The following is a lightly edited transcript of the June 22 episode of the Daily Blast podcast. Listen to it here.
Greg Sargent: This is The Daily Blast from The New Republic, produced and presented by the DSR Network. I’m your host, Greg Sargent.
It’s now becoming clear that Donald Trump’s failed war in Iran will have far-reaching consequences for our country, and geopolitically as well. We’re only just beginning to get our heads around how disastrous this war and this presidency could very well prove over time. It’s a deeply consequential moment, and Trump is spending his nights tweeting crazed demands for adulation, insisting that his war was a world-historical triumph, and seething about the prospects for finishing his ballroom.
This gap between what Trump is doing to this country and the world on one side and his megalomaniacal trivial obsessions on the other is really jarring and unnerving to witness. Paul Krugman has been writing really well on his excellent Substack about both sides of this divide, so we’re talking to him about how to make sense of it all. Paul, nice to have you back on.
Paul Krugman: Good to be back on, although I wish the times were better, but anyway.
Sargent: Exactly. Let’s start with the easy stuff. At 4:32 in the morning, Donald Trump posted this:
“These fools who think I haven’t been tough enough on Iran when the stock market just hit a record high and oil prices are tumbling down are either jealous, bad people, or stupid. MAKE AMERICA GREAT AGAIN!!!”
Paul, Trump is very angry that he’s not getting more worshipful praise for the world-historical triumph that was his ceasefire with Iran, which basically just put a stop to the disaster he created. So we might as well start here: What did you think of the quote-unquote deal?
Krugman: Obviously, it’s horrible. Iran won. Iran is in a much stronger position and the U.S. in a much weaker position than before the war started. And of course, the deal is vastly inferior to the Obama JCPOA that Trump ripped up in his first term—all of this at the cost of enormous outlays of money, depletion of weapons stocks, killed a lot of people. Basically, we’ve just shown the whole world that we’re maybe not quite a paper tiger, but a lot less of a power than we were supposed to be. So all of this is an enormous diminution of the United States.
The hawks are saying, Why is Trump giving in? Why isn’t he following up on his victory? But there was no victory. This is actually the best you could do given how the war has gone. He should have made this deal about a week in when it became clear that the whole premise of his enterprise was not going to work.
Sargent: He could have made a better deal before the war started.
Krugman: Of course. He could have just done nothing—that would have been better. Going back in time, he could have kept that Obama agreement, which was doing a much better job of containing Iran.
But it tells you something about where we are that there are apparently a substantial number of, at least until recently, pro-Trump people who really believe that we were winning the war or we had won the war. Which just shows you how detached from reality they are.
Sargent: Well, they’re all in the same information bubble. Trump did another missive that was in all caps, saying this:
“OIL IS FLOWING, IRAN CAN NEVER HAVE A NUCLEAR WEAPON (THE WORLD WILL BE SAFE!), THE STOCK MARKETS ARE ROARING, JOBS ARE AT RECORDS, AND PRICES ARE DROPPING (AFFORDABILITY!). OUR COUNTRY IS STRONG, SAFE, AND RESPECTED LIKE NEVER BEFORE. ‘YOU’RE WELCOME!’”
OK, Paul. He got nothing significant on Iran’s nukes and our country is weaker, less safe, and less respected. But we should step back. He’s making a bigger argument there, isn’t he? It’s that in every way, the nation is booming, strong, and leading decisively in the world. What do you make of that bigger argument?
Krugman: So, the stock market is up. No question about that. Although the stock market rose a lot under Joe Biden, too—Trump would like you to put that down the memory hole. And stocks are up, by the way, around the world. There’s a stock market boom. I haven’t checked the numbers lately, but I believe that they’re up substantially more outside the United States than inside the United States. So this is stuff that is not really reflecting U.S.-specific developments and certainly not Trump-specific developments. Presidents do not control the stock market.
But leaving that aside, the economy—it’s not booming. We basically have had slower job growth than we did in the last two years of Biden, and basically flat unemployment. So that’s not great—it’s not a catastrophe, but it’s not great. Real wages are lower than they were when Trump took office because we’ve had a lot of inflation.
By the way, one of the things with this corruption of how we do stuff—click on pretty much any information site—I’ve been only looking at the ones that have to do with economic policy, but federal government information sites, which are traditionally just the facts, Here’s what’s happening, maybe discreetly touting administration policies—but if you click on any site, you get a pop-up that has a picture of Trump that says, Welcome to the Golden Age, which is all part of this incredible dingbat cult of personality.
Sargent: He corrupts everything. It just seeps into every last corner of public life.
Krugman: It’s worth pointing out that this incredible personalized cult of personality for Trump, while it’s at an absolutely ludicrous level now, actually started a ways back. There was a fair bit of it under Reagan, and let’s not forget George Bush and the flight suit.
This the-president-is-a-comic-book-hero thing is something that appears to go along with modern Republican governance. But it’s reached a level of absurdity with Trump, both because of the extremeness of the cult of personality and because the reality is—there has to be a better [way to put it]—he’s a fuck-up. Everything Trump touches turns to crud. So it’s really insane.
Sargent: There are a lot of dimensions to it. If you look at some of those late-night tweets, the tweets we’re talking about here, you kind of get hit by a real dose of somebody in very steep mental decline. It’s sort of two-layered.
On the one hand, it’s the sheer nakedness of the demand for adulation, which is just completely crazy. Somebody who’s sunsetting very plainly in plain sight, who knows he’s on his way out and is desperate to have something that he can call a legacy. That’s what we see there.
But at the same time, you also see him completely detached from the reality of what he’s actually done to us. What he’s done to you and me, to liberal America, to blue America, even to red America, even to MAGA country.
Krugman: In some ways especially to MAGA country.
Sargent: Two dimensions here of someone in steep mental decline, don’t you think?
Krugman: I’m not a psychologist, but it’s my understanding that when you’re sundowning, when you’re in this dissociation that does, among other things, tend to come with age, you in some ways become more like yourself. Those aspects of your personality that were disagreeable and unpleasant and dysfunctional, but which you were able to at least police when you were still more there, now just come out. It’s a little bit like getting drunk.
There’s a complete lack of a filter now. Presumably Trump always was a person who lived for external adulation. It must be awful to be him. There’s no inside at all. But 10 years ago he was canny enough to keep it somewhat under wraps. Now he’s just out of control. It all gets blurted out at 4 in the morning.
Sargent: Indeed. You had this video where you went very big picture, assessing where we really are right now. I want to try to summarize your argument briefly. Basically it’s that the United States is no longer seen by our allies and much of the world as an indispensable nation. Our military can’t do what we thought it could—can’t force smaller countries like Iran to do our bidding, or Trump’s bidding. That due to Trump’s tariff fiascos, we have less leverage in trade wars than we thought. That China has unexpected leverage over supply chains and important goods and important resources. That in part due to our abandonment of Ukraine, our onetime allies are looking past us to a post-American world. Et cetera. Is that the basic argument?
Krugman: That’s the basic argument. Even things that I find somewhat encouraging, like the fact that Ukraine is holding despite Trump having cut them off completely—the United States just stopped sending money and basically stopped the flow of arms, we won’t even allow the Europeans to buy arms for Ukraine—and yet Ukraine seems to be gaining the upper hand, which is telling you that they don’t need us. The world doesn’t need us.
That’s part of what’s happened in Iran as well. It turns out that if there was one thing we thought America really had, it was the world’s greatest military and the world’s best weapons, and nobody else could manage without us. And it turns out that we were completely flat-footed in the face of Iranian drones and that Ukraine is holding its own without American weapons.
So who are we? We’re becoming bystanders in world events. America is a rogue power, it does crazy things, it can’t even impose its will on a third-rate military power like Iran, and we don’t seem to actually be necessary for the defense of Europe. We’re a kind of shadow of our former selves on the world stage.
Sargent: Is this inexorable decline, do you think? Can it be turned around?
Krugman: Some of it is probably irreversible, and some of it would have happened anyway. To a large extent, America as it seemed to be as Trump took office was an outmoded vision. We didn’t fully understand that. But there was still a reflexive tendency on much of the world to think, You have to accommodate, you have to give in, allow yourself to be bullied by an American president no matter what. The truth is the fundamentals had already shifted against the United States in the global power game.
But there’s a lot that has obviously been made much worse by Trump screwups. What the world now has to suspect, even when Trump is gone from the stage, is who’s the next guy? How do we know that we won’t have another Trump-like figure? Does an agreement with America mean anything, since we’ve just seen an American president rip up every agreement that we had? Does a threat from America mean anything, because we’ve just seen that same guy cave totally? After all, this guy was—sorry to say—elected fairly by the American people. What does that say about America?
We don’t get that back. It took generations to build the reputation of America. You don’t get that back unless you give us three generations of good governance from here on in.
Sargent: I want to highlight another aspect of our self-inflicted wounds. You brought up Spain as an example of a country that weathered the energy shock from Iran well because it’s transitioning to renewables quickly. Here’s another area where Trump has set back our country tremendously. He’s on two fronts trying to strangle the transition to clean energy in every way he can. It’s like a whole-of-government approach to strangling the clean energy transition.
At the same time, he’s delivering a big oil shock with the Iran war. That’ll lessen a bit, but it’ll take time. But we have learned that being dependent on oil is a problem. The lesson here is that making this transition is even more imperative. At the same time, we’re lagging behind by choice. How bad is this self-inflicted wound? And what can be done about it?
Krugman: On Wednesday, the Interior Department announced that it was paying another $765 million to an energy company not to build wind farms. We’re not only refusing to follow pro–green energy policies, but actually spending taxpayer money to block it. The Pentagon is using spurious national security concerns to block development of wind farms. This is an aggressively anti–renewable energy administration. I will be talking shortly on Substack about the motivations.
At a fundamental level, this is one of these things where U.S. influence was fated to decline. The U.S. does have oil and gas in a way that other advanced countries do not. That gave us something of a special position. But with the incredible progress in renewable energy, that matters a lot less than it used to.
But on top of that, the U.S. is basically alone. Everyone else is marching towards an energy transition, and we’re trying to go back to coal. To the extent that countries might have wanted to rely on us a bit, it’s actually—even more than oil—liquefied natural gas. There was a possible future we seemed to be heading for in which, to a certain extent, the world would be relying on U.S. LNG as at least a transitional source of power on the way to the green revolution.
But if you were dependent on the United States for LNG, wouldn’t you worry that Trump might get mad at you because you won’t hand over Greenland or something, and cut it off? Are you sure that America won’t again be led by somebody like that? The U.S. is—on top of everything else—risky. We’re not trustworthy. Nobody is going to rely on us for energy.
Sargent: Well, Trump’s focused on the important things here. At 2:51 a.m. he went on a rampage about his ballroom. He insisted it’s coming along brilliantly and effectively demanded more adulation for how great it’s going to be—it’s going to be outfitted with all this powerful military security, et cetera. Then he raged about the legal travails he’s still facing over this, even though he tore down the White House East Wing unilaterally and probably illegally.
In another tweet, he celebrated the gilding of some statues. In a third, he posted a picture of himself on the cover of a magazine in India, as if we’re supposed to marvel at that in some way: Look, Trump is the cover guy on a magazine in India.
What’s striking to me here, and you wrote about this, is just this relentless desecration and degradation of everything. He’s desecrating the ways in which our capital is supposed to embody small-r republicanism. He’s turning it into a crass imperial court, basically.
Krugman: Washington, D.C., was designed very much with classical models in mind. The Founding Fathers were very much into ancient Roman history—but they were into the history of the Roman Republic, not the Empire. We have all of this grand monumental architecture in D.C., but it’s all celebrating the people, the republic. It’s not personal glory. Certainly you would never exalt a currently living president that way.
I live in New York—there’s, along Riverside Drive along the west side of Manhattan, a series of monuments. There’s Grant’s Tomb, there’s the Soldiers’ and Sailors’ Monument, and so on. They’re all very impressive. They’re kind of like Washington, D.C. in a way.
But notably, there’s no personal glorification. Even Grant’s Tomb—it’s not a monumental statue of Grant. It’s a celebration of defense of the republic. The Soldiers’ and Sailors’ Monument has the names of generals, but they’re in plain type. And names of battles which include the defeats as well as the victories, because this is the republic: We are stoic, we are modest.
Now we have Trump gilding everything, wanting to erect a gigantic arch of triumph in the capital, and filling the reflecting pool with algae—which is just showing that the gods have a sense of humor.
Sargent: Yeah, that is perfect. The “drain the swamp” guy is filling the reflecting pool with algae. I just want to pull this all together. I guess what really bothers me about this moment is that Trump and JD Vance don’t feel a shred of obligation to speak to the country with even minimal candor at all about what just happened. Everything is all about false glorification of Trump, and it’s always just about using the most cynical lies they can to insulate him from any accountability for this calamity.
It’s all about him, no matter what. There’s no sense of obligation on their part to function as real leaders or statesmen who care about the nation and its future and have a conception of what’s in the interests of the American people.
How do you put all this together in your mind?
Krugman: It’s about them, but the real question is, what has happened to us—or at least to the Republican Party, but maybe it’s even broader than that—that this can happen? There was a time when people used to think of Marco Rubio as a sort of reformist Republican, “reformicon,” whatever. Now here he is walking around in oversized shoes because Trump bought them for him and he’s afraid to take them off, and acting as a lickspittle for all of this crazy ego demonstration. My God.
There will probably be many future books written about the downward spiral that everyone who deals with Trump seems to go into. But we always knew that there were people like Trump. The idea that the world’s basically oldest republic—the nation that invented republican values and democratic norms—puts up with it, that’s what really shocks me.
Sargent: Let me just close out this way. It’s my feeling that Democrats—they’re functioning more as an opposition than they were at the outset of Trump’s second term, when they were clearly snakebit and terrified. On some level, Democrats had widely concluded that Trump had put his finger on some real popular sentiment that everybody missed. That was never true. He won by a point and a half, and it was at a time of inflation and post-Covid shock and so forth. But that’s where Democrats were.
Now they’re functioning more as an opposition. But still, I feel like there’s a smallness to their politics, Paul. You’ve been writing about the big problems here—the desecration plus the decline, those two sides that I talked about.
Should Democrats be making a bigger argument? What might something like that look like? Some argument which essentially says, Let’s be real about what this guy is doing to us? An argument that says, Let’s face reality about what this man and his movement have done to our country, and really setting forth a new direction. Is there some way to do that for Democrats?
Krugman: At some level, corruption is the theme. Corruption of various kinds, but that all ties together. And if we want to talk about kitchen-table issues, you can make that part of it: The reason that you can’t afford your electricity is because of the corruption. The reason that you can’t afford health insurance is because of the corruption.
And look, one of the happiest things politically that’s happened in the world was the overturn of the Orbán regime in Hungary, which was very much something that MAGA people viewed as a role model: This is how you subvert a democracy. And it turns out that with enough people mad enough, you can flood across all of the barriers they’ve created. The central theme of the Magyar campaign was corruption. These guys are corrupt.
There were zebras on the Orbán family estate in the countryside, apparently, and the zebras—stuffed zebras—became an image for the opposition. It was all about corruption. People may not think in terms of abstract—they certainly won’t think in terms of republican norms. But to make it, I can shave 15 percent off the price of gasoline if you elect me—that is not how to stop this horrifying situation. To say, These people are utterly corrupt, self-centered, and you are paying the price—that sounds like a movement that can work.
Sargent: Yes, and I like the idea of using corruption to open the door to an argument about moral corruption and degradation, which I think people sense is happening. The reflecting pool and the algae, the tearing down of the White House East Wing and the replacement of it with a ballroom, the arch—those are things that really resonate for people. And it’s because of what we’re talking about here.
There was a point at which Democrats said something like, The ballroom’s a distraction. But it’s clear that these things have profound resonance for people for these reasons—there’s a sense that our common life is just being fundamentally degraded at a very profound level. The corruption argument opens the door there.
I’d point out, by the way, to close out, that the Magyar campaign was also about what this man, Orbán, and his movement, Orbánism, did to us. Look what he did to us. You’ve been writing about what Donald Trump is doing to us. And it seems like some Democrats need to step up and grab that mantle in some way.
Krugman: Yeah. And fire some of the consultants.
I’m a numbers guy. I like to live—I view the world through spreadsheets. But it’s not about the numbers. If there’s $300 million of taxpayer funds going to the ballroom, whatever, in the scale of the federal budget, that’s not big. But it’s a symbol of this horrible thing that’s happening. And I think it’s something people can relate to.
Sargent: Paul Krugman, thank you so much for writing your Substack. I learn from it all the time, really. I’m not exaggerating. I learn from it every day. And Paul, thanks for coming on with us.
Krugman: Well, thank you.