#RIPUSA Paul Krugman’s Latest Conspiracy: Trump Is A Gold Bug

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 Paul Krugman’s decay from Nobel Prize winning economist to partisan hack has only escalated since taking control of his Twitter account (it was previously used to simply link to his New York Times columns.) Some notable 2016 lowlights include Krugman accusing the FBI of working with Russia, one of the more impressive election night meltdowns, and his suggestion last week that Trump losing the popular vote gives him extra incentive to have his own 9/11.

This morning however, Krugman took to the President-elect’s favorite medium to make the case that Donald Trump was actually a secret “gold bug.”

As I noted last week, Trump himself has taken a number of various position on money, the Fed, and gold (giving the gold standard a literal thumbs up last year during an interview with GQ), so it was interesting to see Krugman’s case. Did he manage to confirm the fears of Tim Duoy at Bloomberg, that Trump may put Austrians in the Fed?

Krugman’s first point is essentially as simple as pointing out that Treasury nominee Steve Mnuchin knows John Paulson, who invested heavily in gold, therefore Mnuchin must share Paulson’s world view.

Of course Mnuchin is also friends (and former business partners) with George Soros, so the logic is a bit weak. Further, John Paulson’s notoriety stems less from owning gold and more from making billions of dollars correctly shorting the housing market the Fed inflated - as Krugman advocated.  (For any fans of The Big Short, Paulson is one of the big players left out.)

While it’s true that Paulson had some of the same inflationary concerns that many Austrians had, he also saw Bernanke’s quantitative easing having some value. So instead of being some ideologically driven investor or passionate “gold bug” – Paulson was simply making a move to protect himself against what he viewed as a threat from inflation. In fact, Paulson has decreased his exposure to gold over the years. So while it’s good that Trump and Mnuchin have a personal relationship with a man who seems to read some of the same signs Austrians do, Krugman’s analysis has more to do with petty insults than anything substantive.

Krugman then set his sights on Rep. Mick Mulvaney, who Trump announced as his choice for Director of the Office of Budget and Management.

Mulvaney’s selection was widely praised by libertarians due to a record of being a rare Republican who was willing to take on defense spending. As a member of the House Financial Services Committee, Mulaveny has shown to be a Fed critic. On multiple occasions he has criticized Janet Yellen for speaking on matters outside of monetary policy and what business the Fed has in regulating commodities. Mulvaney is also a co-sponsor of the FORM Act, an ambitious if flawed attempt at Fed reform championed by Rep. Jeb Hensarling that would limit the discretion of the Fed by forcing it to adopt a monetary policy rule.

In spite of Mulvaney’s apparent embrace of rules-based monetary policy, he has embraced some issues which are praise worthy. He has been one of the most supportive Congressmen in DC on Bitcoin, praising it as a currency “not manipulated by government.”  Last year, Mulvaney submitted questions to Yellen pressing her on what regulations the Fed may place on cryptocurrencies, as well as when the last time the Fed audited its gold holdings.

Of course instead of highlighting the pro’s and con’s of having a Fed critic at the position of Budget Director, Krugman instead opted to ridicule Mulvaeny for speaking at an event hosted by the John Birch Society.

It is not a surprise that Krugman found Larry Kudlow to be the “most reasonable” “gold bug” around Trump. After all, Kudlow has supported increasing the money supply to combat deflation, was a fan of Obama’s disastrous “cash for clunkers,” and in general has fairly conventional views on the Fed.

Though it’s not a shock to see Krugman’s Twitter tirade consist mainly of insults masquerading as analysis, it is surprising the Krugman forget to mention Trump’s flirtation was another gold standard advocate – former BB&T chief John Allison who discussed the Treasury role at Trump Tower. In fact, for Austrians looking for any reasons for optimism, there are few better than the fact Allison name continues to be connected with the administration – possibly at the Fed.

Meanwhile, it is promising to see Trump surrounded by at least some people who seem to view the Fed as something less than a heroic force for good. Whether this leads to the new president fulfilling his promise to “drain the swamp” is yet to be seen. But as we wait to see what 2017 has in store for us, at least we can enjoy watching Krugman continue to destroy his reputation 140 characters at a time. 

Oy Vey God Save Us from Donny T.... Nobel Laureate Paul Klugman on Donald Trump , the Siberian Candidate with Ostrich Head in the Sand Foreign Policy

Donald Trump, the Siberian Candidate by Nobel Laureate Paul Klugman ( republished with permission of the author and NY Times )


Paul Krugman 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 was awarded the Nobel Memorial Prize in Economic Sciences for his contributions to New Trade Theory and New Economic Geography. The Prize Committee cited Krugman's work explaining the patterns of international trade and the geographic distribution of economic activity, by examining the effects of economies of scale and of consumer preferences for diverse goods and services.Krugman was previously a professor of economics at MIT, and later at Princeton University. He retired from Princeton in June 2015, and holds the title of professor emeritus there. He is also Centenary Professor at the London School of Economics, and was President of the Eastern Economic Association in 2010. As of 2016, Research Papers in Economics ranked him as the world's 4th most influential economist based on citations of his work. Krugman is known in academia for his work on international economics (including trade theory, economic geography, and international finance), liquidity traps, and currency crisis.






CreditEric Thayer for The New York Times

If elected, would Donald Trump be Vladimir Putin’s man in the White House? This should be a ludicrous, outrageous question. After all, he must be a patriot — he even wears hats promising to make America great again.

But we’re talking about a ludicrous, outrageous candidate. And the Trump campaign’s recent behavior has quite a few foreign policy experts wondering just what kind of hold Mr. Putin has over the Republican nominee, and whether that influence will continue if he wins.

I’m not talking about merely admiring Mr. Putin’s performance — being impressed by the de facto dictator’s “strength,” and wanting to emulate his actions. I am, instead, talking about indications that Mr. Trump would, in office, actually follow a pro-Putin foreign policy, at the expense of America’s allies and her own self-interest.

That’s not to deny that Mr. Trump does, indeed, admire Mr. Putin. On the contrary, he has repeatedly praised the Russian strongman, often in extravagant terms. For example, when Mr. Putin published an article attacking American exceptionalism, Mr. Trump called it a “masterpiece.”

But admiration for Putinism isn’t unusual in Mr. Trump’s party. Well before the Trump candidacy, Putin envy on the right was already widespread.

For one thing, Mr. Putin is someone who doesn’t worry about little things like international law when he decides to invade a country. He’s “what you call a leader,” declared Rudy Giuliani after Russia invaded Ukraine.

It’s also clear that the people who gleefully chanted “Lock her up” — not to mention the Trump adviser who called for Hillary Clinton’s execution — find much to admire in the way Mr. Putin deals with his political opponents and critics. By the way, while the Secret Service is investigating the comments about executing Mrs. Clinton, all the Trump campaign had to say was that it “does not agree with those statements.”

And many on the right also seem to have a strange, rather creepy admiration for Mr. Putin’s personal style. Rush Limbaugh, for example, declared that while talking to President Obama, “Putin probably had his shirt off practicing tai chi.”

All of this is, or should be, deeply disturbing; what would the news media be saying if major figures in the Democratic Party routinely praised leftist dictators? But what we’re now seeing from Mr. Trump and his associates goes beyond emulation, and is starting to look like subservience.

First, there was the Ukraine issue — one on which Republican leaders have consistently taken a hard line and criticized Mr. Obama for insufficient action, with John McCain, for example, accusing the president of “weakness.” And the G.O.P. platform was going to include a statement reaffirming this line, but it was watered down to blandness on the insistence of Trump representatives.

Then came Mr. Trump’s interview with The New York Times, in which, among other things, he declared that even if Russia attacked members of NATO he would come to their aid only if those allies — which we are bound by treaty to defend — have “fulfilled their obligations to us.”

Now, some of this is Mr. Trump’s deep ignorance of policy, his apparent inability to understand that you can’t run the U.S. government the way he has run his ramshackle business empire. We know from many reports about his stiffing of vendors, his history of profiting from enterprises even as they go bankrupt, that he sees contracts as suggestions, clear-cut financial obligations as starting points for negotiation. And we know that he sees fiscal policy as no different; he has already talked about renegotiating U.S. debt. So why should we be surprised that he sees diplomatic obligations the same way?

But is there more to the story? Is there some specific channel of influence?

We do know that Paul Manafort, Mr. Trump’s campaign manager, has worked as a consultant for various dictators, and was for years on the payroll of Viktor Yanukovych, the former Ukrainian president and a Putin ally.

And there are reasons to wonder about Mr. Trump’s own financial interests. Remember, we know nothing about the true state of his business empire, and he has refused to release his taxes, which might tell us more. We do know that he has substantial if murky involvement with wealthy Russians and Russian businesses. You might say that these are private actors, not the government — but in Mr. Putin’s crony-capitalist paradise, this is a meaningless distinction.

At some level, Mr. Trump’s motives shouldn’t matter. We should be horrified at the spectacle of a major-party candidate casually suggesting that he might abandon American allies — just as we should be horrified when that same candidate suggests that he might welsh on American financial obligations. But there’s something very strange and disturbing going on here, and it should not be ignored.

Oy Vey God Save Us from Donny T.... Nobel Laureate Paul Klugman on Donald Trump , the Siberian Candidate with Ostrich Head in the Sand Foreign Policy

Donald Trump, the Siberian Candidate by Nobel Laureate Paul Klugman ( republished with permission of the author and NY Times )


Paul Krugman 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 was awarded the Nobel Memorial Prize in Economic Sciences for his contributions to New Trade Theory and New Economic Geography. The Prize Committee cited Krugman's work explaining the patterns of international trade and the geographic distribution of economic activity, by examining the effects of economies of scale and of consumer preferences for diverse goods and services.Krugman was previously a professor of economics at MIT, and later at Princeton University. He retired from Princeton in June 2015, and holds the title of professor emeritus there. He is also Centenary Professor at the London School of Economics, and was President of the Eastern Economic Association in 2010. As of 2016, Research Papers in Economics ranked him as the world's 4th most influential economist based on citations of his work. Krugman is known in academia for his work on international economics (including trade theory, economic geography, and international finance), liquidity traps, and currency crisis.






CreditEric Thayer for The New York Times

If elected, would Donald Trump be Vladimir Putin’s man in the White House? This should be a ludicrous, outrageous question. After all, he must be a patriot — he even wears hats promising to make America great again.

But we’re talking about a ludicrous, outrageous candidate. And the Trump campaign’s recent behavior has quite a few foreign policy experts wondering just what kind of hold Mr. Putin has over the Republican nominee, and whether that influence will continue if he wins.

I’m not talking about merely admiring Mr. Putin’s performance — being impressed by the de facto dictator’s “strength,” and wanting to emulate his actions. I am, instead, talking about indications that Mr. Trump would, in office, actually follow a pro-Putin foreign policy, at the expense of America’s allies and her own self-interest.

That’s not to deny that Mr. Trump does, indeed, admire Mr. Putin. On the contrary, he has repeatedly praised the Russian strongman, often in extravagant terms. For example, when Mr. Putin published an article attacking American exceptionalism, Mr. Trump called it a “masterpiece.”

But admiration for Putinism isn’t unusual in Mr. Trump’s party. Well before the Trump candidacy, Putin envy on the right was already widespread.

For one thing, Mr. Putin is someone who doesn’t worry about little things like international law when he decides to invade a country. He’s “what you call a leader,” declared Rudy Giuliani after Russia invaded Ukraine.

It’s also clear that the people who gleefully chanted “Lock her up” — not to mention the Trump adviser who called for Hillary Clinton’s execution — find much to admire in the way Mr. Putin deals with his political opponents and critics. By the way, while the Secret Service is investigating the comments about executing Mrs. Clinton, all the Trump campaign had to say was that it “does not agree with those statements.”

And many on the right also seem to have a strange, rather creepy admiration for Mr. Putin’s personal style. Rush Limbaugh, for example, declared that while talking to President Obama, “Putin probably had his shirt off practicing tai chi.”

All of this is, or should be, deeply disturbing; what would the news media be saying if major figures in the Democratic Party routinely praised leftist dictators? But what we’re now seeing from Mr. Trump and his associates goes beyond emulation, and is starting to look like subservience.

First, there was the Ukraine issue — one on which Republican leaders have consistently taken a hard line and criticized Mr. Obama for insufficient action, with John McCain, for example, accusing the president of “weakness.” And the G.O.P. platform was going to include a statement reaffirming this line, but it was watered down to blandness on the insistence of Trump representatives.

Then came Mr. Trump’s interview with The New York Times, in which, among other things, he declared that even if Russia attacked members of NATO he would come to their aid only if those allies — which we are bound by treaty to defend — have “fulfilled their obligations to us.”

Now, some of this is Mr. Trump’s deep ignorance of policy, his apparent inability to understand that you can’t run the U.S. government the way he has run his ramshackle business empire. We know from many reports about his stiffing of vendors, his history of profiting from enterprises even as they go bankrupt, that he sees contracts as suggestions, clear-cut financial obligations as starting points for negotiation. And we know that he sees fiscal policy as no different; he has already talked about renegotiating U.S. debt. So why should we be surprised that he sees diplomatic obligations the same way?

But is there more to the story? Is there some specific channel of influence?

We do know that Paul Manafort, Mr. Trump’s campaign manager, has worked as a consultant for various dictators, and was for years on the payroll of Viktor Yanukovych, the former Ukrainian president and a Putin ally.

And there are reasons to wonder about Mr. Trump’s own financial interests. Remember, we know nothing about the true state of his business empire, and he has refused to release his taxes, which might tell us more. We do know that he has substantial if murky involvement with wealthy Russians and Russian businesses. You might say that these are private actors, not the government — but in Mr. Putin’s crony-capitalist paradise, this is a meaningless distinction.

At some level, Mr. Trump’s motives shouldn’t matter. We should be horrified at the spectacle of a major-party candidate casually suggesting that he might abandon American allies — just as we should be horrified when that same candidate suggests that he might welsh on American financial obligations. But there’s something very strange and disturbing going on here, and it should not be ignored.