We are no longer a serious country
paulkrugman.substack.com
paulkrugman.substack.com
- How Venezuela went from the richest country in South America to a disaster area.[1]
- Decline of Argentina.[2]
- Decline of Portugal.[3] Portugal used to be a world power. Yes, Portugal.
- Decline of Roman Empire.[4]
This is a real worry. The US is on that path.
[1] https://www.history.com/articles/venezuela-chavez-maduro-cri...
[2] https://worldhistoryjournal.com/2025/04/02/history-argentina...
[3] https://cepr.org/voxeu/columns/cross-gold-brazilian-treasure...
[4] https://en.wikipedia.org/wiki/Fall_of_the_Western_Roman_Empi...
If Trump takes over the Fed, that will make the 1930s look like fun times.
If he Trump tried once and was forced to backpedal, I'd say you're probably spot on. But considering he tried again quickly after shows, that he ain't gonna take a no. He's just gonna keep trying. At that point: yeah, I'd be worried.
But I'm not American, so I didn't particularly mind
As a reminder, the Mary Meeker slides on AI reported that the US share of top companies in the public equity market went from ~50% in 1995 to ~85% recently.
Still, the signal from US debt might reflect only changes in a few dominant players (and we famously have adversaries investing in US debt -- Middle East, China, Russia). Also the big beautiful bill shows even Republicans want to spend now and pay later, so this might be unwinding the false expectation of austerity during the Republican trifecta. Both are transitory and neither really goes to seriousness.
The real question is whether we've lost seriousness by continuously moving upstream, into financial and information services and technologies. Our willingness to sell IP/infrastructure now rather than protect and control (milk) it over time reflects a generational lack of diligence. (Sorry - not trying to diminish exit strategies for interim investment tiers.)
pair this with each district, state, and constitute company/nonprofit/whatever looking for a piece of the pie creates an utter mess of non-stop spending
Trump won the popular vote. America is trying very hard to become one big red state.
Red states have had the worst outcomes for generations but they keep going back to republicans. The reasons escape me. The Civil War was basically southerners strongly preferring to use slaves instead of modernizing. Lots of them died for this. Make it make sense.
This dysfunction goes a lot deeper than any one administration. Maybe the rise of China will motivate them to get their act together.
And, it should be very clear why. When you, say, de-prioritize or are even actively hostile to public education then of course your education is going to suffer. Which, in turn, makes your economy suffer, because most people who are working are now uneducated and therefore poor. So you get a lot of brain drain.
There's some notable exceptions, like Texas. But, it's definitely a trend that red states just have worse outcomes across the board. It seems to me people in those states just don't care much, which... whatever. If they're fine with it then I guess it's fine.
There's a great book called "The One Sentence Persuasion Course - 27 Words to Make the World Do Your Bidding", which I keep thinking about with respect to Trump and his ability to sway his voting bloc. The 27 words are:
"People will do anything for those who encourage their dreams, justify their failures, allay their fears, confirm their suspicions, and help them throw rocks at their enemies."
Trump ticks a lot of these boxes. He "confirms" their suspicions and justifies their failures when he says their problems are caused by immigration, China, and wokeism. He helps them throw rocks at their enemies every time he invents a new petty nickname for his political opponents ("Sleepy Joe" Biden, "Crooked Hillary" Clinton, "Kamabla" Harris, etc). He encourages their dreams with his "Make America Great Again" slogan and "allays their fears" with his "Only I can solve it" rhetoric. And they eat it up because, as misguided as he is, he speaks to them on an emotional level, not a logical one.
Trump's base is fundamentally fueled by grievance, and he knows it. When we stop bending over backwards to give them some noble rationale and start looking at their actions from this lens, it starts to make a lot more sense.
So they have to be as vague as possible about everything until an audience gathered behind some specific topic, then it is required to lie so that they think you are one of them.
Beyond those basic requirements the competition is to encourage their dreams, justify their failures, allay their fears, confirm their suspicions, and help them throw rocks at their enemies
but it doesn't even matter anymore.
If they're feeling overwhelmed by the pace of the change happening in our modern world/society, feeling as though they are being left behind — they're not the only ones.
If they're feeling as though the contract between the wealth-holders and the laborers has been getting worse and worse for the worker, they may be on to something.
Maybe they see the wealthy continuing to fail upward and are finding that just working hard and saving money seem to be less than treading water.
There's plenty of things to have grievances about.
And I think "left" and "right" might have common ground on these issues.
In practice, this means tax cuts, deregulation, opposition to min wage increases, welfare reform, school vouchers, opposition to unions, healthcare cuts, project 2025, etc etc. They’ll reduce govt intervention and go all in on free markets.
They are wrong because the outcomes of this unrestricted free market approach are not so good, but nevertheless for now it’s impossible to find common ground with FDR-style progressives. Check back after the next depression.
Note: there’s also a strong racist/sexist/homophobic/etc streak that prevents most kinds of solidarity.
OP (toomanyrichies)'s comment makes much more sense. The right's grievances aren't against elites, the wealthy, the privileged, employers, or the pace of change. Their grievances are against less powerful outgroups who serve as scapegoats that can't fight back: Immigrants, minorities, gay and trans people, "woke" culture warriors, the poor, and so on. The government is seen as a tool for punching down and exacting cruelty onto these outgroups. That's what really motivates them.
I live in a "red" part of the country, surrounded by Trump flags. Ask them what good their team has done for their own lives, and if you get past the canned talking points that don't make sense, they'll admit their lives aren't really much better than they were in 2016. Ask them what they like about MAGA, and it will be all about the attacking and cruelty he's doing to their perceived enemies.
+1. Just as we engineers say "The purpose of a system is what it does" [1], a corollary to that is "the intention of a vote is what it achieves". If red-state voters consistently vote against their own economic interests, then either one of two things is true:
- They must have other interests in mind (i.e. punching down on marginalized groups), or
- Their interest in economic self-preservation is outweighed by their belief in helping the rich get richer, possibly because they see themselves as "temporarily embarrassed millionaires"? [2]
1. https://en.wikipedia.org/wiki/The_purpose_of_a_system_is_wha...
2. https://www.reddit.com/r/QuotesPorn/comments/jotijb/john_ste...
https://www.brennancenter.org/our-work/analysis-opinion/how-...
But I also think there is a lot of money to be made playing Trumps game. If i as an investor just jumps on when he says jump and jumps off before the last fool, there is money to be made.
At least that’s my explanation as to why sudden declines in tariffs (or even just breaks) causes investor confidence to return.
Disclosure: this foreign capitalist has caused a 5 figure blip by selling all US shares (the move aligned with my other personal goals).
The rest of this essay just reads like griping and cherry picking though. Complaining about the name of the bill "One Big Beautiful Bill Act" is just dumb. Senators and Reps name bills all sorts of funny things aiming to be catchy or what have you, it's part of our process.
And, it seems much more likely that whipsawing serves the purpose of someone than that people in the whitehouse are "unserious". I'd rather see Mr. Krugman's estimable mind devoted to figuring out who is benefiting, how long they will benefit, and what that will do to others than to read him complaining about the name of a bill.
I agree with you that saber rattling is a major change in foreign policy for the US. There aren't a lot of stops between "reserve currency" and "former reserve currency". That said, there also aren't a lot of options globally.
I think the benefactors of the saber rattling might be a little closer to Pennsylvania avenue than you suggest, though.
Sorry, but that administration is dumb, period. Stop being politically correct.
From day one in the office these guys executed hard. Hundreds of executive orders. And if you read those orders, often up to half of them is calling out all the ways exec orders from 2016 were mutated or ignored and specifically banning them. They are in no way the work of dumb people. Legally and practically aggressive people? Yes. People with policies you might dislike or hate? For sure. People who are masters at engaging media and outrage? Yes. People headlined by someone who really loves self-enrichment and get-out-of-jail free rulings? Definitely.
Calling them dumb is radically misunderstanding the real situation in the whitehouse and to the extent journalists are calling them out as dumb it's because they're following the ball laid out by the street magician; watch the hands. The ball is all the sturm and drang and drama, the hands are actual practical outcomes.
There is nobody to execute hard the stupidly-worded EOs, which are not worth the paper they are printed on.
And lets not forget the time a journalist was added to a Signal chat about incoming air strikes. Was that another 5-D chess move in your opinion?
That said, I'm sympathetic to just clicking "update" on an ask like that from my iPhone. I don't think too hard about those if they pop up. Well, I didn't until I read the debrief. Geez Siri.
If that story is true and not, you know, complete bullshit to cover that Walz is one of the "off-the-record" sources that are American politics'constant news mill feeders.
These guys "executed hard" the whims of an incompetent, uneducated, psychopathic, certainly terminally senile President. Have you read Trump's speeches? Read, not listened to.
The only practical outcomes so far have been books banned from some Army libraries, websites changed, and posturing. What has been accomplished in practice? Very little: the tariffs are in Schrodinger's cat state, the expulsions are lagging far behind their targets, the Army is loosing soldiers and equipment (Hesgeth is only renaming things), the transportation secretary is more worried about biblical paintings than fixing air controllers shortages, etc. etc.
But yeah, tell me how those guys executed a "coherent" strategy wrt. foreign trade. What's the strategy again?
And countless abuses by police and ICE against immigrants with legal status and court orders protecting them. Being unconstitutional or otherwise impractical doesn’t stop the abuses. While EOs might be challenged, so will have the abuse instances. The goal is not to pass everything, but to overwhelm the defenses of their targets.
Internal admin policy wonk (Or Project 2025 insiders?) type strategy there seems to be to reset and expand the tools the State department has to work with -- it's been a long time since the US could credibly threaten war, for instance. That just doesn't sit right with some hawks.
Canadians took semi-seriously 51st state talks, enough that there are boycotts of American goods in Canada. Denmark took fairly seriously Greenland. Both of these took all of a day or two of talking to the media to get done, and in Canada at least will be grist for the mill in trade deals - having a crazy like a fox type throwing around random threats gives State some leeway.
Note that I'm not in any way condoning this strategy or saying it's perfectly (or well) executed, a good idea, or even that some or many people at the State Department like this strategy. But if you can get over blind rage on policy differences, a convicted rapist president, accepting gifts well in excess of the mandated $25 maximum, and on and on, and look at what they're saying and doing, I do think there's some coherence and execution in there.
Read those leaked signal chats -- that group is on the same page: They think the US is overpaying allies / getting a raw deal, and they want to set a clear message that they intend to change that. I think they got the message across.
Senators and reps and bills all sorts of funny things aiming to be catchy by creating a succinct acronym. [1]. This cultural practice is sometimes called ‘backronym’. Trying to tie ‘One Big Beautiful Bill Act’ as an example of that practice is ‘sane-washing’; ‘One Big Beautiful Bill Act’ is a dumb person’s idea of a backronym [2]. Dissecting the bill name is not just complaining for complaining’s sake; it’s just another in the long list of examples of Trump doesn’t understand what he’s doing and his enablers are not serious people by going along with
[1] https://thehill.com/homenews/news/8710-lawmakers-turn-to-cat...
[2] Trump is a poor man's idea of a rich man, a weak man's idea of a strong man, and a stupid man's idea of a smart man etc
Look at Trump's career. Look at his skill set. Look at what he's doing in the white house. He's a lot of things but he's not bad at getting what he values; he is in fact perhaps the most successful American ever in those terms. If you care about America it is incredibly short sighted to think he's dumb. He's extremely effective, just not at the things that a) you might want him to be b) we hope a President will be c) he says he's doing to the media.
>> He's a lot of things but he's not bad at getting what he values; he is in fact perhaps the most successful American ever in those terms.
Nonsense. He’s bankrupted casinos. He lost his first reelection bid. He started on third base and ended up back at first.
>> If you care about America it is incredibly short sighted to think he's dumb.
He IS that dumb. He really doesn’t understand how tariffs/trade balance works. But his enablers have let him run riot. Biden was old. Reagan had mental issues. But their teams had firm hands on the steering wheel. That’s a serious country with some checks and balances. Trump admin is trying to revoke all that
In what sense can "NY developer nepo baby" be third base while "guy with the nuclear codes, billions of dollars of graft and personal guarantees from the Supreme Court" be first base? I truly don't understand that thinking.
Things are bad right now, but making stereotyped statements like this, as if the entire country just flipped a permanent switch after Trump was elected and it will be like this forever doesn't do anyone any favors. It doesn't explain what's happening, what happened before Trump was elected, what happened after Trump was elected, it doesn't point to any solutions — it just sweeps all of these issues under the rug and implicitly or explicitly attributes things to some sudden catastrophic change in Americans, like an asteroid the size of North America just collectively hit everyone on the head on Jan 20th.
Absolutist statements have always been around — there's plenty of examples during the pandemic, the online tech boom of the 90s and 2000s, and so forth — and it seems to be happening again. But this time to me it seems irresponsible not just for being so extreme, but also because it shirks away from any attempt to solve any problems. I don't expect Krugman to solve problems all the time — he's allowed to despair — but I at least expect him to have some courage and proactivity in his overall stance toward the situation.
From an outsider (non American),I am not sure.. but I have been looking more into american scandals due to trump and due to Michael Moore documentary.
And I have come to only one conclusion, I feel like you guys aren't picking the people who are better for the job but rather whose worse. The shift is so real. And I don't trust democrats too much either. But they are better than republicans at the moment.
If you guys are even in the position that you can literally get a guy elected as president that can effectively erode trust on america as a whole,you need to rethink elections. How can I trust america if there is even a 1% chance of such happening again (more than 1% for sure)
Trust shouldn't be played with. It's a hard thing to get
The only guy I have genuine trust is Bernie sanders. But he's too old but that to me feels like the only hope in America. I truly like how Bernie sanders is kind of like the north pole in my short understanding of american politics and has always been saying the things that I personally resonate with too.
I kind of wish,I had a Bernie sanders in my own country tbh. The guys a true gem.
"US Army Hits Annual Recruitment Goals 4 Months Early" => https://link.theepochtimes.com/mkt_app/us/us-army-hits-annua...
Is this some meaning of beard I am so far unfamiliar with? The only meaning that jumps to mind is the facial hair, and when I looked up in the dictionary I was reminded me of the LGBT meaning, but neither of them fit here.
> to face, meet, or deal with an unpleasant or frightening person in a brave or determined way
https://www.biblegateway.com/passage/?search=1%20Samuel%2017...
I chose a start date half way through the last Obama Administration (2014) and scaled to 100 relative to values on that date. I didn't match Krugman's relative scales but plotted it again ( https://fred.stlouisfed.org/graph/?g=1JqXv ) ... you can see the trends in the graph across two Trump presidencies a bit of Obama and all of Biden and it paints a different overall picture. A lot of wild variance is hidden.
You mean the thing that was right from the beginning, that is happening right now and that is even worse than the forecast?
> Actually, the chart was a bit too neat: When I set out to reproduce it, I found that the FT chose a time period during which the relationship looked especially clear.
I’ve been doing a lot of independent research myself since finding useful, non-partisan sources is a huge issue anymore. I’ve found LLMs to be very useful in helping[1] me navigate these areas so I can learn enough to make my own determinations.
For what it’s worth my opinion is that this country is in a very bad position that could very well lead to massive world wide economic problems in the future. When and how that manifests is impossible to say; there are a lot of possibilities but I’m expecting the next decade will show us the path we’re on and what that looks like. The tariffs are having an effect (which is to be expected) but it didn’t start there nor does it end there.
I think one of the biggest problems we face as a nation is that the citizens do not understand what’s going on and end up parroting what someone else said without really understanding it, usually filling in the gaps of their knowledge from their own world view rather than reality. I don’t mean this as a denigration as most people have families and jobs and do not have enough time to know enough to have well-informed opinions about everything, myself included. However, it is leading to absurdities like screeds about the name of the bill.
[1] I don’t trust the LLM of course. I’m not asking it if X is happening or if Y is a problem. More of a way to guide me to finding good primary resources.
Diplomacy is dead in USA. These days nobody sane in the world believes anything coming out of White House, not even a paper, and Trump is just a current facade for the same elites that nobody trusts.
It's our fault for being the only ones to take defense spending seriously? We just reopened the shipping lanes clogged by the Houthis, which literally the entire world profited from. That could have been done by anyone else but wasn't, because they happily benefit from US interventionism but then pretend to hate it too. You can't have it both ways.