Paul Krugman: Trump’s 'crank economic doctrines' would make inflation much worse

30 April 2024

Presumptive 2024 GOP presidential nominee Donald Trump and his MAGA allies have been attacking President Joe Biden relentlessly on the economy, blaming his policies for inflation.

The United States has had record-low low unemployment rates during Biden's presidency, including 3.8 percent in March (according to the U.S. Bureau of Labor Statistics). But voters are resentful over inflation, which National Public Radio (NPR) reporter A. Martínez described as "one of President Biden's biggest and most persistent political challenges."

In his April 29 column for the New York Times, liberal economist Paul Krugman is vehemently critical of Trump's economic proposals — which he slams as quack economics," arguing that they could, if implemented, make inflation much worse in the U.S.

"Even as Republicans denounce President Biden for the inflation that occurred on his watch," Krugman explains, "Trump's advisers have been floating policy ideas that could be far more inflationary than anything that has happened so far…. As a number of observers have noted, some of Trump's policy proposals would surely raise inflation."

Krugman elaborates, "An immigration crackdown would undermine one of the key factors that have allowed America to combine solid economic growth with falling inflation. Proposals for a wave of new tariffs would raise consumer prices — and the odds are that Trump would raise tariffs well beyond the 10 percent rate he's been floating if it didn't significantly reduce U.S. trade deficits, which it wouldn't."

The economist warns that what is "really worrisome" are "indications that a future Trump regime would manipulate monetary policy in pursuit of short-run political advantage, justifying its actions with crank economic doctrines."

Those "doctrines," according to Krugman, include removing "much of" the U.S. Federal Reserve's "independence" and a desire to "devalue the dollar" — which would be "clearly inflationary, raising import prices and overheating a U.S. economy that is already running hot."

"Even as they talk about weakening the dollar," Krugman explains, "Trump advisers are reportedly discussing punishing other countries that reduce their use of the greenback — which seems both contradictory and to involve a delusional view of how much economic power even America possesses. The details of these bad ideas are probably less important than the mindset they reveal — one that rejects hard-learned lessons from the past and buys into economic fantasies."

Paul Krugman's full New York Times column is available at this link (subscription required).

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