Nobel Prize-winning economist Paul Krugman said a scandal surrounding Nvidia CEO Jensen Huang offers a glimpse into the darker side of President Donald Trump’s inner circle.
In a Thursday Substack post, Climates of Treason, Krugman said Huang was a fool and should never be allowed near national security again. But the real issue, he said, is that the Trump administration tried to bury any inquiry into the threat that Huang’s affair represents. That, he said, is “part of a bigger story of betrayal at the highest levels.”
Huang admitted to an affair with Alice Huang, no relation, a former executive at Singapore-based Megaspeed whom U.S. intelligence reportedly suspects of spying for Beijing.
The New York Times reported that Commerce Department agents investigating whether Megaspeed had smuggled Nvidia chips into China stopped their probe after Nvidia’s top lawyer reached out to them, and the Justice Department took over the case. The Commerce Department said it handled the case by the book, and Nvidia’s board, which is now investigating, said it has seen no indication national security was compromised. Trump defended Huang on Sunday.
Krugman said that after two years of Trump, America is neither loved nor feared. It can’t be trusted to keep its promises or defend its allies, and it seems unable to punish its enemies. It has essentially lost a war with Iran and a trade war with China, and it might be losing the technology race, too, he wrote.
“How did we fall so far, so fast? It’s all about Trump,” he wrote.
Part of that is just plain incompetence, Krugman said. For example, he wrote, Defense Secretary Pete Hegseth thinks that a military in the age of drones and artificial intelligence needs testosterone shots. That’s no accident, he said.
“MAGA hates people with expertise, because such people might engage in critical thinking and might care about their reputations,” he wrote. “Only the truly hapless can be counted on to be truly loyal.”
Key figures in or near the administration, he said, are knowingly making the U.S. less secure.
“I don’t know how much of this betrayal meets the legal standard of treason, but morally that’s what it amounts to.”
Taking his title from a 1979 book about the Cambridge spies who served Stalin out of conviction, Krugman thinks it’s a mix of motives. In regard to Russia, he thinks it’s largely ideological: Trump, Elon Musk and other hard-right types look up to Putinism, with its authoritarianism, male supremacy and crony capitalism. It’s probably only secondarily about money, he said.
In regard to China, it’s money: Nvidia gave $25 million to Trump’s ballroom, Krugman wrote, and the A.I. industry appears to have funneled hundreds of millions of dollars in Trump’s direction. He wrote that people around Trump protected Huang, partly out of fear that exposing the scandal would be bad for a major source of money.
And he’s betting that the vast payments made to Jared Kushner by Middle Eastern rulers are eventually going to turn out to be in return for favors.
“This is a huge scandal even if there weren’t any quid pro quos. And I’ll bet that we’ll eventually learn that there were, in fact, favors exchanged for that money.”
Those in charge of the country, Krugman said, are all about waving the flag but in fact are completely unpatriotic, unwilling to sacrifice for the country and hostile to democracy and the rule of law.
“They are completely unwilling to make personal sacrifices, no matter how small, or to pass up personal opportunities, for the sake of the nation.”
“In other words,” he wrote, “USA! USA! USA!”
