Paul Krugman: The Entire Trump Administration Suffers from the Same Dangerous Affliction

News & Politics

This week, John Kelly, a four-star general and chief of staff for the president of the United States, lied to the American people—about Trump's conversation with a Gold Star widow, and about Florida Rep. Frederica Wilson's account of their call. A transcript of the call confirmed Kelly's lies, but outright mendacity seemingly has no consequences in our new age of unreality. As Paul Krugman writes in his Monday column, "We are ruled by men who never admit error, never apologize and, crucially, never learn from their mistakes."

Which brings Krugman to the Federal Reserve. While seemingly unrelated, it too is vulnerable to what Krugman calls "Trumpal infallibility,"  or "the insistence on clinging to false ideas and refuted claims, no matter what—a disease that infested the modern Republican Party long before Trump. And one of the areas where the symptoms are especially severe is monetary policy." 

Back in 2008, when the financial crisis struck, Federal Reserve head Ben Bernanke radically cut interest rates and "printed money," according to his Republican critics. Conservatives claimed his actions would trigger inflation and "debase the dollar."

"It never happened," Krugman writes. "In fact, the Fed’s preferred measure of inflation has consistently fallen short of its target of 2 percent a year." 

So what happens to economists who can't own up to their mistakes? In Trump's America, they're rewarded with a place on the short list to become the next Federal Reserve chair. Meet John Taylor, of Stanford:

Since the financial crisis, however, he has repeatedly demanded that the Fed raise interest rates in line with a policy rule he devised a quarter-century ago. Failing to follow that rule was supposed to cause inflation, which it hasn’t — but seven years of being consistently wrong hasn’t inspired any rethinking on his part. What it has inspired is a descent into increasingly strange reasons the Fed should raise rates despite low inflation. Easy money, he declared, was part of a conspiracy to “bail out fiscal policy,” that is, an effort to help President Barack Obama.

Sanford's actions had fellow economists "scratching their heads," but he has never offered an apology or mea culpa. Krugman recognizes he has been wrong himself on any number of occasions, including on election night 2016, and he's still gainfully employed. He emphasizes that, "everyone makes forecast errors. If you’re consistently wrong, that should certainly count against your credibility; track records matter. But it’s much worse if you can never bring yourself to admit past errors and learn from them." 

This is especially dangerous because it, "makes it all too likely that you’ll keep making the same mistakes; but more than that, it shows something wrong with your character. And men with that character flaw should never be placed in positions of policy responsibility."

Unless Donald Trump is president. In that case, dishonesty is a badge of honor. 

Read the entire entire column

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