Paul Krugman Looks Back

Brian Lehrer: It's the Brian Lehrer show on WNYC. Good morning, everyone. First of all, thanks to David Furst and Brigid Bergen for handing off today in this end-of-year pledge drive day donations that have been coming in this morning, very helpful on our one-day end-of-the-year fundraiser. Thank you. Not really going to talk about it now except to say you count on us and we count on you at this time when journalism is under so much financial and political pressure. Right? Human beings being the last-minute creatures that we are, me included, people make so many of their gifts to nonprofits in these last days of the year. Thanks for yours. If you can @wnyc.org match in effect. Here's where we begin the program today. It's a kind of exit interview today with Paul Krugman, the Nobel prize-winning economist who just wrote his last New York Times column after 25 years on the opinion page. It was called my final column, Finding Hope in an Age of Resentment. Dr. Krugman, we always appreciate when you come on with us. Welcome back to WNYC. This is your 41st appearance on the show by our count, since you started your Times column. Welcome back for number 41.

Paul Krugman: Thank you. Always good to-- except for the reminder of how old I am, but that's great.

Brian Lehrer: You start the column by comparing the widespread anger and resentment that's around today to the optimism that many people had when you launched the column on January 2nd in the year 2000. Would you begin by taking us back to then? Who was optimistic about what?

Paul Krugman: Almost everybody was optimistic about almost everything. The economy was great and people admitted that it was great, which is one of those issues. Unemployment was extremely low, inflation was low, the stock market was booming. Even though there were some reasons to be concerned about a bubble, and there was a lot of silly stuff which ended up losing some people money. Pets.com and all of that. It just seemed like a pretty benign environment. People were optimistic about the future.

That year's election what really struck me was that you would think that a really good economy would reelect the incumbent party, but people had come to take prosperity and peace for granted. They assumed that those would continue whoever won, and so they voted for the guy that seemed like he'd be more fun to hang out with. Nothing at all like this sour, bitter, and really angry mood that prevails today.

Brian Lehrer: Then you ask, why did the optimism of the turn of the century curdle? You cite the decline of trust in elites, with the first example you give being the Iraq war that Bush began in 2003 and then the financial crisis of 2008. Those are such different things. Do you think they're related in some way to each other and the arc of politics toward today?

Paul Krugman: They were very different stories about how each of them happened. In each case, what you had was a lot of people who sounded knowledgeable and important and had the ear of presidents and those around them assuring the public that everything was under control and that they knew what they were doing.

It turned out, first of all, they didn't know what they were doing, and secondly, in the case of Iraq, and I think to some extent, in the case of the financial crisis, they were not being honest. I was pretty much alone out there and saying, I don't believe this case for war. I think it's being fabricated alone in terms of being on a major op-ed page. A lot of the pushback was, ''Oh, an American president wouldn't do such a thing.'' At this point, nobody believes that there's something that an American president wouldn't do.

The financial crisis, again, people thought that Wall Street really was smart and financial innovation was the road to the future, and politicians who were scrapping regulations and trying to enable financial innovation. That was to an important degree bipartisan, and it turned out to have been just a other disaster. People really weren't ready for the possibility that people in positions of power and influence could be that wrong.

Brian Lehrer: It's the loss of faith in government elites. You can certainly peg that to the Iraq war. To financial elites. You cite banks as a private sector, elite institution that people lost faith in after the 2008 crash. Also, tech billionaires, who, you're right, used to be widely admired, admired for their innovations across the political spectrum when their products were new. Why do you think that went south and across the political spectrum as much as it has?

Paul Krugman: I think the answer is that in each case, you had stuff that really wasn't as good or wasn't as good for society as it was sold as. You had something that seemed new and great and then it turned out not to be. If you just think about how much 15 years ago people thought that social media was a great liberating force. It was bringing us the Arab Spring. It was democratizing information. Now in some cases, it's specific --

Brian Lehrer: [crosstallk] Misinformation, disinformation, messing with our teenagers' emotional lives, all those things.

Paul Krugman: Yes. I was a very heavy Twitter user and once in a while, I take a peek into that neighborhood, but it's overrun with Nazis now. That's not metaphorical. I just read stuff from even seven, eight years ago, and Elon Musk was a bipartisan culture hero. People thought of him as the man of the future. Now I guess there are people who admire him, but I think even among the people who are aligned with him politically, nobody really thinks of him as a virtuous figure anymore. Wow. We talk about kakistocracy, ruled by the worst, which turns out to be not a new invention. It's a term that's been around for a while, but the sense that we are in living in a kakistocracy is pretty much universal now.

Brian Lehrer: He probably does have supporters who think of him as representing virtue, at least in a public sense, what he's doing, the way that he is trying from his point of view, or at least what he argues to bring back free expression on social media with the accusations of censorship, from that point of view, just acknowledging that he's got his fans, but we've--

Paul Krugman: He has fans, but if I may say, I think that even his fans, and for that matter Trump's fans do recognize that these guys are thugs. They just think that they're thugs on their side. He's our thug and they're probably-- a lot of them are going to experience some major disappointment.

Brian Lehrer: We've had this popular anger emerge from both left and right. Like after the financial crisis, we had the emergence of both the Occupy movement and the Tea Party. Yet, it seems like the populist movements from the right are winning politically. Why do you think that is, if in your opinion, they're so wrong?

Paul Krugman: The average person is not all wonk studying politics, which makes sense. People have lives to live, families to raise, and the information environment is really very right-leaning. When all is said and done, particularly somebody who doesn't spend a lot of time reading, someone who gets their news from Fox or Facebook for that matter. The right-wing narratives tend to prevail. Actually, one of the things that struck me about all of this, I didn't really have a space for it in that final column.

It's ironic that the thing that really got people angry, which was the inflation surge in 2021, 2022, happens to be one where actually that was not elite failure. That was basically an unavoidable consequence as the world economy climbed out of the COVID recession. For once, the elites, particularly in the United States, we actually handled it pretty well in terms of quickly recovering, fairly quickly getting inflation back down. People were mad as hell and they blamed the people in power. I guess we have to believe that justice prevails in the long run.

On the other hand, I'm an economist and I've got to remember John Maynard Keynes. In the long run, we were all dead. It has really been the case. There's issues of organization too. Clearly, Democrats have been consistently-- in the United States, have been consistently behind in new information spaces. When talk radio was the thing, it was always right-wing. When social media has tended to be right-wing, there's a dedicated right-wing cable TV network. Whatever people claim, there's no equivalent on the left. People see things happening that get them upset and the ready-made narratives tend to be coming from the right.

Brian Lehrer: Listeners, if you're just joining us, Paul Krugman is our guest on the occasion of the publication last week of his final New York times column after 25 years on the opinion page there. You write, ''At some point, the public will realize that most politicians railing against elites are elites themselves in every sense that matters and start to hold them accountable for the promises that they're failing to deliver on.'' What do you mean elites in every sense that matters?

Paul Krugman: If an elite means having a lot of money and a lot of power, then a cabinet of billionaires supported by billionaires. Someone who's getting lots of money from Silicon Valley tech bros, and Wall Street guys and is implementing policies that are very pro-billionaire and very anti-worker. At some point, you have to say, ''Hey, who are these elites of whom you speak?'' Some college professor at the City University of New York is an elite and Elon Musk is not. I think at some point that will start to filter through.

Brian Lehrer: That brings us to something you wrote in your Substack newsletter the other day. I see that even though you're ending your Times column after 25 years, you're still doing other things like your newsletter with the Great-- Go ahead. What do you want to say?

Paul Krugman: I haven't retired. I retired from the Times, not retired. I've actually since that column, I think I've been writing two or three times as much per day as I was at the Times. You're right, yes, I--

Brian Lehrer: [crosstalk] A bunch of newsletter posts. I've been reading them on your Substack newsletter with a great title, by the way, Krugman Wonks Out. One of your posts the other day was called Will Trump be Called on His Inflation Lie? Here I think is the lie you're accusing him of. This is Trump on the campaign trail. One version of something that he said many, many times.

Donald Trump: Prices will come down. You just watch. They'll come down and they'll come down fast. Not only with insurance, with everything.

Brian Lehrer: Why do you call that Trump's inflation lie?

Paul Krugman: Because anybody who knows anything, and I think even Trump, because given what he said, walking that back now that he won the election, is really, really hard to get prices down. Getting the rate of inflation, the rate at which prices are rising down, that is not all that hard. In fact, we've done that. We basically won the war over inflation and we won it at surprisingly low cost. Actually getting prices back down to what they were in 2010, that never happens unless you have a full-on depression.

The only times in history, the only times anywhere that you can find broad declines in the price level are when you get 15,% 20%, 25% unemployment. There are reasons for that. We don't want to go into all the technical economics, but this is one of those things that we know, really history tells us, and unambiguously. That was an unfulfillable promise, and I suspect that even Trump knew that he had no way of making it come true.

Brian Lehrer: You referred to him starting to walk it back. I have the quote here from Time Magazine last week that people are citing as him now walking away from that promise and trying to lower expectations on bringing prices down. He said, ''I'd like to bring them down. It's hard to bring things down once they're up. You know it's very hard, but I think that they will.'' That's really different from what we heard in the campaign trail clip.

Paul Krugman: Yes, and it's exactly what people like me were saying. There were reasons why prices shot up in the aftermath of the pandemic, and we wish they hadn't, but wages actually also rose, and getting prices back down to what they were before the pandemic is-- It's not utterly impossible, but you really do not want to pay the price, which is a depression that it would take to what they were before.

Brian Lehrer: As you end your New York Times column, can you reflect on the work of being a columnist a little bit? You were first a professional economist and college professor, then suddenly you were an opinion page writer in a newspaper. How did you ever see the mission and did that evolve in any ways over the 25 years?

Paul Krugman: I think the mission was always to inform people as best I could. A lot of it involved translating. We do have academic. There's real research. I didn't only write about things that were really up my alley, but I think I do because of being an academic, I have some ability to recognize what is serious scholarship and what is not, but trying to get people some understanding. One of the things you do learn is that even at the New York Times, even with the greatest newspaper in the world with gigantic circulation, you are reaching only a relative handful of people.

Maybe you can help to set the tone for conversation and occasionally help push back on something bad. I actually didn't get a chance in that last column. 800 Words is a big constraint, but I think we managed to avoid privatizing Social Security, and I think I played some role in that. Positive. We did manage. People have forgotten how nightmarish US Health care was before the Affordable Care Act. A number of people, a number of obviously politicians, but also public intellectuals helped get that across the line. I think I was one of those people. You make the world a little--

Brian Lehrer: [crosstalk] That's pretty bad still today we're seeing from all the rage after the CEO killing, right?

Paul Krugman: Obamacare was a Rube Goldberg device. If you were starting from scratch, you wouldn't at all design the system we have, but there are political realities-- Change usually has to be incremental. We put a bunch of stuff on top of an existing system, and it's nothing anyone would have designed. In health insurance companies, there's an arms race between the government, between regulators trying to get health insurers to do the right thing, and health insurers constantly trying to find ways to do the wrong thing.

People are feeling that. I think everyone was shocked by the public reaction to the assassination, which is-- this is not how you do it. You don't do health care reform by shooting health industry executives. Lots of people didn't react that way. Lots of people said, ''Oh, he had it coming,'' and ''This guy was a hero,'' which is all wrong, but is telling you something about public perceptions of where we are right now.

Brian Lehrer: In our last minute, to end on the headline of your final Times column, Finding Hope in an Age of Resentment, are there places you find hope the most right now?

Paul Krugman: There's a number of things. I've been struck. I'm an internationalist, probably a globalist, Trump would say. I look and I see other countries where the public pushes back on authoritarian regimes. I guess you'd have to be a little esoteric to be really encouraged by recent elections in places like Poland. The fact is that maybe this is not a permanent.

You can claw your way back. Let's be clear that innovation goes on. When I started the column, renewable energy, the idea that we could curb climate change without making a major sacrifice in the standard of living was regarded as hippie nonsense. Now solar and wind are actually the cheapest sources of power out there. Innovation continues, the possibilities continue. Politics, it's always a struggle. It's never been axiomatic that the good guys will win, but sometimes they do, and I've seen that several times over these past 25 years. We just keep on plugging.

Brian Lehrer: Paul Krugman, still plugging, even though he's written his last New York Times column. After 25 years, he still got his Substack newsletter called Krugman Wonks Out. Thanks for continuing to come on with us. This is not our last conversation, I hope.

Paul Krugman: Take care and keep up, and keep up the good work.

 

Copyright © 2024 New York Public Radio. All rights reserved. Visit our website terms of use at www.wnyc.org for further information.

New York Public Radio transcripts are created on a rush deadline, often by contractors. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of New York Public Radio’s programming is the audio record.