← The Last Word with Lawrence O’Donnell
The Last Word with Lawrence O’Donnell
Lawrence: Did Trump lie when he said he didn't know about Ghislaine Maxwell's prison transfer?
00:41:33
August 5, 2025, 10pm; Tonight on The Last Word: The House Oversight Committee issues subpoenas for Epstein documents. And Donald Trump defends firing a labor official after a weak jobs report. Rep. Ro Khanna, Andrew Weissmann, and Paul Krugman join Lawrence O’Donnell.
Loading summary
Transcript60 lines
- [00:00]
Lawrence O'Donnell
Saturday, October 11th. From New York City, it's MSNBC Live 25. Join your favorite MSNBC hosts, Rachel Maddow, Joe Scarborough, Mika Brzezinski, Nicole Wallace, Ari Melber, Alicia Menendez, Simone Sanders Townsend, Michael Steele, Chris Haynes, jen Psaki, Lawrence O', Donnell, Stephanie Ruhl and more. Visit msnbc.comlive25 to buy your tickets today. Subscribe to MSNBC Premium on Apple Podcasts for early access, ad free listening and bonus content to all of MSNBC's original podcasts, including the chart topping series the Best People with Nicole Wallace, why Is this Happening, Main justice and more. Plus new episodes of all your favorite MSNBC shows ad free and ad free listening to all of Rachel Maddow's original series, Ultra Bagman and Deja News. Subscribe to MSNBC Premium on Apple Podcasts.
- [01:01]
Jen Psaki
The Last Word with Lawrence o' Donnell starts right now. Hey Lawrence, welcome back from vacation. Hey Jen. Thank you. So I know there's a lot of people out there who have trouble listening to Donald Trump's lies and ramblings and madness. Imagine being a Nobel Prize winning economist listening to Donald Trump talk about economics. Paul Krugman's gonna join us later in this hour because he suffers that every day. As a Nobel Prize winning economist who has to listen to Donald Trump, I mean, he must be banging calculators and economics textbooks against his head. I don't even know what he does to keep himself going through it all. Yeah, we can only imagine, and it's one of those things where if you think it's tough for you or anyone out there to listen to Donald Trump, imagine what it's like for a Nobel Prize winning economist. And he will join us and clarify a few points that Donald Trump got wrong today. Well, I look forward to listening to that. I'm sure he's got a long list. He does indeed. Thanks, Jim. Thanks, Lawrence. Thank you. Well, the current owner of the Washington Post is one of the billionaires who now lives in abject fear of Donald Trump. The owner of the Washington Post is actually the fourth richest person in the world. And like every fourth richest person in the world, he dreams of becoming the richest person in the world, which could happen if Donald Trump decides to support that billionaire's support space exploration company. And if Donald Trump helps that billionaire get an edge in the business development of artificial intelligence. And so the fourth richest person in the world no longer allows the Washington Post to count Donald Trump's lies. During the first Trump presidency, the Washington Post counted 30,573 lies that averaged out to 21 lies a day by Donald Trump. And there were days, remember, when Donald Trump didn't speak at all, didn't post anything at all, like when he had Covid. And that means that there were days when Donald Trump told many more lies than 21. Donald Trump told more than 21 lies this morning when he called into CNBC, as we will hear later in this hour when we're joined by Nobel prize winning economist Paul Krugman. And then Donald Trump took some questions from reporters later in the Eisenhower Office Building beside the White House. And I leave it to you to decide if this was one of the lies Donald Trump told today. Were you aware of and did you personally approve the prison transfer for Ghislaine Maxwell? I didn't know about it at all. Nope. I read about it just like you did. The only people who can believe that are the people who believe every word Donald Trump says. The next question was question, do you believe that she's credible to be listening to? Your deputy attorney general sat down with her recently. To which Donald Trump responded, well, he's, let me tell you, he's a very talented man. The reporter Kaitlan Collins of CNN repeatedly says, but what about her? But what about her? As Donald Trump rambled on about his former criminal defense lawyer, Todd Blanche, who is now the deputy attorney general who Donald Trump claimed today is respected by everybody. Now, I sat in a courtroom in Manhattan and watched Todd Blanche lose in, in the one criminal trial Donald Trump has faced where Donald Trump was hit with 34 guilty verdicts on 34 charges because Todd Blanche was the worst lawyer in that room. So no, Todd Blanche is not respected by everybody. That is another lie Donald Trump told when praising his criminal defense lawyer. Today, the Trump White House is leaking the possibility through various news agencies that a transcript will be released of Todd Blanche's interview with Ghislaine Maxwell. There is no possibility that that transcript will include all of Todd Blanche's communication with Ghislaine Maxwell and her criminal defense lawyer who is a personal friend of Todd Blanche. As Donald Trump kept rambling about Todd Blanche and the reporter kept asking, but what about her? Donald Trump ignored that question, what about her? And didn't say a word about Ghislaine Maxwell. This time, Donald Trump did not say, I wish her well, which Donald Trump has said before about the woman who was convicted of recruiting children to have sex with Jeffrey Epstein and sexually abusing those children herself. Tonight, ABC News is reporting, quote, during her nine hours speaking with Deputy Attorney General Todd Blanche last month, Ghislaine Maxwell said nothing during the interview that would be harmful to President Donald Trump, telling Blanche that Trump had never done anything in her presence that would have caused concern, according to sources familiar with what Maxwell said. That was obviously the mission Donald Trump's criminal defense lawyer embarked on. Get Ghislaine Maxwell to say nothing that would be harmful to Donald Trump. And then Ghislaine Maxwell immediately got transferred from a serious federal prison in Florida meant to house, among others, sex criminals, to the easiest federal custody facility that exists in America for women, which is not meant to house sex criminals like Ghislaine Maxwell. The rules had to be changed by Donald Trump's Justice Department to get Ghislaine Maxwell into that much more pleasant facility that is located in Texas near members of her family. Ghislaine Maxwell's lawyers lied today in a motion opposing the release of grand jury testimony in her case. The lawyers made the legitimate point that I've made on this program that Ghislaine Maxwell's appeal is still pending before the United States Supreme Court. So grand jury transcripts should not be unsealed in a case that could conceivably go back for a retrial. That is a serious legal point. But the lawyers went beyond that and claimed that Ghislaine Maxwell is a scapegoat. That was their word and that's the word that they want out there about Ghislaine Maxwell. The Maxwell lawyers wrote. When Epstein died, prosecutors from the Southern District of New York pivoted and made Maxwell the face of his crimes. She became the scapegoat and the only person the government could put on trial. This is what Judge Allison Nathan said about Ghislaine Maxwell's own crimes, the ones she committed when the judge sentenced Ghislaine Maxwell for 20 years in federal prison for the crimes committed not by Jeffrey Epstein, but the crimes committed by Ghislaine Maxwell. The judge said, quote, the evidence at trial established that Ms. Maxwell directly and repeatedly and over the course of many years participated in a horrific scheme to entice, transport and traffic underage girls, some as young as 14, for sexual abuse by and with Jeffrey Epstein. The judge paused there to stress that phrase, by and with. The judge said, I will pause on those words for a moment by and with Epstein. It is important at the outset to emphasize that although Epstein was of course central to this criminal scheme, Ms. Maxwell is not being punished in place of Epstein or as a proxy for Epstein. Like every other participant in a multi defendant case, Ms. Maxwell is being punished for the role that she played in the criminal conduct. As to that role, the trial evidence established that Ms. Maxwell was instrumental in the abuse of several underage girls and that she herself participated in some of the abuse. Ghislaine Maxwell was a child molester. That was proved in her trial. During her sentencing hearing, the prosecutor said that the whole sex trafficking scheme began with Ghislaine Maxwell's recruitment of the first girl enlisted into that scheme. The prosecutor said this about Jeffrey Epstein and his co conspirator, Ghislaine Maxwell. They were predators together. They molested kids together. And Ghislaine Maxwell's criminal defense lawyers did not say one word in her sentencing hearing to contradict that statement that the prosecutors made. They heard the prosecutors say that, and they didn't say a word about it. No one stood up in that courtroom for Ghislaine Maxwell to say that she did not molest kids. Ghislaine Maxwell spoke at her sentencing hearing herself and she did not say that she did not molest kids. She heard the prosecutor minutes before her say that about her, say that she molested kids. And when it was her turn to speak, Ghislaine Maxwell did not dispute that statement, that she personally molested kids. And today her lawyers use the word scapegoat. That's the word Donald Trump is going to use and that Todd Blanche is going to use. If they are scheming to make Donald Trump's wish come true for Ghislaine Maxwell. Donald Trump said he wishes her well. And the man who wishes her well now has the power to pardon her. The man who wishes her well has the power to release her from prison. And if that's what he's trying to do in exchange, exchange for Ghislaine Maxwell insisting that Donald Trump knew nothing about Jeffrey Epstein's raping of children, then Donald Trump will want to claim that she was just a scapegoat. And that is a lie. Donald Trump now likes to claim that he revoked Jeffrey Epstein's membership in the Mar A Lago private club that Donald Trump runs, that he kicked him out. Today, the Daily Beast reports that Jeffrey Epstein remained a member of Donald Trump's club for more than a year after he was first indicted on federal charges of sex trafficking in Florida. The Daily Beast reports the president told reporters that he cut ties with Epstein after the pedophile stole female workers from his exclusive Florida members club. But the revelation that Epstein was allegedly still a member of the club seven years after Epstein poached Virginia Giuffre from the spa at Mar a Lago in 2000 raises questions over Trump's version of events. Epstein was a member of the club until October 2007, more than a year after he was indicted and released on bail, according to the Grifters Club. Trump, Mar a Lago and the selling of of the presidency. In the footnotes of their book, the team of Miami Herald journalists Sarah Blasky, Caitlin Ostroff, Nicholas Nehamas and Jay Weaver reported the authors viewed a membership list showing that Epstein's account had been closed. The book reports that the membership log shows his account at the club was closed in October 2007. So seven years after Ghislaine Maxwell found Virginia Giuffre working at Donald Trump's spa and brought her to Jeffrey Epstein's house the day that she met her at Donald Trump's spa, seven years after that, Jeffrey Epstein was still a member of Donald Trump's club. A year after he was indicted, Jeffrey Epstein was still a member of Donald Trump's club. And there is no evidence in the records that Donald Trump is ended Jeffrey Epstein's membership, that he kicked him out. That might have been Jeffrey Epstein's own decision to close that membership. Today, the Republican chairman of the House Oversight Committee, James Comer, issued subpoenas after they were approved two weeks ago by a subcommittee. One subpoena demands the Epstein files from the Justice Department, asking for, quote, all documents and communications relating or referring to Mr. Jeffrey Epstein or Ms. Ghislaine Maxwell and further relating or referring to human trafficking, exploitation of minors, sexual abuse or related activity. The committee also issued subpoenas to every Attorney General, Republican and Democrat, who served during any of the federal investigations of Jeffrey Epstein and to every FBI director who served during the federal investigations of Jeffrey Epstein and to President Bill Clinton, because the subpoena said he traveled on Jeffrey Epstein's plane four times. Something Bill Clinton has publicly knowledge, and a subpoena to former Secretary of State Hillary Clinton. Hillary Clinton is being subpoenaed, according to the chairman's letter to her, because, quote, Ms. Maxwell's nephew worked for your 2008 presidential campaign and was hired by the State Department shortly after you became Secretary of State. That is a much weaker connection to Ghislaine Maxwell than the guy who's in this picture over my shoulder right now. Who knows much more about Jeffrey Epstein and Ghislaine Maxwell than Hillary Clinton ever will. Leading off our discussion now is Democratic Congressman Ro Khanna of California. He's a member of the House Oversight Committee. Congressman Connor, thank you very much for joining us once again on this subpoena issue that you've been so heavily involved in. Tell us what to expect next in this subpoena process.
- [15:36]
Ro Khanna
Lawrence, we expect the Justice Department to release the files. I think it's absolutely correct for you to point out that there was no reason to have Secretary Clinton, including, included in this subpoena. That is Chairman Comer being partisan about it. Really, we need to be hearing from Donald Trump. And what we really need is all of the Epstein files released. We're going to push for that, but we're also going to push as soon as we get back after Labor Day for Thomas Massie and my bill to be passed to put every member of Congress on record so that we have all of the release of the Epstein files. And Ghislaine Maxwell, I'm concerned because of the dangling of the pardon that she may try to be disingenuous in who she implicates and try to exonerate Donald Trump. And so she has very little credibility.
- [16:24]
Jen Psaki
Yeah. And she was facing perjury charges that were then dropped after she was convicted in the case that got her the 20 years. And one of the reasons that it was dropped is that the sentencing of her for all of her convictions were concurrent and another trial would probably not have added to that sentencing. There's something interesting in the scheduling of all those individual subpoenas, the first one being to former Attorney General Bill Barr. That's Donald Trump's attorney general for August 18th. And then Secretary Hillary Clinton. Not until October 9th. President Bill Clinton not until October 14th. That guarantees that schedule, guarantees this story to be intensely active over at least through October 14th. Does that indicate that Chairman Comer expects more resistance in the later subpoena schedules that he has there from possibly James Comey or Merrick Garland or Bill and Hillary Clinton?
- [17:29]
Ro Khanna
Look, I think everyone save Secretary Clinton and should testify. I mean, we should be compliant. And it's not partisan. It's Colmer who is making this partisan. But Colmer knows that there's going to be a lot of resistance from the Justice Department. But he also knows that his own members want this released. And if the Justice Department slow walks this, if they don't release the files, then they're going to continue to see more and more Republican members speak out against this. I mean, they have now Vice President Vance and Susie Wiles trying to figure out what to do about this. They think they can just sweep this under the rug. It's not working. There is an intense desire of people to get all of the facts out.
- [18:16]
Jen Psaki
When you come back in September. What will be the first order of business on this matter in the House of Representatives?
- [18:25]
Ro Khanna
The first order of business will be Thomas Massie and my bill will be used as a discharge petition. That means if we can get 218 House members to sign it, we will get a vote on it and we have every Democrat supporting it. That's 212. And right now we have about 12 Republicans supporting it. Now, one of the things I learned frankly from your show because of the introduction to Bradley Edwards, who's been this courageous lawyer for victims, is that we need to center the stories of victims. And I think you're going to see over the next few weeks more, more and more victims coming out and saying that for their own closure, for their own sense of justice, they want a transparent release of all the files. They don't want a political football on this. They don't want this to score points against Secretary Hillary Clinton. They want a release of the evidence for them. And we need to remember it's about the victims.
- [19:25]
Jen Psaki
Congressman Ro Khanna, thank you very much for starting off our coverage tonight.
- [19:29]
Ro Khanna
Thank you, Lawrence.
- [19:31]
Jen Psaki
Andrew Weissman will join us next.
- [19:37]
Andrew Weissman
USAA knows dynamic duos can save the.
- [19:40]
Jen Psaki
Day like superheroes and sidekicks or auto and home insurance. With usaa, you can bundle your auto and home and save up to 10%.
- [19:47]
Lawrence O'Donnell
Tap the banner to to learn more.
- [19:49]
Jen Psaki
And get a'@usaa.com bundle restrictions apply.
- [19:52]
Lawrence O'Donnell
MSNBC Films presents season two of Leguizamo does America, an NBC News Studios production on the final episode. John Leguizamo travels to San antonio Sunday at 9pm Eastern on MSNBC and streaming on Peacock. Start your day with the MSNBC Daily Newsletter, sharp insights from voices you trust, standout moments from your favorite shows, and fresh perspectives from experts shaping the news. Sign up now@msnbc.com.
- [20:25]
Jen Psaki
Today, Annie Farmer, a victim of Jeffrey Epstein and Ghislaine Maxwell, filed a letter in court supporting the release of grand jury transcripts as long as they include redactions of victims names and identifying information. Her letter says the court should not, however, rubber stamp redactions to withhold from the public information related to third parties who neither have been charged or alleged to be involved in the crimes with which Epstein and Maxwell were charged. Any effort to redact third party names smacks of a cover up. The government does not elaborate on what protocol it is using to redact other third party names or which types of individuals it seeks to protect in this way. By the government's admission over 1,000 victims suffered from Epstein's and Maxwell's actions. To date, however, the combined forces of our country's law enforcement agencies have only ever arrested these two individuals in connection with crimes committed against countless young women and girls. And the government's recent suggestion that no further criminal investigations are forthcoming is a cowardly abdication of its duties to protect and serve. Joining our discussion now is Andrew Weissman, former FBI general counsel and former chief of the Criminal Division in the Eastern District of New York. He is an MSNBC legal analyst. And Andrew, there are two things we need to distinguish for the audience. The Epstein files versus the grand jury transcripts, which are just one aspect of what would be in the Epstein files in the Justice Department. We already have reports that the Trump Justice Department has searched the Epstein files, found repeated references to Donald Trump, which they presumably have already redacted.
- [22:19]
Andrew Weissman
So the government has revealed that they have hundreds of gigabytes, hundreds of gigabytes of information as part of the Epstein and Glenn Maxwell investigation. It's not surprising, given that it went to trial, that would there would be this kind of thorough investigation. And yet the charade here is the litigation over grand jury transcripts and exhibits. Those are not likely to contain much, if anything, that is new or interesting. And the reason it's just a total sideshow is precisely because of all of that other material that the government is free to disclose any day of the week. There's nothing about grand jury secrecy that would prohibit them and they don't need to get court approval to do that. So they're sitting on a mountain of stuff and then they're litigating this issue about whether they will turn over grand jury testimony. Just one quick thing that we learned from, from the filing today from DOJ is that this was a pretty typical grand jury presentation where it looks like it was just an agent goes in or maybe two agents go in and they summarize and present hearsay as to what the evidence is. So that is a very short and sweet type of grand jury presentation. This is not what I used to do, which is sort of a long term grand jury where you call lots of firsthand witnesses and you might actually think the grand jury material would be voluminous and substantive. So this is really a real sideshow from the government in terms of this kind of litigation.
- [24:05]
Jen Psaki
And grand juries have different rules of evidence that hearsay, as you say, is a perfectly acceptable form of evidence in a grand jury. And when we're talking about child victims or victims who were children at the the Time. That may be one of those cases where the choice is to present the evidence to the. Their evidence to the jury through reports from, say, FBI agents who interviewed them.
- [24:31]
Andrew Weissman
Yeah. There's another reason, which is that anytime that a witness is in the grand jury or in any sort of forum, you're creating a transcript and a record, and any little mistake is something that the defense will use. So the government likes to have the first time that somebody is really on record testifying, be at trial, and not put them in the grand jury unnecessarily to create that kind of record that is then disclosed to the defense. But it is true that you could have a young victim who you don't want to have, sort of put them through that process more than necessary. So there could be multiple reasons, but it's pretty normal for the government to have this sort of very truncated presentation. At least in federal court, where you're allowed to use hearsay in the grand jury. It's different in the New York State court.
- [25:29]
Jen Psaki
One of the lawyers for the victims said today expressed their disappointment that Ghislaine Maxwell was not interviewed by someone who knows every detail of the case. That in fact, the prosecutor who knows every detail of the case was fired a week before Todd Blanche went down there, not knowing anything close to every detail of the case. To have his conversation with Ghislaine Maxwell.
- [25:55]
Andrew Weissman
Absolutely. And this, as you say, leaked story that they're thinking about revealing, the transcript of Ghislaine Maxwell's interview is one more charade. The idea that you would release that when you're sitting on so much material that was prepared by career people, not political appointees, and was prepared at a time there was no motive to create a fabrication for the President of the United States. I mean, the idea that that's what you would be sort of thinking about releasing when you have all this other material. I mean, to me, it just assumes that the audience are a bunch of morons and that they're not going to be able to separate what's going on here. And I just don't think that is going to work, even though they might try it as a distraction. To me, it just highlights what they're not turning over.
- [26:51]
Jen Psaki
And a transcript won't indicate to us necessarily everything that was actually said in that room. We don't know when the transcript begins. You know, when they walk in and say hello. All sorts of things can get said beyond the boundaries of a transcript, including whatever could have been said over the phone, possibly between Todd Blanch and his friends. Friend Ghislaine Maxwell's criminal defense lawyer.
- [27:14]
Andrew Weissman
Oh, absolutely. You don't know if the questions were rehearsed. You don't know if they were given to the defense counsel. But most importantly, you don't have any of the information to test her credibility. I mean, why would you release a transcript if somebody, as you said, was accused of perjury, who has this horrendous criminal record? And you, you're sitting on a mountain of evidence that would allow people to assess her credibility that you're disclosing. But if there's something that you think would be helpful from this convicted child sex trafficker who is alleged to have committed perjury, I mean, again, this is such a charade that the government is engaged in. And finally, I should point out they're probably hoping that either way that whether the judge releases the grand jury transcripts where there's not going to be much in there, or if the judge doesn't and they then can blame the court, it's all a sideshow from the fact that they're sitting on a mountain of evidence that they're not disclosing.
- [28:21]
Jen Psaki
Andrew Weissman, thank you very much for joining us tonight.
- [28:25]
Andrew Weissman
You're welcome.
- [28:26]
Jen Psaki
And coming up, we all know how hard it is for millions of Americans to have to listen to the pathological lies, gibberish and outright madness of Donald Trump. But imagine, just imagine how hard it must be, how profoundly agonizing it must be for a Nobel Prize winning economist to have to listen to Donald Trump talking about what Donald Trump thinks is economics. Nobel Prize winning economist Paul Krugman joins us next.
- [29:07]
Ro Khanna
How many discounts does USAA auto insurance offer?
- [29:10]
Andrew Weissman
Too many to say here.
- [29:12]
Ro Khanna
Multi vehicle discount, safe driver discount, new vehicle discount, storage discount. How many discounts will you stack up?
- [29:18]
Jen Psaki
Tap the banner or visit usaa.com autodiscounts restrictions apply.
- [29:23]
Lawrence O'Donnell
Saturday, October 11, from New York City, it's MSNBC LIVE 25. Join your favorite MSNBC hosts, Rachel Maddow, Joe Scarborough, Mika Brzezinski, Nicole Wallace, Ari Melber, Alicia Menendez, Simone Sanders Townsend, Michael Steele, Chris Haynes, jen Psaki, Lawrence O', Donnell, Stephanie Rule and more. Visit msnbc.comlive25 to buy your tickets today.
- [29:55]
Jen Psaki
Donald Trump called into CNBC's Squawk Box this morning and had some trouble getting away with his usual lies.
- [30:05]
Ro Khanna
Have the best poll numbers I've ever had. You know why? Because people love the tariffs and they love that countries and they love that foreign countries aren't ripping us off anymore. For years they ripped us off Friend and foe, and the friend was worse.
- [30:21]
Jen Psaki
Overall poll numbers, you don't have the best you ever had. In overall poll numbers, you do. I, I cited one of those. I have the best.
- [30:28]
Ro Khanna
I have the best poll number I've ever had. Among Republicans, I have poll numbers where I'm 71%. I have the best poll numbers. Those are among Republicans.
- [30:38]
Jen Psaki
Joe Kernan and his co host spent about 40 minutes trying and mostly failing to get anything resembling actual answers to their questions. When Andrew Ross Sorkin asked Donald Trump about tariffs, he got gibberish in reply, including imagined dialogue by Donald Trump with, quote, a very nice prime minister, which ended with Trump quoting himself saying, that's not a nice thing, Angela. When Andrew Ross Sorkin asked Donald Trump about a potential executive order punishing banks, especially the bank of America, for discriminating against conservatives, Donald Trump rambled on about trouble that he claims to have had with his own bank accounts. That's it. He didn't identify a single government policy or banking policy that concerned him in any way. But he did add this pearl of wisdom. You know, banks are not afraid of anything but a regulator. They're regulators and their wives. Typical Trumpian 1950s childish, sexist thinking, if you can call it thinking. And here's what happened. When Donald Trump tried to lie to Joe Kernan about the jobs report numbers that came out in the final year of the Biden presidency. Donald Trump had trouble getting away with the lie that the Bureau of Labor Statistics issued a heavily favorable jobs report for the Harris campaign in the closing days of the campaign and then revised that number downward after the election. Joe Kernan had to point out repeatedly to Donald Trump that the revision he was talking about happened in August of the election year.
- [32:23]
Ro Khanna
Moving on to your claim that that.
- [32:25]
Jen Psaki
Revision helped Biden hurt you for the 800,000.
- [32:29]
Paul Krugman
It was, it was in August.
- [32:31]
Ro Khanna
There was still plenty of time for voters to see that those after the election in November. I believe it was in like November something. There was a massive revision downward.
- [32:48]
Andrew Weissman
I.
- [32:48]
Jen Psaki
Think was in August and then later it came out In March of 2025, it went to 598, not 818. The August 2024 revision by the Bureau of Labor Statistics reduced the number of jobs created by 818,000. That number landed in August and was in fact harmful to the Harris campaign and very helpful, helpful to the Trump campaign. Our next guest, Nobel Prize winning economist Paul Krugman, writes in his column on Substack, quote, trump's claim that disappointing economic numbers are fake news disseminated by Radical leftists is ugly nonsense. But it was also predictable. Claiming that economic data you don't like is fraud perpetrated by a deep state conspiracy has been standard practice on the right for a long time, going back to the inflation truthers of the Obama years when inflation temporarily surged under Joe Biden. I'm not aware of any Democratic leaning economist inside or outside the administration who denied the reality of the inflation numbers, let alone attributed them to a political conspiracy. The paranoid style in American economics is very much a right wing thing. And because on today's right, every accusation is a confession. I predicted even before Trump took office that his administration would do what he falsely accused the Democrats of doing and begin manipulating economic data. And this means that when the economy starts to have serious problems, Trump won't even admit that bad things are happening, let alone make a serious effort to fix those problems. And joining us now is Nobel Prize winning economist Paul Krugman. He is a distinguished professor at City University of New York's Graduate center and publishes daily newsletter on substack. Professor Krugman, thank you very much for joining us tonight. And I wanted to get your reaction to whatever you think you heard. Cuz I'm not even sure what Donald Trump said today about the Bureau of Labor Statistics and the numbers being rigged. And of course that's why he had to fire the commissioner of the Bureau of Labor Statistics.
- [35:02]
Paul Krugman
Yeah, I mean there's no, not only is there no evidence that they rigged the numbers, let alone for partisan purposes, if you actually know anything about how they're put together, it would be required, an enormous, you know, it would require basically hundreds, if not thousands of people to be in on, on the conspiracy. This is just, this is just silly stuff. And it's clear that, that just if Trump sees a number or a fact he doesn't like, he claims that it's a conspiracy against him. And this is a real shame because the Bureau of Labor Statistics is one of the, the gems of the US Government. It's a, provides crucial information, business needs it, policymakers need it. And it has always had, you know, rock solid integrity. And this is really quite, it's shocking but not surprising because as you said back in, before, even before Trump took office, I said he's going to go after the statistics. And if you look at the statements that Kevin Hassett, his chief economist, has made, it's very clear that their intention is to replace career civil servants with Trump loyalists at the bls.
- [36:14]
Jen Psaki
Yeah, I first was exposed to the reverence people have for the bls Through Senator Moynihan, who's first job in Washington was in the Labor Department during the Kennedy administration. He talked endlessly about the importance of bls, about the importance of just how hard they work at trying to get their numbers right. And of course, given that you're doing kind of real time estimates of what's happening right in front of you, there will be revisions when better data. That's a normal thing. Yeah.
- [36:45]
Paul Krugman
Meaning to BLS to be useful, they have to produce timely data. But not all of the information has come in by the time they release the first advance reports. So as more information comes in, they do revisions. And this is absolutely standard. It happens all the time. One thing that people may not realize is that the BLS also produces the inflation numbers. And so if you start to corrupt the jobs numbers, they'll also corrupt the inflation numbers. We know. And those directly affect your life. If you receive Social Security, your cost of living adjustment is based on the official inflation number. If you have a bond, an inflation protected bond, the inflation protection is against official inflation as measured by the bls. So if this starts to get politicized, this is not just going to be some abstract thing that matters to Wall street traders. This is actually going to directly and adversely affect the lives of tens of millions of people.
- [37:42]
Jen Psaki
Yeah. When Donald Trump orders the BLS to cut their estimate of inflation to reduce it, that means it will be reducing Social Security checks to recipients. Professor Krugman, could you please stay with us? We want to squeeze in a commercial break right here. We'll be right back with Paul Krugman. Here's a lie that Donald Trump did not try to tell on CNBC this morning.
- [38:11]
Ro Khanna
Starting on day one, we will end inflation and make America affordable again to.
- [38:18]
Jen Psaki
Bring down the prices of all goods. And Professor Paul Krugman is back with us. And Professor Krugman, now I guess we know how he's going to do that, although he didn't pull it off on day one. We may just get new people installed at the Bureau of Labor Statistics whose orders are bring down inflation. Bring down that number.
- [38:41]
Paul Krugman
Yeah, I mean, this is, you know, this would not be an innovative policy. We have seen other countries do it. This is Argentina, Venezuela. This is what basically tin pot dictators do. They, you know, if you can't actually deliver good economic results, well, you can at least order the people who report the statistics to announce good economic results. But, you know, nobody really is fooled. But it's. Except possibly the guy in charge. I mean, in some ways, the greatest danger if they start corrupting the statistics, which I think they will, is that Donald Trump will believe, you know, just like a clip I saw, he believes he's enormously popular and he'll also believe that he solved inflation because who's going to tell him different? And it's, it's really, really bad. I mean it is, we're, we're kind of regressing into, you know, are we still a third world status with lightning speed?
- [39:40]
Jen Psaki
So how will you personally adapt to the possibility that BLS statistics going forward aren't reliable in your own analysis? How might markets adapt to that? People out there living their lives will be adapting to it. Every day at the grocery store they see prices changing, going up.
- [39:58]
Paul Krugman
Yeah, look, there's a bunch of measures that are not as good. Nothing can match the BLS which has thousands of people going out there and, and checking prices and surveys 60,000 companies every month to get his job estimates. But we do have, there are the purchasing manager surveys S P Global and Institute for Supply Management undertake. There are inflation estimates from the Atlanta Fed survey. We may resurrect the billion prices index which we used to have and it's now somewhat, it's behind the pay wall. But it's so you can produce, you know, if, if, if, if the Trumpified BLS says that we have great job growth and no inflation, we will know that that's not happening. We will have these other measures. And I'm actually fiddling with my own spreadsheets trying to say, you know, how do I construct a quick and dirty estimate from the PMIS and you know, jargon but from, from these independent sources? It's never going to be as good. I mean, we have the data processing company ADP produces payroll estimates. They are not as good as the bls. They're much noisier. It's not, you know, it's not the same thing. But if, you know, we've always said if ADP and the official numbers diverge, believe the official numbers six months from now might be the other way around.
- [41:26]
Jen Psaki
What will it do to mortgage rates? Consumers out there thinking of trying to buy a home if it's months from now and people are unsure of what the inflation situation actually is?
- [41:39]
Paul Krugman
Well, there's a real question. I mean, in part we think that Trump is going to try and bully the BLS into reporting no inflation even though there is inflation, and to cut interest rates, claiming that there's no inflation. And for the, but what the Fed controls is overnight interest rates and longer term interest rates. Mortgage Rates will go up because people will expect inflation in the future. And it doesn't matter what the BLS says. If everybody knows that we actually have 4 or 5% inflation rather than 2, then that's going to show up as higher borrowing costs. And this is all, it's all really bad. I mean it's a, it's actually amazing once you start to look into it, how much business practice, how much financial markets, how much just ordinary things again like Social Security depend upon honest numbers from government statistics.
- [42:36]
Jen Psaki
What does this mean for the practice of economics? When you were pursuing your PhD, when you were entering the field, this was inconceivable.
- [42:47]
Paul Krugman
That's right. I mean it's, we've always, now you always know economic data is, is imperfect. It's, you always know that there are, that there's some noise in it. And, but I'm, I'm, there's a website called Fred Federal Reserve Economic Data that everybody I know, you know, visits five times a day just to pull up these numbers. And it's going to be much, much harder. I mean we know if you read old economics books, you can find John Maynard keynes in the 1920s basically trying to roll his own economic data from very limited stuff. And yeah, you know, you manage to do it, but it's going to be a lot worse and, and you're gonna have a problem. At some point I, I can envision somebody publishes a paper that's, or an article that's based upon realistic inflation estimates and then you know, Trump and his people say, arrest that man. He's, he's, he's using fake news data.
- [43:48]
Jen Psaki
Nobel Prize winning economist Paul Krugman, thank you very much for joining us tonight. Always an honor to have you here. We'll be right back. Nobel Prize winning economist Paul Krugman gets tonight's last word.
- [44:04]
Ro Khanna
How many discounts does USAA Auto Insurance offer?
- [44:07]
Andrew Weissman
Too many to say here.
- [44:08]
Ro Khanna
Multi vehicle discount, Safe driver discount, new vehicle discount, storage discount. How many discounts will you stack up?
- [44:15]
Jen Psaki
Tap the banner or visit usaa.com autodiscounts restrictions apply.