Trump 'desperate' as last political asset becomes liability: Nobel economist

President Donald Trump speaks during an event to sign executive orders related to beef in the Oval Office of the White House in Washington, D.C., September 4, 2026. REUTERS/Evelyn Hockstein/File Photo

The debate over the dangers of artificial intelligence has exploded in recent days as a string of industry insiders have warned that its development should be slowed. President Donald Trump, however, has rejected such concerns, claiming that his “high IQ” is all that’s needed to ensure that AI won’t destroy humanity.

This has left many wondering why Trump seems to take such a personal stake in the technology. According to Nobel Prize-winning economist Paul Krugman, the motivation for the president’s “desperate” behavior regarding AI stems from one thing: Trump thinks it’s his “last political asset,” and he’s losing it.

While the jury is still out on whether AI will reshape the economy, as Krugman writes, “AI does seem to be transforming U.S. politics. I can’t think of a technology that has inspired so much hate across such a wide political spectrum. Even the leading AI companies are warning about the dangers of their technology and pleading for government regulation to slow it down.”In the face of that, Krugman notes that it’s “puzzling” how Trump has continued “going all in on AI, claiming that concerns about its dangers are a ‘hoax’ and opposing any kind of regulation.” What’s more, “in so doing, he’s taking a wildly unpopular position.” Here Krugman points to a new poll on Trump’s handling of AI, in which five percent of Democrats, seven percent of independents, and 51 percent of Republicans say he’s doing a good job. His own base is turning on him, with only 24 percent saying he’s handling it well, and still Trump is hitching his political future to the tech.

As Trump posted on Monday, “The only control or ‘guardrails’ that AI needs is a STRONG AND SMART (High IQ!) PRESIDENT, and the U.S.A. has that, in spades! The Trump Administration has stopped AI ‘people’ from doing bad, or potentially bad, ‘things,’ like Dario (Anthropic!), who is now pretending to be a ‘perfect little angel’ – and we will continue to do so! We already have tremendous CRIMINAL and REGULATORY power over these companies! There is a SICK conspiracy going on against AI and Data Centers, and the only one that is happy about it is China. WHOEVER WINS AI, WINS! We are leading China, and all others, and will continue to do so. Conspiracy Theorists, Treasonists, Traitors, and Leakers.”

Robert Reich has suggested that Trump’s stance comes down to money. The Trump family has personal stakes in the industry, and according to Krugman, “one motive one should never, ever dismiss in current U.S. affairs is Trump’s personal greed.” But Krugman also argues that two other factors may be driving Trump’s position on the issue.

“First,” writes Krugman, “I think Reich is too glib in dismissing the idea that Trump imagines that he knows what he’s doing. ‘It can’t be,’ Reich writes, ‘that he knows very much about AI.’ But does he know that he doesn’t know? That Truth Social post above, in which Trump declares himself perfectly able to manage this wild new technology because he is a ‘STRONG AND SMART (High IQ!) PRESIDENT’, is like a textbook illustration of the Dunning-Kruger effect, in which incompetent people are highly confident in their own judgment because they’re too incompetent to realize that they’re incompetent.”

“Second,” argues Krugman, “it’s important to realize how much Trump needs an AI boom. Trump came into office believing that his tariffs would produce a huge boom in ‘manly’ jobs. In fact, job growth has been weak — and more than all of the job gains have gone to women. Meanwhile, tariffs have driven up consumer prices. And then there’s the Iran war, which has been an economic as well as a strategic disaster. Diesel prices are now well above $6 a gallon. Trump officials love to say that gasoline was over $5 a gallon under Biden, which was true — for one week.”

The one thing that did seem to be going right for Trump was enthusiasm for AI, which resulted in a huge investment and stock boom. Many Trump officials have taken to claiming that AI will solve all their problems, ending inflation by reducing costs and fixing the budget deficit by generating huge economic growth. But the backlash against the tech, says Krugman, “is taking away the one thing the Trumpists thought they had going for them. So in a way it’s understandable that Trump is trying desperately to hold on to the magic (and possibly endangering the future of humanity, but he doesn’t care about that.) But of course it won’t work. The AI boom, once Trump’s last remaining political asset, is now a huge liability.”

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