Paul Krugman | Crashing Crypto: Is This Time Different? – The New York Times

Opinion Columnist

“Last week TerraUSD, a stablecoin — a system that was supposed to perform a lot like a conventional bank account but was backed only by a cryptocurrency called Luna — collapsed. Luna lost 97 percent of its value over the course of just 24 hours, apparently destroying some investors’ life savings.

The event shook the crypto world in general, but the truth is that this world was looking pretty shaky even before the Terra disaster. Bitcoin, the original cryptocurrency, peaked last November and has since declined by more than 50 percent.

Here’s one way to think about that decline. Almost everyone is concerned about the rising cost of living; the Consumer Price Index — the cost of a representative basket of goods and services — has gone up about 4 percent over the past six months. But the cost of the same basket in Bitcoin has risen around 120 percent, which means inflation at an annualized rate of about 380 percent.

And other cryptocurrencies have performed far worse. Two cities — Miami and New York — have introduced their own cryptocurrencies, with enthusiastic support from their mayors. MiamiCoin is down more than 90 percent from its peak, and NewYorkCityCoin is down more than 80 percent.”

Paul Krugman | Republicans Say, ‘Let Them Eat Hate’ – The New York Times

    Opinion Columnist

“So Donald Trump has endorsed J.D. Vance in the race for Ohio’s Republican Senate nomination. Will Trump’s nod tip the balance? I have no idea, and frankly I don’t care.

Ohio’s G.O.P. primary has, after all, been a race to the bottom, with candidates seemingly competing to see who can be crasser, who can do the most to dumb down the debate. Vance insists that “what’s happening in Ukraine has nothing to do with our national security” and that we should focus instead on the threat from immigrants crossing our southern border. Josh Mandel, who has been leading in the pollssays that Ohio should be a “pro-God, pro-family, pro-Bitcoin state.” And so on. Any of these candidates would be a terrible senator, and it’s anyone’s guess who’d be worst.

But the thing about Vance is that while these days he gives cynical opportunism a bad name, he didn’t always seem that way. In fact, not that long ago he seemed to offer some intellectual and maybe even moral heft. His 2016 memoir, “Hillbilly Elegy,” drew widespread and respectful attention, because it offered a personal take on a real and important problem: The unraveling of society in Appalachia and more broadly for a significant segment of the white working class.”

Paul Krugman | Putin, Ukraine and the Illusion That Trade Brings Peace – The New York Times

Opinion Columnist

“On April 12, 1861, rebel artillery opened fire on Fort Sumter, beginning the U.S. Civil War. The war eventually became a catastrophe for the South, which lost more than a fifth of its young men. But why did the secessionists believe they could pull it off?

One reason was they believed themselves to be in possession of a powerful economic weapon. The economy of Britain, the world’s leading power at the time, was deeply dependent on Southern cotton, and they thought a cutoff of that supply would force Britain to intervene on the side of the Confederacy. Indeed, the Civil War initially created a “cotton famine” that threw thousands of Britons out of work.

In the end, of course, Britain stayed neutral — in part because British workers saw the Civil War as a moral crusade against slavery and rallied to the Union cause despite their suffering.

Why recount this old history? Because it has obvious relevance to the Russian invasion of Ukraine. It seems fairly clear that Vladimir Putin saw the reliance of Europe, and Germany in particular, on Russian natural gas the same way slave owners saw Britain’s reliance on King Cotton: a form of economic dependence that would coerce these nations into enabling his military ambitions.”

Paul Krugman | The Great Resignation is Coming to an End, Statistics Show – The New York Times

Opinion Columnist

You’re reading Paul Krugman’s newsletter, for Times subscribers only.  A guide to U.S. politics and the economy — from the mainstream to the wonkish. Get it in your inbox.

All of the evidence suggests that right now, it’s unusually easy for U.S. workers to find jobs and unusually hard for employers to find workers. The odd thing is that we have a very tight labor market, even though the number of employees is still about a million and a half below prepandemic levels and even further below the prepandemic trend:

Not all the jobs are back.

Not all the jobs are back.

Paul Krugman | America’s Economy in the European Mirror – The New York Times

“Last week Eurostat, the European Union’s statistical agency, released a revised estimate of the euro area’s February inflation rate. It wasn’t a happy report: Consumer prices were up 5.9 percent from a year earlier, more than most analysts had expected. And it’s going to get worse, as the effects of the Ukraine war weigh on food and energy prices.

Britain hasn’t yet released its February inflation number, but the Bank of England expects it to match the rate in the euro area.

Of course, U.S. inflation is even higher, with February consumer prices up 7.9 percent from a year earlier. These numbers aren’t exactly comparable, for technical reasons, but inflation in the U.S. does seem to be running around two percentage points higher than in Europe. I’ll come back to that difference and what might explain it. But surely the fact that inflation is up a lot in many countries, not just America, is worth noting.

After all, the entire Republican Party and a fair number of conservative Democrats insist that the recent surge in U.S. inflation was caused by President Biden’s big spending policies. Europe, however, had nothing comparable to Biden’s American Rescue Plan; last year the euro area’s structural budget deficit, a standard measure of fiscal stimulus, was only about a third as large, as a percentage of G.D.P., as America’s.”

Paul Krugman| How Not to Have a Putin Recession – The New York Times

Opinion Columnist

“Kevin McCarthy, the Republican House minority leader, said something cynical and transparently dishonest the other day. To be fair, that’s sort of an evergreen remark; you could have said the same thing about him just about any week over the past few years. But this particular statement seemed important, because it involved a lie that has a direct bearing on how America will respond to Russia’s invasion of Ukraine.

Here’s what McCarthy tweeted: “These are not Putin gas prices. They are President Biden gas prices.”

Now, that’s just false. You can argue about how much responsibility Biden’s policies bear for inflation in other parts of the economy, but the rising price of gasoline reflects the rising world price of crude oil, which hasn’t been significantly affected by anything Biden has done. And soaring crude prices have caused prices at the pump to surge in nations around the world, indeed by roughly the same amount. That is, these really are Putin gas prices.

Why does this matter? Aside from the crassness of McCarthy’s attempt to blame Biden for something that really, truly isn’t his fault, there’s an important economic issue here.

Like it or not, the world is facing a Putin shock: a surge in the prices of oil and other commodities as a consequence both of Russian aggression and of the West’s retaliation with economic sanctions. But will the Putin shock lead to a recession (outside Russia itself, which is probably facing a near-depression)?”    . . .

David Lindsay: Keep reading. Krugman is magnificent.

The top comments are also very good. I approved the top six. Here are the top ones currently:

That’s What She Said
The WestMarch 14

It’s a shame gasoline has such a stranglehold on the economy. Relying on gasoline for a sound economy is like relying on cigarettes for sound health. It’s an addiction that should’ve been dealt with long ago.

18 Replies964 Recommended

Bruce Williams
ChicagoMarch 14

McCarthy in particular and the right in general want a recession to help them gain control. That’s obvious.

8 Replies858 Recommended

Socrates commented March 14

Downtown Verona, NJMarch 14

There are incredibly few adults in the political room these days…and an incredible number of children. Kevin McCarthy and Mitch McConnell are doing their Party First:Country Last best to ensure that both the economy and democracy tank in order to regain Grand Old Power, at which point they will…step on the gas pedal of cooking the climate, do their utmost to give the Mercer family and a few other billionaires a new raise with fresh tax cuts, and make sure that government fails to help the American people while bamboozling them with tall tales about a war on Christmas, guns and apple pie. Higher interest rates are needed to deflate the real estate and Wall St bubbles and the inflation bubble. Higher taxes on the tax dodging class are desperately needed to level the playing field. Campaign finance reform is desperately needed to reverse the the Republican oligarchs’ ownership of the United States Congress. The internet needs to be regulated so disinformation doesn’t further collapse the American mind with more Pizzagate, QAnon and conspiracy jabberwocky that has reduced a third of Americans into Big Lie zombies. But hard medicine and actual problem-solving and Republicans just don’t get along. They much prefer quackery, charlatanism and magical thinking to boring reality-based solutions. So it’s “Biden Gas Prices” from now until they invent their next marketing gimmick. What did you expect from the Gaslighting Over People party…thoughtful analysis and discourse ?

16 Replies754 Recommended

Eric commented March 14

OregonMarch 14

‘We’ll do ok’ if gas goes back to $2.50 a gallon? No, we won’t. Chea     gas is enabling mindless consumption to destroy the climate. Gas needs to cost $10 a gallon, minimum. Shocking people out of their complacency with high prices is the only way that we will ever get the transition to a carbon-neutral economy off of the ground. There is no viable alternative: people are not going to do this voluntarily. By the way, I drive a truck full of tools that gets 17 mpg to work every day. What I don’t do is drive it 30 miles to a grocery store or a gun range or whatever. We can’t legislate away bad choices, but we can force people to pay for what they are doing to the planet.

20 Replies523 Recommended

Paul Krugman | Putin’s Economic Miscalculation With Ukraine – The New York Times

“But a funny thing has happened in this case. So far, economic pressure against Russia appears to be highly effective, crimping Russian trade even in goods that haven’t officially been placed under sanctions. The financial restrictions that have already been imposed have made transactions with Russia — even the purchase of oil — difficult; fears of future sanctions, plus the general sense that any Western institutions perceived as helping the Putin regime will face harsh treatment from regulators, have led to widespread self-sanctioning, cutting off even trade that is formally permitted.

We don’t know yet how this plays out, but if we see the kinds of mass civilian casualties and reign of terror that seem all too likely in the weeks ahead, the effect may be to largely isolate Russia from the rest of the world economy.

Economists have a rather arcane term for this kind of isolation: “autarky.” And it’s likely to be extremely damaging.

You might think that autarky is just a strong form of protectionism, which also tends to reduce trade. But it’s actually a lot worse.”

Paul Krugman | America’s Very Peculiar Economic Funk – The New York Times

“I’ve been on a few trips recently and took the opportunity to do a bit of naked-eye economic assessment. As I’m sure many people can confirm, planes are flying full, while shops and restaurants are jammed. It definitely looks like a booming economy out there.

That’s also what the numbers say. In his State of the Union address, President Biden — while acknowledging that inflation has eroded wage gains — pointed to the 6.5 million jobs added last year, “more jobs created in one year than ever before in the history of America.” This claim was entirely correct.

Yet the public doesn’t believe it. According to a new survey by Navigator Research, only 19 percent of Americans believe that the U.S. economy is experiencing more job growth than usual, while 35 percent say that it is experiencing more job losses than usual.”

“. . .  And while I do not come here to bash the news media, I do feel that we’re missing a big part of the story if we take negative public views of the economy at face value without pointing out that they’re at odds not just with official statistics but also with self-reported experience. And we should try to understand where that disconnect is coming from.”  -30-

David Lindsay Jr.
Hamden, CT | NYT comment:
Good question, thank you Paul Krugman. I like the comment that it is partly the poison of GOP and Fox and company negative propaganda. I think it is also the fault of the news. I don’t remember ever seeing once, a giant headline at the NYT this year, about how good the economy or hiring really was last year. I learned about it from quiet articles, as if it were not a big deal.
I propose a third cause, climate change, extinction rates, and overpopulation anxiety. Informed people are deeply depressed at regular intervals if they are paying attention. This funk, which is real, also possibly permeates the larger society. They see the devastation around the world in the news, and my guess is that it effects their general outlook more than many economist and social commentators think.
Traditional economics hasn’t caught up to the realty of over population and limited planetary resources. While the economic slump due to Covid caused headlines. Underneath those headlines, one read, our social carbon footprint declined dramatically. The vaccines save millions of lives. Even that good news has a dark component. 8 billion humans are the cause of both the climate crisis and the great sixth extinction of species, which is accelerating. I predict that even people who don’t understand or follow this science, who don’t look up, are at some level disturbed by the stories referring to it.
David blogs at

Paul Krugman | Russia Is a Potemkin Superpower – The New York Times

“Beware, Vladimir Putin: Spring is coming. And when it does, you’ll lose much of whatever leverage you had left.

Before Putin invaded Ukraine, I might have described the Russian Federation as a medium-size power punching above its weight in part by exploiting Western divisions and corruption, in part by maintaining a powerful military. Since then, however, two things have become clear. First, Putin has delusions of grandeur. Second, Russia is even weaker than most people, myself included, seem to have realized.

It has long been obvious that Putin desperately wants to restore Russia’s status as a Great Power. His already infamous “there is no such thing as Ukraine” speech, in which he condemned Lenin (!) for giving his neighbor what Putin considers a false sense of national identity, made it clear that his aims go beyond recreating the Soviet Union — he apparently wants to recreate the czarist empire. And he apparently thought that he could take a big step toward that goal with a short, victorious war.

So far, it hasn’t worked out as planned. Ukrainian resistance has been fierce; Russia’s military has been less effective than advertised. I’ve been especially struck by reports that the early days of the invasion were hampered by severe logistical problems — that is, the invaders had a hard time providing their forces with the essentials of modern war, above all fuel. It’s true that supply problems are common in war; still, logistics is one thing advanced nations are supposed to be really good at.” . . .

David Lindsay Jr.
Hamden, CT | NYT Comment:
We could help things along by accepting Volodymyr Zelensky’s request for emergency admittance into NATO. NATO could openly go to Ukraine’s defense, and the bloodshed would end sooner, and hopefully, with Putin put away one way or the other. My father fought in WW II and lost 25% of his classmates in Yale class of 1944. Some things are worth dying for.

Paul Krugman | Laundered Money Could Be Putin’s Achilles’ Heel – The New York Times

“. . . Yet the world’s advanced democracies have another powerful financial weapon against the Putin regime, if they’re willing to use it: They can go after the vast overseas wealth of the oligarchs who surround Putin and help him stay in power.

Everyone has heard about giant oligarch-owned yachts, sports franchises and incredibly expensive homes in multiple countries; there’s so much highly visible Russian money in Britain that some people talk about “Londongrad.” Well, these aren’t just isolated stories.

Filip Novokmet, Thomas Piketty and Gabriel Zucman have pointed out that Russia has run huge trade surpluses every year since the early 1990s, which should have led to a large accumulation of overseas assets. Yet official statistics show Russia with only moderately more assets than liabilities abroad. How is that possible? The obvious explanation is that wealthy Russians have been skimming off large sums and parking them abroad.

The sums involved are mind-boggling. Novokmet et al. estimate that in 2015 the hidden foreign wealth of rich Russians amounted to around 85 percent of Russia’s G.D.P. To give you some perspective, this is as if a U.S. president’s cronies had managed to hide $20 trillion in overseas accounts. Another paper co-written by Zucman found that in Russia, “the vast majority of wealth at the top is held offshore.” As far as I can tell, the overseas exposure of Russia’s elite has no precedent in history — and it creates a huge vulnerability that the West can exploit.

But can democratic governments go after these assets? Yes. As I read it, the legal basis is already there, for example in the Countering America’s Enemies Through Sanctions Act, and so is the technical ability. Indeed, Britain froze the assets of three prominent Putin cronies earlier this week, and it could give many others the same treatment.

So we have the means to put enormous financial pressure on the Putin regime (as opposed to the Russian economy). But do we have the will? That’s the trillion-ruble question.

There are two uncomfortable facts here. First, a number of influential people, both in business and in politics, are deeply financially enmeshed with Russian kleptocrats. This is especially true in Britain. Second, it will be hard to go after laundered Russian money without making life harder for all money launderers, wherever they come from — and while Russian plutocrats may be the world champions in that sport, they’re hardly unique: Ultrawealthy people all over the world have money hidden in offshore accounts.”   . . .