Transcript: Paul Krugman

The transcript from this week’s MiB: Paul Krugman, is below.

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VOICEOVER: This is Masters in Business with Barry Ritholtz on Bloomberg Radio.

BARRY RITHOLTZ, HOST, MASTERS IN BUSINESS: This week on the podcast, I have an extra special guest. His name is Paul Krugman and probably know him from his ubiquitous “New York Times” columns. If you don’t know him from that, you must know him from television, from all of his books, including his textbooks. He was the 2008 winner of the Nobel Prize as well as just too many honorifics to list.

If you are remotely interested in any of the following, economics, income inequality, climate change, the history of economic development and thought, how public policy affects the population, healthcare law, climate change law, go down the list. We just wonk out on everything and it’s just an absolutely fascinating conversation.

So, with no further ado, my MIB interview with Paul Krugman.

VOICEOVER: This is Masters in Business with Barry Ritholtz on Bloomberg Radio.

RITHOLTZ: My extra special guest today is Paul Krugman. He is the winner of the 2008 Nobel Memorial Prize for his contributions to new trade theory and new economic geography. He is a distinguished professor at the CUNY Graduate Center of the City of New York.

He spent much of his career teaching at MIT and Princeton where he focused on economics. He has either authored or edited 27 books, published over 200 scholarly articles. Most recently, his book, “Arguing With Zombies: Economics, Politics, and the Fight for a Better Future” just came out.

He is the second most cited author on the college syllabi for economics and is perhaps best known as a columnist for the “New York Times.” Paul Krugman, welcome back to Bloomberg.


RITHOLTZ: It’s good to see you again. Let’s jump right into this. So, I recall you telling a story that you were a science-fiction geek as a kid, how did Isaac Asimov’s foundation trilogy lead you to economics?

KRUGMAN: Isaac Asimov wrote these books I think it’s 1940 or thereabouts which are — it’s Galactic Empire and people use blasters and have spaceships. But actually, the science fictiony part is the least of it.

It’s social science fiction that the core of the story is there’s this group of mathematical social scientists, the cycle historians, who have figured out that galactic civilization is falling and have discovered that if they intervene in just the right way, they can limit the period of barbarism.

So, it’s basically social scientists saved the universe. I want to be one of those guys and economics was as close as I could get.

RITHOLTZ: That’s pretty amusing. People may not know that you are an economics textbook author. You and your wife wrote what is today the second most popular economics textbook in colleges today. Who’s the lead? Is that Mankiw?

KRUGMAN: Yes. I’m afraid it’s Greg Mankiw.

RITHOLTZ: So, whatever led you to write a textbook, that sounds like a lot of work.

KRUGMAN: Actually, yes. So, the first thing about it is that nobody writes one of those principles books except out of ignorance of how much work is going to involve. The actual — the labor that’s involved in producing especially the first edition but even the revisions is enormous. Partly, it’s a reasonably honest way to make a living since it is …

RITHOLTZ: But teaching is not?

KRUGMAN: Well, it’s supplemental. So, this is — my wife is my co-author. Our in-house name for the book is economics 401(k).

RITHOLTZ: That’s funny.

KRUGMAN: But it was also — we thought that we could have a different kind of textbook that people — most students are kind of thinking economics as this totally dry subject and some of it is, I kind of admit that, but there’s stories.

So, we thought we could try to write a textbook which was as much as possible story driven. It was about real-world things and then we say, here’s how economics helps to make sense of these things. And so, we wrote a textbook that was different and a lot of people like it.

RITHOLTZ: And you are still doing the revisions on the textbook while you were in Stockholm for the Nobel Prize, is that true?

KRUGMAN: That edition — that was second edition and the financial crisis broke as we were going through pages. So, we already were in galleys and suddenly nothing in the money and banking chapter was true anymore.

And so, we were frantically working to revise that chapter in pages. So, every replacement passage we had to exactly physically fill the space of the stuff it replaced.

So, yes, we — I had a lot of stuff I had to do in Stockholm. Robin spent a large part of the time on the floor of our hotel room crawling from one set of papers to another doing the revisions. That was insane.

RITHOLTZ: You had written or maybe I read it in an interview about a decade ago that at the top of the dot com bubble, you said, geez, stock market doesn’t make any more sense, I’m going to pull out of equities. A, was that true, and B, how did you …

KRUGMAN: That was true then. We have, in fact, gotten back in some. Still, I think probably our portfolio was less equity heavy than probably the average.

RITHOLTZ: Well, 20 years ago, you were, what, early 50s, late 40s?

KRUGMAN: I was — no. Twenty years ago, I was late 40s.

RITHOLTZ: Late 40s. So, you should have equities then and now less equities.

KRUGMAN: Yes. Yes. So, I mean, I don’t claim to be a great investor. In fact, Robin has got the better head for detail, which is important. So, we own a lot of selective real estate, not things where we think we know something.

RITHOLTZ: OK. Well, real estate goes up over time as well. So, wait, if — when you say you’ve partially gotten back in, does that mean you’re some stock, some bond, some real estate. So, you have diverse …

KRUGMAN: We have a diverse portfolio.

RITHOLTZ: That’s makes a whole lot of sense. There’s another issue I have to ask you about which is that of media bias. Lots of people these days have accused the media of being fake news or biased or whatever. You take a decidedly different perspective on bias. Tell us a little bit about that.

KRUGMAN: Yes. The biggest — so, by and large, the media get facts right, the formal media. I mean, that’s not obviously true of “Breitbart” or something like that. But the “New York Times” gets its facts right.

What it doesn’t do very well is that it doesn’t know how to handle things where there really aren’t two sides to a debate. When there’s a — one of the very first columns I wrote back during the 2000 election said that if Bush had said that the Earth was flat that the headline would probably read, views differ on shape with the planet.


KRUGMAN: The media are really terrible and that’s very hard to — that’s a real problem when you have not just a highly polarized political environment but a asymmetrically polarized political environment where one side of the debate is peddling zombie lies and the other is not.

So, it’s very good — there’s a real failure, I think, to inform. There’s an unwillingness to — I mean, when I started out, I was literally forbidden to use the word lie in my columns and that’s no longer true. But even so, there’s a tremendous bias towards evenhandedness even when the hands are not remotely even.

RITHOLTZ: So, you get this false equivalence where both sides are treated equally. The other thing that you have referenced as a form of bias that I’m always has been amused by is the concept of, quote, “very serious people.”

KRUGMAN: That’s right.

RITHOLTZ: What are the very serious people?

KRUGMAN: So, very serious people, the phrase actually — a lot of it comes from the buildup to the Iraq war when all the serious people though it may — this was a good idea, which it wasn’t obviously.

But very serious people are people who buy into what is a conventional wisdom at the time, something that important people say and everybody thinks it’s serious because all of the other serious people are saying it and …

RITHOLTZ: They all nod their head.

KRUGMAN: That’s right.

RITHOLTZ: All in agreement.

KRUGMAN: So, like the U.S. debt levels are major threats even though that’s not really true. We have a real problem of skills gap in the workforce. And so, these are things that — so, I stalled it, I think I stalled it from the (inaudible). But it really works.

These things that — and that’s, by the way, where the media drops its evenhandedness on this. So, a lot of reporting on debt was uncritically Bowles and Simpson are great national heroes.


KRUGMAN: Yes. Remember …


KRUGMAN: But the whole — so, it’s funny that the one place where the news media really dropped the false equivalence and start saying one side is right is in fact wherever that side happens to be wrong.

RITHOLTZ: But they’re very impressed by titles and by positions and by some academic credentials and if you’re the head of a think tank, they think you’re actually thinking one when really you’re not thinking.

KRUGMAN: Well, yes. They are impressed by think tanks which is really a bad idea because there are think tanks and then there are think tanks and a lot of the think tanks don’t actually think. They’re very impressed by rich people, powerful people.

So, if you’re — if Jamie Dimon says we have a skills gap, that must be serious whereas Jamie Dimon is no doubt a great business person but he doesn’t know anything about macroeconomics.

So, it’s a — really, it’s a real problem on many issues. Going to important people is actually the worst place to get information because they are people who have a stake in a particular point of view.


KRUGMAN: Or they’re too busy to actually think hard. So, it is a — those are the places. Now, it’s gone better I have to say. The “Times” now has several people writing who actually do understand some economics, don’t uncritically accept stuff. We got a whole section, the upshot, which tends to be the analytical pieces from …


KRUGMAN: … multiple disciplines. So, it’s better than it was but still. So, those are the biases. It’s not liberal bias. It’s not even actually conservative bias. So, thus (ph), very serious people tend to be somewhat right of center but it’s — mostly, its seriousness and evenhandedness on things which are, in fact, not serious and, in fact, where you shouldn’t be treating equal — both sides equally.

RITHOLTZ: Let’s talk a little bit about free trade which is what you won your Nobel for. Free trade has been the cornerstone of U.S. economic policy. Why has it gotten such a bad reputation amongst some economists and a lot of people in this administration?

KRUGMAN: Economists love free trade for some good reasons and some not so good reasons. We love free trade because, in fact, there’s a lot to be set forth. There’s — it’s particularly important really for smaller or poorer countries trying to think about what would happen to Bangladesh without the ability to export clothing. It would probably literally be starving to death.

So, trade — open markets don’t have to be precisely free trade but open markets are really important for a lot of the world. It’s always been the case that if you did it right, you understood that while free trade generally makes all countries richer, it doesn’t make everybody within the countries richer. It has effects — possibly strong effects on the distribution of income.

Now, we try to quantify that a little bit and no question that it’s a — growing world trade has been some a source, nowhere near the dominance source, but a source of rising inequality within the U.S. What we really missed, which has been where a lot of the adacemic research has gotten, we missed how concentrated the negative effects are, right?

So, you take a look and you say, look, OK, we’re importing a lot of stuff from China that we didn’t use to import. One of things is furniture. So, we’re importing lots of furniture from China.

RITHOLTZ: Furniture, clothing, boys.

KRUGMAN: But I like furniture as a particular example because if you ask, all right, how many jobs were displaced by Chinese — imports of Chinese furniture, the answer is …

RITHOLTZ: 50,000?

KRUGMAN: Maybe. It might — it’s more probably more than a hundred thousand.


KRUGMAN: Maybe even 200,000. But the other jobs were created, lower-priced consumers, how big a deal is that? Well, if you happen to be in Hickory, North Carolina, which is a city that is built entirely around the furniture industry, all of a sudden, for that community is a devastating impact.


KRUGMAN: So, we missed the extent to which — the U.S. economy is gigantic and it’s turning all the time. A million and a half people are fired every month. So, you say, how much difference can this trade make? Well, the trouble is that the impacts of trade have tended to fall quite heavily on specific communities and, mea culpa, I didn’t see that and it really took a very good paper published in 2013, I think, on the China shock that, among other things, written by one of my students and to point out how much we were missing that effect.

RITHOLTZ: So, lots of countries have an industrial policy. Shouldn’t there be some sort of, hey, if you’re in West Virginia coal country or in North Carolina furniture country or in the broad loam and fabric areas that are …


RITHOLTZ: … specific to certain states, when it’s apparent that a region is getting decimated because of global trade advantages where essentially global labor arbitrage and some of the improved technologies that become specific to elsewhere in the world, why don’t we do a retrain, reeducate, give people new skills so they can compete even if it’s no longer in coal or furniture?

KRUGMAN: Well, we try and actually, we’ve had trade adjustment assistance at various points in our history. It’s never been tremendously successful. And by the way, trade is not unique. Technology does it.

If you actually want to ask what happened to West Virginia, international trade, it turns out, is not an important thing for West Virginia. It’s changes in the technology …

RITHOLTZ: Fracking.

KRUGMAN: Fracking and even before fracking, it was mountaintop removal. So, all of a sudden, instead of employing thousands of workers to mine coal, you just blow the tops of mountains and use some machines.

RITHOLTZ: There it is. Right.

KRUGMAN: So, now, you can’t have policy to or it’s hard to have a policy to deal with every shock. What you really want is a strong safety net so that at least some basics or supplies or at least people or other resources, among other things, the resources to move or seek different jobs whatever, the little secret of American policy is that we actually have a lot of that.

We actually have — because the major social programs, the Social Security, Medicare, Medicaid are paid for at the federal level, mostly, because the tax system is — at least the federal tax system is fairly progressive, we actually end up providing a lot of de facto aid to distressed regions.

Let me take Kentucky. It’s receiving net aid from the federal government to the tune of about 20 percent of GDP.


KRUGMAN: So, we don’t — we actually do do a lot. Now, that doesn’t — it’s not clear that we have anything that can — we can replace a fair bit of the income that’s lost. We can’t replace the dignity and — but it’s not clear that anyone knows how to do that.

RITHOLTZ: Another thing that’s kind of interesting that you’ve written, quote, “international trade and trade policy aren’t nearly as important as people think they are.”

KRUGMAN: People love to go on about international trade because of a variety of reasons but among other things, it sounds important. It’s international. It’s global.

My parents once gave me a sweatshirt that said, Global Schmobal (ph) on it and I said what and they said, every time you go off to a conf, we ask you what it’s about, you say Global Schmobal (ph). Now, people love to talk global and — which means that we exaggerate.

Compare, we spend about the same share of our income on imports and on healthcare as a nation. Trade — even with the Trump tariffs, trade is sort of only — it’s mostly actually pretty clean. Healthcare is a howling mess.


KRUGMAN: So, healthcare policy is much, much more important than trade policy and — but that’s not reflected in the way we talk about the world.

RITHOLTZ: So, let’s talk about changes to some of the trade policy. We had, I recall, Ross Perot talking about the great sucking sound that NAFTA was going to create.


RITHOLTZ: Pulling all those jobs out of the border. Trump effectively ran on that and now we’ve tossed aside NAFTA with USMCA. We’re all so much better now, aren’t we?

KRUGMAN: Right. So, I have people I know who have been calling USMCA the village people of Greenwich.


KRUGMAN: And it’s — USMCA is basically NAFTA with Trump’s name stuck on it.

RITHOLTZ: Is it not all that different than what …

KRUGMAN: It’s — 95 percent of it is just the same thing as before and there’s a few other things. The one place where there’s some significant difference is it actually gives a little bit more protection clout to labor unions, which is why Democrats voted for it.

RITHOLTZ: In the U.S.?

KRUGMAN: In the U.S.


KRUGMAN: In Mexico, too, but it’s — it was kind of a pro-labor union change in policy. Not big deal but enough so that Richard Trumka of the AFL-CIO said, vote for this, and the Democratic caucus voted it through because there was something in it for organized labor, which I’m sure was not — I’m not sure whether that was over Trump kicking and screaming or whether he just didn’t even know that he had done that. But anyway, that’s …

RITHOLTZ: He’s quite the policy one (ph).

KRUGMAN: Right. So, he knows, unlike everybody else, that Kansas City is in Kansas. But the …

RITHOLTZ: Post Super Bowl. Congratulations. That was pretty — so, a few people pointed out that it’s actually in Missouri.

KRUGMAN: Yes. Well, kind of — the people in Missouri kind of noticed that.

RITHOLTZ: Let’s talk a little bit about your book which I found quite intriguing filled with all sorts of fascinating topics. Let’s begin with the great financial crisis. You had some very prescient columns in ’05 and ’07, running out of bubbles, that hissing sound coming out of real estate and innovating our way to financial crisis, all of these predate 2008, what were you looking at that gave you such a clear view of the financial crisis that was coming?

KRUGMAN: It was just clear that on the normal metrics, things like the prices to rent, the housing had gone way out of sight …


KRUGMAN: … and it just had — there are good reason for this and then if you were — there were the kind of telltale informal signs. The dot com bubble, I thought — I used to had an inkling that things were going to be bad when I realized that in — when you went into a bar, they tended to have CNBC on in the bar instead of sports. And then …

RITHOLTZ: I have a very vivid recollection of that era where stocks became the national pastime.

KRUGMAN: Right. And then — so, if you’ll go back to around 2005, it was shows like “Flip This House.”


KRUGMAN: So, it was the same kind of feel to it. So, it just looked way out of whack and I had an inkling but only a partial inkling that the financial sector was out of control, that we didn’t know what we were doing, that things have gotten complicated.

It was only when the crisis was in full swing that it became clear that we were in much worse shape than I’d realized that more than half of the banking sector was things that weren’t called banks and therefore, weren’t regulated like banks. And so, shadow banking was a huge vulnerability.

But that was one of the few times when it really seemed obvious that something was majorly out of whack and that something bad was going to happen.

RITHOLTZ: So, let’s fast forward to couple of years during the second Bush term. You had been staunchly opposed to privatizing Social Security and you wrote, quote, “an amazing thing happen for the first time since I became a “New York Times” columnist in 2000, my side of a policy debate actually won.”


RITHOLTZ: How was that possible that for 10 years, you’re not winning any debates despite making pretty good arguments?

KRUGMAN: Well, if good arguments won then the world would be a very different place from the way it is. And, look, I started writing during the 2000 election and, obviously …

RITHOLTZ: For the “Times.”


RITHOLTZ: Because you had been publishing at “Slate” for a good couple of years.

KRUGMAN: Yes. And “Fortune” as well. But right for the times I’ve only got really political during the 2000 election because it was obvious to me that then candidate George W. Bush was lying through his teeth about his policies.

But the — so, it was a period of Republican ascendancy and the Republican Party already been, although not as much now, was dominated by zombie ideas, by beliefs in the magical power of tax cuts and so on. So, I was on the losing side of most of the political stuff and it wasn’t …

RITHOLTZ: You tell me you don’t believe the Laffer curve was a real …

KRUGMAN: I believe that there is a Laffer curve and there is some tax rate beyond which you actually lose revenue. But I suspect that that tax rate is on the order of 80 percent or …


KRUGMAN: And I suspect. I actually estimate that the Laffer curve is not relevant for the U.S. economy. And, yes, so, between the fact that you have a very powerful right wing which has — is committed to things that are not true and the fact that the very serious people tend to go for things that are serious but not actually serious.

RITHOLTZ: So, let’s talk about a very serious person that you seem to have a constant ongoing argument with, Paul Ryan. You have a section called fiscal phonies.


RITHOLTZ: You specifically point out Paul Ryan. I have a problem with the group I call the deficit chicken hawks. They’re chicken hawks — they’re big deficit hawks as long as they’re out of power. Once they get into power, suddenly, the deficit doesn’t matter. What’s your beef with Paul Ryan?

KRUGMAN: Well, it wasn’t really with him. In fact, I’m not — you know me personally, I’m not a person that’s particularly into grudges, personal feuds whatever. I don’t — but Paul Ryan was a symbol both of where the Republican Party has gone but also what’s wrong with media coverage.

I mean, the media equivalence required that there’d be serious honest conservatives. People who are really earnest, had interesting ideas. So, there was a role that someone had to fill except there actually is nobody like that.

So, they promoted Paul Ryan into that role because he pretended to be that kind of person, not actually a very good imitation. It was pretty obvious if you took even a few minutes reading his stuff that he was a phony.

But that wasn’t what people wanted to hear. So, I was out there years ahead of almost anybody else say, hey, this guy that you’re claiming to be the intellectual leader of the Republican Party is a flat-out phony and an obvious one and actually a pretty clumsy one. So, I returned to him as an example both of where the GOP has gone and how the media can go wrong.

RITHOLTZ: So, you said I know you personally and I want to put a little color on that. I probably know you pretty well for, is it a decade?

KRUGMAN: Probably.

RITHOLTZ: It was before the financial crisis.

KRUGMAN: Started more than a decade.

RITHOLTZ: So, it’s more than a decade. But the thing that I find fascinating about you, and full disclosure, we have these monthly salons, we go to dinner, I see you pretty regularly, I think that something I wrote was the subject of your very first blog post, “Conscience of a Liberal.” It’s since backfilled so it’s hard to judge.

KRUGMAN: I can’t tell.

RITHOLTZ: Meaning — but I recall seeing that in posting and saying, look, Paul Krugman is blogging. I’m fascinated by your public persona and how — what people think of you because of your columns is nothing like what you’re like in the real world. You’re very different person in the real — in reality than I think what people see in terms of your columns.

KRUGMAN: Yes. I’m a pussy cat. I mean, I’m quite shy, not at all — I’m not a very angry person or any of those things.

RITHOLTZ: Not at all. You’re optimistic, you’re upbeat, you’re funny. People don’t realize you have a sense of humor.


RITHOLTZ: Sometimes a sharp sense. But still — I don’t know if I would use the phrase happy-go-lucky but you’re pretty easy-going happy person.

KRUGMAN: Yes. It’s …

RITHOLTZ: Not your image.

KRUGMAN: Yes. Because people look and say, well, those are tough columns, which is they are.

RITHOLTZ: Angry. He’s angry.

KRUGMAN: Yes. But I’m not angry, I’m just realistic. I mean, sometimes, I’m angry but that’s — but it’s a policy anger. It’s about how we handle the world. Person-to-person, I’m mild-mannered Clark Kent or something.

RITHOLTZ: OK. That’s pretty fair. Clark Kent. And one of the things that I find fascinating is that you’re much more right than wrong. I don’t mean right versus left but on a lot of things you’ve discussed, broad policy issues, the result of certain things, you’ve been pretty dead-on on everything.

On the rare occasions where you get something wrong, people like jump on it and beat on it. But I just want to say, hey, that’s the exception that proves the rule. If you have to — my favorite example is if Trump gets elected, we’re going to have recession, all the markets going to be pressed, something like that.


RITHOLTZ: People pound — beats that drum constantly and I would say, what else has he got wrong. It’s hard to find broad pronouncements that are widely applicable that you weren’t …

KRUGMAN: And I retracted that quote (ph) three days later.

RITHOLTZ: Right. And then no one wants to talk about that.

KRUGMAN: Yes. I retracted that quote (ph) that Trump was going to run bigger deficits that that would probably going to provide some stimulus.

RITHOLTZ: And he has and it has.

KRUGMAN: Yes. So, well, but that’s part of why do zombie ideas persist, well, because there’s a network, there’s money behind it. There used to be a guy at “National Review” who’s fulltime job was basically to stalk me. We wrote more blog posts attacking my columns than I wrote columns.


KRUGMAN: And so, there’s a whole industry and they go after lots of people. But it’s — but I seem to be a particular favorite and so, yes, there is …

RITHOLTZ: That means because you’re effective.

KRUGMAN: Well, yes, it’s a bit of a compliment and in terms of getting — if you never make a mistake, if you never get something wrong, then you’re not taking enough risks.


KRUGMAN: But, of course, if you’re in a position like mine where there are people and probably I am paranoid but there are, in fact, also people out to get me and …

RITHOLTZ: Just that’s the old line just because you’re paranoid doesn’t mean they’re not out to get you.

KRUGMAN: Right. There are well-financed people out to get me and …

RITHOLTZ: And, by the way, that might be Philip K. Dick although I could be wrong since I know you’re a sci-fi buff.

KRUGMAN: I don’t know. I don’t remember whether he used that. But anyway — and, sure. So, yes, I think if you take it as a whole effect — look, the five years or so after the financial crisis were in a peculiar way. They were glory days because the models worked.

People like me who had an updated modernized but still fundamentally Keynesian approach to things made predictions about what would happen to interest rates, to inflation, what the effects of austerity policies would be that all came out right and all the very serious people who said something different turned out to be wrong.

RITHOLTZ: So, hyperinflation …


RITHOLTZ: … didn’t happen. Austerity would bring us out of our economic doldrums especially in U.K., didn’t work. Basically, Keynes knew what he was talking about.

KRUGMAN: Yes. I mean, Keynesian came in thinking that the multiplier, the impact on GDP of $1 cut in government spending would be around 1.5 and after we had five years or so of hard evidence, it turns out that the multiplier is 1.5. I mean, it wasn’t just the quality — even the quantitative stuff was dead on.

RITHOLTZ: Quite fascinating. I want to talk about politics because some of the reviews of this book and other books that you’ve written have described you as a political animal blood, but really, if you go back to the early history of Paul Krugman, “Newsweek” did a profile of you and called you ideologically colorblind. I think a lot of people don’t know you worked in the Reagan White House.

KRUGMAN: Yes. That was a sub-political level.

RITHOLTZ: Right. New staffer.

KRUGMAN: I was the senior international economic staffer at the Council of Economic Advisors.

RITHOLTZ: Right. So, sending approval, no …

KRUGMAN: Right. Yes. The senior domestic staffer was a guy — what was his name? Larry Summers, don’t know what happened to him. So, yes, that was — I mean, that was high level but technical position.


KRUGMAN: And, I mean, I was already — I was registered Democrat as was Larry but willing to work and my job did not require that I’d be in public defending positions and, of course, being at the Raegan administration although Marty Feldstein was the Chair of the Council …


KRUGMAN: … and who brought Larry and me down although he was …

RITHOLTZ: Princeton Marty Feldstein?

KRUGMAN: Harvard.

RITHOLTZ: Harvard. OK. That’s right.

KRUGMAN: Although he was a conservative, he was reasonable and on any internal debate within the Reagan administration, I always was happy to back Marty side of that debate.

But it was interesting. I mean, it was partially — I hope I did some good but it was also a little bit of tourism. I got to see government from the inside.

RITHOLTZ: Sure. So, that was a different era in conservatism. They seem to be a little more rational, fact-based.

KRUGMAN: Yes. There were a fair number of strange people even in the Raegan administration.


KRUGMAN: I mean, some of the people I dealt with, I mean, I dealt with people that — economics people at National Security Council who were crazy and I thought, well, but this is not their real thing. I’m sure the actual security people are better.


KRUGMAN: And then along came Iran-Contra and it turned out, no, they’re all crazy. One of the things about where we are now is that each successive Republican president is managing to make his predecessor look good by comparison.

RITHOLTZ: That’s right. But it was to certainly to look better at very least.

KRUGMAN: Yes. But it was — still was true that there was a lot more room for rationality then than there is now.
RITHOLTZ: So, most of your career, not a partisan, more of a technocrat. Your role is to provide policymakers with information about what did and didn’t work. What changed? How did you flick a switch from being an ideological colorblind technocrat to someone who has been described as the hard-core partisan?

KRUGMAN: Well, two things happened. One is I changed jobs. So, what you want to write if you’re writing working papers and publishing in academic journals is very different from what you want to write if you’re writing columns in the “New York Times.”


KRUGMAN: But also, the world changed and in particular, the Republican Party changed. So, the Republican Party of the 1980s was still a fairly diverse group and while there were some voodoo economics types and — we were still in some — to some degree in a space where we were having real arguments about real issues.

Today, it’s a monolithic. It’s been completely taken over by zombies that have eaten the party’s brains. So, actually, just saying things that are true, just read — saying I’m not going to give credence to stop this obviously false is a partisan act.

And since you’re going to be doing that, you might as well try and make that case in a strong way and not pretend that you’re having a serious argument when you aren’t.

RITHOLTZ: So, one’s facts are no longer indisputable once people can say what they want to believe, how can you have an intelligent debate about economic policy?

KRUGMAN: Well, across party lines, you can’t. I mean, you just can’t.

RITHOLTZ: It’s just off the …

KRUGMAN: No. They’re — not everything is party politics. If we want to talk about monetary policy, the Federal Reserve is still a zone of actual discussion and relatively non-politicized although Trump is trying to put some very strange people on the Federal Reserve Board right now.

RITHOLTZ: Yes. Gold bugs and also, it’s a wacky …

KRUGMAN: Yes. So, that may change but for now, still, it’s a place where you’re going to have honest arguments and, of course, within the Democratic Party, there’s serious discussion. I mean, there’s no question that there were real debates about the shape of stimulus or the TPP or whatever you’re having. But it’s true that half of the political spectrum is just a complete dead zone for actual debate.

RITHOLTZ: So, let me switch gears with you and talk about something related to this that you wrote at “New York Times” Sunday magazine article about which is how did economists get it so wrong. So, let me throw the question back to you, why did the profession failed to anticipate the great financial crisis?

KRUGMAN: OK. So, that actually — I mean, at some level, predictions are hard especially about the future.


KRUGMAN: And failing to see the financial crisis I think that people should have seen the housing bubble because that seemed pretty obvious. But that’s not the major sin. The major sin was that a substantial number of economists enthusiastically embraced financial deregulation before the crisis and at least …

RITHOLTZ: For the decades before the crisis going back to the repeal of Glass-Steagall and …

KRUGMAN: Much more than that. Yes.

RITHOLTZ: Way even before that?

KRUGMAN: Yes. And then post-crisis, many of them were extremely critical of fiscal stimulus even though they should have known better and what happened there — so this is academic economics to a large extent.

What happened there was that, look, their — part of it is ideology. It was kind of conservatism that the economics profession is kind of center right on average.


KRUGMAN: So, there was something political about it. But also, we had these beautiful models, the model of an efficient market, efficient financial market where asset prices are always right, is gorgeous, it’s aesthetically pleasing, it feels great to play with it, it happens not to be true.

But it’s a huge lure for the profession and then after crisis, it turned out also that the years and years of railing against Keynesian economics is being too ad hoc and so it had led to a lot of people just not actually understanding. If we had this — if we had the financial crisis in 1970 instead of in 2008, we would have had a much better policy response because it was — unfortunately, the evolution of the economic profession in the ’70s and the ’80s and the ’90s took us away from understanding what we needed to understand in the aftermath of 2008.

RITHOLTZ: So, let’s talk about how where you physically were different schools around the country impact your understanding of that. You described it as — in that same column as the difference between saltwater and freshwater economists.


RITHOLTZ: I love that …

KRUGMAN: Yes. It’s actually Bob Hall who came up with that one but it’s a — it turns out that the places that kept the memory of Keynes alive tended to be places like MIT and Yale and Princeton and the places that forgot all about it tended to be places like Chicago and Minnesota and Carnegie.

And so, it just so turns — it just so happens the places that I would say maintain a fairly realistic view of how macroeconomics works that were willing to actually look at the facts and not insist on the perfection of their models tended to be places that were on the coast of the U.S. as opposed to in the middle.

RITHOLTZ: So, I’m going to throw a curveball at you, Berkeley clearly is a saltwater …


RITHOLTZ: … economics thesis. Where do you put Stanford and the Hoover Institute?

KRUGMAN: The Hoover Institute is a peculiar thing within Stanford. It’s an odd thing. It’s not actually the — and Stanford is a mix ideologically and Hoover is this independent entity really within.

So, yes. So, what can you say? But definitely, I mean, the — Bernanke hired me at Princeton and then actually promptly left for the Fed. But still — but Princeton was a hotbed of people who worried about Japan because we thought that Japan’s problems were a possible omen for the rest of us and that turned out to be exactly right.

RITHOLTZ: Can you stick around a bit? I have a ton more questions for you.

KRUGMAN: OK. We can do that.

RITHOLTZ: We have been speaking with Paul Krugman, professor at CUNY Graduate Center and author of the book, “Arguing with Zombies.” If you enjoy this conversation, be sure and come back for the podcast extras where we keep the tape rolling and continue discussing all things economics.

We love your comments, feedback and suggestions. Write to us at Be sure and check out my weekly column on Follow me on twitter @Ritholtz. I’m Barry Ritholtz, you’re listening to Masters in Business on Bloomberg Radio.

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RITHOLTZ: Welcome to the podcast. Paul, thank you so much for doing this. I’ve been looking forward to discussing your new book, which I have right here, and just talking about so many other things. How goes the book slog? And I know it’s a slog.

KRUGMAN: Yes. I’m just in the early stages as we sit here. I’m just on two events so far. Actually, Samantha Bee in New York and …

RITHOLTZ: She’s so funny, isn’t she?

KRUGMAN: Yes. And then Mark Sandy in Philadelphia who is not quite as funny but was also really good.

RITHOLTZ: Right. So, Sam Bee, it’s hard not to — when I did the daily show, she was the one who ran that segment.


RITHOLTZ: And you just — so many takes ruined because she just makes you laugh. You cannot laugh.

KRUGMAN: No. We did. That was fine. Yes. I’m not a spring chicken anymore so I’m not doing the crazy change cities every day.

RITHOLTZ: Not Coast to Coast?

KRUGMAN: Yes. I’m not coast to coast.

RITHOLTZ: So, you should do Bill Maher. He would have you on in a heartbeat.


RITHOLTZ: Too far to fly.

KRUGMAN: Yes. Although I’m actually — I’m doing London and Madrid because I’m big in Spain. For some very peculiar reason, I’m big in Spain.

RITHOLTZ: Aren’t you affiliated with London School of Economics also?

KRUGMAN: Yes. But it’s a very loose thing but, yes. They advertise my books on the sides of buses in Spain for some reason.


KRUGMAN: Yes. And Spanish language edition came out same day as the English edition.

RITHOLTZ: So, where are you going in Spain?

KRUGMAN: It’s all going to be in Madrid but it was …

RITHOLTZ: Right. So, we were about two, maybe three Septembers ago, we were in San Sebastian and it’s in — deep in the hinterland of Spain …


KRUGMAN: … and it’s just spectacular.

KRUGMAN: I’ve spent a fair bit of time in Santiago, the Compostela, which is really great. The climate is really weird. The climate feels like Wales and it’s — they still take siestas. But it’s really — there’s a lot of great stop and I’ve been around with fair a bit of Spain.

RITHOLTZ: They know how to live there. They know how to kick back, relax and enjoy food and wine. They’re really — it’s a whole different head space.


RITHOLTZ: Paul, what do you think are the two most important zombies that you discussed in the book?

KRUGMAN: Clearly, it’s the belief that tax cuts pay for themselves.

RITHOLTZ: Wait, I thought they do. Are you telling me they don’t? Didn’t the Laffer curve on that napkin say that you could cut taxes and they pay for themselves?

KRUGMAN: Yes. It turns out we’ve had an erroneous napkin and it has never once happened. So, that’s the one in that in terms of our political life …

RITHOLTZ: That is shocking. I had no idea.

KRUGMAN: Yes. And other one is climate change denial.

RITHOLTZ: It’s a hoax. It’s a Chinese hoax.

KRUGMAN: That’s right. The belief that it’s a hoax or at least that is not rally serious or anyway, there’s nothing we can do about it, that’s — as the evidence keeps on piling in and as the consequences start to show, the fact that that is still — I mean, 60 percent of Republicans in Congress are climate deniers. They deny that climate change is happening at all.

RITHOLTZ: The only major political party in the world with the majority that believes climate change isn’t real.

KRUGMAN: Yes. Although I’m not entirely sure about the current governing party in Australia but yes. But, yes, this is a — and this is really — those are enough to go on. There are other zombies out there but those are the two really big ones.

RITHOLTZ: Those are the big ones. Fascinating. All right. So, let me jump through a couple of questions we missed during the broadcast portion. The two things I didn’t get to that I felt were important were, well, let’s start with climate change. a well-known Chinese hoax, right?


RITHOLTZ: Climate change created by the Chinese so they could continue to dominate us on the industrial side. You call it, quote, “an existential threat and a priority above health reform, income inequality and financial crisis.” That’s a big statement.

KRUGMAN: Yes. Because if you make the planet unlivable or large portions of the planet unlivable that let’s say trumps everything else. So, now we got some word …

RITHOLTZ: So, that’s a fair way. Right.

KRUGMAN: And then we’re on track to really catastrophic outcomes. It’s — the climate models have been surprisingly accurate so far and they …

RITHOLTZ: There was just a big piece, I don’t remember if it was Bloomberg or the Times …


RITHOLTZ: … about the — I think it was Bloomberg, it was the 1988 forecast turned out to be dead accurate.

KRUGMAN: Yes. Yes. So, it’s — this is — it’s good science, it’s real science and it’s scary as hell and the thing about it also as an issue is it happens to be something we know how to deal with. A little — a mixture of public investment and new technologies plus putting a price on carb and it would make an enormous difference and technology is our friend here. Renewable technology has made enormous advances.

RITHOLTZ: Crisis dropping. Sure.

KRUGMAN: So, all the ingredients are in place for solving this existential threat except that we have the …

RITHOLTZ: You need leadership.

KRUGMAN: Well, we have leadership which is trying to make sure that the catastrophe happens.

RITHOLTZ: What about a technological solution? So, if we don’t get a change in leadership and 10 years from now we find ourselves with a rising global temperature and rising sea levels, what about seeding the clouds or some magic bullet that will make all these go away?

KRUGMAN: Well, that’s the last resort. I’m not going to rule it out. But there’s enormous problems if you start to think about that because anything you do that is actually geo-engineering …


KRUGMAN: … is going to have very uneven impacts. It’s going to — it may stop the planet from cooking but it will cause worsening of the climate in some places.


KRUGMAN: It will be very uneven. So, if you’re upper, lower Slavistan (ph) and it turns out that the United States and the European Union are planning a project of geo-engineering that just have these small side effect, it’s going to turn your country into a desert …


KRUGMAN: … how are we going to deal with the political fallout of that? I mean, it’s better than total doomed but it’s really not the route we want to go down. Have you been following the debate about climate change in Australia? It’s quite fascinating.

KRUGMAN: Some of it. And they’re …

RITHOLTZ: They’re deep in denial, at least the elected officials.

KRUGMAN: The elected officials are. So, it’s a lot like our situation.

RITHOLTZ: Like Florida.

KRUGMAN: Yes. It’s a place which is really on the — as it happens. They’d have to be right at sort of the leading edge of disaster that the continent is burning. But they have, like us, they have people who have an ideological opposition to any form of government action. They have powerful fossil fuel interests and some …

RITHOLTZ: Huge mineral and timber interest that don’t want to change.

KRUGMAN: Yes. So, yes, the Australia -if you want to feel depressed, look at Australia where, on the one hand, you can see what the shape of things to come in terms of disaster and you can also see politically how hard it is to do the right thing.

RITHOLTZ: There’s a wonderful book called “Windfall,” came out about four years ago that traces the history of investment in climate change and new technology and all these things. And the conclusion of the book is essentially areas that are hot are going to get hotter, areas that are dry are going to get dryer, areas that are cold are going to get colder, areas that are wet are going to get wetter and it’s not so much that the climate is going to change as it’s just going to be so much more intense everywhere.

Desertification is going to continue expanding, places that suffer coastal flooding are going to be overwrought. It’s whatever you have just multiple eight times …

KRUGMAN: Well, I’m not sure it’s that simple but it’s a- but, yes, there’s a lot of things. It’s not linear. It’s not just it. Every place gets two degrees warmer. It is that a lot of stuff happens in addition to that and, yes, it’s — it really, it really — it’s quite terrifying.

And, really, we — fossil — I talk in the book about zombie ideas.


KRUGMAN: Fossil fuels is basically a zombie sector. We shouldn’t be — we should be phasing out fossil fuels entirely, quite quickly. And in fact, we have the technology to do that. So, they — if we had any kind of realistic pricing, we wouldn’t be — we wouldn’t be digging coal. We wouldn’t be — we might be doing a little bit fracking …

RITHOLTZ: These are every bit a subsidized and solar is …

KRUGMAN: More so at this point and I mean, at the moment, coal is losing the battle against solar and wind just on pure cost grounds …


KRUGMAN: And you have the Trump administration trying desperately to force people to burn coal.

RITHOLTZ: And the electrical — the electric production facilities, all of — all of the big plans that are making electricity, they’re all moving to natural gas. It’s so much cheaper and cleaner.

KRUGMAN: Well, they’re moving to natural gas and to — and a lot of wind and solar. And natural gas — fracking is one of those things which it — there’s a lot — we’re releasing a lot of greenhouse gas, it’s because of lax regulation. But if we did it right, fracking is a good transition technology because hydrocarbons, methane has a lot less carbon for BTU than coal does.


KRUGMAN: So, and it’s good for surge capacity. So, we could, in a rational world, we’d be using a natural gas to provide surge capacity with using renewables to provide base capacity, some nuclear. I’m OK with that.

We would be getting completely out of the coal business, we’d be shifting to electric vehicles. All of it, fraction of a percent of GDP in terms of what it would actually do to growth. But of course, not under current management.

RITHOLTZ: Interesting. And then the other thing we didn’t get to during the broadcast portion that I have to talk about because you’ve written about it so much and it’s such a giant issue is the income and wealth inequality that’s in our society and I have to point out that back in 1992, you are first writing about this.

KRUGMAN: Yes. I was the first person to notice it but it was already obvious. So, I did — yes, a 1992 piece called “The Rich, the Right and the Facts” which goes through a lot of the bad arguments that people were making against worrying about rising income inequality. All of which — all of those arguments, by the way, still being live (ph) because they’re zombie ideas that won’t go away.


KRUGMAN: So, yes, this was — now, it’s gotten substantially worse since then, by modern standards. Gordon Gekko was a piker.


KRUGMAN: But that — this is definitely — and it colors everything. I mean, the fact that we have a society where a few people have so much money, so much influence, and also, where people aren’t living in the same universe. So, we’re socially divided particle. We don’t live in the — at all in the same material universe which is not the kind — the America I grew up in.

RITHOLTZ: Right. So, let’s put some numbers, some flesh on the bone. You wrote, quote, CEOs now get paid more than 300 times as much as the average worker.

So, how did that come about? How was it formally a 25x or a 30x to now 300x?

KRUGMAN: Now, that’s a — that’s actually quite an interesting story, right? It’s — now CEOs have always pretty much appointed the people who decide how much they’ll be paid. So, in some sense, it was always a game where CEO appoints some people who have every incentive to say this guy is great, he needs to be paid in …


KRUGMAN: But they didn’t use to exercise that power to anything like the extent that they do now. What changed? There was a big shift in power relations used to be that if you paid the extravagant some, your union would pick up.


KRUGMAN: And of course, we think the death of private-sector unions has meant that that’s going to wait. It used to be that if you got yourself paid an enormous salary, the federal government would take a lot of that away in higher taxes. So, at some level, if there was a question of shall I I piss off my entire workforce in order to be able to take home an extra — in order to get paid an extra million dollars, well, if I’m only going to be able to take home 150,000 of that, I might not want to do it.

If I can take home a much larger share of it, then maybe I will. So, that changed. And then, just a general set of norms, expectations. One thing is clear, it’s not because we’re — that we have better CEOs, right? It’s for sure.

RITHOLTZ: It’s the same pool that come in from the same schools and …

KRUGMAN: Well, and — and look at how much money disaster CEOs end up getting in their severance packages, right? So …

RITHOLTZ: Yes, that’s kind of surprising. It’s really — that sort of thing used to be if you really screwed up, they would hand you your hat and send you in your way, not with a $25 million exit package.

KRUGMAN: Yes, 25 million. That’s the point. Anyway, but yes. So — and so, this is a real — this is one of the key pieces of evidence that says that if you think the technology and globalization explains why we’ve gotten so unequal, explain to me how that has means that incompetent CEOs get paid as much money as they get paid.

RITHOLTZ: Does — so, there’s a couple of bullet points that come from that. First is a fascinating plan that money episode on the unintended consequences of some of the employment compensation changes under Clinton, Bill Clinton, that was part of the big set of tax changes where they tried to cap the dollar payment and allowed payment in stock.

How much of that is a source of this giant — because when you look at stock compensation, it’s the lion share of these giant CEO comps.

KRUGMAN: Yes. And it’s a — whether that’s the result of the policies enacted during the Clinton years, I don’t know. It’s a — it’s certainly as part of the — part of the issue and it — I mean, there was a period when economists, some of them said, good, we should pay people in stock because that gives them an incentive to perform well. But it turns out it doesn’t actually work that way, partly because you get stock options but they reset the price if the company does badly.

RITHOLTZ: Right. For sure.


RITHOLTZ: Wait, but aren’t CEOs incentive to do a good job because they’re the CEOs, you have to incentivize them more?

KRUGMAN: That’s — that’s the point. It turns out — back in — back in the America I grew up in, again, I’m an charger (ph) here, we had, I think about photos of — I always think of photos of NASA and all of these guys in short-sleeved white shirts …

RITHOLTZ: With a pocket protector.

KRUGMAN: Yes. With the pocket protectors, all of whom are being paid not all that well, none of whom have incentive pay, doing incredible things. I mean, it wasn’t — we think of NASA but the same thing was going at the great technology companies at the time.

So, it’s not — it’s amazing, actually, to think that — I mean, money matters. Monetary incentives matter. But people do good work for lots of reasons and we’ve lost the notion that people might do good work because they take some pride in their work.

RITHOLTZ: Right? Also, it’s their job not to — not to go too far on a limb. So, you’ve described — we’re talking about climate change and denial there before. You’ve described, quote, “the inequality denial industry” that either inequality wasn’t rising or that it didn’t matter. Who can legitimately, with a straight face, say there hasn’t been a giant increase in economic inequality?

KRUGMAN: Well, there’s a good salary to be made from the ability to say that with a straight face and that’s really what drives it. But, yes, it’s quite amazing. I mean, the numbers, the official numbers show it, although we actually have a problem with many of the standard measures because they don’t actually keep track of gigantic incomes because that’s — we didn’t think we needed to but because — but now we do.

But I — yes, when — there are people out there, still, trying to claim that inequality hasn’t gone up much and it’s just saying, among other things, just walk around. Look at New York City. Look at at the way we live now. It’s just is not the same middle-class country it used to be.

And then we do have — yes, we have pretty sophisticated ways of between tax data, surveys and so on which …

RITHOLTZ: The Federal Reserve new data series?

KRUGMAN: Federal Reserve …

RITHOLTZ: That’s new. They never used slice it as fun as they do top 1 percent, 10 percent, half and …

KRUGMAN: Well, and the fact …

RITHOLTZ: That’s a big change.

KRUGMAN: The top point 0.01 percent, nobody ever thought that was important, how much money could there be up there, but the answer is now a lot.


KRUGMAN: And so, yes. So, it — this is not — there shouldn’t be any real question about that. But again, it’s difficult to get a man to understand something when the salary depends and he’s not understanding it.

RITHOLTZ: So, let’s talk about headline from a different writer that I had to ask you about because it’s so fascinating. Derek Thompson in the Atlantic, the weekend before we tape this, had a column, quote, this is the headline, “Boomers have Socialism, Why Not Millennials?”


RITHOLTZ: It’s kind of a fascinating take.

KRUGMAN: Well, there is a — yes. I mean, it is a peculiar thing that when people say America will never stand for government health insurance, every American, 65 and older has government health insurance.


KRUGMAN: When I say the Americans won’t stand for why — large government guarantees of income, of income, Social Security. So, we actually do have, in fact, the U.S. welfare state, it’s not that — it’s smaller than that of other advanced country but not that much smaller because in fact, we do provide healthcare and retirement income to people …

RITHOLTZ: People who vote.

KRUGMAN: .. under 65.

RITHOLTZ: To people who vote.

KRUGMAN: It’s part of the people who vote, but I think the other thing that happened was that when Medicare came in, why was it possible to go and provide government health insurance to everybody over 65. Why didn’t people complained that this was taking away private insurance and the answer was that private insurers weren’t interested in covering people over 65.

There was never ..

RITHOLTZ: They’re expensive.

KRUGMAN: Yes. They’re expensive and unpredictably expensive.


KRUGMAN: So, the — you are basically moving in to a blank space and the trouble — the reason that it’s not so easy to just have Medicare for all is that the people under 65, many of them do have private health insurance which both means that you have a lobby interest group. But I think even more important means that you’re telling people, we’re going to take away the insurance you now have and we’re going to replace with something different, trust us, it will be better.

RITHOLTZ: Plus death panels on top of it.

KRUGMAN: Plus death panels. And it probably will be better, in fact, but that’s a really heavy political lift and it’s …


KRUGMAN: I mean, if you can start with a tabula rasa, I dedicate this book to the — “Arguing with Zombies,” to the memory of Uwe Reinhardt, healthcare economist at Princeton who helped me a lot. And Uwe and his wife, Mei Cheng, they actually put together Taiwan’s healthcare system which is single-payers, basically Medicare for all …

RITHOLTZ: And how is it working?

KRUGMAN: That’s working fine. But the — but Uwe himself, said look, we’re not going to be able to do that in the United States. We’re — if you want — if you wanted to get there, I wouldn’t start from here.

RITHOLTZ: So, we’re recording this the day of the Iowa caucuses of all the democrats who are running for office, who has the most compelling workable healthcare proposal of everybody.

KRUGMAN: That’s an interesting question. Because the — I mean, they’re all workable proposals on the technicalities. Medicare for all would work. Elizabeth Warren has laid out a lot more detail about how it would be paid for than Bernie Sanders has, but something like that would work. Enhanced — massively enhanced Obamacare which is basically what Joe Biden …

RITHOLTZ: It means just to extend and to cover everybody and …

KRUGMAN: Well, extend, cover, yes. So, the subsidies don’t cut off, so that we have a much reduced copays and it’s just — that also works. There are countries that have universal health coverage that do it through private insurance companies like the Netherlands. So, that’s also workable.

So, I’m not sure that anyone — in terms of who’s plan is — actually, the truth is, I believe that if any Democrat is elected, what we will, in fact, get is Obamacare 2.0. That Medicare For All ain’t going to happen, not for a few years, anyway.

And so, what we’re actually going to get is something that is just a greatly enhanced version of what we managed to achieve in 2010 which is fine with me.

RITHOLTZ: Right. And people have come to, like, Obamacare. In fact, the current ministration but for John McCain would’ve gotten rid of it. I think that is certainly a factor in the outcome of the 2018 midterm elections.

KRUGMAN: No, it’s probably the single biggest factor.


KRUGMAN: Yes. That’s what most of it’s — that was largely a healthcare election. One thing that worries me about Medicare for all and all that is it — that instead of people talking about the fact that Trump wants to take away what we have achieved that they’re going to be talking about some radical new proposal and we need to focus because in fact, if Trump is reelected, there’s a very good chance that you will find a way to kill Obamacare in his second term.

RITHOLTZ: So, what do you think the outcome of November 2020 is going be?

KRUGMAN: I have zero idea.

RITHOLTZ: I personally have no idea, although I will tee this up by saying it feels — it seems like 2016, he had a thread and needle quite precisely and it was 150,000 votes across five states that put them over the top.

KRUGMAN: Yes. And if …

RITHOLTZ: Has he gained votes or lost votes since then?

KRUGMAN: I don’t know. We really don’t know. I mean, it was also a media obsession with Hillary’s emails and all of that. And Trump won in large part because nobody thought he could possibly win. He benefitted enormously from …


KRUGMAN: … coverage that ignored the possibility of his winning and so it was okay to beat up on Hillary because, obviously, Trump can’t win. And that won’t happen, I hope this time. But God knows. I mean, the economy is — unemployment is low, although what all of the political scientist say is that what matters is how fast is the economy growing, not the level but the rate of change …


KRUGMAN: In the year before the election and …

RITHOLTZ: Two percent.

KRUGMAN: And 2 percent is kind of borderline.


KRUGMAN: Because that’s more or less neutral.


KRUGMAN: So, but who knows? I mean, I — trump has certainly not managed to build mass support.


KRUGMAN: He has …

RITHOLTZ: He’s got a score …

KRUGMAN: … more popular overtime.

RITHOLTZ: His core group, he’s still at, whatever that is, 42 percent, 38 percent. Yes.

KRUGMAN: And it’s — and but electoral college probably still gives him an advantage.

RITHOLTZ: Well, it looks like he’s lost Pennsylvania already.

KRUGMAN: We hope.

RITHOLTZ: And it looks like he’s lost Michigan already and …

KRUGMAN: Not sure. Possibly …

RITHOLTZ: … Wisconsin. So …

KRUGMAN: Well, it is interesting that to the extent that Trump was making economy overall, I have to admit, it’s a low unemployment economy.

RITHOLTZ: It’s the Obama economy extended out for years.

KRUGMAN: Yes. But it feels pretty …

RITHOLTZ: Feels good.

KRUGMAN: It feels good. But the peculiar thing, the amazing thing, actually, is that where Trump’s economy is bad, is precisely where he promised to help. So, manufacturing …

RITHOLTZ: Foreign bankruptcies, way up.

KRUGMAN: Foreign bankruptcies are way up. Manufacturing, we’re at manufacturing recession.

RITHOLTZ: Recession. Yes.

KRUGMAN: Even as — even as we have — so, it’s possible that that — that that tips the balance.

RITHOLTZ: Ohio, Michigan, Wisconsin. That area.

KRUGMAN: So, maybe, but then on the third hand, there may be other factors coming in and it’s hard — I really have no ability to prognosticate on this stuff.

RITHOLTZ: Two years ago, I would have bet you a million dollars that the senate would not change hands and following 2018 and following the arch of all the news that’s come out this year, I think it’s a better than even chance that the democrats take the Senate or at the very least, 50-50.

KRUGMAN: It’s — yes. I think that’s …

RITHOLTZ: And that wasn’t true two years ago.

KRUGMAN: No, that’s clear. And that’s — and in some way …

RITHOLTZ: A bad map, a challenging — it’s only a third of the seats were up. Everybody said 2022, maybe. But 2020, no chance.

KRUGMAN: No. It’s a real chance now. That’s one of those things that we’re — there’s enough — there are enough really weak Republican Senators.

RITHOLTZ: Candidates. Yes.

KRUGMAN: And it’s Arizona. Places where …

RITHOLTZ: Well, she was an appointee. She never won any of those.

KRUGMAN: That’s right. And is lagging pretty bad — but actually, I tried not to OD, by the way …

RITHOLTZ: Running against an astronaut (ph), by the way, in Arizona.

KRUGMAN: Yes. I try not to OD on this stuff, too much. It’s — the fact of the matter is that we don’t know. But it’s — the realm of possibilities, I think, do range from Trump victory and Republican Senate, probably still Democratic house but …

RITHOLTZ: A sweep?

KRUGMAN: … Democratic victory — democratic sweep and that would be really interesting. I mean, the — give us a chance to do — Obama only had two years when he was actually able to do anything.

RITHOLTZ: So, did Trump, only had two years.

KRUGMAN: Yes. And so, I think if we actually looked at it, the possibility of another — we’re not going to get Medicare For All. We’re not going to get …

RITHOLTZ: Free college.

KRUGMAN: Free college. We’re not — we might get a green new deal. Maybe not as big as the one that the advocates want but I would definitely be for that.

And but on the other hand, we might — we may be on a slide and to becoming a authoritarian one-party state, that has happened and I’m really quite concerned that it could happen to us. That would be better if it happens.

RITHOLTZ: So, on that cheerful note, because I know you are heading out to Seth Meyers from here, let’s jump to our favorite question that we ask all of our guests.

We call this the speed round and I’ll just plow through these as quickly as I can and we’ll send you on your way starting with what are you watching these days? What are you streaming? What’s your favorite podcast? What are you paying attention to?

KRUGMAN: OK. I actually — I should say it, I really do podcasts.


KRUGMAN: I — very little. I’m listening when I can to the Peterson Institute Trade Talks which is — that is professional listening.



RITHOLTZ: How about watching? What are you watching? Amazon Prime, Netflix …

KRUGMAN: Amazon Prime. I have both Amazon Prime and Netflix and I watch all kinds of stuff. But mostly, not nerdy stuff. So, I’m a huge fan of “The Expanse.”

RITHOLTZ: God, I love that series.

KRUGMAN: Right. I think — and it makes me almost forgive Jeff Bezos for all other things he’s done that he rescued “The Expanse” and has continued.

RITHOLTZ: Yes. This last season has been spectacular.

KRUGMAN: It’s fabulous.

RITHOLTZ: So, good.

KRUGMAN: Actually, it’s something that social science nerds like as well which is a whole lot of story. That’s …

RITHOLTZ: And there’s another season now coming in the future.

KRUGMAN: Right. There’s another season coming. There’s also going to be — I don’t know how many people saw this but “Altered Carbon” which was Netflix …


KRUGMAN: … that was a great science fiction novel then they turned it into a great series and there’ll be a …


KRUGMAN: I think we’re having a second season coming up next month.

RITHOLTZ: If you like “Altered Carbon” you should check out “Electric Dreams” which is loosely based on Phillip K. Dick’s …

KRUGMAN: I haven’t watched that one.

RITHOLTZ: Really, it’s the first one. It’s spectacular. And they’re all separate. It’s not a contiguous series, they’re all standalone. So, really — really interesting.

KRUGMAN: And I watched lots of concerts on YouTube.

RITHOLTZ: That’s right. You’re a music geek.

KRUGMAN: Well, it’s kind of weird. I’m a 66-year-old wannabe hipster. I watched a lot of indie music performances.

RITHOLTZ: Right. Have you seen David Byrne’s on Broadway American Utopia?

KRUGMAN: No, I have not.

RITHOLTZ: So amazing. I’ve seen it twice.

KRUGMAN: I can imagine.

RITHOLTZ: It’s done February 16th, so you better go hurry up and see it.

KRUGMAN: We missed the window. I’m a …

RITHOLTZ: You’re leaving the country.

KRUGMAN: I’m going to be out of the country.

RITHOLTZ: If you’re a Talking Heads fan, it’s amazing. It’s really just a great show.

KRUGMAN: Well, too bad.

RITHOLTZ: And did you see — it’s been — y ou mentioned Amazon Prime. “The Boys”?

KRUGMAN: Haven’t watched that yet.

RITHOLTZ: So, it’s like the anti-Marvel Universe. Like the opposite of …


RITHOLTZ: … where — when you look at the model there, superheroes are part of a corrupt corporation that abuse their power to obtain government contracts. It’s just fascinating.

KRUGMAN: I probably should be — the whole superhero thing, by and large, leaves me cold. So …

RITHOLTZ: You would totally — so, I only recommended this series to two people who could not be more different, you and Cliff Asness and I am betting both of you are going to love it.


RITHOLTZ: So, put that down. Second. What’s the most important thing we don’t know about Paul Krugman?

KRUGMAN: OK. So, we have touched on this before. I think the most important thing that people don’t know is that I’m a pussy cat in person.

RITHOLTZ: That’s right. Your …

KRUGMAN: I’m not at all …

RITHOLTZ: Your whole public persona …

KRUGMAN: The public persona, somehow, even though I don’t think I …

RITHOLTZ: You don’t encourage it.

KRUGMAN: I don’t encourage it. I don’t insult. I don’t talk about people’s personal appearance. I don’t …

RITHOLTZ: But your writing is barbed and effective and people interpret that as mean and angry.

KRUGMAN: Yes. But I’m not angry and I’m not a — I don’t hold grudges.

RITHOLTZ: You’re a pussy cat.


RITHOLTZ: You’re a mensch (ph). Let’s talk about your early mentors. Who influenced the way you look at the world of economics?

KRUGMAN: OK. So, I had two great economics mentors. First, Bill Nordhaus.




KRUGMAN: And Nobel — although, after me which is kind of weird but he got it. And I was his research assistant when I was still an undergraduate and that was tremendous apprenticeship.

And then Rudi Dornbusch at MIT was a huge influence on me and on the many students. So, huge influence. So, those are the two people whose personal advice, mentorship mattered a huge amount to me.

RITHOLTZ: What about economists? What economists have influenced how you think of the field?

KRUGMAN: Yes. So, the — so, although I wasn’t an adviser but Bob Solow of MIT.


KRUGMAN: Just — I — a whole lot of the way I do economics, the whole writing style which fills over to my public writing as well comes a lot from Robert Solow who was this great MIT economist who had this tremendous gift for taking complicated issues and turning them into simple models that illuminated the world and I have always been in that. And then not a simple modeler but John Maynard Keynes.

RITHOLTZ: I was waiting for you to go there.

KRUGMAN: The — maybe you have to actually do economics as a an advocation to appreciate the greatness. Keynes’ ability to think his way out of the box in which economists were trapped at the time and see things differently, there’s never been anything like it. I would say not even Adam Smith did as much to …

RITHOLTZ: Really? Wow.

KRUGMAN: … really just say this is — the world is not the way you think it is. And it’s an amazing performance.

RITHOLTZ: Quite fascinating. Let’s talk about books. What do you like to read for fun? What do you read — what do you recommend to people? Tell us some of your favorite books.

KRUGMAN: OK. So, I’m a geek. So, I read lot of science fiction. Anything by Charlie Stross who I consider the living science fiction author.


KRUGMAN: And the S-T-R-O-S-S. The — but lot’s — there we are. Actually, if you search, you can find — I have met him.

RITHOLTZ: “The Atrocity Archives.”


RITHOLTZ: .. names.

KRUGMAN: “The Laundry Files” novels are amazing.


KRUGMAN: They are …

RITHOLTZ: “The Annihilation Score.”

KRUGMAN: Yes. The — but he’s incredibly prolific and I had a memorable evening with him and several other science fiction authors who all live in Edinburgh where we talked science fiction and tasted of single malt scotches and I described it as a half memorable evening because I only remember the first half.

RITHOLTZ: So, give us some other books. That’s — he’s interesting.

KRUGMAN: So, I mean, and in science fiction, actually, I just recently, for the first time in decades, reread “Doom” which is …

RITHOLTZ: You know it is a new version …

KRUGMAN: There’s going to be a new version coming out and the previous ones, they’ve all screwed it up somehow.


KRUGMAN: But let’s see. Because that is actually an incredible book.


KRUGMAN: The other thing I do is I read a lot of history. So, all kinds of stuff and I just read a long-detailed book on the Peninsular War which is part of the Napoleonic wars. But it’s the piece that where they — the Spaniards and the Portuguese would help from the Duke of Wellington who were fighting the French in Spain and it’s a — and what was great about that was that most of the stuff that you read about that in English is very Wellington scent (ph). It’s very much about the British Army.


KRUGMAN: But this one gives you the whole panorama which is much vaster and much more brutal.

RITHOLTZ: “The Peninsular War.”

KRUGMAN: “Peninsular War.”

So, it’s really from 1808 until 1813. There was this extraordinary, very grim, but fascinating struggle for control of Spain.

RITHOLTZ: Give us one more and I’m going to ask you about one.

KRUGMAN: OK. So, favorite books. God, so many things. I mean, I’m a — actually, I was very much influenced by — haven’t — not — but the philosophy of David Hume, “An Enquiry Concerning Human Understanding” of how skepticism and demanding evidence made a big difference. I t was actually only years later that I realized, actually, he probably was the first modern economist even before Adam Smith.

RITHOLTZ: Wow. That’s really quite fascinating.

So, back to science fiction. Two different people who were sci-fi geek friends, who I have a giant overlap with their taste, I respect what they like and don’t like. When two people recommend the book, I go out and get it but I haven’t read it yet.

Both recommended, “The Three-Body Problem.”


RITHOLTZ: Have you seen this …

KRUGMAN: I have read it.

RITHOLTZ: You read it? What are your thoughts on it?

KRUGMAN: I mean, I liked it.

RITHOLTZ: It’s a full trilogy now.

KRUGMAN: It’s a full trilogy and it’s kind of weird. I mean, it’s — but it’s Chinese …

RITHOLTZ: Right. Originally. Yes.

KRUGMAN: It’s very different in feel. And it’s strange but full of interesting ideas. And even some character development, a lot of science fiction, I have to admit, the characters are kind of two-dimensional, it has a little bit better than that with this.

And it’s not — it’s not the best that I — stuff I’ve read. I mean, I think maybe it may lose something in translation. I don’t know. But it’s …

RITHOLTZ: You didn’t read it in the original mandarin?

KRUGMAN: Not my — mandarin skills are a little bit limited…

RITHOLTZ: All right. So, that’s probably where it fell a little — it fell a little short.

Speaking of fail, tell us about a time you failed and what you’ve learned from the experience?

KRUGMAN: Gosh. I mean there’d been multiples. But I mean, obviously, I made a bad call about the economy on election night 2016.

RITHOLTZ: Yes. But didn’t you roll that back pretty quickly?

KRUGMAN: Three days.



RITHOLTZ: No one wants to hear about that. They just want to beat you with the original call.

KRUGMAN: But it is a reminder not to let — not to let — and I’ve done some things before. I mean, I was some things before. I mean, I was warning about a debt crisis during the Bush years and …

RITHOLTZ: Never happened.

KRUGMAN: It never happened and I — usually, when I make these things, I go back and ask myself was that actually grounded in hard thinking or was I letting my desire to see bad things happen to bad people, influence my judgement? That’s usually what — what is the case?

RITHOLTZ: Do you think Bush was a bad person or was he amiable doofus in over his head?

KRUGMAN: I think he was not a great person. I mean, I think …

RITHOLTZ: Was he a bad person? So, if you had to pick Cheney or Bush?

KRUGMAN: No. Cheney was a bad person.

RITHOLTZ: OK. So, when I look at Bush, I look at, like, all right. I don’t agree with most of his decision but he seems kind of like goofy …

KRUGMAN: Well, utterly lacking in empathy for the platform who are less fortunate to himself.


KRUGMAN: So, that’s …

RITHOLTZ: That’s fair.

KRUGMAN: That’s fair. So, but not actively evil in the same way that Cheney was and certainly not in the way that Trump is.

RITHOLTZ: All right. So, let’s — so, the failures there. What do you do for fun? What do you do when you’re not panning “New York Times'” columns?

KRUGMAN: Well, I go to as many indie concerts as I can manage.

RITHOLTZ: Tell us the last couple you saw.

KRUGMAN: OK. Last two I saw were most recently Reina del Cid which is actually — it’s the — it’s an indie band, it’s also a person. But she’s the core of it from Minneapolis, does sort of folky stuff, but the really great — fun. And I saw that at Rockwood Musical which is a standing-only venue, you stand there with a beer in your hand and …

RITHOLTZ: Yes. I don’t do that anymore.

KRUGMAN: … and you’re five feet from the band. So, that was great.

RITHOLTZ: You stood for two hours in front of the band?

KRUGMAN: I’m managing — as long as I can keep on doing it.

RITHOLTZ: All right.

KRUGMAN: And then …

RITHOLTZ: It’s impressive.

KRUGMAN: And then one before that was another, Larkin Poe, which is blues.


KRUGMAN: They’re two sisters from Atlanta and they have a band, for touring, they have a band and the records are just them plus various pieces of equipment …

RITHOLTZ: So, like a drummer and a guitar or a drummer and a bass player?

KRUGMAN: That. But the two of them are both. One is live (ph) guitar and one is regular guitar and they do amazing harmony vocals and that was just …

RITHOLTZ: They got hot recently, didn’t they?

KRUGMAN: They got nominated for a Grammy.

RITHOLTZ: Blew up a little bit?

KRUGMAN: They didn’t win one …


KRUGMAN: But they got nominated for a Grammy and they — no. And I saw them at Bowery Ballroom which is 550 instead of 150 standing …

RITHOLTZ: Standing room people. Yes.

KRUGMAN: So, these are all standing with a beer in your hand concerts.

RITHOLTZ: Yes. That’s a tough — the last thing I did that for was U2 at the Garden and that has to be 12 years ago. And I’m younger than you. I can’t stand for two hours.

KRUGMAN: No. So, far so good. I mean, there will come a time when I can’t — and the other thing I do is I do — I do bike trips now. I have, actually, done bike trips.

RITHOLTZ: Like the full trip with a chase van and they’re sitting …

KRUGMAN: Yes. More or less. Yes.

RITHOLTZ: And they’re saying go two hours this direction and there’s a pace vehicle and you’re following.

KRUGMAN: Well, not pace vehicle. There’s a van that that pops up with bottles of cold water once in a while and takes your bags to the next hotel. And so, I’ve been doing — lately, I’ve been doing two of those a year. So …

RITHOLTZ: So, you’re biking for seven days, effectively.

KRUGMAN: Yes. Or, actually, the next one which is in Portugal is going to be 10 days.

RITHOLTZ: And your wife does this happily with you?

KRUGMAN: She actually has — the last couple, she’s gone and done other things and met at the end.


KRUGMAN: But I have some buddies. All of them, sort of my age, who are all of us still say, hey, we can still do this, let’s do it. And …

RITHOLTZ: And you could do that pretty easily in Europe. They’re built for that more than we are.

KRUGMAN: Yes. You want to go village to village. Although I’ve done — I’ve done them in Vermont, I’ve done them in Quebec. I’ve done — so, but it’s a great way to get out of your head, right, instead of …


KRUGMAN: Instead of worrying ab out the fate of the economy or the fate of — it’s just — can I actually get up that hill?

RITHOLTZ: Right. Changes your focus. So, speaking about worrying and being pessimistic or not, what are you most optimistic about these days and what you most pessimistic?

KRUGMAN: Well, I’ll start with the pessimism. I think there’s basically an even chance that we’re going — we’re going to lose our democracy. That’s …

RITHOLTZ: Fifty-fity.

KRUGMAN: Fifty-fifty.


KRUGMAN: Because even if we get past Trump …

RITHOLTZ: The forces of popularism …

KRUGMAN: The forces are there.

RITHOLTZ: … have been unleased and that’s …

KRUGMAN: Yes. I mean, I — for complicated reasons, I’ve tracked the collapse of democracy in Hungary pretty closely. And you can easily see. I mean, if Trump was as smart as Viktor Orban, we’d have lost it already.


KRUGMAN: And so, this is what really scares me most.


KRUGMAN: There’s my pessimism. My optimism, the — Americans are just incredibly more open-minded than they were and it’s apparently young people, not just young people. I mean, it — when I think back to what the country was like in the early 1980s, I mean, and you can — you can see it both — you can see it in polling but on other things, too.

I mean, I — as an adult, working economist, I lived in a country where only a third of white people thought interracial marriages were OK. A country where — I mean, as recently as 2004, gay marriage was a major election losing issue. We’re just — we had a closed mindedness and prejudice level and we’ve gone vastly more tolerant and that’s got to be a good thing.

RITHOLTZ: So, the pushback to that is hasn’t the current administration revealed — I’m not saying they are this. I’m saying Trump has revealed there are still big streaks of anti-Semitism, racism, misogyny, much more in the United States than a naïve upper-middle-class white guy like myself would’ve guessed.


RITHOLTZ: No one is anti-Semitic to me, how could it exist in the country?

KRUGMAN: You don’t get my mail.

RITHOLTZ: I get — I used to get the black comments. You and I have had conversations about how horrific some of the comments used to be and I just — I just chuck that up to, hey, people are getting killed in the financial crisis. No one wants to read me yammering about it, but they do and then they would make a really obnoxious comment. That said, I didn’t think that that was — I never extrapolated that to the rest of American society.

KRUGMAN: No. I think, though — but that stuff is always there. And that’s …

RITHOLTZ: But you think of it as a streak as like, couple of outsider cranks.

KRUGMAN: No. It’s …

RITHOLTZ: It kind of feels like it’s a little more expansive than it was.

KRUGMAN: I actually wrote something. It’s not in “Arguing with Zombies” but I wrote something early 2000s about — actually, about France where the National Front had gone a lot of votes in an election and saying that they’re — that they are angry people, that there’s something like a quarter of the population.


KRUGMAN: And every advanced country who are all of these things. And that doesn’t go away. The idea that whenever …

RITHOLTZ: Every disenfranchised, frustrated, willing to express it in kicking the cat in any way they can.

KRUGMAN: Yes. And does anybody — and it’s always the usual things. It’s always about brown people, it’s always — I don’t know if anybody listens to Tom Lehrer anymore, but he had a great satirical song from like 1961 about the — the chorus is the protestants hate the Catholics, the Catholics hate the Protestants, the Hindus hate the Muslims and everybody hates the Jews.


KRUGMAN: And that’s — so that’s always there. But the point is that there was a sort of assumption that the majority of the population was like that which was probably true in the in the ’50s and it’s not — it’s a lot better now.

RITHOLTZ: So, just as economics advances one funeral at a time, does the enlightenment of America advance one generation at a time? Is that what’s going on?

KRUGMAN: Well, some. I mean, there are plenty of — there are plenty of horrible young people and plenty of pretty decent older people. So, it’s not that straightforward.

But it’s a — I think it is true that that the younger generations are more tolerant than older generations and the other hand, I grew up in the ’60s and I did watch lots of fun Age of Aquarius people turn into Wall Street traders. So, that’s not always the case that people …

RITHOLTZ: Right. What’s the old joke? You’re heartless if you’re not a socialist when you’re young and then a capitalist when you’re older. (Inaudible).

KRUGMAN: No. And anyone who’s not a socialist under 30 has no heart. Anyone who’s still a socialist after 30 has no head.

RITHOLTZ: There you go.

KRUGMAN: That was the old line.

RITHOLTZ: That’s a great joke.

So, we’re done to our last two questions. Speaking of young people, what sort of advice would you give a college graduate or a millennial who was interested in exploring a career in economics?

KRUGMAN: OK. So, first of all, do get the education and …

RITHOLTZ: Does that mean doctorate or how far do you go?

KRUGMAN: Well, it depends on what you want to do. But you want to — you’re going to need some kind of graduate degree to get entering into stuff. A Master’s, in some cases, is good enough. But the — but you do need some certification.

The thing I can say is that it’s — to figure out what you’re good at and something that interests you, but not necessarily of cosmic importance, figure out something that’s really good and that that you do well and get that as a kind of a baseline. You can branch out — you can start to do stuff like writing this paper columns and so on later on but you do want to get that baseline, in fact, your contribution to society.

By and large, basically the answer is don’t try to be me, not yet. And the — I quote in “Arguments with Zombies,” I quote there was an essay by Raymond Chandler on writing books and he said that there have been some very dull books written about God and some very fine books written about making a living while staying fairly honest. So, focus on where you can actually add.

RITHOLTZ: I like that.

And our final question, what do you know about the world of economics today that you wish you knew 30 or 40 years ago when you were first ramping up your career?

KRUGMAN: Actually, see the thing is, my career has been — the angels were smiling on me. I’ve had an optimal career that’d never been anything that — everything broke the right way for me in ways that there’s just — I had no right to expect.

So, it’s not that. What I — there is now a major sort of — scandal has pretty much come up in economics were we’re realizing just how strong the misogyny within the profession is, just how …


KRUGMAN: … badly people — badly women have been treated. Not Harvey Weinstein level, but lots of love discrimination …

RITHOLTZ: Is this in terms of hiring or publishing or promotion?

KRUGMAN: Everything. I mean, publishing — the way that they’re treated in seminars and of course, then they — thanks to — we have anonymous social media, we know the way that some male economists talk about their female colleagues.

And I was oblivious. Maybe at some sense, but I didn’t realize. I don’t think I was ever doing it, but I wasn’t campaigning to say, let’s stop this. So, I really wish that I had been more aware. I was sitting there comfortably and it’s super comfortable environment. I mean, I was — I had all the qualifications. I had the right school, I was white, I was male, I was Jewish which I was — in economics in my generation was sort of normal.

RITHOLTZ: Didn’t hurt. Right.

KRUGMAN: And had no idea what a lot of people were going through. And so, I regret. If I had — if I have had a better sense of what was really going on, maybe I could’ve contributed a little bit to making it better.

RITHOLTZ: Interesting observation along those lines.

Paul, thank you so much for being so generous with your time.

We have been speaking with Paul Krugman, Professor at CUNY Graduate School as well as the author, most recently, of “Arguing with Zombies.” If you enjoy this conversation, well, be sure and look up an inch or down an inch on Apple iTunes and you can see any of the 300-plus conversations we’ve had over the past five plus years.

We love your comments, feedback, and suggestions. Write to us at Give us a review on Apple iTunes.

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I would be remiss if I did not thank the crack staff that helps put together these conversations each week. Sam Shivraj is my producer. Michael Batnick is my Head of Research. I’m Barry Ritholtz. You’ve been listening to Masters in Business on Bloomberg Radio.

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