Skip to main content

Quote of the Day: Paul Krugman Deconstructs The Myth That Donald Trump is Qualified to Manage the Economy

"It’s far from clear that he has expanded that fortune any more than he would have if he had simply parked the money in an index fund."
  • Author:
  • Updated:

Paul Krugman takes on the myth that Donald Trump is somehow more qualified to manage the economy than Hillary Clinton -- a perception corroborated by several polls:

One of the many peculiar things about his run for the White House is that it rests heavily on his claims of being a masterful businessman, yet it’s far from clear how good he really is at the “art of the deal.” Independent estimates suggest that he’s much less wealthy than he says he is, and probably has much lower income than he claims to have, too. But since he has broken with all precedents by refusing to release his tax returns, it’s impossible to resolve such disputes. (And maybe that’s why he won’t release those returns.)

Remember, too, that Mr. Trump is a clear case of someone born on third base who imagines that he hit a triple: He inherited a fortune, and it’s far from clear that he has expanded that fortune any more than he would have if he had simply parked the money in an index fund.

Krugman also notes that running a country and running a business are two completely different things, and the advice given to presidents by prominent businessmen/women is usually "startlingly bad" for fairly obvious reasons:

Wealthy, powerful people sometimes don’t know what they don’t know — and who’s going to tell them? The other is that a country is nothing like a corporation, and running a national economy is nothing like running a business.

Krugman points to the old adage in business that wages must be cut to increase profit -- an operable principle for a corporation whose sole motive is making profit, but a disaster for a national economy. "Businesses sell stuff to other people; they don’t need to worry about the effect of their cost-cutting measures on demand for their products," writes Krugman. "Managing national economic policy, on the other hand, is all about the feedback."

That feedback being the massively reduced purchasing power of American citizens who can no longer by the products being made by the corporations they work for. 

But then what does reality have to do with politics these days? Donald Trump is rich, so obviously he knows better. “Our wages are too high," said Trump during his campaign. "We have to compete with other countries.”

And that apparently means ensuring Americans are too poor to feed themselves -- a huge competitive advantage if you are competing to turn your country into a third world basket case.