← The Last Word with Lawrence O’Donnell
The Last Word with Lawrence O’Donnell
Lawrence: How many flashes of insanity from a president should we tolerate?
00:44:05
Tonight on The Last Word: Donald Trump’s frozen federal tunnel funds hit the New Jersey race for governor. Also, Rep. Maxwell Frost says Trump and Republicans are at fault for the government shutdown. And analysts warn of a slumping economy under Trump. Rep. Mikie Sherrill, Rep. Maxwell Frost, and Paul Krugman join Lawrence O’Donnell.
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A
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C
The Last word though, with Lawrence o' Donnell starts right now. Hey, Lawrence.
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A
Hey, Jen. You know our my booking policy here for Nobel Prize winning economist Paul Krugman is whenever he can do it and it turns out that it's my Nobel Prize booking policy and it turns out he can do it tonight. Day one of a government shutdown. And I think an economist will have a few things to say about that and including reacting to some of the deranged things Donald Trump said yesterday about tariffs. So we're going to be eager to get to that tonight.
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C
Looking forward to it. He's an always book guest for everybody. He should be, but he loves to come on with you. So we'll just all watch.
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A
We're lucky to get him. Thanks, Jen.
- [01:37]
C
Thanks, Lawrence.
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D
Thank you.
- [01:39]
A
Well, Tom Nichols, a former professor at the U.S. naval War College, wrote in the Atlantic that the question on the minds of the top military commanders after listening to Donald Trump yesterday must have been how can I know that an order I received to launch my missiles came from a sane president? They won't know how many flashes of insanity from a president should we tolerate that? Sounds like something that deserves a zero tolerance policy. And we have never seen public flashes of insanity from any president other than Donald Trump. And we now see them every day. A president who has failed to get his funding plan passed by a Congress completely controlled by his party, then spends the day creating public versions of his hallucinations about the Democratic leaders of the House and the Senate. The president gives every indication that you could possibly ask for that he has lost his mind. And every single elected Republican official in Washington Excuses it. Most of them run away from it. They don't even want to talk about it. And the highest ranking elected Republican in Washington says, it's funny. Those were his words. It's funny. The vice President of the United States is empowered by the Constitution to convene the Cabinet, to take a vote under the 25th Amendment, to temporarily relieve the president of his duties and install the vice president as the acting president when the president is obviously insane, or when the president is incapacitated in some way, mental or physical, and obviously cannot do the job. Most Republicans in Washington are running away from the question of is Donald Trump insane for posting crazy social media lies about Chuck Schumer and Hakeem Jeffries in the middle of a government shutdown or in the middle of any workday for a president when Donald Trump is supposed to be trying to find a solution to that shutdown and other governing challenges. It sure looked like 25th Amendment Day in the White House today where Donald Trump was not publicly visible and the Vice President of the United States took to the microphone on day one of the government shutdown to basically assure the country, I guess, that he's in charge. And very specifically and deliberately to draw attention to Donald Trump's public insanity by actively seeking out an opportunity to talk publicly about Donald Trump's manifestations of outright insanity.
- [04:41]
E
On the Sobrera thing, I mean, Hakeem Jeffries said it was racist, and I know that he said that, and I honestly don't even know what that means. Like, is he a Mexican American that is offended by having a sombrero meme? I mean, I saw one of the major TV stations put the meme up and then say, this is AI generated. And he had, like, the curly animated mustache, too. It's like, do the American people. Do you really not realize the American people recognize that he did not actually come to the White House wearing a sombrero and a black curly animation mustache? Like, give the country a little bit of credit. We're all trying to do a very important job for the American people. The President of the United States likes to have a little bit of fun when he's doing it, and I think that's okay.
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A
Of course he thinks it's okay. James David Vance wants to start publicly acting as president as soon as possible, as he did today when Donald Trump was totally invisible, perhaps slumped over in exhaustion, too weak from yesterday's exertion of giving a speech, to slather on his homemade orange makeup. And to think of something to say to the American people about why he shut down the government. Donald Trump was incapable of doing that today. And so J.D. vance jumped forward. Why did J.D. vance and every Republican in Washington, why are they in favor of taking health insurance away from Americans and only from Americans? Donald Trump didn't even have the energy today to lie again about Democrats trying to provide health insurance for undocumented immigrants. That is a lie. And Donald Trump thinks that that lie is brilliantly underlined by him tacking mariachi music and sombreros onto videos of Hakeem Jeffries and Chuck Schumer. And the vice president thinks it's funny, but he hasn't explained the joke. In all that explaining he was trying to do of whatever it is Donald Trump is doing with those videos. J.D. vance could not explain the joke. Jokes never have to be explained. J.D. vance had to explain that one and couldn't because it's not a joke. There's nothing funny about it. The president has lost his mind. That is the clearest explanation for what Donald Trump is doing in his social media posting. He's lost his mind. John James David Vance says Donald Trump likes to have a little bit of fun while he is working. That is not an explanation for anything because we know Donald Trump is not working and we know Donald Trump has no sense of humor. And we know what they all would have said, what they'd all be screaming if Joe Biden had ever done anything like what Donald Trump has done this week and what Donald Trump does every week and every day. The vice President of the United States is what Donald Trump's secretary of defense now calls a beardo. Pete Hegseth thinks you're weird. You're a weirdo if you have a beard. And so he has coined the term beardo. Pete Hegseth thinks it is disqualifying in the American military to have a beard. Pete Hegseth said that in an administration with more beards than we have seen since President Grant's administration, including the vice president's beard, which is hardly the weirdest thing about him. So the secretary of defense told the generals and admirals yesterday, don't you dare get as fat as Donald Trump, and don't you ever, ever, ever look like the current vice President of the United States at time that that Secretary of defense wants to worship at the altars of Confederate generals, including the very bearded Robert E. Lee, who this Secretary of Defense now worships, even though Robert E. Lee committed treason against this country to fight to preserve slavery in this country. The current Secretary of Defense doesn't seem to know that the general who won the bloodiest war in history against Robert E. Lee, United States General Ulysses S. Grant, won that war with a beard and then served as President of the United States for two terms with a beard. The Secretary of Defense is, of course, an utter incompetent and a shockingly poor student of history, employable only by someone as incompetent and ignorant as Donald Trump. The first Republican president, Abraham Lincoln, was also what Pete Hegseth, who had to promise to stop drinking to get his job, would call a beardo. Those generals and admirals yesterday were subjected to the worst stew of fetid ignorance ever stirred in front of them by a Secretary of defense and a president who spent the day yesterday and today delighting in a shutdown of the government that Donald Trump himself chose to do. They're supposed to be governing J.D. vance and Donald Trump. They're supposed to be keeping the government open. That's the one task, the one task of the executive branch. And they are supposed to do it cooperatively, which is, it may be hard to believe tonight, the American way. Doing things cooperatively with people you don't always agree with and sometimes never agree with. And that's not just an American form of social wisdom. That is how civilization has advanced on this planet by cooperation, small scale and large scale and ultimately international and intercontinental cooperation, something Donald Trump and all Republicans now swear to oppose. But we all still do it. We out here all still do it every day. No one has described how we do it better than Jon Stewart and what has always been, for me, his finest moment of so many fine moments. It was 15 years ago when many of us thought then that our politics were coming apart, that people were losing the ability to talk to each other. Across the political divide, John Stewart and Stephen Colbert went to Washington and of a Saturday afternoon held a rally called the Rally to Restore Sanity. Jon Stewart created that day an image of our cooperation that I found then and now unforgettable. He located that cooperation in the place that so many Americans think of as the roughest place in the country, the rudest place in the country, certainly a place they certainly never want to have to try to navigate through traffic jams. A place where everything from the outside seems chaotic and impossibly crowded. It is a place that Donald Trump decided to attack today in his own hateful way, because the place where Donald Trump is from voted against him. And so he decided to try to stop funding for the new tunnel under the Hudson River. Journeying New York, New York and New Jersey, a crucial Interstate connector that benefits the entire country, not just New York and New Jersey commuters. Years on that day 15 years ago when Barack Obama was president and no one feared for the sanity of the President of the United States, but many of us had thought that our politics had come to the most tense standoff since the Vietnam War. Jon Stewart, in a truly beautiful flight of urban poetry, found the soul of American cooperation, the soul of, of the American way. In a tunnel.
- [12:48]
B
Most Americans don't live their lives solely as Democrats, Republicans, liberals or conservatives. Americans live their lives more as people that are just a little bit late for something they have to do, often something they do not want to do, but they do it. Impossible things every day that are only made possible through the little reasonable compromises we all make.
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C
Look.
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B
Look on the screen. This is where we are. This is who we are. These cars. That's a school teacher, probably thinks his taxes are too high. He's going to work. There's another car, A woman with two small kids. Can't really think about anything else right now. There's another car swinging. I don't even know if you can see it. These millions of cars must somehow find a way to squeeze one by one into a mile long, 30 foot wide tunnel carved underneath a mighty R, carved by people, by the way, who I'm sure had their differences and they do it concession by concession. You go, then I'll go. You go, then I'll go. You go, then I'll go. Oh my God. Is that an NRA sticker on your car? Is that an Obama sticker on your car? Well, that's okay. You go and then I'll go. And sure, at some point there will be a selfish jerk who zips up the shoulder and cuts in at the last minute. But that individual is rare and he is scorned and not hired as an analyst. Because we know instinctively as a people that if we are to get through the darkness and back into the light, we have to work together. And the truth is, there will always be darkness. And sometimes the light at the end of the tunnel isn't the promised land. Sometimes it's just New Jersey. But we do it anyway, together.
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A
For 100 years. The Holland Tunnel connecting New York and New Jersey. You go, then I'll go. You go, then I'll go. You go, then I'll go. Pure poetry. And we all do it every day. Getting on subways, getting on escalators, elevators, airplanes, driving on the freeways. We all know how to do it. And Congress used to know how to do it. And Congress used to do it, but Donald Trump doesn't want to do it. And so the government of the United States of America has shut down. Leading off our discussion tonight is former Navy helicopter pilot Congresswoman Mikey Sherrill. She is the Democratic nominee for governor of New Jersey. Congresswoman Sherrill, thank you very much for joining us tonight. And I very much wanted to begin with Jon Stewart's poetry about those tunnels connecting the most important tunnels in the country under the Hudson river, because Donald Trump is trying to stop the construction of the next one. And your Republican opponent for governor in New Jersey, as far as I know, has not yet disagreed with Donald Trump on anything. Has he finally found something to disagree with Donald Trump about?
- [16:48]
C
Well, Lawrence, you would think so, but no, of course not, because he's in lockstep. So here we have the president of the United States saying he's going to freeze the money to construct the Gateway Tunnel. They've already denoted the federal share. This is the largest program of national significance. This is something that I fought so hard for, for years that I was at times called the tunnel obsessed Congresswoman. And when we saw Trump year after year refuse week after week of infrastructure week, refused to put any plans into infrastructure, we were able to get this done. And this means almost 100,000 jobs to the region. It's $12 billion that we got denoted to this. And Jack Cittarelli has once again sat by and said nothing to Donald Trump attacking the economy of New Jersey.
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A
So I want to consult you both now as a member of Congress and a former federal prosecutor, because I'm seeing something today that I thought was impossible because I know it's illegal. But it turns out the Hatch act is primarily a civil law and therefore has no criminal penalties. And this is, you know, on the HUD website, Housing Urban Development website, they're saying on it, the radical left in Congress shut down the government. HUD will use available resources to help Americans in need. So purely political language, and of course, Trump political language, which is the most extreme political language of our lifetimes, calling you the radical left, calling everyone in the Congress, every Democrat in the Congress, the radical left, saying that you have shut down the government. But what about the legality of that? Is there a spot where the Hatch act crosses a criminal line?
- [18:44]
C
Well, it's not only a Hatch act problem, it's a problem with the truth because quite frankly, Democrats don't control government right now. Boy, do I wish we did. We would not be in these horrible economic straits with costs going up Everywhere. But unfortunately, Trump has the presidency, Republicans have the Senate, and Republicans have the House of Representatives. So the idea that somehow they are not responsible for shutting down the government is laughable. And again, when asked when, you know, Jack Cittarelli, my opponent was just asked about this, he said he doesn't really. Hasn't really followed it or doesn't really know what's going on because he knows exactly who shut down the government. He doesn't want to talk about it. So I would tell you, yeah, this is a pattern and practice of Trump utilizing the federal government politically in a way that is illegal and violates all rules, regulations, and norms. And I think some of the most egregious moments are things like this HUD website, which shows that, you know, this is not a concern when you are talking about shutting down the United States government and you have an organization that's responsible for making sure people are housed, and all you can think to put on your website is an attack on Democrats. I mean, that shows where your priorities are. But we also see this in use in military bases where he's created political theater at different military events on military bases. So this is certainly nothing new for the president, violating the law and something that he continues to do.
- [20:15]
A
So Donald Trump comes out and attacks New Jersey today. I mean, there's nothing more vital, a few things more vital to New Jersey than the Hudson river tunnels and the ability to cross that river. It's so important to the entire country. Freight, all sorts of stuff that is necessary to cross that river, always has been throughout our history. And Donald Trump says to the people in New Jersey, I don't care. I do not care. I have no intention at all of wanting to in any way expand the capacity to cross that river. Even though the country has grown a great deal in the hundred years since we built the Holland Tunnel.
- [20:58]
C
This is the highest trafficked rail in the entire nation. This region is responsible for about 20% of the nation's GDP. And this impacts the whole Northeast rail system. So the attack on it is not just attack on New Jerseyans, not just attack on New Yorkers, but really an attack on the economy of the United States. But this is, again, something that Trump has always been willing to do. We see right now this whole tariff regime, which is a worldwide extortion scheme where he uses the US Markets as leverage and everyone else is paying more, as he's gaining billions of dollars. We see it as he's shutting down the government of the United States of America, costing everyone money. And we certainly see it as he's freezing assets, going towards federal money that's been denoted, towards the Gateway Tunnel that he wants to freeze. And that'll cost almost 100,000 jobs in the region if we can't get him to successfully overturn that. And we will, we'll fight him tooth and nail till I'm running for governor so I can take these fights on for the people of New Jersey. And again, this, I think, just goes to show how critically important it is. We have strong leadership here because my opponent has said time and again that he is not going to take Donald Trump to court, that he doesn't disagree with anything that Donald Trump does. And this has been no exception. I thought this might be the line, but nope, yet again, he is refusing to lead in this moment and simply kowtowing to Trump.
- [22:32]
A
So as far as we know, as of tonight, the Republican candidate for governor in New Jersey agrees with Donald Trump. We don't need any more capacity, tunnel capacity. We don't need to in any way improve the tunnel connection between New York and New Jersey.
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C
That's what it appears like, yes. And again, lest you think, oh, you know, that can't be right, I was just at a debate with him where he defended the President's one big beautiful bill which is going to attack the one in three children that are on health insurance through the Medicaid. Through Medicaid here in New Jersey. It's attacking people in nursing homes. It's attacking the Department of Ed Funding, it's attacking NIH funding. I mean, you just look down the row of things that it's attacking. And this from a state that sends $70 billion more to the federal government than we get back. He has also said that for these tariffs where Trump is making billions of dollars as the people of New Jersey see all of their costs go up, he has actually said, yeah, people should feel some pain for Trump's tariffs, inexplicably picking Trump over the people that he says he wants to serve. So at every turn, we have seen him choose Trump over the people of New Jersey. And I think what's so offensive here is, you know, I mean, Jon Stewart, you were just showing him, a native son of the Garden State to have, as people know, the kind of bravado we have here, the kind of toughness, the kind of fight we have, and we're known for it the world over, to think that we'd have a governor that isn't going to stand up to the President, that's, that's not going to stand up for people here, I think is really unacceptable.
- [24:19]
A
And before you go, I have to ask you about your reaction as a former helicopter pilot to what the secretary of defense had to say yesterday about women serving in combat.
- [24:33]
C
You know, this is the most incompetent secretary of defense that this nation has ever seen. He's been accused of being an alcoholic, of sexually harassing and assaulting people. He's run every organization that he's ever led in to the ground. We see him attempting to do this with our military. The idea that he wants to go back to the 90s, you know, he was 10 years old in 1990, I think I was entering service to this country. And to have him somehow want to undermine the service of women, women who've been chiefs of naval operations, who've been superintendents of the Naval Academy, who've been cos of aircraft carrier, people that I have been so proud to know and so impressed with their service. And to have this community guy who seems like he's some little kid playing it, being SecDef, to have him try to tear all this service down is just incredibly offensive. And the fact that he would undermine our national security with his play acting is even more offensive. So I'm going to fight tooth and nail. I am committed to this. New Jersey, the governor's race here is the central race, I think as we focus on how we are building a different pathway forward, whether it's funding for the Gateway Tunnel, fighting against all of the cuts to health care, to utility costs, to the cuts to education that the president wants to lodge against our state, but also just making sure that we have a strong path forward with strong leaders and that's what we're building here. So I just want to ask your listeners, if they have a moment, go to my website, mikeysharrill.com, please sign up for a volunteer shift chip in a little bit. We can use the help because I have to tell you, it's going to be a rough month there. But in New Jersey, we're used to it and we're going to have a great result for America this November.
- [26:22]
A
Congresswoman Mikey Sherrill running for governor of New Jersey. Thank you very much for joining us tonight.
- [26:28]
C
Thank you.
- [26:29]
A
And up next today, the youngest member of the House of Representatives. Easily explained in a way that even Donald Trump could understand how the government shutdown happened. Congressman Maxwell Frost joins us.
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F
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- [27:32]
G
Oh, hey, love your shoes. If you're hearing this, this is your sign to try those on. Trust us, you can totally pull them off. In fact, try on every shoe here if you want. We won't stop you in our house. You've got unlimited freedom to play. And hey, fall is the perfect season to do wear. Be whatever you want. And with tons of shoes that get you at prices that get your budget, we'll give you something to brag about. So go ahead, try them on. Let us surprise you.
- [28:07]
A
While the 79 year old, presumably exhausted and obviously mentally feeble president remained invisible today, he somehow summoned the strength to post more hateful fake videos of the first black Democratic leader of the House of Representatives. The youngest member of Congress clearly and simply explained the government shutdown today in a way that even Donald Trump could understand.
- [28:33]
H
This is completely the fault of Donald Trump and Republicans. Why? They literally run the White House, the Senate and the House. They want to pass an evil bill to take away health care from people. They cannot expect Democrats to vote for a bill that's going to sell out working people just to give billionaires a tax cut. And so we didn't vote for it. But they run the government. It's their job to keep the government open. And so we're in this shutdown because they wanted us to be in the shutdown.
- [28:59]
A
Joining us now is Democratic Congressman Maxwell Frost of Florida. He's a member of the House Oversight Committee. Congressman, your point about this is just so clear. There's Republican majority in the House. There's a Republican majority in the Senate, There's a Republican in the White House. And they couldn't pass the bills to keep the government running. They control everything.
- [29:28]
H
Exactly. I mean, it's really as simple as that. And all you have to do is look at the fact that the last time we were in this situation, the last time we had a government shutdown was in Trump's first term. So he has a habit of shutting down the government over whatever is his issue of the day. And right now he is shutting down the government because he doesn't want to do something to fix this healthcare system that he really broke. I mean, look at the big ugly bill that was passed. 17 million people being kicked off their health insurance. Now we have this Affordable Care act tax subsidy expiring. What does that mean? It essentially means that for 25 million Americans, they're getting letters that are being sent out today that'll tell them that their health premium, health care premiums are going to go up anywhere from 50 to 300%. And what we're saying is, let's fix that. Let's make sure 17 million people don't get kicked off their health insurance. Let's make sure that working class Americans are not receiving that letter saying they're gonna pay more than double for their healthcare. And Donald Trump wants nothing to do with it. So he said, no, I don't wanna do that, so shut down the government. And it all has to do with him working to continue to enrich people just like him. He was like this before he was in the White House as a CEO, taking advantage of and screwing over working families. It's no different now that he's president.
- [30:45]
A
And you know, on the Senate side, if the Republicans want to, they can just change the Senate rule that has been putting them through a 60 vote threshold on this thing. They can just change it right away with a majority vote of Republicans and then just pass it with Republican votes. There's nothing stopping them in the Senate from doing that.
- [31:06]
H
Exactly. But they know, and the leader over there, Thu, knows that if he were to do something like that, he's setting a standard even he himself doesn't wanna set, when the balance of power may change in one year or three years. And that's probably something that's very top of mind for them as well. But at the end of the day, both of these guys, Thune and Mike Johnson, Mike Johnson being the biggest one, are complete lap dogs for Donald Trump. Unfortunately, there is no separation of power right now. Donald Trump is the speaker of the House. Donald Trump is also the President of the United States. I got in trouble for calling them lap dogs on a oversight committee a few weeks ago. But I'm just trying to tell the truth here because bills that we were talking about two years ago, bipartisan bills that we had many Republicans on, now when we try to introduce them behind the scenes, they tell us we're scared of Trump. We don't want to cross them. I mean, these are the things they're saying behind the scenes. They're more scared of Trump than they are of their own constituents. And it's part of the reason why many of these Republicans, especially in these frontline districts, many of these districts that actually voted for Kamala Harris last election, they're scared right now cuz they know they're gonna lose their reelection. And that's why Donald Trump is trying to cheat by trying to essentially change the lines by gerrymandering as many states as he can.
- [32:23]
A
This, you are suffering through the weakest Congress in history, which is to say a Congress living in total fear, Republican Congress living in total fear of a President that has never happened before. Congress has never been afraid of the President before this one. You have the pleasure of being surrounded by the weakest Republicans who've ever been in that building.
- [32:49]
H
Exactly. We've completely. And they have. The Republicans in Congress have completely relinquished their power to the president. You know, it's funny, these are the same guys who will oppose things left and right, and their explanation for opposing things like D.C. statehood is I'm a constitutionalist. Well, number one, it doesn't say anything about not making D.C. a state in the Constitution. But putting that aside, they're proud to be constitutionalists, but yet they're the ones essentially disgracing the Constitution and defiling it by completely giving up the power of the United States Congress to the President of the United States, a branch that's supposed to be an equal branch of government. Actually, my colleague Jamie Raskin would tell you, we're actually not a co equal branch of government. The Constitution explicitly gives Congress more power than the presidency is what Jamie Raskin would say. But they've essentially given all this power to the President because to him, he's the king. And this is why Democrats are standing tall and strong right now and saying, no, we are not going to be complicit in taking away health care from Americans. And I want to be clear, we're not doing this to fight just for Democrats right now. We're doing this to fight for all Americans, even the ones that don't vote for us. And that's why I'm really proud of the work we're doing right now. We did not shut down this government. The people who run the government shut down the government. And we were there yesterday morning in the House, ready to work. And where were the Republicans? Nowhere to be found. Scattered around the country. Some on vacation, some even caught having dinners with the same billionaires that are going to be enriched by the legislation they're trying to pass.
- [34:30]
A
Congressman Maxwell Frost, the master of the simple explanation. Thank you very much for joining us tonight.
- [34:37]
H
Thank you.
- [34:37]
A
Thank you. And coming up, Donald Trump's public hallucinations yesterday include imaginary conversations about tariffs. Nobel prize winning economist Paul Krugman will have something to say about that when he joins us after this break.
- [34:57]
D
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- [35:18]
F
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- [35:33]
G
Oh, hey, love your shoes. If you're hearing this, this is your sign to try those on. Trust us, you can totally pull them off. In fact, try on every shoe here if you want. We won't stop you in our house. You've got unlimited freedom to play. And hey, fall is the perfect season to do wear. Be whatever you want. And with tons of shoes that get you at prices that get your budget, we'll give you something to brag about. So go ahead, try them on. Let us surprise you.
- [36:07]
A
Yesterday, 800 of the highest ranking commanding officers in the American military were the captive audience of a tired, rambling, incoherent, 79 year old man who hallucinated conversations like this one the other day.
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I
They had 31 billion, that they found $31 billion. So we found $31 billion and we're not sure from where it came. A gentleman came in, a financial guy, I said, well, what does that mean? He said, we don't know where it came. I said, check the tariff shelf. No, sir, the tariffs haven't started in that sector yet. I said, yes, they have. They started selling seven weeks ago. Check. It comes back 20 minutes later. Sir, you're right, it came from tariffs. 31 billion. That's enough to buy a lot of battleships. Admiral.
- [37:01]
A
Imagine commanding officers listening to hallucinations like that, wondering, does he have hallucinations about military threats and military discussions around the world. The admirals and generals who took college level economics courses at West Point or Annapolis or the Air Force Academy could not have been fooled into believing that there is a financial guy who works in the Trump administration who somehow knows less about tariffs than the person they listened to yesterday saying the stupidest stuff they have ever heard in their lives about tariffs and everything else. Our next guest, Nobel Prize winning economist Paul Krugman, noted this about yesterday's spectacle with Donald Trump and his Secretary of Defense. There's a clear family resemblance between hagsethian stupidity about modern war and Trumpian stupidity about economic policy. Modern nations don't achieve prosperity by emphasizing manly jobs. They don't win wars by having big biceps. Joining us now is Nobel Prize winning economist Paul Krugman. He is distinguished professor at City University of New York's Graduate center and a former New York Times columnist who's now posting his work on Substack. Professor Krugman, thank you very much for joining us tonight. Economic incoherence as usual yesterday and what Donald Trump had to say in that speech. But there he is telling people that, oh, you know, mystery pots of money are being found as if they come from other places. And of course, the mystery pots of money are not being found and all of that money comes from us here in the United States paying those tariffs.
- [38:48]
J
Yeah. I mean, I don't know what he thinks. How does he think the federal government works? You know, it's all on the computers. It's all coming. You know, if there's one thing that even under Trump the Treasury can do, it is keep track of where the money is coming from. But you know, the sir, whenever Trump has people coming up and saying to him, sir, that's a tell.
- [39:13]
A
Yeah. And there's a tariff shelf, of course, where you just go and check. And Donald Trump knows more about it than the financial guy who's working for him. So we're in a government shutdown. The federal government is the single biggest purchaser, the single biggest player, the single biggest entity in our economy. What does this do to the American economy?
- [39:36]
J
Well, it depends on how long it goes on and how extensive large parts of the government continue to function if, unless they shut them down deliberately. But that's not, you know, that's not required. A lot of stuff continues to happen regardless. The federal government will, some purchases will be put off. A lot of federal workers are supposed to continue working while not receiving pay, which in the past has always meant that they get the back pay once the government returns to normal. We don't know how long that can go on. I think the thing that really worries me is that everything we see suggests that we have people, you know, running things. You know, you, you mentioned Trump, but what about our Secretary of War, as he calls himself, who clearly has absolutely no idea what war is like and they just, in general, they seem to be clueless about what is actually happening.
- [40:37]
A
What are the manifestations on the economic side of the hegsethian kinds of delusions that we heard yesterday?
- [40:45]
J
Well, there's two things. What I wrote about on Substack was the hexith seems to think that being able to do pull ups is how you fight modern wars. When we have a real war, a very bloody, deadly war being fought, and it's being fought largely with drones and cruise missiles out there in Ukraine. So I think he's living in the fourth century B.C. but on the economic side, and we've been hearing this all along, is that we need to bring back manly jobs. And I mean, I didn't put it in there, but it's thinking that we're going to bring back coal mining as a major source of jobs is kind of like thinking that doing pull ups is, is how you make yourself a military power. It's just living in a long vanished past. And it's, you know, being, being technology smarts and getting the best people, whether they're men or women, whether they're whatever the color of their skin. That's, that's how you become a great nation, both economically and militarily. And that's everything that they're against.
- [41:50]
A
It sounds like with Donald Trump that he's, if it were 1910, he's fighting to hold on to all those blacksmith jobs. We don't want to lose those blacksmith jobs. And this crazy automobile thing isn't going to amount to anything.
- [42:05]
J
That's right. I mean, I do think that the COLA is particularly revealing. It's not just that coal is a dead industry. Fundamentally, coal is not cost competitive. Even leaving the environmental concerns aside, coal is not cost competitive. And coal hasn't employed many people for a long time. We don't have manly men digging coal. We use high explosives to blow the tops off mountains. Not we, but the corporations do. So this is just the idea that we're going to go back to the way things were. It's not going to happen. And trying to make it happen just really cripples U.S. economic prospects.
- [42:50]
A
We're going to squeeze in a quick commercial break right here. We're going to be back with Professor Paula Krugman right after this break.
- [43:05]
I
I said tariff is my favorite word. I love the word tariff.
- [43:10]
A
Back with us is Nobel Prize winning economist Paul Krugman. Professor Krugman, I did not expect to live long enough to hear a Republican saying tax is my favorite word.
- [43:20]
J
Yeah, yeah. Tariff is just pure and simple. It's a tax. It's a tax that US Importers pay when they bring stuff in from abroad. And you know, that's usually, it falls on consumers. And so this is a sales tax that happens to be levied on, you know, most sales taxes don't cover everything. This just happens to be a sales tax on stuff that, that we buy that was made abroad. And Trump talks as if it's some miracle that, that taxing people is raising money. Well, surprise. That's what taxes do.
- [43:57]
A
Yeah. And he said on a social media post, we've made so much money on tariffs that we're going to take a small portion of that money and help our farmers. And as we saw in the first Trump administration, farmers were the first to realize what tariffs were really doing and doing to them. Closing off markets to them around the world.
- [44:18]
J
Yeah, I mean, there are some pieces of the US Economy that really, really depend on foreign markets and farming is right at the top. You know, we, we produce a lot more soybeans than we can use in the United States and we rely on selling them to other countries. And guess what? Other countries respond. If the United States is busy slapping tariffs on, you know, on, on bathroom vanities and softwood lumber and all of that, then other countries end up not buying our soybeans and the farm sector is in huge trouble. And this is, you know, if, if a, if a group of people who are really, you know, victims of policy or events say, well, we need help, we're a society, then Republicans say, oh, you know, that's what, that's welfarism. But somehow or other, bailing out farmers from a catastrophe that is entirely man made and one man made, because this is all Trump. That somehow is something he thinks he's going to do and it won't actually compensate. There's so much other stuff that's going to hurt rural America that he's doing that farmers are still going to be in dire straits.
- [45:27]
A
Is it an oversimplification to say that what's the standoff in this shutdown is that Democrats are trying to save health care, health insurance for some Americans and Republicans are not? Is it as simple as that?
- [45:43]
J
Well, I think in some ways the Democrats made a decision that they were not. Remember, the Republicans have a majority. What they don't have is 60 votes in the Senate. And Democrats have said, look, we, you haven't offered us anything. You haven't made any deals. You haven't acted as if we have any right to representation, so why should we give you the extra votes to get you to 60? And they've decided that they're asked is that we continue these health care subsidies which are really, really vital to Americans. There's 24 million Americans receiving health, health care through the Affordable Care act exchanges. Almost all of them receive government subsidies. The expiration of those subsidies, which is December 31, is according to the latest estimates, going to more than double premiums for on average for those 24 million Americans. This is going to be a crushing blow to a lot of families. You would think that a lot of these are Republican constituents. You would think that they would want to preserve these subsidies and keep health care affordable for their own people, although we should all be their own people. But anyway, but Democrats have an extremely reasonable ask. It's something that is actually in some ways saving the Republican Party from its own mistakes. But there we go.
- [47:04]
A
Professor Paul Krugman, thank you very much for joining us tonight.
- [47:07]
J
Thank you.
- [47:09]
A
We'll be right back. Nobel Prize winning economist Paul Krugman gets tonight's last word.
- [47:21]
D
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- [47:30]
J
I need a coffee.
- [47:31]
D
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