Alberto Mingardi  

Trump, Krugman and the long run

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From what we are reading in the papers, it would appear Donald Trump is relying mainly on seasoned Republican apparatchiks: people that may be liked or disliked, but not considered amateurish newcomers to the Washington scene. Some people, however, are arguing that the Trump's election will have resonance no matter what the new President actually does - just because he won. I think there is more than a grain of truth in there. Though the Trump platform isn't necessarily on par with, say, Marine Le Pen's in France, and though Brexit may well be considered more of a "British" thing than another popular insurgencies against the establishment, all these things have been boxed together by mainstream media as "populism." Therefore, in this narrative, "populists" have won the biggest prize of them all, the White House.

Paul Krugman wrote a piece claiming that Trump is not going to do much damage to the U.S. economy in the short term, but is likely to have very problematic consequences for the American society in the long run. The piece is a masterful exercise in the sort of rhetoric a successful populariser of ideas ought to command. Krugman writes not so much to send a message to a wider and politically neutral readership--that perhaps doesn't even exist--but to reassure his crowd in the wake of the Trump shock. He manages to tell his readers that (a) the world won't blow up because Donald Trump became President, and he has now told you so and (b) well, if Trumponomics works, it will be because it aims to "stimulate" the economy (even though, of course, stimulus for the rich, of the Trumpian sort, is inferior to the Keynesian/Krugmanian sort). So, if the danger isn't imminent, where, according to Krugman, is it lurking? In the long term, the Nobel laureate predicts "a major degradation in both the quality and the independence of public servants," which should imply "the dismantling of financial reform" and a new financial crisis that will hurt the American working class. 

In short, kleptocracy will lead to disaster. The missing link, perhaps, is that the policies Krugman likes (infrastructural stimulus, for example) are the lever to buy the consensus needed to accomplish those actions he fears (the occupation of government and the civil service by an uncouth bunch of barbarians).

Trump's election has brought Krugman to write a piece that emphasises how people in government are self-interested too, something that many tend to forget selectively, depending on the party in government.

Krugman's emphasis on the fact "in the longer run Trumpism will be a very bad thing for the economy," no matter how well the stock market performs in the next few months, made me recall this 2015 piece in which Krugman chastised the "narrow-minded, irresponsible obsession with long-run problems." Of course, there Krugman was denouncing those who don't take sides against austerity, basically because he thinks it imposed such dreadful economic evils in the short run that they offset any vague long-term benefit.  "In today's economic and political environment, long-termism is a cop-out, a dodge, a way to avoid sticking your neck out." 

Well, I suppose a Trump presidency may have also positive, unintended consequences. I bet a fair number of Trump protesters have campaigned against free trade in the past: will the victory of Trump perhaps let them understand how much the dream of a cosmopolitan, tolerant, open society is intertwined with free trade? It's good that in this instance Paul Krugman is shedding light on the possible, long-term consequences of public policies. The obvious next step is start considering the long-term consequences of policies he likes, and not only those of people he dislikes.


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CATEGORIES: Economic Philosophy




COMMENTS (6 to date)
Brandon Berg writes:

In defense of Krugman's apparent inconsistency, it's not unreasonable to be more concerned with short-term consequences when current conditions are bad and more concerned with the long run when current conditions are good.

Dustin writes:

You are very generous, Brandon. I think that Krugman is rather giving himself a way out: No matter the results of Trump's presidency, Trump's presidency is bad, even if we cannot demonstrate it. Just take PK's word for it.

Besides, 'current conditions' in 2015 were not materially different than the present.

Daniel Kuehn writes:

Barndon Berg - I don't even see it as "apparent inconsistency". He criticized obsession with the long run, he didn't criticize thinking about it at all.

Mm writes:

Typical Krugman- his earlier columns contradict his current one & he fails to consider that the government is already occupied- how else does he explain Lois Lerner?

Thaomas writes:

Since Mr Mingardi cannot disagree either with the opinion that Mr Trump's election will not bring a recession in the short run, or the opinion that things like trade wars and restrictions on immigration are bad in the long run, he decides to criticize an alleged contradiction between these opinions and some previous opinions. Odd!

Ray writes:

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