Brace yourself: Nobel Prize economist says Trump's policies surpass the Gilded Age disaster

President Donald Trump’s economic policies are not just as bad as the Gilded Age, according to a Nobel Prize-winning economist. They surpass them.

The Gilded Age was a period in American history from the late-19th century to the early-20th century marked by severe income inequality and political corruption. It also preceded one of the worst economic meltdowns in U.S. history. Yet this economist says the seeds of the Trump era are already worse.

“Forbes did compile a list of the richest Americans,” economist Dr. Paul Krugman told MS NOW anchor Katy Tur on Tuesday. Going back to 1918, Krugman noted that “if you look at the five richest Americans then versus the 15 richest now, in both cases, that's about 1/100,000 of a percent of the population. You know, that's not the one percent. It's far, far beyond that. The top five now are substantially richer relative to the population at large, relative to the size of the economy than their counterparts were then.”

For example, SpaceX CEO Elon Musk — who earlier this month became the world’s first trillionaire — “is bigger relative to today's U.S. economy than [Standard Oil founder] John D. Rockefeller was relative to the economy of 1918. So we really are in a super-hyper Gilded Age now, far beyond anything that we saw then.”

In addition to the income inequality being worse today than it was in 1918, Krugman pointed out that America’s wealthiest Americans like Rockefeller, H. C. Frick & Co. founder Henry Clay Frick and Carnegie Steel Company creator Andrew Carnegie at least tried to balance their ruthless business practices with large-scale philanthropic efforts.

“They were not nice guys, but there was an expectation that they would give something back,” Krugman noted. “I mean, modern philanthropy was invented during the Gilded Age. Some of that was PR. Some of that was protecting themselves from the pitchforks. But there was also, I believe, some sense that they should give something back. Stunningly, the current crop of our current tech bro lords give very, very little money to anything charitable. They don't make any real effort.” While much of that is their fault, a great deal is also because “we don't seem to have the expectations that there should be any kind of noblesse oblige among the incredibly wealthy anymore.”

Speaking to AlterNet about Krugman’s comments, Dr. Robert J. Shapiro — who served as President Bill Clinton's undersecretary of commerce for economic affairs, as well as the principal economic adviser in his 1992 campaign, and was also a senior economic adviser to president Barack Obama during his 2008 campaign — added nuance to Krugman’s observations.

“First of all, if you're comparing the robber barons with the current hyper-rich in the United States — the number of hyper-rich people in the United States today far exceeds those in the Gilded Age, which was really dominated by about a dozen people,” Shapiro told AlterNet. “... However, the difference between the Gilded Age and today is that today we have a very large middle class, which we didn't have in the Gilded Age.”

In terms of Krugman’s claim that the super-rich often do not feel compelled to give back to their communities, Shapiro said that this is true in many cases — but not all of them.

“Some of the hyper-rich today are philanthropic,” Shapiro told AlterNet. “Somebody like Warren Buffett or Microsoft [co-founder] Bill Gates and Melinda Gates — they're very philanthropic. But I really think what matters to the quality of life in the United States is not the philanthropy of the hyper-rich, but rather, in particular today, the influence of the hyper-rich on government policies that create the conditions for everybody else.”

Shapiro concluded, “In that respect, today and the Gilded Age are mirror images: the government in the Gilded Age was run such that the hyper-rich ensured government policy protected and subsidized not only their wealth, but the increases in their wealth. And that is precisely what we see today.”

This is not Shapiro’s first criticism of the status quo created by the current Republican administration. When discussing the Iran war’s economic impact on Americans (which Trump has said he does not think about), Shapiro argued that the Trump administration’s positions were simply not credible. This applied to how Trump’s ongoing Iran war has hurt the American economy, Shapiro pointed out for example that Trump's senior counselor for trade and manufacturing Dr. Peter Navarro argued that Trump’s war would ultimately reduce gas prices by reducing geopolitical uncertainty.

He also criticized White House spokesman Kush Desai, who had responded to a previous AlterNet story about Trump’s economic policies by referring to economists that disagreed with the president as “idiots.”

"[Desai's] response did everything except address the substance of the people who critiqued him,” Shapiro said. “The guy totally avoided that. He just made an ad hominem attack.”

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