I'm Christian Guru Murthy, and this is the podcast in which we talked to extraordinary people about the big ideas in their lives.

On the experiences that have helped shape Thumb, My guest today is a lightweight thinker who doesn't have a clue who has caused huge economic damage to his followers pocketbooks if he believed Donald Trump.

Paul Krugman is, of course, also a Nobel Prize winning economist, a longstanding columnist at The New York Times and his latest book.

And he's the author of a couple of Dozen or More is called Arguing with zombies.

Economics, Politics in the fight for a better future and it's taken from a lot of his columns and expanded, um, zombies being bad arguments.

That's right.

The zombies in the book are zombie ideas, ideas that should have been killed by evidence that have been proved false repeatedly but just keep shambling along eating people's brains.

Now, of course, Donald Trump and his supporters are trying to turn it around on you and say, Well, you're the zombie thinker.

Yeah, the lightweight because you predicted global recession.

Yeah, I made a bad economic hole on election Night, 2016 which I retracted three days later and apologize for letting my emotions cloud my judgment and went on to say that if anything, bigger budget deficits on Trump might give the economy a boost, which is sort of what happened.

But Trump have no idea what prompted that remark, because I hadn't even written anything about him lately.

But who knows?

Well, he doesn't like criticism, and you criticize him a lot.

Yeah, but so do other people.

Have no idea.

I mean, I appreciate.

I mean, I seem to have occupy quite a lot of space in his head rent free.

So I guess that's that's kind of a privilege.

I mean, that's not the only time, though.

You you've been on the sort of the downside of predictions.

I mean, you did warn of the risks.

You didn't say it would happen, but you thought it was a good chance of of recession over last year as well.

Going into this, I thought there was some chance, as as did lots of people, as did the markets wth e.

Some of the data were pointing pretty weak by now.

I didn't make it an outright recession call because I thought the data were not solid enough for that.

And it turns out that the that it didn't happen.

Um what?

Why knows?

Well, I mean, the biggest thing to say is that in practice, it's Trump has been sort of been pretty.

Kane's Ian.

I mean, he took a budget deficit of less than 600 year and ran it up to a trillion a year on.

And even though it's very poorly designed economic stimulus nonetheless, in effect, he's done.

You know what many of us were pleading with?

Ah, pleading four during the Obama years, which is more support for an economy which which still seem to be well short of full employment.

So you don't criticize him for running a high def?

Oh, no, the deficit.

I mean, I criticized what he's running the deficit.

Four mean, uh, hundreds of billions in corporate tax cuts which don't do very much.

Ah, and no infrastructure plan on cutbacks on aid to poor Children and so on.

So the composition is wrong, but the deficit is just not a front rank, if you and it never has been, did you think the same things are likely to happen over here?

I don't know.

It does look a little bit as if Boris Johnson may, at least in that respect, be a bit like Trump.

That is, who be a de facto Kensi and even while protesting that he is no such thing.

So there may be some of that Ah, relax ation of spending restraint taking place, Uh, despite Theophile Shal ideology, but by Kane's Ian.

For those who don't know what it means, what it was, that means you can see in view is that when the economy's depressed, it's usually not because people are bad workers or any deep structural problem, but just because there isn't enough spending.

For whatever reason, the private sector isn't willing to spend enough to keep the factory's running and keep the shops full, and that in such times there is ah valuable role for the government to do.

The spending of the private sector won't so the government can pump up the economy by running budget deficits if necessary, and that that could be a very good thing for the economy.

So that's just budget deficits are good when the economy's depressed might be a crude way of summarizing Canyon is, um now, I mean, you're always introduced a sort of the Nobel Prize winning economist, but what do you think of yourself as, I mean, because you are hugely influential, essentially as a columnist.

Yeah.

I mean, I've had two careers.

I spent several decades as an economist economist doing papers that I think we're pretty good.

I guess the Swedes thought were pretty good that were read by a few 1000 people.

But I always did a little bit of public writing on the side.

And for the past 20 years now I've been ah ah, regular columnist for The New York Times.

There's obviously some relationship in my mind between the two of them, but I have tried Thio to reach out to this broader audience.

I need to be a columnist on opinion.

Former.

You have to have a pretty high opinion of your own opinion, and you have to believe that it's worth spreading.

Are you Are you doing that?

Because you do want to change the world in whatever way you can off course.

Now, the whole point is to make things a little bit better often by giving people the arguments they need.

Um, maybe you convert some people.

But more important, I think you helped to shape the the discourse.

To some extent, I think I'm still a bridge between the academic and the broader world.

There's a lot of it is hidden.

But to be amazed how much statistical number crunching lies behind a column on guy.

Also, I talked by the way to to social scientists outside my own field.

So I actually talked to political scientists.

Talk to sociologists to make sure that I'm not saying things that are avoidable.

E stupid.

You're very political as well, aren't you?

I mean, you have bridge that gap.

Yeah, Well, how could you not be?

I mean it.

It, um maybe you think I'm on the wrong side, but there's no way to be a political in 21st century America.

The partisan gaps air so huge that it requires a basically ignoring reality not to take political position and given Look, the reality is, although there are there, have been in the past is on the ideas on the left in America, all of the important zombie ideas that are eating our brains are on the right.

But if if Trump hasn't taken America into recession, is he as dangerous as you thought he was?

Economically?

There's a temptation, which I briefly fell into.

But Jesus said, retracted almost immediately to think that because he's terrible on other fronts, that he must be bad for the short term macroeconomy on dhe That's not has not turned out to be true.

And really, I should never have even briefly entertained the notion.

Uh, he's really, really bad on things like rule of law and democracy.

We may be losing our democracy as we speak, but, um, and he's very bad for the long run.

I mean, we there were economically, economically, we're not investing in infrastructure and keeps on promising, and nothing has been done on that front.

He's doing away.

He's trying to take away health care and nutritional assistance for poor Children, which means, you know, deprived Children grow up into unproductive adults, so that's very bad for the long term.

If we if only we were using these trillion dollar deficits to actually build for the future, we'd be in much better shape.

But that will take years and years to really be a parent.

So what do you think is the most important zombie idea?

If you like that, that is current, Is it?

Is it tax cutting?

Or they're two different kinds dimensions of importance here.

So what is it That sort of in political debate is the most important zombie, and the most important zombie in the U.

S.

At least, is the idea that tax cuts pay for themselves.

Always wrong, never abandoned.

It's it's gospel within the Republican Party, even though he's been proved false again and again in terms off the fate of the world.

It's climate changes is non existent.

It's a hoax perpetrated by this vast international scientific conspiracy, which is a very, very powerful zombie idea.

So it's on tax.

Is it?

Is it that they've just gone back to Reaganomics on dhe?

Those old arguments that they just never went away never went away.

It has.

There has never been a point at which it wasn't even true for Reagan.

Uh, we had a big tax cut in 2017 in the US, and you had even allegedly moderate Republicans.

But there aren't any really.

But Republicans who pretend to be a little bit more moderate, saying, Well, I'm convinced that this tax cut will actually increase revenue, and there's never been a shred of evidence that supports that, and there's overwhelming evidence that it never happens.

But some tax cuts do increase revenue.

Oh, look, because in this country the one that's constantly quoted by the center right on the right is the reduction from 50% to 45% of the top rate of tax.

And they say, Well, that actually increased tax receipt.

I would very much doubt that that's actually true.

It, ah, tax free.

One of the things that is always a problem here is that tax receipts tend to grow over time because of inflation and growth in the economy.

But I would be really surprised because we have, ah, lot of estimates of the revenue maximizing tax rate.

Um, that all say that it's actually between 70 and 80%.

So did I would be very, very surprised if a careful examination of the numbers supported that claim, even for the UK cause.

To a non economist, the idea of giving people more of their own money back, letting them keep more of their own money, eh?

So that they can spend that in the economy and that money be recycled.

Seems quite seductive.

What is it?

Why is it wrong?

Well, that's a cans in view, right?

If if you think that the problem is that people are not spending enough when you want something that needs two more spending.

But why cutting taxes on rich people is one of the most inefficient ways of doing that.

Um, and then more broadly, in times when you're not trying to support a depressed economy, you know the government, we value the things that government does, you know, which is better cut taxes on on high income people or provide the N HS with adequate funding.

And I would have said if I were living here that much more important to fully fund the N HS and in the United States, if we're we're going to have a budget announced in the United States tomorrow, and we know already know that it's gonna include massive cuts in Medicaid, which is health care for lower income Americans.

All of which is to offset the revenue lost because of a tax cut for corporations that's not a good trade off to be making.

There are lots of similarities, I think, between the Democratic Party in the Labour Party in Britain then order the same stage in the cycle.

But, I mean, certainly what we're seeing in America is people being much more confident about saying I'm a socialist.

I'm on the left.

Yeah, You're worried about that?

Yeah.

I mean, one of the things I do write about in in arguing with zombies No, No, because you're not.

No, I am not saying I'm a social Democrat.

That is, I favor a strong welfare state of mostly market economy, though with a with government role, where appropriate.

And so, in fact, a CZ.

Bernie Sanders.

People, what about a socialist is not, You know, that's the it.

And I says we have this longest anything where any time you propose anything that might make reduced the amount of misery in the country, whether it be health care for senior citizens or our food stamps for Children, the right wing says that socialism and part of the what we try to do is say no, that's not That's just being reasonable, modern, civilized country and then you have a few people like Bernie Sanders, who are, in fact, not socialists, who have proudly embraced the label, which you can sort of understand if if anything good is socialism, then well, yes, I'm a socialist.

But I think it's probably bad electoral strategy long well, because there are some people who think that who will say that?

Well, if he's a socialist, that must mean he wants to turn America into Venezuela, whereas in fact he just wants America to be a bit more like Denmark.

Why, why play into this thing stereotype this this abusive term?

Um, and you know, if Bernie Sanders is the Democratic nominee, I'm going to be in the slightly awkward position of saying, Well, he says he's a socialist, but, you know, he really isn't.

And in fact, I'm not at all worried about the policies that Bernie Sanders would implement.

If he becomes president, I think they would.

What he would actually be able to do is less than he promises.

In any case, it will be quite good things for America, but But he himself is kind of for whatever reason, stoking the the right wing disinformation campaign So what?

What?

What is the definition of socialism for you?

Is it state ownership?

Yeah, certainly.

If socialism means anything, it means state ownership of the means of production.

And, uh, and by that standard, there are no socialists in America.

Uh, do you think the Labour Party manifesto was a socialist manifesto?

Now, is that some national?

Yeah, but that's that's there some things that should be nationalized.

I mean, so I think the Labour Party manifesto was Maur was further left, probably than I would want to go.

But on the other hand, the UK has privatized some things that really should not have been privatized.

You know, passenger rail.

The United States doesn't have privatized passenger rail and on GUK does.

And that was a big mistake when you say further left than you would want to go because it's economically no sensible or because you think it's politically impossible.

Ah, little bit of both.

I mean, I just worry mostly politically that I think that that, uh, most people certainly in the U.

S.

If you ask people their views on policy issues, the public is in fact, mildly center left.

It wants higher taxes on the rich.