Paul Krugman Talks 2016 Race, Donald Trump on 'What'd You Miss' (08/16/16)

TL;DR

Paul Krugman discusses the 2016 election, economic policies, and global economic conditions.

Transcript

STOCKS CLOSING LOWER, SLIPPING FROM ALL-TIME HIGHS. JOE: "WHAT'D YOU MISS?" SCARLET: THE TAKE ON THE ELECTION, FISCAL STIMULUS, AND THE FED'S NEXT MOVE. JOE: GEORGE MAGNUS WAYS IN ON THE ECONOMY AND TRADE AFTER THE BREXIT VOTE. >> A LIVE UPDATE FROM WASHINGTON , GOING DARK IN COLORADO AND PENNSYLVANIA. SCARLET: WE BEGIN WITH MARKET MINUTES. STOCKS ... Read More

Key Insights

• Paul Krugman believes Donald Trump's economic stance on spending is correct, albeit accidentally, and emphasizes the need for infrastructure investment.
• Krugman argues that Trump's business experience does not translate to effective economic policy for the national economy due to differing domains.
• He highlights the inconsistency of Trump's economic views with traditional Republican values, noting a focus on tax cuts for the wealthy.
• Krugman suggests that economic anxiety is not the primary driver of Trump's support; rather, it is fueled by underlying political and social sentiments.
• Hillary Clinton's economic proposals are described as cautious and center-left, focusing on strengthening social safety nets without assuming radical economic growth.
• Krugman discusses the limited effectiveness of monetary policy, suggesting fiscal policy as a necessary tool for economic stability.
• He notes that global productivity slowdown is a phenomenon beyond presidential control, linked to a technological lull.
• Krugman expresses skepticism about the effectiveness of current central bank policies, advocating for higher inflation targets and fiscal expansion.

Questions & Answers

Q: What is Paul Krugman's view on Donald Trump's economic stance?

Paul Krugman believes that Donald Trump's stance on increasing spending is correct, albeit accidentally. He emphasizes the need for infrastructure investment, which he thinks is necessary for economic growth. Krugman suggests that Trump's business experience does not translate to effective economic policy for the national economy, as the domains are vastly different.

Q: How does Krugman view the alignment of Trump's economic policies with Republican values?

Krugman points out that Trump's economic views are inconsistent with traditional Republican values, particularly in his advocacy for increased spending. He notes that Trump's focus on tax cuts for the wealthy aligns with the usual Republican agenda, but his other economic positions, such as trade policies, do not fit the typical conservative framework.

Q: What does Krugman say about Hillary Clinton's economic proposals?

Krugman describes Hillary Clinton's economic proposals as cautious and center-left, focusing on strengthening social safety nets and taxing high-income earners. He notes that her proposals do not assume a radical quickening of the U.S. economy, and her approach is seen as a continuation of Obama's governance with some enhancements, particularly in infrastructure spending.

Q: Why does Krugman believe monetary policy is limited in effectiveness?

Krugman argues that monetary policy has shown limited effectiveness, especially in the current economic climate where interest rates are near zero. He suggests that quantitative easing and negative interest rates have not significantly moved inflation or economic growth. Krugman advocates for fiscal policy as a necessary complement to monetary policy to provide economic stability.

Q: What is Krugman's perspective on the global productivity slowdown?

Krugman views the global productivity slowdown as a phenomenon beyond the control of any single president, attributing it to a lull in technological advancement. He argues that this slowdown is a global issue and not something that can be easily addressed through domestic policy changes.

Q: How does Krugman suggest central banks should change their approach?

Krugman suggests that central banks should consider higher inflation targets and fiscal expansion as part of their strategy. He argues that current monetary policies, including low interest rates and quantitative easing, have not been effective in stimulating economic growth or inflation, and a radical rethink is necessary.

Q: What are Krugman's thoughts on the economic impact of the 2016 election?

Krugman believes the 2016 election has significant economic implications, particularly in terms of fiscal policy and the direction of economic growth. He emphasizes the need for infrastructure investment and criticizes the current focus on tax cuts for the wealthy. Krugman also highlights the potential risks of Trump's unpredictable economic policies.

Q: Why does Krugman criticize the economic analysis supporting Bernie Sanders during the primary?

Krugman was critical of the economic analysis supporting Bernie Sanders during the primary because he felt it lacked competence and relied on wildly implausible assumptions. He emphasized the importance of honest and accurate economic modeling, suggesting that the assumptions made by Sanders' economists were not grounded in reality.

Summary & Key Takeaways

• Paul Krugman discusses the economic implications of the 2016 election, highlighting Trump's accidental correctness on spending and Clinton's cautious economic proposals. He critiques the effectiveness of monetary policy and advocates for fiscal expansion.

• Krugman critiques Trump's business experience as irrelevant to national economic policy, emphasizing the need for infrastructure investment and questioning the alignment of Trump's policies with traditional Republican values.

• He discusses the global productivity slowdown and the limitations of monetary policy, advocating for higher inflation targets and fiscal expansion as necessary tools for economic stability.