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- [00:01]
Crucible Moments
Support for the show comes from Crucible Moments, a podcast from Sequoia Capital. We've all had turning points in our lives where the decisions we make end up having lasting consequences. No one knows this better than the founders of some of today's most influential companies, and Crucible Moments lets listeners in on the make or break events that defined major Companies like Dropbox, YouTube, Robinhood and more told by the founders themselves. Tune into season two of crucible moments today you can listen at crucible moments.com or wherever you listen to podcasts.
- [00:38]
AT&T
Support for Pivot comes from AT&T. What's it like to get a new iPhone 16 Pro with ATT next up anytime? It's like when you first light up the grill and think of all of the mouth watering possibilities. Learn how to get your new iPhone 16 Pro with Apple Intelligence on AT&T and the latest iPhone every year with AT&T. Next up anytime ATT connecting changes everything. Apple Intelligence is coming in fall 2024 with Siri and device languages set to US English. Some features and languages will be coming over the next year. $0 offer may not be available on future iPhones. Next Up Anytime feature may be discontinued at any time, subject to change additional fees. Terms and Restrictions apply. See att.com iPhone for details.
- [01:30]
Solidigm
Support for Pivot comes from Solidym. Creating highly advanced AI is complicated, especially if you don't have the right storage. A critical but often overlooked catalyst for AI infrastructures, solidigm is storage optimized for the AI era. Offering bigger, faster and more energy efficient solid state storage, solidigm delivers the capability to meet capacity, performance and energy demands across your AI data workloads. AI requires a different approach to storage. Solidigm is ready for everything. Everything the AI era demands. Learn more@storageforai.com.
- [02:06]
Kara Swisher
I don't think you seem like the hot rabbi type. Hi everyone, this is Pivot from New York Magazine and the Vox Media Podcast Network. I'm Kara Swisher. Scott is off today, so to fill his shoes, his tiny shoes, I brought in someone with big shoes. I brought in a Nobel Prize winner and a famed economist, Paul Krugman, who recently announced he was going off on his own from the New York Times after a long and illustrious career there. Hi Paul, how you doing?
- [02:35]
Paul Krugman
I'm good.
- [02:36]
Kara Swisher
Can you tell us a little bit about what you're doing?
- [02:38]
Paul Krugman
Well, basically at the moment I'm trying to build an audience for a substack. Okay. And yeah, one of the things that I couldn't do at the Times was have an Independent newsletter. They used to have an independent blog, but they eliminated those a long time ago. And so now off, they're able to weigh in on whatever seems appropriate and even have charts and funny pictures and whatever else. So that's. That's what I'm doing for now.
- [03:11]
Kara Swisher
Whatever you feel like. Right. So you were 25 years a columnist there, correct?
- [03:16]
Paul Krugman
Yeah.
- [03:18]
Kara Swisher
You know, you're still writing. Your substack, by the way, is I love the name is Krugman. Wonks out, you said it's gonna be wonkier and snarkier. You've got music recommendations everybody wants through the world. You had Tears for fears this week, so I'm gonna ask you about those in a second, but about the specific pieces that you've written. Cause I'm really interested in them. But what are you gonna do different? And Talk about your 25 years at the Times just briefly. I mean, what a. A run you've had.
- [03:49]
Paul Krugman
Yeah. What a strange thing. I mean, I was hired at the beginning of 2000 and literally Halloween, who recruited me at the time, said, you know, we have five guys writing about the Middle east and nobody writing about the economy, and the Middle east just isn't interesting anymore, which turned out to be a pretty bad call. But it was also the economy, and it was just a very different time. And we were all having fun with dot coms and on the. It's, you know, stuff looks silly, but interesting, and then, you know, turned into a much grimmer world. But, you know, there was a period, my best year, the best years of my life were the worst years for the world economy, which was the aftermath of the financial crisis, when there was a perfect convergence between my job as a journalist and my own academic research. Not only was I, you know, economist, but I had literally spent a lot of time on the Asian financial crisis in the 90s and had warned that something like that could happen here, and it did.
- [04:52]
Kara Swisher
So when you decided to break it, why now? Was it. You said, 25 years. You know, I quit my conference 20 years. I was like, I did a great job for 20 years. I want to do something else.
- [05:02]
Paul Krugman
Oh, yeah, there's a lot of stuff. I think I probably shouldn't talk about the. Okay. But the one thing was exactly we were to do this. I mean, there was no. The Times had actually canceled my newsletter. Even at the Times, look, I'm still a wonk. I want to do stuff where I can have lots of charts, maybe even an occasional equation, and also the flow. Rather weirdly, I felt like I wasn't. I wanted to write more than I was able to at the time because I was limited to two columns a week. And there's so much going on right now. I've got subjects and topics stacked up in a holding pattern, waiting for a chance to write about them.
- [05:46]
Kara Swisher
Right. Isn't it cool?
- [05:47]
Paul Krugman
It is cool.
- [05:47]
Kara Swisher
I can do whatever I want. I always used to say someone asked me why I leave various places, not just the Times, because I also left the Times too, which was, I don't want Mama telling me what to do. I don't know what else to say. It's not. Nothing's wrong with Mama. But I was sort of like, I got, what if I want to do this today, I want to do that. It makes you very. It's very creative. I think you'll find it. Someone like you will find it really creative to be able to wake up every morning and just decide what you want to do, which is a very different thing.
- [06:13]
Paul Krugman
Yeah, it's. Among other things, it gives me a chance to be silly, you know?
- [06:17]
Kara Swisher
Yeah. Silly does not pop to mind when.
- [06:20]
AT&T
I think of Paul Krugman.
- [06:21]
Paul Krugman
Well, but that is, you know, I was able to start, you know, the most recent just before we recorded this with Mike Myers as Dr. Evil saying, $1 million. You know, I'm not sure that that would have been beneath the dignity of the times. But not beneath mine.
- [06:40]
Kara Swisher
No. Beneath your dignity anymore. No dignity. No dignity. But first, let's talk about your latest. One of your latest posts on Substack. Oh, by the way, you're not supposed to say you're on subs. You're supposed to just say you're my own newsletter. Yeah, your wonky, Paul. But crypto is for criming. I love this piece. Talk about this one and you've talked about whether it matter. Then the next one was about whether Trump is ignorant on trade and whether it matters. So talk about those two. Those two that you just wrote.
- [07:11]
Paul Krugman
So crypto has been. I've been following the crypto thing. I've actually made money in crypto by going to conferences as a paid speaker, as the designated enemy. I'm there for people to yell at and they pay me a fee in actual money. But it's a remarkable phenomenon. And a lot of people what makes it remarkable aside from the fact that they incredible price gains. But those of us who think we know something about monetary economics have asked, does this thing look like money? Does it fulfill at all the functions it's supposed to and not just talking about academics but also financial industry types. I'm part of various groups that have informal meetings, and in some of them we've actually invited articulate crypto people. And the question is always, what purpose does this serve? What can you do with crypto that you can't do more cheaply and more easily with conventional stuff? Bitcoin and Venmo are roughly contemporaneous in terms of their creation. And Venmo is clearly useful and everybody uses it. Why would you want to go through all the somersaults and so on and have never gotten an answer in terms of legitimate uses yet?
- [08:37]
Kara Swisher
It's on the upswing, right? It's $107,000.
- [08:41]
Paul Krugman
It's crazy high, but still not in for anything legal. That's the most amazing thing. Even where they've tried, I mean, the, you know, El Salvador tried to make bitcoin legal tender and actually subsidize people's crypto wallets on their phones, and they still don't use it because it's awkward. It doesn't really, you know, dollar dollar linked digital payments are just a much easier tool. So. And, but it just occurred to me after a few stories in particular, after seeing some of the latest whining from Elon Musk, that the real trick here is that we were asking the wrong question. We're asking what legitimate use case is there for this? And there still is none. Nobody has actually come up with one. But illegitimate use cases are a pretty big deal. And if you actually know anything about currency, you know that actually crime is big business. You know, the vast bulk of the dollars in circulation by value are $100 bills. And nobody uses hundred dollar bills. Most people never see one. You can't actually go into a store with a hundred dollar bill, but there's trillions of dollars. There's actually about $6,000, $6,000 bills in circulation for every man, woman and child in the United Most of them, we think, and this is all inferential, are outside the country. But we also are reasonably sure all of this is inherently impossible to prove, that they're mostly for illegal purposes.
- [10:18]
Kara Swisher
So when they say to you, well, it's up in 100 and some, Trump's going to create a bitcoin currency for everybody. It's still going up like crazy. And that's what they'll point to. Krugman's an idiot, Kara's an idiot.
- [10:35]
Paul Krugman
Well, I mean, we've been through that before. Now. This is a longer run than most, but I've been around long enough to Remember the dot com bubble when lots of people thought, you know, just stupid for thinking that this is a bubble. I remember the housing bubble where people got extremely furious if you said, you know, the housing prices circa 2006 did not make sense. So you know, it's the old line, the market can, the market can stay irrational longer than you can stay solvent. Plus there's also, and this is something I did write about in my last newsletter, there's a strong element of kind of, it's not just speculation, there's gambling. We ask who. A lot of crypto is clearly being used by Putin and by drug lords, but a lot of small players buying crypto are basically young men. And at this, contemporaneous with this big rise in crypto prices has been an explosion of sports gambling. Also meme stocks, like game stock is also. So that's probably a general phenomenon of people. They probably would say, oh, I'm being a forward looking investor, but the psychology is really that of gambling or. And so, you know, put all these things together, it's still kind of astonishing that's gone this high. But then, you know, the national Bitcoin reserve amounts to a huge government bailout, which is, you know, for, for a libertarian invention. It's very fair point.
- [12:17]
Kara Swisher
That is actually the. It is they, well, they talk about free speech and then they try to censor everybody. But that's another issue. So one of the other ones you wrote about today was about trade as we tape, two things. One is your piece about trade and whether Trump knows what he's doing around tariffs, which you basically conclude no. But then at the same time as we take this news just broke that Trump and SoftBank CEO Masayoshi Son will announce $100 billion investment in the US over the next four years, which they say will create 100,000 jobs based on AI and related infrastructure. It's very thin on information. As you know, Masayoshi Son has had his share of failures and wins. He's sort of one of these, you know, there's a book coming out about him basically, you know that he just goes, goes up and down like it's just, he's really quite a risk taker. So talk a little bit about this idea of Trump pushing the trade issues and at the same time saying I'm going to bring, I'm going to give free. Anyone who invests more than a billion dollars in this country is going to get like right through the regulatory thicket without a problem.
- [13:21]
Paul Krugman
Yeah. So first of all, you know, the fact that somebody's bringing money to the United States. You know, the regulations are there for a reason. Now, if you want to fix the regulations, fine, but to say, well, you know, bring a billion dollars to the US It'll, and I'm not sure what that we won't, we won't care if you're polluting the air, we won't care if you're poisoning the water. But what's really funny for somebody, certainly with my background, is there's a, I'm trying to figure out if there's a way to say this and that it doesn't totally put people off. But, you know, it is a, a fact that's an accounting identity that the trade balance plus net capital flows into the United States equals zero. The balance of payments always balances. And so if we can persuade foreigners to invest more in the United States, then arithmetic says that we have to have a bigger trade deficit. So you have Trump, on the one hand saying, you know, we're subsidizing Canada and Mexico because we run trade deficits with them, on the other hand saying, it's great. I'm bringing in all this foreign money which guarantees, one way or another, an even bigger trade deficit. And I have no question in my mind that he has no idea that that's how it works.
- [14:40]
Kara Swisher
People say they're going to try to stop him in this or move him off him, but they don't seem to be able to. There's a lot of people saying he's going to do a, you know, a more lukewarm version of it that has a lot of jazz hands and not a lot of push behind it. But. And that you were noting that other countries have a lot of things at their disposal to make it hurt here.
- [14:59]
Paul Krugman
I mean, I have no way of reading Trump's mind, but the lots of stuff he makes, you know, on crypto, he, he was, it's total nonsense. Oh, and also I'm going to throw hundreds of billions of taxpayer money at it. So he changes his minds on lot lots of things. But tariffs have been an obsession of his for a very, very long time and long before he really entered politics. Trade deficits are bad as a long obsession of his. So I would be surprised if he's willing to water it down too much. But if he doesn't, then he has a very kind of 19th century, if you like, view, which kind of makes sense given he loves William McKinley of trade as countries trade food and manufactured goods for each other. And that's kind of the end of the story. That's not the world we live in now. We live in a world of these highly interdependent economies and supply chains. Trump thinks that because we run a trade deficit, because we buy more from other countries than they buy from us, that we have all the leverage. But the fact of the matter is that some of the most effective forms of retaliation that other countries can do are not levying tariffs on US Exports, but putting taxes or restrictions on things that we import. And I thought it was striking to see that even the Canadians are talking about putting export taxes on oil. To get the Canadians mad and seeking revenge takes special talent. But the. So the fact of the matter is that we could be very much in a world of mutual punishment over trade, escalating trade war. And the trade war will not look the way I think Trump imagines. He imagines the US Puts on tariffs. Everybody says, oh, my God, we need access to the US Market. What can we do? And they surrender, although it's not even clear what they surrender because I'm not sure he has coherent demands. But what would actually happen is a mixture of retaliatory tariffs, but also retaliatory export restrictions and just a big global economic mess.
- [17:08]
Kara Swisher
Is there any way that what he's saying is that he's going to. He sort of sees it as a boxing match or something? It seems like that.
- [17:16]
Paul Krugman
That's right. He thinks of it as zero sum, that basically if we sell more to foreigners than they buy from us, then we buy from them, that we win. And if we buy more than we sell, then we lose. And that's never made any sense as a story. And it's pretty clear. I mean, when he. I have to even I was shocked when he said, I'm going to have 25% tariffs on Canada and Mexico. I mean, if you know anything about modern manufacturing, you know there is no US Manufacturing sector. There's a North American manufacturing complex in which things like auto parts may cross the border six or eight times in the course of putting a car together. And so that's completely crazy. But he doesn't know that. And who's going to tell him?
- [18:03]
Kara Swisher
No, he lives back in the McKinley Times. You're absolutely right. Where we used to have all these big factories. Speaking of retaliatory, OpenAI has fired back in its ongoing lawsuit with co founder Elon Musk, who had left the company. In a blog post, OpenAI said you can't sue your way to AGI and said Musk wanted to transform the company into a for profit six Years ago. The Post also claims Musk demanded majority equity, which I think he has said he had. And he said he needed $80 billion to. He needed that because he needed $80 billion to build a city on Mars. Now Meta, of course, no surprise, is siding with Musk. The company is urging California's AG to block OpenAI's planned conversion to a for profit company. They're trying to slow this company down, which doesn't seem to be slowing. Talk to me about this because one of the things that's really astonishing and you were talking about this is people that talk about competition really just want to stop each other using all kinds of regulatory or legal means.
- [18:57]
Paul Krugman
Yeah, I mean this is. We have a remarkably. The tech sector is remarkably oligarchic. There are, you know, a handful of players that have strong market positions.
- [19:08]
Kara Swisher
It's called a broligarch.
- [19:09]
Paul Krugman
Well, I like the broligarch too and that's good. But it's a. And they do their best to prevent competition. They do. The nature to some extent of tech is that once you've sort of committed to a platform, it's very hard to get out of it, which gives them a lot. And this is, you know, if there are things I, again, something I'm sure I would never be able to write for the Times, but I'm a big fan of Corey Doctors and certification.
- [19:41]
Kara Swisher
Certification. You can do that.
- [19:42]
Paul Krugman
You, you build it. You build a platform that could get a lot of people locked in through network externalities and then degrade the experience step by step to extract the maximum amount of money from it. So these guys, and they're of course they're using the courts as well to try and prevent competition. But really, is anybody surprised?
- [20:04]
Kara Swisher
What does that look like? Do you think that it'll work or. When people do this, what stage are we at with tech when they're doing this? Because this is obviously the next great race Is to dominate AI. And OpenAI is way ahead by a lot compared to even despite the money being spent $30 billion at Meta, $80 billion at. At I think Microsoft and 50 at Google.
- [20:26]
AT&T
These are.
- [20:26]
Kara Swisher
And of course, whatever. Elon spending at Grok, which in trying to keep up by both these kind of things or any other means he can to get ahead.
- [20:36]
Paul Krugman
Yeah, I mean, I don't know where we are on this. First of all, the ultimate value of AI is very much up in the air. We still don't know what it's worth. I mean I actually had someone who works with, with us on the text. Now I have A textbook. But he. But is also teaches students and they're all totally into AI. And he fed one of my substack posts into ChatGPT for a summary and my God, it bore no resemblance at all to what I said and it fantasized it somehow had me talking about Brexit, which wasn't in there at all. So I mean that's just an example. They say there are some things that it's really useful for, but we don't know. There's a real question whether the amount of money that's being thrown at it will ever make sense.
- [21:24]
Kara Swisher
Right. It's a little like the beginning of the Internet, may I point out. Remember, it was like we didn't know and then of course it would have been good to have been there with the right players.
- [21:31]
Paul Krugman
Right, with the right players. Although yeah, it's a little bit what we used to call the Sierra Madre effect where somebody said the reason gold costs so much because all the people who went out looking for it and didn't find it and tech is a lot like that. It's the. But yeah. And the question is, are we. It turns out that a lot of established tech has turned into kind of when the old days we would have called natural monopolies. It settles into a handful of big players. And that happens really fast actually with Internet based stuff. I suspect it may happen with AI now, whether it's. I mean open AI does look like it's got a big lead, but maybe that maybe there's still room for somebody to jostle the side. But I very much doubt that we're going to have 10 years from now multiple competing LLMs.
- [22:29]
Kara Swisher
It's commodification of them that seems unlikely.
- [22:32]
Paul Krugman
What's more likely is that we'll have a kind of network effect where everybody is using something.
- [22:37]
Kara Swisher
I mean the general LLMs, the big ones that they can't all competing at once. What's really interesting is OpenAI could have become like Netscape, if you remember Netscape had the far and away. Or maybe it's Google. Right. That's the issue is which one it. Which one.
- [22:52]
Paul Krugman
That's right. And we have no idea really or.
- [22:55]
Kara Swisher
What it's going to be.
- [22:56]
Paul Krugman
And I think further we can say that nobody has any idea. We just don't know how the plays out.
- [23:00]
Kara Swisher
What do you say to students who are like I got to get into AI, how do you advise them?
- [23:05]
Paul Krugman
You know, just generally, you know, how about learning a lot of basics, you know, particularly grad students, they, they actually all Students, they want to. You want to learn a lot of tools for analysis. And if you start using AI for every question, first of all, you're not going to get those other skills. And secondly, it's, you know, apparently, again, there are some things it does. But on anything I happen to work on the Munkhouse, in effect, it fabulates. It just makes up stuff.
- [23:36]
Kara Swisher
I think it's improved. Having used it since the beginning, it's certainly improved. And you can see it, how it's doing that. But you're right, it's not. It's hard to figure out what the best use cases are. And eventually someone will. Who would have thought of Uber back when the iPhone was created. Right. Or even before that. Right.
- [23:51]
Paul Krugman
It's actually, it was funny. I, I was ahead of the curve because I. Because they already had digital ride hailing for taxis in the UK years before it came to the US oh, yeah. So I, I was spending time over there and I got accustomed to it. But it's true that. And something looks. Is something that actually is useful to me is. And it's fundamentally the same kind of big data thing is translation. I remember when translation or, or speech recognition were both, you know, total jokes and, and are now, you know, not that they're completely usable now.
- [24:27]
Kara Swisher
Have you looked at their sora?
- [24:29]
Paul Krugman
I haven't looked at it.
- [24:30]
Kara Swisher
Yeah. A lot of what I'm getting a lot recently is a bunch of CEOs going. I'm going from 6,000 engineers to 2,000. That's my goal. Like, that's. They're. All they're looking for is efficiencies. And I think that's. That's where I see a lot of the opportunity efficiency, by the way, in.
- [24:46]
Paul Krugman
Terms of giving students advice. It's not very long ago, like maybe two years ago that you would have been telling your students, learn to code.
- [24:54]
Kara Swisher
Right.
- [24:55]
Paul Krugman
And that turns out that's exactly one of the jobs that learn to do plumbing.
- [24:58]
Kara Swisher
Plumbing is a big plumbing.
- [25:00]
Paul Krugman
Plumbing is going to be a long time before we have robot plumbers.
- [25:02]
Kara Swisher
No. Yeah. There's not going to be digital plumbing anytime soon. All right, Paul, let's go on a quick break. We come back. ABC settles with Trump and Apple's votable vision for the future.
- [25:14]
AT&T
Support for Pivot comes from AT&T. What does it feel like to get a new iPhone 16 Pro with at and T? Next up, anytime. It's like when you first pick up those tongs and now you're the one running the grill. It's indescribable. Like something you've never felt before. All the mouthwatering anticipation of new possibilities, whether it's making a perfect cheeseburger or treating your family to a grilled baked potato, which you know will forever change the way they look at potatoes. With AT and T Next Up Anytime you can feel this way again and again. Learn how to get a new iPhone 16 Pro with Apple Intelligence on AT&T and the latest iPhone every year with AT&T next up anytime attconnecting changes everything. Apple Intelligence coming fall 2024 with Siri and device language set to US English. Some features and languages will be coming over the next year. $0 offer may not be available on future iPhones. Next Up Anytime feature may be discontinued at any time, subject to change. Additional fees, terms and Restrictions apply. See att.com iPhone for details. Support for Pivot comes from Vanta Proving.
- [26:24]
Kara Swisher
Trust is more important than ever, especially.
- [26:26]
AT&T
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- [27:10]
Stripe
Support for this podcast comes from Stripe. Payment management software isn't something your customers think about that often. They see your product, they want to buy it, and then they buy it. That's about as complex as it gets, but under the hood of that process, there are a lot of really complicated things happening that have to go right in order for that sale to go through. Stripe handles the complexity of financial infrastructure, offering a seamless experience for business owners and their customers. For example, Stripe can make sure that your customers see their currency and preferred payment method when they shop, so checking out never feels like a chore. Stripe is a payment and billing platform supporting millions of businesses around the world, including companies like Uber, BMW and Doordash. Stripe has helped countless startups and established companies alike reach their growth targets, make progress on their missions, and reach more customers globally. The platform offers a suite of specialized features and tools to power businesses of all sizes, like Stripe Billing, which makes it easy to handle subscription based charges, invoicing and all recurring revenue management needs. Learn how Stripe helps companies of all sizes make progress@swepe.com that's stripe.com to learn more stripe make progress.
- [28:27]
Kara Swisher
Paul we're back with more news to discuss. Let's start with TikTok is facing it, and I want to get into China because it's looking like you've written extensively about China over the years. But let me go through a couple of things. They're facing this legal setback after D.C. court of Appeals rejected a temporary freeze on the upcoming law requiring the parent company ByteDance to divest or face a ban. TikTok is expected to ask the Supreme Court to take the case, though it's unclear if anything will happen before the law goes into effect next month, which means they've got to act. The leaders of the House China Committee sent letters to Google and Apple on Friday telling be ready to remove TikTok from their app stores on January 19, a day before Donald Trump goes into office. Donald Trump was against TikTok before he was for it, especially because one of his big funders, Jeff Yass, was ByteDance, for people who don't know, is owned by a lot of big US Billionaires. Just so you know, it's running out of time and options. And let me just say you've written extensively about China. What you see is their move because China's economy continues to struggle. It's in a period of deflation with prices falling in six consecutive quarters and of course, these Trump tariffs we just discussed. So what do you see as their move at repercussions here? I'd love your thought if you want to go backwards any way you want to go through it.
- [29:38]
Paul Krugman
Yeah. On TikTok, that is one social media platform that I have never visited in my life and don't really expect to. And so but we know that, you know, in many ways the social media are media and we wouldn't want a largely foreign controlled entity to own the New York Times. We wouldn't want it to own one of our major cable news networks. And the same logic really does apply to social media. So I'm fine with the idea that we really need to force divestiture now. I mean, you could say the general principles, you shouldn't have people who are fundamentally hostile to American values owning social media platforms. So of course Elon Musk did divest Twitter. But anyway, the China story. Let me talk about stuff. I actually know something about China. It's a really interesting case because China has moved very quickly from incredible roaring economic success story towards something that looks a lot like Japan circa 1990. It's. And of course Japan was a huge. I'm old enough to remember when, you know, airport stores were full of books with samurai warriors on their covers promising to teach you the secrets of Japanese management and Japan. But what's happened with China is we go to the fundamentals. Their working age population has been declining now for almost a decade. So they're in a kind of a real, you know, Japanese style demographic slowdown. They're, it's interesting, they're. They are still doing really impressive stuff on some advanced technologies. But the, as best we can measure it, the overall technological level of the economy, you know, what economics jargon calls total factor productivity. By the way, the overall efficiency of the Chinese economy is not growing very fast. The big convergence on western economies that they were experiencing in the 80s, 90s, even the first decade of the 21st century appears to have largely stalled. Which means that China has gone from an economy that's capable of doing 8% growth not that long ago to something where 3 or 4% would be really a lot. But their whole economy is set up to be an 8% growth economy. They have very, very low consumption relative to income. The government kind of suppresses distribution of income that comes from production to the public as a complicated story, but basically lots of their growth does not filter down to consumers. And they maintain investment of 40% of GDP, which is like triple what we do. And there's no place for that money to go. So they were able to mask it for about a decade with a gigantic housing bubble with all those ghost cities and all of that. But they run out of room. They can't do that really anymore. But they seem to be weirdly incapable of accepting that. They need to kind of grow up and accept that they are going to be a middle income, moderate growth economy from here on in.
- [32:58]
Kara Swisher
Right. So what do they do with these bands coming with this TikTok thing with the tariffs?
- [33:04]
Paul Krugman
That just adds to the pressure because one way that you can temporarily try to deal with that kind of stagnation is to run. You have this productive capacity and not enough domestic demand, so you want to export stuff. And I'm not sure exactly how TikTok plays into that, but the reality is the world is not going to accept all those exports. The world is not going to see BYD destroy their auto industry.
- [33:27]
Kara Swisher
BYD for people don't know, is their car, which is quite a good car, but they're not going to let it. In this country. There's no way.
- [33:33]
Paul Krugman
Yeah, it's just not. It's just. I mean, even if you can make an intellectual argument that we should accept it, it's not going to happen. I used to spend a lot of time in and studying Japan. So I was one of the relative handful of Western economists who looked at Japan's problems in the 90s, and instead of saying, oh, those stupid Japanese said, gee, this is a big advanced country with policymakers who are not ideal but are not idiots, if this can happen to them, it could happen to us. And sure enough, it did. But a lot of us were very, very critical of the Japanese for not being more forceful. And I've often argued that those of us who were critical with a group that included, among other people, Ben Bernanke, that we should all go to Tokyo and apologize to the Emperor because they actually did a better job. First of all, they did a better job of dealing with their financial crisis than we did. But also that they, in the end, handle it pretty gracefully. Japan is no longer going to rule the world. But they never had mass unemployment. They haven't had mass social unrest. Every indication is that the Chinese are not managing that kind of graceful downshifting in their growth rate. And so that could be really ugly.
- [34:44]
Kara Swisher
How can they. With the population, with. They've got the expectations.
- [34:48]
Paul Krugman
Oh, but they. No, but they just need to let more income get through the consum. They need to shift from 40% of GDP invested to 25 and then 20%, which means increasing the consumption share by the same amount. And now it's true that it took the Japanese about 15 years to make that kind of shift. And the Chinese have delayed this so long that it's a much more violent thing. But still, they don't have a choice, basically. Live it up.
- [35:13]
Kara Swisher
Yeah. What will the tariffs do? If these tariffs go into place at one point, it's 100%, I guess, on those cars.
- [35:20]
Paul Krugman
Well, and it's. I mean, during the campaign, Trump was saying 60% on China, and that may now escalate. And yeah, this is rough. I mean, particularly, you could say, well, all right, they can just export to someplace else, but where a fair bit of stuff was probably, in effect, you know, rerouted through Vietnam. But that won't be. That will be cracked down on.
- [35:42]
Kara Swisher
So is Trump putting the squeeze on them a good thing for the United States?
- [35:46]
Paul Krugman
No, because we do not want the world's biggest country, by some measure the world's biggest economy. We do not want to see them descend into chaos and among other things, autocracies that are failing at economic management have this habit of trying to distract people by launching wars. I find myself thinking about the Argentine junta and the Falkland Islands. I've been around for a long time here.
- [36:17]
Kara Swisher
So it's going to. Taiwan's going to be a little different than the Falkland Islands, I suspect.
- [36:20]
Paul Krugman
Yeah, a lot tougher. Although that didn't work out too well for still. But. And that would be critical. That would be disastrous for all of us.
- [36:26]
Kara Swisher
Right, right. Because of our chips and everything else. Speaking of that, I'm just curious with Apple. Apple is looking to kickstart sales growth with a series of major design changes. They have a big market in China, by the way. They would love to see China put more money in the hands of consumers because that's one of their. Same thing with Elon Musk, by the way, with Tesla. The company plans to produce an iPhone next year that will be thinner and cheaper than current models. According to the Wall Street Journal, Apple is working on two foldable devices. Foldable devices are very hot now. They're going to do a smaller one and a giant iPad like one. They're pushing for quick release. Now, you've been skeptical and somewhat contrarian about tech product hype in the past. Talk a little bit about that. Because iPhone sales, which account for about half of Apple's overall revenue, are in the slump with. With fiscal 2024 revenue growing less than 1%. They were on a bit of a tear in the last few years, but they don't. People don't. Don't upgrade anymore. They don't. And you talked about this. So talk a little bit about it because. And China is a critical part of their business. Right. Where they make stuff and they also sell stuff.
- [37:28]
Paul Krugman
Yeah. So a trade war would be bad for just about everybody, but it would be especially bad for Apple and Tesla. And Tesla. But the, you know, one of the things that is extremely. Makes me very unpopular when I do talk to tech types is saying that, you know, for practical purposes, in terms of the lived experience, technology has really slowed down a lot. I remember when people were enormously excited at the latest iPhone or you know, I remember when smartphones first became available and now it's okay, it's going to be thinner and foldable. Well, that's fine. I have nothing against that. In fact, I'm pretty much in the Apple ecosystem in terms of my own phone and computing and all of that. But it's not world changing by a long shot. And so, yeah, they're going to in a way. Apple is kind of in the position that China's in a very high growth past and a kind of that if they do it right, an okay but.
- [38:33]
Kara Swisher
Not spectacular future, could they fix that by some spectacular. You know, Jobs did that many times. He was in one business. And then suddenly the iPhone, then suddenly the blank.
- [38:43]
Paul Krugman
Yeah, maybe there's something out there that will do it. Although at this point everybody's into AI as the. And that's where all this attention comes from. But hard to know. I mean new technologies are by their nature really hard to predict what might be coming down the pike and what might be transformational. But as they are. Stan. No, it's hard to see China.
- [39:04]
Kara Swisher
Apple's like China. That's a really interesting insight that they, they've got to sort of manage their decline.
- [39:09]
Paul Krugman
That's. That's on my. Not even decline. It's just downshifting. It's sort of. You've been driving along the highway at 70 miles an hour and now you're, now you're on local streets where you really shouldn't be going above 30. And how do you, how do you. Can you make the adjustment to driving safely under these conditions?
- [39:30]
Kara Swisher
No. Paul. Foldable phones.
- [39:32]
Paul Krugman
Foldable phones. Foldable phones. Will you get one? I waited for the last, you know, the. I only have my current phone because my last phone was viciously attacked by a tile floor.
- [39:44]
AT&T
So okay, I'm getting one right away.
- [39:48]
Kara Swisher
You know that I'm getting a phone.
- [39:50]
Paul Krugman
Yeah.
- [39:52]
Kara Swisher
I have wanted a foldable for a long time. I've been bugging them about it my whole, my whole. When I saw Cook recently, I was like, you know, the app economy's over. You get that, right? Because it's all going to be. And by the way, they're getting, to be fair, they're getting very good reviews for their integration of ChatGPT into the iPhone right now. So some of the things will be services which have been growing like crazy at Apple comparatively.
- [40:15]
Paul Krugman
I've actually invested in one of those poor pay search engines that doesn't do AI.
- [40:20]
Kara Swisher
Oh, okay.
- [40:21]
Paul Krugman
Because anything I actually really need to research.
- [40:24]
Kara Swisher
Yeah.
- [40:25]
Paul Krugman
I have a much better idea than ChatGPT of what is actually a relevant result. And it just gets in the way for now. Eventually lots of things can be replaced and then me as well. But the.
- [40:36]
Kara Swisher
Would you, would you put all your stuff up and become. You know, I was talking to Martha Stewart. She was going to do Marth AI. Like she has so much content. She's created and has been affiliated with. She was going to load it all up and find out what happened.
- [40:49]
Paul Krugman
Let's just say watch this space.
- [40:51]
Kara Swisher
Oh, oh, Paul Krugman is AI. Robotic.
- [40:54]
Paul Krugman
Robot. Robot knee.
- [40:55]
Kara Swisher
Yeah, robot. You so. Well, you have. I love when you keep saying, watch this space. I love. It's such a.
- [41:01]
Paul Krugman
Well, you know, personally there, you know, I'm talking with various people about various things and I also have some constraints because, you know, I'm. And it's just in general, I'm still on the, on the payroll at the Times through the end of this month. And also I don't want to be one of those people, you know, trashes the place on the way out.
- [41:19]
Kara Swisher
Yeah, yeah, that's for later. But. No, I'm kidding. But you're going to do merch, obviously. Paul Krugman merch. There's going to be.
- [41:26]
Paul Krugman
Well, let's try. I don't know, I haven't figured that one out yet.
- [41:28]
Kara Swisher
Deal with Kim Kardashian for skims or something like that.
- [41:32]
Paul Krugman
Look, I'm 72 and fighting it, but I don't think fashion is going to be my thing.
- [41:37]
Kara Swisher
Paul, the world is your oyster now. So, speaking of lack of oysters, ABC News has agreed to pay $15 million to settle a defamation lawsuit brought by Donald Trump. The suit centered around comments that ABC's George Stephanopoulos made against. In a civil suit against Trump brought by Eugene Carroll, he said he was found liable for rape when he actually been found liable for sexually assaulting and defaming Carroll. The judge had mentioned that it was in most terms that would be considered that, and that's, I think, why he said it. But in fact, the jury had found him liable for sexual assault and defamation. Under the terms of the settlement, ABC News will donate the money, $15 million, to a future presidential foundation, a museum. And Stephanopoulos and ABC also also issued a statement of regret for the mistake. Many experts thought. I've talked to a dozen lawyers. They thought ABC would have won. And Trump typically does this a lot and so does speaking of Elon Musk. We just talked about him. They use legal threats as a means of having people acquiesce. So talk a little bit about this. I mean, from a business point of view, again, it's using censorship, it's using legal means, it's using anything but actual competition or just like things work out.
- [42:52]
Paul Krugman
It's more than that. What we're seeing is that, I mean, some of us had warned that a Trump administration, second Trump administration, would be one in which the coercive power of the government against business would become huge. That means we're in a mixed economy. The government plays a big role. Private sector plays a big role. Lots of things in the private sector depend upon government decisions that are reasonably favorable. As long as you have rules nor rule of law, then that kind of works. Okay. But if you start to have arbitrary exercise and one of the things we worry about on tariffs, it happens to be the case that the way that our trade laws are written, the President has enormous discretion in tariff setting. And in some ways, one of the worst things about Trump tariffs will be not the tariffs he applies, but the ones he doesn't. Because he can play favorites with who gets to get exempted from a tariff. There is some evidence he did, even on the relatively small tariffs he imposed in the first term. So if you were ABC and you're looking at all the ways that Trump can hurt you if he wants to, then you pay protection money. That's what just happened. And this is a much bigger thing than just competition. This is basically big business already acknowledging that we've become a protection racket.
- [44:21]
Kara Swisher
Pay for play, pay for play.
- [44:23]
Paul Krugman
And that's scarier than anything. I mean, that's one of those reasons to wonder whether 2024 was maybe the last real election.
- [44:35]
Kara Swisher
So talk a little bit of because from a business, from an economy point of view, you can have a very robust economy even with this cooperation. Or does it ultimately end this oligarchy and in lack of innovation which has been the Hallmark of the U.S. really, dominance and innovation and new fresh ideas. It's really been a remarkable run for the United States over the last 40 years.
- [44:57]
Paul Krugman
Yeah, the last 25 years. You know, in 2000, roughly all advanced countries seem to be about on the same level technologically. The US has now pulled well ahead. And there are. One of the pieces I've written recently says a lot of that is actually just geography. There's probably room for only one Silicon Valley anywhere in the world. But a lot of it is also, yeah, openness, rule of law. Success depends upon actually producing stuff that people want and can use, on being able to attract the best and brightest from around the world to work. And all of that is at risk. You're in a situation where, you know, we know that there are people with influence on Trump who, who think of tech jobs as being goodies to be handed out and don't let foreigners have those. We know that we're may well be heading for a situation in which success in business depends upon poll with the administration, depends on whether you're in or out of favor. And we even have, I mean, for what it's worth, regimes like that. According to an IMF study, it subtracts about 1% from growth.
- [46:11]
Kara Swisher
How do you look at with all these billionaires around him? And they certainly are just one. It's mostly tech that's going there. But Disney just did this, right? This is Bob Iger doing this. He had had to approve of this settlement and he is not. You haven't seen him at Mar a Lago, but this is his version of that, right? What is that? Were you surprised that it's been the tech people who had mostly stayed out of government? Right. And until they realized there was. There was an interview that Marc Andreessen did, who I've known for a long time. I find him largely a despicable character. But one of the things he said, he was terrified by what Biden was going to do and he was scared. And that's what drove him into Trump's arm, which I think is unlikely on some level.
- [46:52]
Paul Krugman
I mean, I am actually not surprised because I'm a cynic. And the thing about tech, by the way, is these are no longer upstart innovators that we're talking about.
- [47:00]
Kara Swisher
No, they're not.
- [47:01]
Paul Krugman
We're talking about people who made their billions very, very young, but they're now middle aged and they're sitting in many ways on these monopoly positions created by their past efforts. And of course they're going to try and curry favor with the government. The libertarian ideology was never more than skin deep. But I also think that some of the backing Trump, this is the classic error oligarchs. It's funny, in a democratic rule of law nation, great wealth brings a lot of power with it. And it's natural to think, well, if I help elect an autocrat who will, you know, is sympathetic to my interest, that I'll have even more power. But you very quickly find out that actually all of the powers on the other side that the and you know, I don't think analogies with Putin. I mean, I'm hoping that we're not going to go full Putin. But the analogies are really clearly there. And the oligarchs who helped put Putin in power thought that they had bought themselves a government and they found out that they were working for him, not the other way around. And if they didn't work for him, they were, you know, their fortunes can disappear quite quickly. Yes, windows started well, falling out of windows. I hope we don't get to the falling out of windows stage. But it could. And so, no, this is a. And that's going to happen very, very fast. I mean, I think there's a reasonably strong case, too, that Elon Musk and Trump will have a falling out and Musk will not be the winner. And I don't know that for sure, but I'm actually kind of looking forward, to be honest, I'm not a saint.
- [48:49]
Kara Swisher
Okay, all right. What's the counter to that? Where does that break? Because rich people have always been quietly running the country. Right. The whole idea of turn Greece into Greece. Yes, but is this unprecedented? I don't think so. Right.
- [49:06]
Paul Krugman
It's totally precedented.
- [49:07]
Kara Swisher
Right. So talk about the precedent for.
- [49:09]
Paul Krugman
This is the story of Putin's Russia.
- [49:11]
Kara Swisher
This is the story. Right. What about in our country, that there have been wealthy people behind the scenes, they just aren't as performative. They don't jump down at a rally and show off their belly and stuff like that. How is this different?
- [49:23]
Paul Krugman
I actually have been wondering about that and planning to do a little. You know, I'm not a historian, but I think it really is an interesting question. We had a gilded age in which there were enormous fortunes and a lot of raw corruption, and yet democratic institutions were not corrupted too much. I mean, a lot of purchased votes and all of that, but in the end, when people voted for something different, those votes were honored. We. We didn't lose, in some ways, the essence of what America's about, despite all of that. And it's an interesting question to ask. Why. Why didn't the J.D. rockefellers and the J.P. morgans, you know, go to the limit? Why were they willing to allow Teddy Roosevelt to be elected?
- [50:14]
Kara Swisher
Right. Often a wealthy person. Fdr, wealthy person. Jfk wealthy like billionaires.
- [50:19]
Paul Krugman
FDR brought us closer to a coup than we like to think. But. Yeah, but, but how did the progressive movement manage to flourish in a time when the wealthy also had. And I don't quite know the answer, although it's possible. Hard to believe, but it's possible that people actually had at least some values and ideals. Enough to say that, okay, I will go this far, but not beyond that point.
- [50:42]
Kara Swisher
I'm not so sure what this crew.
- [50:43]
Paul Krugman
I'm not so sure either, but whatever.
- [50:45]
Kara Swisher
I'm certain they will go as far as they take. Because they are perpetually aggrieved. They're aggrieved, Paul, because they're very. They're the victims. Just so you know.
- [50:53]
Paul Krugman
Oh, it's one thing. I mean, you would know better than me, but my really strong sense is that particularly the tech bros. I mean, everybody loved and admired them 10, 15 years ago and now they're not loved and admired universally. And I think that really, you know, I didn't spend enough time in meetings with people of various people at the top of multiple status hierarchies. And everybody wants to be what they aren't. And these are people who can buy anything except love and adulation.
- [51:29]
Kara Swisher
That's correct. It was funny. It's funny you say that because one of them was in touch with me and then like, see, we won. And I said, you're still an asshole. I still think you're an asshole.
- [51:39]
Paul Krugman
I'm sorry, can I say this? But apparently somebody used grok to search for the word most used to characterize Elon Musk and it was asshole.
- [51:48]
Kara Swisher
Yeah. Yeah, well, that wasn't the one who called me. But nonetheless, same difference. I want to say the same thing I often say to many of them. You're so poor, all you have is money. Anyway, we're going to go on a quick break when we will be back for wins and fails.
- [52:05]
Solidigm
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- [53:46]
AT&T
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Kara Swisher
And the truth of it is, if.
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AT&T
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Kara Swisher
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- [54:56]
Kara Swisher
Okay Paul, let's hear some wins and fails. Would you like me to go first or would you like to go first?
- [55:00]
Paul Krugman
Why don't you go first?
- [55:01]
Kara Swisher
Okay. I think a fail is HBO is no longer airing episodes of Sesame street on Max. They've been. They've opted not to renew the output deal which brought new episodes. The library, the existing Sesame street library, which my kids watch a lot, I have two younger kids remain on the platform till at least 2027 and they will, the new season will be there but they're moving on. And so I just, I don't know. They're wonderful. It's not like some things get old and you shouldn't keep airing them, but Desmond street remains fantastic. It had been in a five year deal and it's sad. I mean they're trying to save costs. It probably doesn't do very well for them. But to me, Sesame Street's been around since 1969, if you can believe it. They're often at the wim of politicians and defunding and everything else. But so I just. You can see them till 2027. But the control over something like this is really sad to me by people who are just looking for, you know, obviously David Zaslav just did a whole mechan about spinning things into pieces at the company. And I, by the way, I have a contract cnn. Nonetheless, I think it's horrible. David. Bad job. And the. My, my plus is I just did a whole on with Kara Swisher about books and I had two amazing book critics come on. Dwight Garner from the New York Times, who's amazing, and Becca Rothfeld who writes for the Washington Post. And we had a great time talking about books that'll be appearing I think next week. But she did a review of Jordan Peterson's new book, who Wrestled with God. And I recommend that you read this review. I think Jordan Peterson is just a dimwit, which she writes about and she says, let me just read this. It takes a special kind of spiritual dimwit to cast a texts as fierce and mysterious as the Old Testament as a banal and scolding exhortation to make your bed. But Peterson, as it happens, is just this kind. I just loved her writing. I think she's a wonderful writer and I just, I laughed and cackled throughout the review and it's a wonderful review of a terrible book. And that's always a pleasure for me. You know, I think it's just, I just love, I love. Really great. As you said, there's no Paul Krugman. There's no. You can't replace any of this with anybody else but the person writing it. So I just love Becca. What a great review you did. And I'm excited for people to listen to her thoughts on books along with Dwight's all you, Paul.
- [57:35]
Paul Krugman
Okay. Wow. So fails. You know, I live in New York, although it's not where I am at the moment. But. And I have to say this whole business with congestion pricing, which was on and then off and is now down on and you know, this is completely insane driving into lower Manhattan, the cost you impose on everybody else by making that. You know, this is insane if there was ever. And not only that was it. Not only was it something that we should be doing just plain to discourage people from doing this, but it was also a revenue source for really badly. So that has been a. I thought we'd finally gotten to the point of doing the right thing there. And it's just. And it's. It's. Now I mostly take the subway, but this does get at the quality of my life.
- [58:25]
Kara Swisher
So you think there should be congestion pricing?
- [58:27]
Paul Krugman
Oh, yeah.
- [58:27]
Kara Swisher
To limit people.
- [58:29]
Paul Krugman
If you try to estimate what the true cost that you impose on other people by driving into Lower Manhattan during the workday, it's on the order of $100 just by slowing up other people. So the congestion pricing should be really strong. And this is. So that's a big fail. And New York is still my. I. Sometimes even when I'm elsewhere, I say something, well, I'll be in the city tomorrow. The city means New York.
- [58:58]
Kara Swisher
There's only one city.
- [58:59]
Paul Krugman
There's only one city. But this is really. Anyway wins. So I have lots of questions about Apple and Tim Cook, but Apple tv. I'm a science fiction fan and first of all, just in general, film science fiction. And we are in a golden age for that. The two Dune movies, I grew up with that book. And that, my God, Villeneuve was incredible. And now I just saw just about an hour before we got online with each other, that Tim Cook has extended Silo for two seasons. And I'm a total. Both a total silo freak and a total Rebecca Ferguson fan. So two more seasons of Silo, that's a significant improvement in the quality of life. Life.
- [59:48]
Kara Swisher
Oh, good. You know, Severance is coming. Did you like that one? That's. Yeah.
- [59:52]
Paul Krugman
I found. It's funny. I've good friends on Wall street who are absolutely into severance and I. Not. Not quite. Maybe because I've never actually worked in a cubicle. I know it doesn't quite work the same way for me, but I. I sort of see it.
- [60:06]
Kara Swisher
Have you tried Dark Matter? What about Dark Matter?
- [60:09]
Paul Krugman
Dark Matter. I've been working through it. It's stressful for some reason. It makes it a little too stressful for these times. You would think that Silo with every Everybody buried underground will be worse.
- [60:18]
Kara Swisher
It's a great show.
- [60:19]
Paul Krugman
I have a cluster of civilized Wall street friends. We're constantly going back. I was the one that turned them on. This is already old stuff, but Orphan Black, once upon a time. So amazing. So this is. Anyway, so, you know, I think my. I'm reading a little bit less news now because it is painful and so better streaming entertainment.
- [60:44]
Kara Swisher
Good. That's a great. Silo's wonderful. I think you should watch. Nobody wants this on Netflix. It's very delightful. It's not sci fi at all. It's about a hot rabbi. Paul, that's.
- [60:55]
Paul Krugman
Oh, gosh. All right.
- [60:58]
Kara Swisher
Well, I think you seem like the hot rabbi type. Anyway, Silo is wonderful. And you're right. Rebecca Ferguson, who was also in Mission Impossible, a whole bunch of things is just. And she was also in Dune. Astonishing. Astonishing person. Is there any movie you like right now? Is there any movie that you.
- [61:15]
Paul Krugman
That is your favorite meaning still. Still absorbing Dune, too. And not a real nothing has really, really grabbed me since then. I mean, you don't seem like a.
- [61:26]
Kara Swisher
Wicked kind of guy. You and you and Scott.
- [61:28]
Paul Krugman
I should go to it. Although I did actually see Oppenheimer was actually a little bit back, but it was wonk, wonk, wonk, wonk, wonk.
- [61:37]
Kara Swisher
Well, that's the name of your. That's the name of your crook in wonk's house.
- [61:40]
Paul Krugman
And if I might say, I thought caught it in a historical error there, and it's too. Too much to explain. But then I checked that it wasn't. II Rally was actually at the. At the Trinity test. I thought it couldn't have been because he was working at the MIT's Radiation Lab, but he was there for that. So.
- [61:58]
Kara Swisher
Amazing.
- [61:58]
Paul Krugman
Wow.
- [61:59]
Kara Swisher
That's amazing. That is a great film. That's a good film to go back and watch. He's working. Chris, the director, Nolan is working on a couple of new things that I think you'll like.
- [62:07]
Paul Krugman
Oh, and actually, by the way, I'm always a little bit shocked in general in pop culture at what I like and totally the musical stuff that's showing up now and again at the end of my newsletter. But I absolutely shocked to find out. I really enjoyed Fallout.
- [62:23]
Kara Swisher
Who knew the new Paul Krugman? He's a.
- [62:26]
Paul Krugman
Not really.
- [62:26]
Kara Swisher
And he's the same Paul Kregman now. Unleashed. Unleashed.
- [62:30]
Paul Krugman
Unbound.
- [62:31]
Kara Swisher
Yeah, Unbound. Paul Kregman, Unbound, which I love. I'm really enjoying this episode. We want to hear from you, by the way, listeners. Send us your questions about business, tech, or whatever's on your mind. Go to nym mag.com pivot to submit a question for the show or call 85551, pivot. I also want to mention that I recently sat down with Democratic Congressman Ro Khanna for On with Kara Swisher speaking.
- [62:51]
Paul Krugman
Paul.
- [62:51]
Kara Swisher
He talked about how billionaires funding the left are just as problematic as Elon and his minions on the right. Let's listen.
- [62:58]
Ro Khanna
Our side will say, well, Elon's a problem. Yeah, sure, it's a problem that he's pouring in hundreds of millions, but how about the billionaires on our side? I mean, how about the fact that Kamala Harris more billionaire money than Trump did and more wealthy money that Larry Lessig and I had an op ed on that, that I think that was part of the reason we weren't talking about transformative change on Medicare for all or standing up for unions. How often did Kamala Harris talk about inequality? And so yes, let's get the super PAC funding out. Let's be a party that says no super PAC funding in primaries. But, you know, voters respected more. It's not that I'm not going to call out Elon, I'm just dead. Don't you know that it's terrible to have that kind of spending? But voters respect you more if you're also willing to call out your own side so it doesn't just come off as hypocrisy.
- [63:47]
Kara Swisher
What do you think about that, Paul? I thought it was a little two sides of his mouth kind of thing.
- [63:51]
Paul Krugman
I think it's a little bit. It's certainly a little distressing that billionaires are so important to the finances of both parties. But you know me, I watched the campaign a lot and I didn't see any real evidence that Paris was being more centrist than would have been warranted by the politics. And in general, I think there are times when it's clearly billionaires are buying their interests. But I didn't see a lot of that in this campaign. And I'm going to have a newsletter on that very quite soon about, given the assassination in New York about healthcare. But the reason we can't have Medicare for all just now is not because billionaires are in the way. It's actually much more just that most people are reasonably happy with their private insurance. And even if you tell them, look, this government provided insurance will be better and people who have Medicare actually are happier than you are, that's just not. People won't believe it and that, you know. So it's not the billionaires that are stopping this.
- [64:59]
Kara Swisher
Yeah, they're in a rage. And the polls also show they like it. It's a really weird situation. I think it's all these cases of denials.
- [65:06]
Paul Krugman
What the polls actually show us that people really like their private insurance. Unless they get sick.
- [65:11]
Kara Swisher
That was exactly. Unless they get sick. One of the things that I will note that Elon invested $250 million in the Trump campaign and he is now 200 billion richer. What an investment. Best investment of all time, I think. Correct?
- [65:26]
Paul Krugman
Oh, yeah. Buying political influence is still an Incredible bargain.
- [65:29]
Kara Swisher
And look how much richer he is. Despite the fact that Tesla's share of the market is down considerably. Just amazing.
- [65:37]
Paul Krugman
And I'm, you know, as a New Yorker, watching the current mayor and Eric Adams. Yeah. And the scandal of the bribes that he was receiving from Turks. It was. Yeah. It's tiny. It's like two days in a luxury hotel in Istanbul. My God. That you can buy the mayor of New York for that little money.
- [66:00]
Kara Swisher
I know. Who should we buy? Paul. No, I'm kidding. Let's not do that. Anyway, anyway, Paul, you're wonderful. I'm so excited that you're out and about. I love these columns and everybody should go to his substack. Krugman wonks out for all of your analysis and musings. It's very varied and you have the musical thing at the end. I like both Slightly Unleashed and I look forward to all the different things you're going to write about in the economy and more and more. Thank you so much. We'll be back on Friday for more and I'll read this out. But Paul, again, really, I'm a huge fan and I'm thrilled that you're doing this. You'll have so much fun. You will not regret it.
- [66:34]
Paul Krugman
I'm definitely going to have a good time.
- [66:36]
Kara Swisher
Good. You deserve it. Today's show was produced by Lara Naiman, Zoe Marcus and Taylor Griffin. Ernie Enderdut engineered this episode. Thanks also to Drew Burrows, Mia Silverio and Dan Schulon. Nishat Kirwa is Vox Media's executive producer of audio. Make sure you subscribe to the show wherever you listen to podcasts. Thanks for listening to Pivot from New York Magazine and Vox Media. You can subscribe to the magazine@nymag.com pod we'll be back later this week for another breakdown of all things tech and business. Scott, I hope you're having a great time in Africa.
- [67:15]
H
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