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Paul Krugman

Paul Krugman

Paul Robin Krugman (born February 28, 1953) is an American economist, Distinguished Professor of Economics at the Graduate Center of the City University of New York, and an op-ed columnist for The New York Times. In 2008, Krugman won the Nobel Memorial Prize in Economic Sciences for his contributions to New Trade Theory and New Economic Geography.

Articles by Paul Krugman

Wonking Out: Keynesian Republicans, Supply-Side Democrats?

1 day ago

This article is a wonky edition of Paul Krugman’s free newsletter. You can sign up here to receive it.

So Joe Biden appears to have his bipartisan infrastructure deal. Of course, progressives will be bitterly disappointed if that’s the end of the story. But it probably won’t be. In the end, Democrats will probably pass a second bill through reconciliation, adding several trillion dollars in “soft” investment — especially spending on children, which almost surely will have bigger economic payoffs than repairing roads and bridges, important as that is.But today’s newsletter won’t be about legislative maneuvering. Instead, I want to talk about a funny thing that has happened to economic policy debate, detailed in a recent article by Jim Tankersley. Suddenly, Republicans have become

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How Covid Became a Red-State Crisis

2 days ago

Less than a month ago President Biden promised a “summer of joy,” a return to normal life made possible by the rapid progress of vaccinations against Covid-19. Since then, however, vaccination has largely stalled — America, which had pulled ahead of many other advanced countries, has fallen behind. And the rise of the Delta variant has caused a surge in cases all too reminiscent of the repeated Covid waves of last year.That said, 2021 isn’t 2020 redux. As Aaron Carroll pointed out Tuesday in The Times, Covid is now a crisis for the unvaccinated. Risks for vaccinated Americans aren’t zero, but they’re vastly lower than for those who haven’t gotten a vaccine.What Carroll didn’t say, but is also true, is that Covid is now a crisis largely for red states. And it’s important to make that point

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Return of the Family Values Zombie

5 days ago

For a few weeks in 1992, U.S. politics were all about “family values.” President George H.W. Bush was in electoral trouble because of a weak economy and rising inequality. So his vice president, Dan Quayle, tried to change the subject by attacking Murphy Brown, a character in a TV sitcom, an unmarried woman who chose to have a child.I was reminded of that incident when I read about recent remarks by J.D. Vance, the author of “Hillbilly Elegy,” who is now a Republican Senate candidate in Ohio. Vance noted that some prominent Democrats don’t have children, and he lashed out at the “childless left.” He also praised the policies of Viktor Orban, the leader of Hungary, whose government is subsidizing couples who have children, and asked, “Why can’t we do that here?”As The Washington Post’s Dave

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Should Only the Little People Pay Taxes?

9 days ago

I yield to no one when it comes to cynicism about politicians who see tax cuts for the rich as the answer to every problem. Indeed, the claim that tax cuts can perform magic is a prime case of a zombie idea — an idea kept alive, despite overwhelming evidence against it, because its survival serves the interests of wealthy donors.Yet even I was caught by surprise when Republicans negotiating over a possible infrastructure bill ruled out paying for it in part by giving the Internal Revenue Service more resources to go after tax evasion.This is a big deal. The Treasury Department believes that there is a “tax gap,” taxes owed but not paid, of more than $500 billion every year; some estimates put the number much higher. And the Biden administration proposes giving the I.R.S. enough resources

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Wonking Out: What Inflation Risks and My Intermittent Fasting Have in Common

9 days ago

Like many people, I put on some pounds during the pandemic. Not catastrophic — I kept working out, and I think my cardio fitness has held up. But I was doing a lot less walking than normal, and also, in retrospect, engaged in too much comfort eating.

So now I’m doing what has worked for me in the past: going hungry, with restricted calories, two or three days a week. This is not proselytizing — the best diet is the one you can actually keep to, and I just happen to have a personality more suited to brief self-inflicted spasms of suffering than to maintaining sustained self-discipline.But why does intermittent fasting work, when it does? You might think that people would just splurge on non-fasting days, making up for the lost calories. Apparently, however, they don’t — there’s only so

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Republicans Have Their Own Private Autocracy

12 days ago

I’m a huge believer in the usefulness of social science, especially studies that use comparisons across time and space to shed light on our current situation. So when the political scientist Henry Farrell suggested that I look at his field’s literature on cults of personality, I followed his advice. He recommended one paper in particular, by the New Zealand-based researcher Xavier Márquez; I found it revelatory.“The Mechanisms of Cult Production” compares the behavior of political elites across a wide range of dictatorial regimes, from Caligula’s Rome to the Kim family’s North Korea, and finds striking similarities. Despite vast differences in culture and material circumstances, elites in all such regimes engage in pretty much the same behavior, especially what the paper dubs “loyalty

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How Big Spending Got Its Groove Back

15 days ago

The way it was: Some years ago I attended a meeting in which President Barack Obama asked a group of economists for unconventional policy ideas. I distinctly remember him saying: “Don’t tell me that I should spend a trillion dollars on infrastructure. I know that, but I can’t do it.”The way it is: Top Democrats have agreed on a proposal to spend $3.5 trillion on public investment of various kinds, to be passed via reconciliation on top of a $600 billion bipartisan plan for physical infrastructure spending. And some news reports are treating this deal as a defeat for the left, because Bernie Sanders proposed spending even more.Obviously the reported agreement is just a proposal, and turning it into actual legislation will require agreement from every single Democratic senator. Still, there

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Wonking Out: Two Cheers for Carbon Tariffs

15 days ago

This time it really is Infrastructure Week. Democrats have agreed on the broad outline of a big public investment program, to be passed through reconciliation on top of a much smaller bipartisan “hard” infrastructure program. As I noted in my column Friday, big spending has gotten its groove back.

But there has been another major policy development: It’s Infrastructure Week, but it’s also Carbon Tariff Week. The Democratic proposal says in general terms, although without specifics, that we should levy tariffs on imports from countries that don’t take sufficient steps to limit greenhouse gas emissions. On the same day, the European Union laid out, in much greater detail, plans to impose a carbon border adjustment mechanism — which I’m afraid everyone will call a carbon tariff, even though

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The Durable Myth of Urban Hellholes

19 days ago

Over the weekend J.D. Vance, the author of “Hillbilly Elegy” and now a Trumpist candidate for U.S. senator in Ohio, tweeted that he was planning a visit to New York, which he has heard is “disgusting and violent.” Vance, a graduate of Yale Law School who currently works as a venture capitalist, surely knows better. But he presumably hopes that Republican voters don’t.But why do so many Americans still believe that our major cities are hellholes of crime and depravity? Why do so many politicians still believe that they can run on the supposed contrast between urban evil and small-town virtue when many social indicators look worse in the heartland than in the big coastal metropolitan areas?To be sure, there was a national surge in homicides — although not in overall crime — during the

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Wonking Out: mRNA Vaccines and the Meaning of Life

22 days ago

Happy days are here again. No, really. Gallup has been asking Americans since the beginning of 2008 whether they are “thriving.” The percentage answering yes hit a low point in the depths of the 2008 financial crisis and again during the worst of the Covid-19 pandemic. But it has soared in recent months, to 59.2 percent, its highest level ever:ImageStriving to thrive.Credit…GallupFor what it’s worth, Gallup’s number deserves to be taken seriously. The question “Are you thriving?” is pretty close to the question “Overall, how satisfied are you with your life?,” which is widely used by eminent scholars like Angus Deaton and reported on a regular basis by international agencies. So the surging number of Americans who say that they’re thriving is meaningful, and it’s worth asking for an

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The Trumpian Roots of the Chip Crisis

23 days ago

What’s the current state of the U.S. economy? A quick summary might be “booming with bottlenecks.”And some of those bottlenecks reflect the mess created by Donald Trump’s trade policy.Where we are now: Employment is growing at a rate we haven’t seen since 1984. So, probably, is gross domestic product, although we don’t yet have an official estimate for the second quarter. We are, however, suffering from shortages of many items, which are crimping production in some areas and leading to sharp price increases in others.Some of these shortages are getting resolved. For example, two months ago, lumber cost almost four times as much as it did before the Covid-19 pandemic; since then, its price has fallen more than 50 percent. Other bottlenecks, however, seem more persistent. World trade is

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It’s Morning in Joe Biden’s America

26 days ago

Last Tuesday President Biden’s Council of Economic Advisers published a blog post warning everyone not to make too much of any one month’s employment report. It presumably released this in advance of Friday’s report to fend off possible accusations that it was just trying to make excuses for a weak number. As it happened, however, the report came in strong: The economy added an impressive 850,000 jobs.

The job gain was especially impressive given widespread claims that businesses couldn’t expand because generous unemployment benefits were discouraging workers from taking jobs. (Recent benefit cuts in many states came too late to have affected this report.) Well, somehow employers are managing to hire a lot of people anyway.Oh, and so much for Donald Trump’s warnings that there would be a

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Wonking Out: Alexander Hamilton and Post-Covid America

28 days ago

In the spring of 2020, the U.S. economy went into what I described at the time as a “medically induced coma”: We shut down much of the economy in an attempt to limit the spread of the coronavirus. This was, in retrospect, a wise policy that should have been followed much more thoroughly. After all, by slowing the spread of the virus, we didn’t just avoid overwhelming the health care system; we also bought time for the development and dissemination of vaccines, so that tens of millions of Americans who would have been infected without the lockdowns ended up dodging the bullet.

But there was a huge initial cost in terms of reduced employment and, to a somewhat lesser extent, reduced G.D.P. Many analysts expected a sluggish recovery at best — similar to the sluggish recovery from the 2008

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Only the Incompetent Need Apply

July 2, 2021

I wrote a few days ago about how ignorance — ignorance about history, about science, about economics and more — has become a core conservative value. This exaltation of ignorance naturally goes hand in hand with disdain for expertise: A vast majority of scientists may agree that greenhouse gas emissions are warming the planet, but hey, it’s all just a gigantic hoax.

But wait, there’s more. On the right, expertise isn’t just considered worthless, it’s viewed as disqualifying. People with actual knowledge of a policy area — certainly those with any kind of professional reputation — are often excluded from any role in shaping policy. Preference is given to the incompetent — often the luridly incompetent.I’m currently reading “Nightmare Scenario,” an account by Yasmeen Abutaleb and Damian

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The Right Goes All In on Ignorance

June 28, 2021

As everyone knows, leftists hate America’s military. Recently, a prominent left-wing media figure attacked Gen. Mark Milley, the chairman of the Joint Chiefs of Staff, declaring, “He’s not just a pig, he’s stupid.”

Oh, wait. That was no leftist, that was Fox News’s Tucker Carlson. What set Carlson off was testimony in which Milley told a congressional hearing that he considered it important “for those of us in uniform to be open-minded and widely read.”The problem is obvious. Closed-mindedness and ignorance have become core conservative values, and those who reject these values are the enemy, no matter what they may have done to serve the country.The Milley hearing was part of the orchestrated furor over “critical race theory,” which has dominated right-wing media for the past few

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What Utica Could Teach New York City

June 25, 2021

Last week I took advantage of the fading pandemic to take a bike tour in the Finger Lakes region, making a detour on the way to visit the old industrial city of Utica, N.Y. — which is where I lived until I was 8 years old. I found the street we used to live on, although to be honest I couldn’t remember which house was ours. But perhaps that’s not all that surprising: The neighborhood has changed since 1961, having become home to many Bosnian refugees in the 1990s.

And whereas my mother used to take me out for lunch at the local White Tower, a once popular hamburger chain, this time I stopped near our old house for cevapi.The thing is, for a city that has lost most of its original reason to exist — the glory days of the Erie Canal are ancient history, and the industries that drove the

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Economics in a Post-Truth Nation

June 24, 2021

If a tree falls in a forest but nobody is there to hear it, did it make a sound? If we have a rapidly expanding economy but much of the electorate refuses to acknowledge it, is the country experiencing a boom?

Despite some growing pains, the U.S. economy is clearly on a vaccine-and-stimulus-fueled tear, with just about every measure indicating rapid recovery from the pandemic slump.Yes, supply bottlenecks have caused some inflation, although recent data seems to validate the view that this inflation is transitory: Lumber prices have fallen sharply, industrial metals have also come down, and used car prices seem to have peaked. Yes, some employers seem to be having trouble hiring enough workers to keep up with surging demand, but this will almost surely be a temporary problem.Overall,

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The Week Inflation Panic Died

June 21, 2021

Remember when everyone was panicking about inflation, warning ominously about 1970s-type stagflation? OK, many people are still saying such things, some because that’s what they always say, some because that’s what they say when there’s a Democratic president, some because they’re extrapolating from the big price increases that took place in the first five months of this year.

But for those paying closer attention to the flow of new information, inflation panic is, you know, so last week.Seriously, both recent data and recent statements from the Federal Reserve have, well, deflated the case for a sustained outbreak of inflation. For that case has always depended on asserting that the Fed is either intellectually or morally deficient (or both). That is, to panic over inflation, you had to

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Wonking Out: Economic Nationalism, Biden-Style

June 11, 2021

If you’re under 50, you probably don’t remember when Japan was going to take over the world. But in the late 1980s and early 1990s, many people were obsessed with Japan’s economic success and feared American decline. The supposedly nonfiction sections of airport bookstores were filled with volumes featuring samurai warriors on their covers, promising to teach you the secrets of Japanese management. Michael Crichton had a best-selling novel, “Rising Sun,” about the looming threat of Japanese domination, before he moved on to dinosaurs.

The policy side of Japanophilia/Japanophobia took the form of widespread calls for a national industrial policy: Government spending and maybe protectionism to foster industries of the future, notably semiconductor production.Then Japan largely disappeared

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Why Won’t Republicans Rebuild America?

June 10, 2021

On June 26, 1956, Congress approved the Interstate Highway Act. Dwight Eisenhower signed the bill three days later. The legislation allocated $24.8 billion in federal funds for a down payment on the construction of an interstate highway system.

That’s not a lot of money by current standards, but prices are far higher now than they were then, and the economy is vastly bigger. Measured as a share of gross domestic product, the act was the equivalent of around $1.2 trillion today. And the interstate highway system wasn’t the only major federal investment program; the government was also spending substantial sums on things like dam-building and the creation of the St. Lawrence Seaway.It was, in short, a time when politicians were willing to make bold investments in America’s future. And

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Yellen’s New Alliance Against Leprechauns

June 7, 2021

Over the weekend, largely at the urging of Janet Yellen, the Treasury secretary, finance ministers from the Group of 7 — the major advanced economies — agreed to set a minimum 15 percent tax rate on the profits of foreign subsidiaries of multinational corporations. You may wonder what that’s about, or why you should care.

So let me tell you about Apple and the leprechauns.Apple Inc. has vast global reach. Its products are sold almost everywhere; it has subsidiaries in a number of countries. It is also, of course, immensely profitable.But where are those profits earned? Apple does very little manufacturing, mainly contracting production out to other companies, mostly in China. Much of its profits comes from licensing fees, reflecting the company’s intangible assets — its patents,

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Krugman Wonks Out: Do Hiring Headaches Imply a Labor Shortage?

June 4, 2021

This article is a wonky edition of Paul Krugman’s free newsletter. You can sign up here to receive it.

Don’t pay too much attention to today’s jobs report; it came in slightly below expectations, but given the noisiness of the data (and the extent to which the numbers are often revised), it told us very little that we didn’t already know.The truth is that two things are clear about the U.S. economy right now. It’s growing very fast, and adding jobs at a rapid clip; but the pace of job creation is being crimped, at least a bit, because employers are having a hard time finding as many workers as they want to hire.Sometimes complaints about a lack of willing workers just mean that companies don’t want to pay decent wages, and there’s no doubt some of that is going on. But this time that’s

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Can the Rich Pay for a Better America?

June 3, 2021

The budget proposal released by the Biden administration last week calls for almost $5 trillion in new spending over the next decade — that is, outlays in excess of its “baseline” estimate of the spending that would take place without new policies. Some of the extra money would be borrowed, but most of it — $3.6 trillion — is supposed to come from new revenues.

President Biden has, however, repeatedly promised not to increase taxes on households making less than $400,000 a year. And his budget does indeed propose raising all the additional money via higher receipts from corporations and high-income individuals.It’s worth noting, by the way, that the two proposals that have attracted the most attention — raising the corporate tax rate, which Donald Trump cut from 35 to 21 percent, up to

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What Joe Biden’s Proposed Budget Gets Right

May 31, 2021

Many reports about the Biden administration’s budget proposal, released Friday, convey the sense that it’s huge. President Biden, scream some of the headlines, wants to spend SIX TRILLION DOLLARS next year. (Sorry, can’t help doing my best Dr. Evil imitation.) It takes some digging to learn that the baseline — the amount the administration estimates we’d spend next fiscal year without new policies — is $5.7 trillion.

In fact, one of the most striking things about Biden’s budget initiative — arguably about his whole administration — is its relative modesty in terms of both money spent and claims about what that spending would accomplish. He is neither proposing nor promising a revolution, just policies that would make Americans’ lives significantly better.And I, for one, find this hugely

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Krugman Asks: Does the U.S. Dollar’s Dominance Really Matter?

May 31, 2021

This article is a wonky edition of Paul Krugman’s free newsletter. You can sign up here to receive it.

Cryptocurrency was supposed to replace government-issued fiat currency in our daily lives. It hasn’t. But one thing I’m still hearing from the faithful is that Bitcoin, or Ethereum, or maybe some crypto asset introduced by the Chinese, will soon replace the dollar as the global currency of choice.That’s also very unlikely to happen, since it’s very hard for a currency to function as global money unless it functions as ordinary money first. But still, it’s definitely conceivable that one of these days something will displace the dollar from its current dominance. I used to think the euro might be a contender, although Europe’s troubles now make that seem like a distant prospect. Still,

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The Economy’s Post-Covid Recovery Is Just Getting Started

May 27, 2021

You’re driving to an appointment, but you’re running late, and you’re stuck at a red light. Being a law-abiding citizen, you won’t run the light, but you floor the gas pedal the second it changes.

And for a sickening instant — maybe because the pavement is a bit wet — your tires spin uselessly before they gain traction and your car lurches forward.You say that this has never happened to you? Yeah, right. Anyway, wheelspin is a common phenomenon, and usually harmless. A few minutes after your awkward jack rabbit start you’re driving normally, having mostly forgotten the whole incident.Which brings me to the current state of the U.S. economy. The business news these days is full of anxiety. Raw material prices are soaring! Businesses can’t find workers! It’s the 1970s all over again!Chill

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Republican Cowardice Endangers American Democracy

May 24, 2021

America’s democratic experiment may well be nearing its end. That’s not hyperbole; it’s obvious to anyone following the political scene. Republicans might take power legitimately; they might win through pervasive voter suppression; G.O.P. legislators might simply refuse to certify Democratic electoral votes and declare Donald Trump or his political heir the winner. However it plays out, the G.O.P. will try to ensure a permanent lock on power and do all it can to suppress dissent.

But how did we get here? We read every day about the rage of the Republican base, which overwhelmingly believes, based on nothing, that the 2020 election was stolen, and extremists in Congress, who insist that being required to wear a face mask is the equivalent of the Holocaust.I’d argue, however, that focusing

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Technobabble, Libertarian Derp and Bitcoin

May 21, 2021

A number of readers have asked me to weigh in on Bitcoin and other cryptocurrencies, whose fluctuations have dominated a lot of market news. Would I please comment on what it’s all about, and what’s going on?

Well, I can tell you what it’s about. What’s going on is harder to explain.The story so far: Bitcoin, the first and biggest cryptocurrency, was introduced in 2009. It uses an encryption key, similar to those used in hard-to-break codes — hence the “crypto” — to establish chains of ownership in tokens that entitle their current holders to … well, ownership of those tokens. And nowadays we use Bitcoin to buy houses and cars, pay our bills, make business investments, and more.Oh, wait. We don’t do any of those things. Twelve years on, cryptocurrencies play almost no role in normal

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Krugman Wonks Out: What We Talk About When We Talk About Money

May 21, 2021

Lately I’ve been getting a lot of mail from readers infuriated by my relative nonchalance about two issues: budget deficits and money growth. When I point out that the federal government is able to borrow at incredibly low interest rates, some retort that this is only because the Federal Reserve is buying a lot of debt. When I say that we shouldn’t be worried about runaway inflation, some point to the rapid growth in the money supply and say that we’re on the verge of becoming Venezuela.

These are actually related complaints — and both, I’d argue, reflect common misunderstandings about what’s actually going on both with the Fed’s balance sheet and with the “money supply.” (Scare quotes explained shortly.)So, what makes an asset money? There’s no ineffable essence that makes green pieces

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Nuestra población envejece y eso no tiene que ser una mala noticia

May 20, 2021

La semana pasada, la Oficina de Estadísticas Laborales informó que la inflación era mucho más alta de lo que casi todo el mundo predijo, y los inflacionistas —personas que siempre predicen un aumento desenfrenado de los precios y que siempre se equivocan— aprovecharon la noticia para usarla como prueba de que ahora sí viene el lobo.Sin embargo, los mercados financieros se lo tomaron con calma. Las acciones cayeron al conocerse la noticia, pero pronto recuperaron la mayor parte de las pérdidas.Los rendimientos de los bonos solo subieron un poco al conocerse la noticia y terminaron la semana justo donde empezaron: es decir, bastante bajos.¿Por qué tan poca reacción a las noticias sobre la inflación? Se puede suponer que parte de la respuesta es que, una vez que los inversionistas tuvieron

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