'Irrational' Ron DeSantis’ latest 'crazy' proposal could enable criminals: Paul Krugman

Gov. Ron DeSantis is planning to introduce legislation banning Floridians from making use of a digital currency under consideration by the federal government – a “crazy” idea that would serve to protect financial crime, economic Paul Krugman writes today in the New York Times.

The United States doesn’t have such a currency today, but the Federal Reserve is studying the idea, Krugman writes. The economist notes there’s a demand for a new system that would provide “virtual equivalents of old-fashioned cash that can be stored and transferred electronically.”

But DeSantis' condemnation in advance of the idea as “woke” is irrational, according to Krugman, citing the governor’s claim that a digital currency would “impose an E.S.G. agenda” and, for example, prevent people from spending too much on gas or from buying rifles.”

Here’s Krugman’s take:

“If this sounds crazy, that’s because it is. I have no idea whether DeSantis believes any of it, or even knows what a central bank digital currency is or what it would do. And it’s possible that he’s taking this stand out of general paranoia."

“But my guess is that he’s being influenced by people who do in fact know what a digital currency might do and fear that it might make it more difficult to engage in such un-woke activities as tax evasion and money laundering. In that sense, DeSantis’s new crusade is a lot like the vote by House Republicans — one of their first legislative moves after taking control of the chamber — to rescind funding that would allow the I.R.S. to crack down on tax cheats.”

Krugman cited the demand for a cryptocurrency “whose tokens wouldn’t be pegged to the dollar — they would legally be dollars, and hence risk-free.” He says that demand is mostly driven “partly from people who honestly, rightly or wrongly, don’t trust banks, and partly from people engaged in illicit activities.”

Krugman says the first group would flock to a safe digital currency, “helping deflate the crypto bubble.” But it’s the bad guys whose DeSantis’ proposed ban would serve:

“DeSantis’ attack on central bank digital currency…wouldn’t protect the rights of Floridians to buy gas or guns; instead, it would protect the ability of wise guys to evade taxes, launder money, buy and sell illegal drugs, and engage in extortion."

"But hey, I guess thinking that money laundering and extortion are bad things is just another example of the wokeness that DeSantis is trying to kill.”