits to AI’s growth — limits I’ll try to illustrate by talking about a technology of the past.

I was probably 9 or 10 when my father took me to a Horn & Hardart automat. For those too young to remember — who I hope are a large fraction of my readers — these were establishments in which a variety of sandwiches and other foods were displayed behind glass doors. You would serve yourself by putting coins into a slot, which would unlock the door and let you extract your egg salad sandwich or whatever.

At the time (and at my age) it seemed wonderfully futuristic: Food service without people! In reality, of course, automats weren’t automated; each required a substantial staff to operate the kitchen and keep refilling those glass-doored compartments. And because automats weren’t all they pretended to be, they were eventually driven out of business by the rise of fast food.

Many applications of information technology are, like the automats of yore, less miraculous than they seem. True, the user experience makes you feel as if you’ve transcended the material world. You click a button on Amazon’s web site and a day or two later the item you wanted magically appears on your porch. But behind that hands-free experience lie a million-strong workforce and a huge physical footprint of distribution centers and delivery vehicles.

And the disconnect between the trans-material feel of the consumer experience and the physical realities that deliver that experience is especially severe for the hot technology of the moment, AI. We’re constantly arguing about whether AI is a bubble, whether it can really live up to the hype. We don’t talk enough about AI’s massive use of physical resources, especially but not only electricity.

And we certainly don’t talk enough about (a) how U.S. electricity pricing effectively subsidizes AI and (b) the extent to which limitations on generating capacity may nonetheless severely limit the technology’s growth.

How much generating capacity are we talking about? The Department of Energy estimates that data centers already consumed 4.4 percent of U.S. electricity in 2023, and expects that to grow to as much as 12 percent by 2028:

AI isn’t the only source of rising electricity demand from data centers. There are other drivers including, alas, crypto — which still has no legitimate use case, but now has powerful political backing. But Goldman Sachs believes that AI will account for a large fraction of rising data center demand:

With Sam Altman of OpenAI promising to spend “trillions” on data centers in the near future — and sneering at economists who, he imagines, are wringing their hands — I wouldn’t be surprised to see demand come in at the high end of the Department of Energy’s projections. True, the AI bubble might burst before that happens, with potentially ugly consequences for the wider economy. But that’s a subject for another post.

So suppose that AI really does consume vast quantities of electricity over the next few years. Where are all those kilowatt-hours supposed to come from?

America is, of course, adding generating capacity as you read this, and can accelerate that expansion if it chooses to. But there are two big obstacles to any attempt to keep up with the demand from AI.

The first is that in recent years growth in U.S. generating capacity has become increasingly dependent on growth in renewable energy. According to S&P Global, almost 90 percent of the generating capacity added in the first 8 months of 2024 came from solar and wind:

Why is this a problem? Because Donald Trump and his minions have a deep, irrational hatred for renewable energy. Not only have they eliminated many of the green energy subsidies introduced by the Biden administration, they have been actively trying to block solar and wind projects.

So even as Trump promises to make America dominant in AI, he’s undermining a different cutting-edge technology — renewable energy — that is crucial to AI’s growth.

Suppose that electric utilities manage somehow to get around Trump’s anti-technology roadblocks and build the extra generating capacity. Who will pay for all that spending? The answer, given the way we regulate these utilities — and as natural monopolies, they must be regulated — is that the cost of adding capacity to power data centers is passed on to ordinary customers who have nothing to do with AI. This is already happening: Over the past 6 months retail electricity prices have risen at a 9 percent annual rate, four times as fast as overall consumer prices.

Last week the watchdog for PJM Interconnection LLC, the nation’s largest grid, declared that this must stop, that it “recommends that large data centers be required to bring their own generation.”

Indeed, requiring that the AI industry take responsibility for the costs it imposes makes a lot of sense. It would by no means end progress in AI. As the website Tech Policy notes, there are many AI applications in which smaller, more focused models can perform almost as well as the bloated, all-in-one models currently dominating the field, while consuming far less energy. Until now there has been no incentive to take energy consumption into account, but there’s every reason to believe that we could achieve huge efficiency gains at very low cost.

But will we do the sensible thing? It’s obvious that any attempt to make AI more energy-efficient would lead to howls from tech bros who believe that they embody humanity’s future — and these bros have bought themselves a lot of political power.

So I don’t know how this will play out. I do know that your future electricity bills depend on the answer.

Reprinted with permission from Substack.

Every Accusation Is A Confession: Trump's Paranoid Style Of Economics

Every Accusation Is A Confession: Trump's Paranoid Style Of Economics

In economist-speak, last Friday’s jobs report brought the “hard data” into line with the “soft data.” Before Friday, anecdotal evidence and independent surveys generally pointed to an economy facing major headwinds as a result of erratic policy, but official employment numbers still said that growth was solid.

On Friday, however, the Bureau of Labor Statistics reported weak job growth in July and, more important, revised down its estimates for May and June. The official numbers now show a slowing economy — not a recession, at least yet, but a marked slowdown. Here’s the three-month moving average of job growth:

Most economists found this report entirely credible. The BLS has a sterling reputation for careful, objective analysis, and as I said, Friday’s report brought the official estimates into line with other evidence. What about those revisions? As Jared Berstein explained in a Substack post yesterday, revisions are normal. Without getting too deep into the weeds, the BLS wants to be timely, so it issues preliminary reports based on incomplete data, then routinely revises them as more data come in. Revisions tend to be especially large around turning points; what we saw Friday is exactly what we’d expect if the economy is in fact experiencing a significant slowdown, which would show up more strongly in revised data than in the initial reports.

But Donald Trump screamed “conspiracy” and fired the head of the BLS, because of course he did:

I don’t want to spend much time debunking Trump’s claim that there was a conspiracy to make the job numbers look bad. Suffice it to say that rigging the job numbers would be a complicated process, requiring the cooperation of many people, and we’d almost surely have whistleblowers telling us that it was happening. In fact, we will know that it’s happening when, as seems highly likely, Trump’s people politicize the BLS.

And as I said, independent indicators also point to a job slowdown. For example, Automatic Data Processing, which does many companies’ payrolls, produces independent estimates of private employment. People I know who follow these things closely consider ADP’s numbers noisy and less reliable than BLS, but if BLS were rigging the numbers to hide the glories of the Trump economy, we’d expect to see that hidden Trump boom in the ADP estimates. We don’t:

So Trump’s claim that disappointing economic numbers are fake news disseminated by radical leftists is ugly nonsense. But it was also predictable. Claiming that economic data you don’t like is fraud perpetrated by a deep state conspiracy has been standard practice on the right for a long time, going back to the “inflation truthers” of the Obama years.

Here's the story: U.S. unemployment soared in the aftermath of the 2008 financial crisis. To mitigate the slump, the Obama administration enacted a fiscal stimulus program, while the Federal Reserve engaged in “quantitative easing” — roughly speaking, printing a lot of money.

Many on the right went wild, insisting that these moves would lead to runaway inflation, even hyperinflation. More or less Keynesian economists like me, however, dismissed these warnings. Our models said that in a depressed economy with high unemployment expansionary fiscal and monetary policy would not be inflationary — in fact, I warned that the Obama stimulus was much too small.

The Keynesians were right. Here, for example, is a comparison of the “monetary base” — bank reserves plus currency in circulation — with consumer prices in the aftermath of the financial crisis:

The big inflation Obama critics predicted just didn’t happen.

But rather than admit that they had been wrong and rethink their economic models, many on the right insisted that runaway inflation actually was happening, but that government statisticians were hiding the ugly truth. For a while many right-wingers were eagerly citing quack analysts — sort of the economics equivalent of anti-vaxxers or climate deniers — to support outlandish claims about inflation. And I’m talking about influential voices, not obscure fringe figures. For example, in 2010 the historian Niall Ferguson, whom many still consider an important public intellectual, insisted that the official numbers were wrong and “double-digit inflation is back.” As far as I know, he has never owned up to his mistake.

By the way, this isn’t a case of “everybody does it.” When inflation temporarily surged under Joe Biden, I’m not aware of any Democratic-leaning economist, inside or outside the administration, who denied the reality of the inflation numbers, let alone attributed them to a political conspiracy. The paranoid style in American economics is very much a right-wing thing.

And because on today’s right every accusation is a confession, I predicted even before Trump took office that his administration would do what he falsely accused Democrats of doing, and begin manipulating economic data.

However, even I didn’t expect Trump to react to the very first bad jobs number of his administration by summarily firing the commissioner of the Bureau of Labor Statistics. Nor did I expect Trump officials to be so blatant about their intention of politicizing the statistical agency.

But that’s what they’re doing. It took just hours for Trump’s chief economist to endorse his conspiracy theories and declare the administration’s intention to replace BLS staff with political loyalists. On CNBC Kevin Hassett, director of the National Economic Council, said that

All over the U.S. government, there have been people who have been resisting Trump everywhere they can

and declared that

To make sure that the data are as transparent and as reliable as possible, we’re going to get highly qualified people in there that have a fresh start and a fresh set of eyes on the problem

I assume that I’m not the only economist already looking for alternative data sources that we can use to figure out what’s happening behind the façade of the Potemkin economy Trump will surely try to create.

The thing is, Trump’s refusal to accept bad economic news and his likely attempt to corrupt official data probably won’t fool many people. But he is, of course, surrounded by people who will tell him what he wants to hear, so he may succeed in fooling himself. And this means that when the economy starts to have serious problems, Trump won’t even admit that bad things are happening, let alone make a serious effort to fix those problems.

Paul Krugman is a Nobel Prize-winning economist and former professor at MIT and Princeton who now teaches at the City University of New York's Graduate Center. From 2000 to 2024, he wrote a column for The New York Times. Please consider subscibing to his Substack, from which this post is reprinted with permission.


Fake Deal: How The European Union Made A (Fossil) Fool Of Trump

Fake Deal: How The European Union Made A (Fossil) Fool Of Trump

Like many U.S. institutions, the European Union has abysmally failed the Trump test. The EU is an economic superpower and could have retaliated effectively against Trump’s illegal tariffs — illegal under both U.S. and international law. Instead, Europe did nothing and even made some apparent concessions.

But notice my wording: apparent concessions. The optics of the Trump-EU deal were humiliating, and optics matter. If you examine the substance, however, it starts to look as if Europe played Trump for a fool. Specifically, a fossil fool.

The EU made two sort-of pledges to Trump. First, that it would invest $600 billion in the United States. Second, that it would buy $750 billion worth of U.S. energy, mainly oil and gas, over the next three years. The first promise was empty, while the second was nonsense.

About those investments: European governments aren’t like China, which can tell companies where to put their money. And the European Commission, which made the trade deal, isn’t even a government — it can negotiate tariffs but otherwise has little power. On Sunday Politico spoke with Commission officials, who effectively confirmed that the investment pledge was meaningless:

[S]peaking Monday, two senior European Commission officials clarified that money would come exclusively from private European companies, with public investment contributing nothing.
“It is not something that the EU as a public authority can guarantee. It is something which is based on the intentions of the private companies,” said one of the senior Commission officials. The Commission has not said it will introduce any incentives to ensure the private sector meets that $600 billion target, nor given a precise timeframe for the investment.

So what the EU actually promised on investment was nothing, Nichts, rien.

The pledge to increase U.S. energy exports was a lot more specific and gave a timeframe. But it’s not going to happen. In fact, it’s going to not happen on three levels.

First, the European Commission, which can’t tell the private sector where to invest, is equally unable to tell the private sector where to buy oil and gas. How would that even work?

Second, the promised level of EU imports is probably physically impossible. Shipping liquefied natural gas (LNG), in particular, requires specialized infrastructure at both ends. On the US side, LNG terminals are already operating at capacity, while Europe’s LNG facilities are “stretched to their limits.” The EU just promised to vastly increase energy imports from America over the next three years, but it’s doubtful whether Europe could build any of the infrastructure needed before the end of that period, even with a crash investment program.

And why would anyone undertake such an investment program in a continent that is rapidly shifting toward renewable energy? As one energy analyst told the Financial Times:

European gas demand is soft and energy prices are falling. In any case, it is private companies not states that contract for energy imports. Like it or not, in Europe the windmills are winning.

Emphasis added because as everyone knows, Trump has a blind, irrational hatred for wind power.

Finally, even if Europe somehow managed to overcome the legal and physical obstacles to buying a lot more fossil fuels from America, both oil and LNG are fungible commodities traded on global markets. This means that any increase in purchases from Europe would reroute U.S. exports rather than increasing them: We’d sell more to Europe but less to, say, Japan and China.

So a big increase in U.S. energy exports driven by demand from Europe is not going to happen. But how will Europe explain its failure to follow through?

It might not have to. Back during Trump’s first term, China promised to buy a lot of U.S. agricultural goods but never did. As far as I know, Trump never made an issue of it. He got to announce a big deal, then lost interest.

And if the issue does come up, if there’s one thing officials at the European Commission are really good at — maybe better than anyone else on earth — it’s bureaucratic delay and obfuscation. Maybe at some point big, strong European men with tears in their eyes will meet with Trump and say, “Sir, we have a temporary hangup over clause #14159 of the 1986 Single European Act. But we’ll get it cleared up any day now.”

Bottom line: Whatever Trump may think, Europe is not going to provide a big boost to U.S. fossil fuel production. He won’t like that, if anyone tells him. But the rest of us should be glad. As I’ve written before, renewables are clearly the energy technology of the future. Trump and his allies are Luddites, trying to stand in the way of progress and keep us burning fossil fuels. Their “burn, baby, burn” obsession is very bad for America and the world. But at least we can be reasonably sure that Europe won’t help, um, fuel that obsession.

Paul Krugman is a Nobel Prize-winning economist and former professor at MIT and Princeton who now teaches at the City University of New York's Graduate Center. From 2000 to 2024, he wrote a column for The New York Times.

Reprinted with permission from Substack.

Real Men Burn Stuff! Trump's Stupid War On Renewable Energy

Real Men Burn Stuff! Trump's Stupid War On Renewable Energy

“We wanted flying cars, instead we got 140 characters.” That famous 2011 quip from the venture capitalist Peter Thiel still resonates, even though Thiel himself has become a deeply malignant force in American politics. I’ll write soon about the madness of the Trumpist tech bros, but for today let me focus on Thiel’s original insight — that everyone, venture capitalists included, had come to focus far too much on digital technology, neglecting the possibilities of breakthroughs in technologies that deal with the physical world.

Yet here’s the irony: In the years since Thiel’s lament we have, in fact, seen revolutionary progress in one fundamental physical-world technology, energy production. Yet the people Thiel and his buddies helped put in power are doing all they can to reverse that progress and send America back into the energy Dark Ages.

Most critiques of the One Big Beautiful Bill have focused on the way it explodes the budget deficit while imposing immense hardship on lower-income Americans. Yet energy policy is also an important component of the OBBB, which basically tries to roll back the rise of solar and wind power — sources that have accounted for more than half the worldwide increase in electricity generation since 2015.

To understand how self-destructive that effort is, you need to know three things about the economics of renewable energy.

First, there are powerful environmental reasons to favor renewables over fossil fuels where possible. Reducing greenhouse gas emissions is the most important, because climate change is an existential threat. But even aside from climate concerns, the air pollution created by burning fossil fuels takes a major toll on health and productivity, which solar and wind don’t.

Second, a transition to renewables, which might have seemed like pie-in-the-sky, hippy-dippy stuff a generation ago, is now not just feasible but the only sensible energy strategy. Here’s a chart showing estimates of the levelized cost of electricity generation (LCOE), adjusted for inflation, for a variety of renewable energy technologies, compared with the costs of power from fossil fuels. I’m aware that LCOE is an imperfect measure, but the results are still astonishing:

We’re talking in particular about a 90 percent decline in the real cost of power from solar panels and a 70 percent decline in the cost of wind power. This isn’t just progress, it’s a revolution.

And — my third point — the revolution isn’t over. Some technological leaps involve one big idea, which takes time to implement but is basically a once-and-done deal — which seems to be the case, to take an example I’ve studied, for freight containerization. Progress in renewable energy, however, has involved a continual process of “learning by doing,” in which efficiency keeps rising and costs falling as the industry expands. This is exactly the kind of situation in which government subsidies — like the clean-energy tax credits instituted by the Biden administration — can accelerate progress and boost overall economic growth.

But the OBBB killed those tax credits. And the Trump administration has been taking executive action to stall renewable development, for example, by halting federal approvals for wind farms. In general, MAGA clearly wants to move us back to burning gas, oil and above all coal. Why?

Campaign contributions no doubt play a role. Fossil fuel industries donate almost exclusively to Republicans. But renewables are also big business these days, and especially in red states. Texas, in particular, is by far the nation’s largest producer of wind power and gets a larger share of its electricity from renewables than any other state. Why would the G.O.P. want to demolish a key pillar of economic success in its biggest source of electoral votes?

Honestly, I think this is a case where the usual logic of money-driven policy is trumped (Trumped?) by irrational, psychological — you might even say psychosexual — issues.

We know that Trump himself has a weird thing against wind power, insisting that wind turbines massacre birds and kill whales. This appears to stem from the refusal of the Scottish government to cancel an offshore wind farm he thought ruined the view from one of his golf courses.

But it’s not just Trump. There is, it turns out, a strong link between the manosphere — the online movement promoting “masculinity,” misogyny and opposition to feminism — and anti-environmentalism. For example, in 2023 Jordan Peterson convened a high-profile conference to declare that concerns about climate change are a “conspiracy run by narcissistic poseurs.”

If you think about it, this makes sense — not intellectually but emotionally. Don’t concern about the environment and advocacy of “clean energy” sound kind of, well, feminine? Real men burn stuff and don’t worry if the process is dirty.

And manosphere-type attitudes are clearly widespread in MAGA. One of the main arguments Trump officials and supporters have made for tariffs is that they will bring back “manly” jobs in manufacturing. (They won’t, but that’s another story.) The same notion underlies the doomed attempt to revive the coal industry.

But here’s the thing: MAGA and the manosphere may hate clean energy, but they won’t be able to stop the rise of renewables. All they can do, possibly, is stop the rise of renewables in the United States. Other nations, China in particular, are making huge investments in wind and solar power, because they understand what Trump and his allies refuse to acknowledge — that this is the only way forward.

So while MAGA’s attempt to strangle clean energy will increase the risks of global climate catastrophe, it will also increase the risks of U.S. economic stagnation, forcing our nation to remain wedded to obsolete energy technologies while other countries march into the future.

Paul Krugman is a Nobel Prize-winning economist and former professor at MIT and Princeton who now teaches at the City University of New York's Graduate Center. From 2000 to 2024, he wrote a column for The New York Times.

Reprinted with permission from Substack.

Republicans Beware! Medicaid Is Not A Soft Target

Republicans Beware! Medicaid Is Not A Soft Target

Does anyone remember the 1995 government shutdown and why it happened? Basically Newt Gingrich, fresh off a big Republican victory in the midterm election, was trying to force Bill Clinton to make big cuts in Medicare. He failed, in large part because Medicare was and is an immensely popular program.

A decade later, George W. Bush tried to privatize Social Security. But he, too, failed, because Social Security is also immensely popular.

But the Republican quest to rip up as much of the social safety net as possible never ends. And for the past 15 years or so that has meant steering clear, for now, of Medicare and Social Security, which are middle-class programs, and going after Medicaid instead. If the One Big Beautiful Bill Act — which is, incredibly, the legislation’s actual name — goes into effect, Medicaid will be cut by around a trillion dollars over the next decade. (As of this morning, the fate of that bill remains uncertain.)

What is Medicaid? Like Medicare, it’s government-provided health insurance. But unlike Medicare, it’s “means-tested”: your income has to fall below a certain level before you’re eligible. This makes Medicaid a program for the poor or near-poor — and that, for many on the right, suggests a political opportunity.

Ostensibly, the right attacks Medicaid because it costs too much. I mean, it’s a government program, which means that it must be riddled with waste, fraud, and abuse, right? And surely there must be millions of lazy people getting health care through Medicaid who should be getting up off their couches and going to work.

The reality is that none of this is true.

No doubt there’s waste and fraud in Medicaid, as there is in any system created and run by human beings. But overall Medicaid provides essential health care relatively cheaply. Once you adjust for the generally poor health of the average Medicaid recipient — chronic illness can make you poor! — Medicaid appears to have significantly lower costs than private insurance:

Actually, in some ways Medicaid resembles the health care systems of other advanced countries, which are much cheaper than U.S. health care (while achieving equally good results) largely because they’re more cost-conscious, willing to bargain hard with drug companies, say no to expensive procedures of dubious medical benefit, and so on.

Meanwhile, the vast majority of Medicaid recipients either are working or can’t work — they’re disabled or need to stay home to care for others:

Oh, and one thing we know from repeated experience is that adding work requirements to Medicaid does not, in fact, lead to more people working.

I don’t know how many of the right-wingers clamoring for drastic Medicaid cuts believe the stories they tell about waste and lazy Americans who won’t get a job. My guess, though, is that they don’t care whether these stories are true. They’re going after Medicaid because they see it as a soft target — a program that helps lower-income Americans, and who cares about them? Medicaid’s beneficiaries, they imagine, are the new welfare queens driving Cadillacs.

But a funny thing has happened to public opinion about Medicaid. The share of Americans covered by the program has increased a lot over the past 15 years:

And the fact that so many Americans now receive Medicaid means that many people have either benefited from the program or know people who have. And as a result the program has become remarkably popular:

83 percent favorability — 74 percent among Republicans! — is incredibly high. In fact, Medicaid appears to have slightly higher favorability than apple pie.

What this suggests is that Republicans who consider Medicaid a soft target, a program that only benefits inner-city rats, are going to be shocked by the blowback if they do manage to eviscerate this key piece of American health care.

Paul Krugman is a Nobel Prize-winning economist and former professor at MIT and Princeton who now teaches at the City University of New York's Graduate Center. From 2000 to 2024, he wrote a column for The New York Times.

Reprinted with permission from Substack.

Trump Policies Poised To Devastate His Voters In Rural America

Trump Policies Poised To Devastate His Voters In Rural America

Everyone is talking, understandably, about Iran. But the rest of Donald Trump’s policy agenda continues to goose-step on. Radical changes in social spending, immigration policy, and tariffs — changes that will hurt tens of millions of Americans — are either about to start or are already happening.

And one point I haven’t seen emphasized much is that while the human damage from these policies will be very widespread, it will be especially severe in rural areas and small towns — the very areas that overwhelmingly supported Trump in 2024.

The first thing you need to understand is that while rural Americans like to think of themselves as self-reliant, the fact is that poorer, more rural states are in effect heavily subsidized by richer states like Massachusetts and New Jersey.

This reality makes it inevitable that the standard conservative fiscal agenda — tax cuts for the rich, benefit cuts for the poor and middle class — hurts the heartland more than it hurts major metropolitan areas. But MAGA’s Reverse Robin Hoodism goes far beyond the standard conservative agenda, in ways that will be especially devastating to rural areas and small towns.

First, consider the shape of the One Big Beautiful Bill Act. (I think it’s important to call it by its ludicrous official name, as a reminder of the extent to which Republican members of Congress have become North Korea-style sycophants.) The final details haven’t been settled, and there’s still an outside chance that the whole thing falls apart. But it’s almost certain that there will be savage cuts to Medicaid and food stamps, programs that disproportionately help Trump-supporting rural areas.

Let’s talk about Medicaid first, a program that is far more important than most affluent Americans tend to realize. Almost 40 percent of children are covered by Medicaid, with some of the highest percentages in deep red states like Alabama and Mississippi. Medicaid pays for 42 percent of births in America. And more to my point, Medicaid covers a higher fraction of the population in rural than in urban counties. So deep cuts in the program will hit Trump-supporting regions especially hard.

The same is true for OBBB’s deep cuts to food stamps.

The damage will be magnified by Republican plans to cut Medicaid spending by adding work requirements. We know from repeated experience that such requirements don’t actually lead to significant increases in employment. What they do instead is block access to health care by creating bureaucratic hurdles for beneficiaries — hurdles that rural Americans, often burdened by limited formal education and inadequate internet access, find especially hard to overcome.

Furthermore, rural America has long had a problem of hospital closures: It’s hard for hospitals to stay in business given both low population density and limited ability of patients to pay. The Beautiful Bill will accelerate this trend, so that even rural residents who can afford care may very well find it geographically out of reach.

In addition, federal health spending, both Medicaid and Medicare, is disproportionately important in supporting rural and left-behind local economies. For example, the economy of West Virginia no longer rests on coal mining, which employs very few people these days. It would be more accurate to say that the foundation of West Virginia’s economy is federal spending on Medicare and Medicaid. That is, in deep red West Virginia, Medicare and Medicaid are directly and indirectly a major source of income.

Then there are Trump’s immigration policies. American agriculture relies heavily on hired workers — and around two thirds of these hired workers are immigrants. A majority of these foreign-born workers are undocumented:

Moreover, even if you a legal resident or even a native-born citizen, do you really feel safe if ICE thinks you look like an illegal immigrant? Not surprisingly, there are reports of widespread ICE raids on farms and of workers refusing to work out of fear of arrest and deportation.

Can immigrant workers be replaced with native-born workers, or even with legal immigrants? No. All indications are that few native-born Americans would be willing to do these jobs unless they were paid much higher wages. Under the Biden administration the U.S. introduced a program offering grants to farmers who bring in foreign workers legally — but the Trump administration has frozen funding for that program, including money that had already been promised, leaving farmers on the hook for many thousands of dollars.

So Trump’s anti-immigrant policies are inflicting will be a major blow to U.S. agriculture — to family farms that employ immigrant workers and are being left high and dry, to food processing and local retail. Like Medicaid, immigrant farm labor directly and indirectly supports many rural jobs for the native-born.

Finally, there’s the trade war. In case you haven’t noticed, Trump hasn’t yet delivered a single one of the 90 trade deals he promised to negotiate by July 8. China has already retaliated, and others will follow. And U.S. agriculture is highly dependent on exports:

Nor can you argue that farmers will make up for lost exports by producing goods we currently import, since we mainly import the farm products we can’t produce here. That’s a point that seems to be lost on Trump’s Commerce Secretary. Recently Howard Lutnick clashed with Rep. Madeline Dean over the impact of tariffs on prices of food items including bananas. “If you build in America … there will be no tariff,” Lutnick argued. “We cannot build bananas in America,” she replied, somehow managing to avoid saying “Duh.”

While many are now realizing that Trump’s policies will produce social and economic disaster, relatively few understand that the disaster will fall disproportionately on rural Trump voters. But of course it will. For the purveyor of Trump bibles and Trump meme coins, screwing the little guy has always been his personal style of grift. It remains to be seen if rural Trump supporters will awaken from their naivete.

Paul Krugman is a Nobel Prize-winning economist and former professor at MIT and Princeton who now teaches at the City University of New York's Graduate Center. From 2000 to 2024, he wrote a column for The New York Times. Please consider subscribing to his daily Substack.

Reprinted with permission from Substack.

Mass Deportation

Lies, Damned Lies, And Mass Deportations

Donald Trump returned to power apparently convinced that America is being overrun with violent immigrant criminals. So all he had to do was order ICE to start rounding up these evildoers and kick them out.

However, tracking down undocumented immigrants who are also criminals has turned out to be a slow affair, because the great majority of immigrants — like the great majority of people in general — are law-abiding. In fact, the available evidence suggests that undocumented aliens are less likely to commit crimes than native born Americans. Things move a little faster if ICE ignores due process and just sends people it imagines might be criminals to overseas prisons. But this means sending people who may well be innocent — and legal residents — to horrifying gulags. And while such things don’t bother Trump or his top aide Stephen Miller, they do in fact bother many Americans.

Yet Miller, by all accounts, has been deeply frustrated at the slow pace of deportations. So the administration began just rounding up people who look to them like illegal immigrants. Again, the abandonment of due process and rule of law clearly didn’t bother them.

But the loss of an important part of the labor force bothered business interests. And so last week Trump suddenly announced that he wouldn’t be going after immigrant workers in agriculture and the hospitality industry, who are “very good, long time workers.”

What this meant, I guess, was that the dragnets will be limited to industries that employ large numbers of undocumented immigrants, but in which these immigrants are not a crucial part of the work force.

So I wondered how long it would take Trump to realize that there are no such industries. I mean, wait until he learned about who does the hard, dangerous work in the construction industry.

Sure enough, it only took a couple of days for the administration to reverse its policy of exempting farms and restaurants from immigrant raids. Anti-immigrant hardliners realized, even if Trump didn’t, that going easy on immigrants who are crucial to the economy would in effect mean abandoning the whole idea of mass deportation.

As often, it’s useful if disturbing to read what Trump says, unfiltered by media sanewashing.

Notice that Trump is still going on about “our crime ridden and deadly Inner Cities,” oblivious to the reality that homicides in major cities have plunged — in New York, where immigrants make up 37 percent of the population, murders were 83 percent lower in 2024 than in 1990, and have continued to fall rapidly this year. Note also that Trump has gone full Replacement Theory, claiming that Democrats are deliberately bringing in illegal aliens to “expand their voter base” (undocumented immigrants can’t vote.)

But in the context of Trump’s temporary move on farm and hospitality workers, the line that struck me was the one about how immigrants were “robbing good paying Jobs and Benefits from Hardworking American Citizens.” Which “good paying Jobs and Benefits” did he have in mind? Agricultural field work? Scrubbing toilets? Installing drywall?

Incidentally, not only do undocumented immigrants often do the most physically demanding and unsafe work, they are often deliberately misclassified as independent contractors, which means that they “do not have access to health insurance, medical leave, workers’ compensation insurance coverage, and safe workplace protections.”

The point is that in general undocumented immigrants don’t take good jobs away from native-born Americans. By and large they take jobs the native-born don’t want or would only take at much higher wages. This means that immigrants are complements, not substitutes, for native workers. They increase, not reduce, native-born wages. And mass deportation, if it really gets going, will be an economic as well as a human catastrophe.

Which doesn’t mean that it won’t happen. TACO doesn’t necessarily mean that Trump chickens out from bad policies. Sometimes it means chickening out from good, or in any case less bad, policies. In this case he has chickened out in the face of MAGA hardliners, retreating from a policy change that would have limited the damage from anti-immigrant fanaticism.

Reprinted with permission from Substack.

2017 inaugural address

Now We Know What Trump's 'American Carnage' Rant Was About

Does anyone remember “American carnage”? In his 2017 inaugural address Donald Trump portrayed a collapsing society, emphasizing in particular the “crime and gangs and drugs” destroying America’s cities.

It was a peculiar and disturbing speech, in part because it bore no relationship to reality. Then as now, America had many problems. But runaway urban crime wasn’t one of them. In fact, Trump chose to proclaim urban carnage after a remarkable generation-long run of plunging crime in our major cities. New York, for example, had only 335 murders in 2016, down from 2,262 in 1990.

So what was that about?

At the time, I thought it was mostly about sadism. Trump clearly loves punishing people, so he was eager to portray a nation full of people who needed punishing. And it remains true, as Adam Serwer pointed out back in 2018, that for Trump and many of his supporters cruelty is a goal in itself, that they rejoice in the suffering of those they hate and fear.

But the events unfolding in Los Angeles as you read this and, I fear, the events likely to unfold across much of America soon, quite possibly this weekend, suggest that the motivations of Trump and his cronies go deeper than mere (mere!) sadism. They want to use false claims of chaos to justify a power grab that, if successful, would mark the end of the American experiment.

As I assume everyone knows by now, on Friday heavily armed — and masked — ICE agents began raiding workplaces in and around Los Angeles, seeking to arrest people they claimed were illegal immigrants. Crowds quickly gathered to protest. After all, ICE wasn’t rounding up members of violent gangs. It was scooping up ordinary people doing ordinary jobs, many of whom had friends and relatives in the neighborhood.

The protests were relatively peaceful, although there were some scuffles, objects thrown and vandalism. Los Angeles has experienced real riots in the past. This didn’t even come close. But ICE and some other law enforcement personnel responded with heavy application of force — not lethal weapons, at least not yet, but lots of tear gas, rubber bullets, and so on.

Until ICE moved in Los Angeles was, in fact, remarkably peaceful. Like other major American cities, LA experienced a significant but not huge crime wave in the aftermath of Covid but has since seen that wave more than completely recede:

Los Angeles right now is probably as safe as it has ever been.

But if you read Trump, which you should to get past the sanewashing, the City of Angels sounds like a scene from Fallout:

And Noem has called LA a “city of criminals.”

As a New Yorker, I’m accustomed to seeing my quite livable city portrayed as a hellscape. Still, there are 13 million people living in Greater Los Angeles who can testify that it has not, in fact, been invaded and occupied, let alone taken over by insurrectionist mobs.

Oh, and let’s not forget that an actual insurrectionist mob tried to overturn the 2020 election — and Trump has pardoned its members.

But no matter. Trump wanted an excuse to mobilize the National Guard, even though the governor of California not only didn’t request it, but has sued Trump to demand that he rescind the order.

When did a president last federalize the Guard against a governor’s wishes? Sixty years ago, when Lyndon Johnson mobilized the Alabama National Guard against the wishes of George Wallace, so that the Guard could protect civil rights marchers.

I’m still seeing some news analyses portraying what’s happening as a confrontation over immigration. And there are definitely people in the administration, led by Stephen Miller, who simply hate immigrants — legal or not, it doesn’t much matter. White South Africans seem to be the only exception.

But this looks bigger even than a play by an administration that has been finding, to its horror, that mass deportation is a lot harder than it sounds — especially if you make any effort at all to follow due process.

What it looks like is an attempt to create confrontations that can be used to impose something that, for practical purposes, amounts to martial law.

And if that’s what it’s really about, what’s happening in Los Angeles is just the beginning.

Most immediately, what is going to happen this Saturday? The government is going to hold a costly military parade in Washington, even though we aren’t celebrating any recent victories I’m aware of. This is the kind of thing one expects to see in Red Square, not the capital of a democracy. And guess what: the parade will also fall on Donald Trump’s birthday.

Many pro-democracy groups have teamed up to organize protests against the parade. There will be “No Kings Day” demonstrations all across the country. I don’t know whether there will be any violent incidents. But I’m quite sure that Trump and his allies will claim that violent incidents are happening and seek excuses to use force against the protestors.

So it’s important to understand what is happening here. Trump isn’t reacting to any real threat of disorder in California. And while anti-immigrant bigotry is certainly an important factor, it’s not the whole story.

No, this is all about finding excuses to use force against Trump’s critics and opponents and justify an anti-democratic power grab.

Paul Krugman is a Nobel Prize-winning economist and former professor at MIT and Princeton who now teaches at the City University of New York's Graduate Center. From 2000 to 2024, he wrote a column for The New York Times. Please consider subscribing to his daily Substack.

Reprinted with permission from Substack.

Elon Musk

Musk Is Right, But He Too Is 'A Disgusting Abomination'

On Tuesday, after Elon Musk blasted out the screed below, a friend texted me: “I guess the worm has turned. Oh, wait, I guess that’s RFK.” Indeed. We don’t know exactly what set off this tweet and the series of whines that followed, but it may have been the ketamine talking.

Anyway, Musk happens to be right: The One Big Beautiful Bill Act — its actual name! — is indeed a disgusting abomination. But this is one of those cases where it takes one to know one. Few men have done as much damage out of sheer arrogance, ignorance and pettiness as Elon Musk. He has thousands, maybe hundreds of thousands, of deaths on his hands.

And even his parting blast is destructive, demonstrating that he has learned nothing from his abject failure as a policymaker. The OBBBA is terrible, but not at all for the reasons Musk claims.

There have been a number of articles about Musk’s departure that portray him as a “Mr. Smith goes to Washington” type, a well-intentioned naif thwarted by special interests. Gag me with a Cybertruck.

What actually happened was that a zillionaire who knew nothing about government marched in claiming that he could cut $2 trillion from the $6 trillion federal budget by eliminating waste, fraud, and abuse. This was obvious nonsense, but Musk has never showed any signs of being willing either to admit his mistakes or learn from them. The wild claims just kept coming, like his insistence that millions of dead people were getting Social Security.

Claims about budget savings by DOGE — the Musk-run not-actually-a-government department that has been running wild since Donald Trump took office — have rapidly shrunk over time. Still, DOGE has continued to put out “walls of receipts” purporting to document some of its achievements. Again and again, investigators going through these reports have found them full of ludicrous errors — the same canceled contract listed three times, an $8 million saving reported as $8 billion, and more.

Seriously, would any of Musk’s tech-bro friends have invested in a venture run by someone with such a record of making extravagant but completely unfilled promises, then following up with false claims of success?

Meanwhile, the Muskenjugend, the extremely young and utterly unqualified acolytes DOGE parachuted into government agencies, disrupted the federal government’s operations. In some cases they summarily fired crucial workers without making any effort to understand their jobs, while encouraging many others to take early retirement. Those workers who remained have found themselves devoting a lot of time and effort to justifying their existence rather than doing their jobs. And although it’s hard to quantify, the DOGE presumption that government workers are worthless unless proven otherwise must have done large damage to morale and efficiency. In the end, DOGE has almost surely increased the budget deficit.

The one area where DOGE really has managed to make big cuts is foreign aid, a very small part of the budget but one it has virtually shut down. The savings have been tiny, but the human impacts immense — as I said, thousands have died as a result of Musk’s actions, and many more will die in the future.

Aside from the special hostility Musk and co. seem to have toward helping the world’s poor, the big driver behind Musk’s whole role in Washington seems to have been the belief that the federal government is a bloated bureaucracy that wastes vast amounts of money. Yet Musk kept not being able to find all that waste. This is despite the fact that he had months to dig up the wasted billions, along with unprecedented, almost surely illegal, access to government data.

A better man might have said to himself, “Hmm. Maybe I was wrong. Maybe the federal government is actually a pretty well-functioning organization, with many workers trying to do their jobs well.”

But Musk isn’t that kind of man. In denouncing the One Big Beautiful Bill Act, he calls it a “pork-filled Congressional spending bill.” Hey, Elon, where’s the beef pork? You’ve spent months trying to find it, with basically zero success. And the reason this bill will explode the deficit is that savage cuts to Medicaid and food stamps aren’t enough to offset huge tax cuts for the rich.

Um, what cost savings? And what personal risks are we talking about?

In the end, Musk’s legacy will be a damaged federal government that has lost many of its best people and will have a hard time replacing them. Oh, and a lot of dead children.

In a just world Elon Musk wouldn’t be heading back to run Tesla. He would, instead, be retreating to a remote monastery somewhere, to spend the rest of his life in poverty and penance.

Reprinted with permission from Substack.