Nobel Prize-Winning Economist Paul Krugman on Retiring from NYT

>>> AND NOW, A CONVERSATION WITH THE NOBEL PRIZE WINNING AUTHOR PAUL KRUGMAN WHO HAS A SHARP TAKE ON THE ISSUES THAT SHAPE AMERICA AND THE WORLD.

HE SAYS THAT HE IS SEEING AN EMOTION OF OPTIMISM, AND THE CAUSE IS COLLAPSING THE TRUST AND ELITES IN INSTITUTIONS.

HE IS JOINING ME, MICHEL MARTIN WITH A NATE FASCINATING LOOK.

>> THANK YOU, CHRISTIANE.

PAUL, CONGRATULATIONS ON YOUR RETIREMENT.

>> I HAVE NOT RETIRED FROM THE WORLD, BUT VI T I HAVE RETIRED THE "TIMES" AND I HAVE A NEWSLETTER UP AND RUNNING, AND I BELIEVE THERE IS GOING TO BE PLENTY TO WRITE ABOUT IN THE NEXT FEW YEARS.

>> YOU HAVE WRITTEN FROM GLOBAL POLITIC, AND THE FINANCIAL CRISIS, AND WHAT DO YOU FIND TO WRITE ABOUT?

>> IT IS WHAT IS IMPORTANT TO PEOPLE'S MINDS WHERE I THINK THAT I CAN FIND SOME VALUE.

AND OCCASIONALLY, THERE IS A PERIOD IN THE IRAQ WAR WHICH IS NOT SOMETHING THAT I EXPECTED TO DO IN THE IRAQ WAR AND NOBODY WAS SAYING THE OBVIOUS WHICH IS THAT THIS IS A VERY, VERY DUBIOUS CAUSE FOR WAR, AND I FELT THAT I NEEDED TO SAY THAT.

BUT FOR THE MOST PART, IT IS WHATEVER CAME UP.

WHEN THE FINANCIAL CRISIS CAME IP, AS HORRIBLE AS IT WAS, IT WAS A GREAT TIME IN MY LIFE, BECAUSE IT WAS A PERFECT CON VE IN A WAY, PEOPLE LIKE ME HAD BEEN WARNING THAT IT COULD HAPPEN, AND THEN ON THE AIR SAYING THAT IT COULD HAPPEN, AND THEN HOW DO YOU EXPLAIN THAT IT COULD HAPPEN IN JARGON IN 800-WORD JUNKETS.

>> AND YOU GO THROUGH ALL OF THE CONS OF HOW TRUMP COULD WRECK THE ECONOMY, AND FOR THE LAST FEW LINES FOR PEOPLE WHO HAVE NOT READ IT, AND THIS IS NOT A SPOILER ALERT.

THE LAST LINE, PROSE, I CAN'T THINK OF ANY.

AND I WONDER IF THERE IS A FEELING OF THE I COULD HAVE BEEN MORE PERSUASIVE.

>> I THINK THAT I'M REALISTIC ABOUT IT.

"THE TIMES" HAS IMMENSE READERSHIP, AND IT REACHES LESS THAN 1% OF THE POPULATION, AND PEOPLE'S BELIEVES ON MANY SUBJECTS ARE JUST NOT MOVABLE REGARDLESS OF HOW GOOD YOUR ARGUMENT IS.

I LEARNED THAT A LONG TIME AGO BEFORE I EVEN WROTE FOR THE "TIMES."

AND WHEN WE HAD A DEBATE OVER THE SECURITY PRIVATIZATION, AND THAT WAS GEORGE W. BUSH HAVING WON THE ELECTION THOUGHT HE HAD A MANDATE TO PRIVATIZE SOCIAL SECURITY, AND I WAS PART OF THE GROUP THAT SAID IT IS A REALLY, REALLY BAD IDEA, AND I WAS SHOCKED WHEN IT FAILED, BECAUSE IT WAS THE FIRST POLICY SIDE WHEN MY SIDE WON.

>> YOU HAVE BEEN CRITICAL EQUALLY OF THE DEMOCRATIC/PROGRESSIVE SIDE WHEN YOU FELT THEY WERE ILL, IN SOME SORT OF WAY, AND SO, WHEN PRESIDENT OBAMA LEFT OFFICE AND I WAS TEARING MY HAIR OUT OF THE STIMULUS PLANS, AND EVEN PARTICIPATED IN MEETINGS WITH GOVERNMENT OFFICIALS, AND THEY DIDN'T DO IT.

SO, NO, IT HURTS MUCH MORE WHEN YOU WERE, YOU KNOW, I HAVE NO ILLUSION THAT ANYTHING THAT I WRITE IS EVER GOING TO PERSUADE DONALD TRUMP OF SOMETHING, BUT WHEN YOU FAIL TO PERSUADE BARACK OBAMA, IT HURTS MORE.

>> SO LET ME GO BACK TO WHEN YOU WROTE YOUR FINAL COLUMN FOR THE "TIMES" YOU LOOK BACK TO THE FIRST COLUMN, AND YOU LOOK AT THE OPTIMISM OF THE EARLY 2000s AND CONTRAST IT WITH TODAY'S RESENTMENT AND ANGER.

AND FOR THE PEOPLE WHO HAVE NOT READ IT, WHAT DO YOU THINK HAPPENED?

>> I THINK THAT A LARGE PART OF IT IS THAT THE PEOPLE, AND THE INSTITUTIONS THAT WE LOOKED UP TO JUST KEPT FAILING US.

IN 2000 IF IF TOP PEOPLE IN THE NATIONAL SECURITY SPHERE TOLD US THAT ANOTHER COUNTRY HAD WEAPONS OF MASS DESTRUCTION, THE IDEA THAT THEY MIGHT NOT BE LEVELING WITH US, AND THEY MIGHT BE TAKING US TO WAR UNDER FALSE PRETENSE PRETENSES FOR WHICH I DID RECEIVE PUSHBACK, AND SO PEOPLE WERE NOT BELIEVING IT, AND PEOPLE WERE RUNNING TO THE FINANCIAL REGULATORS, AND THE BANKS THEMSELVES COULD BE AND PEOPLE WERE BASICALLY RUNNING SCAMS, DOWN THE LINE.

I TALK IN THE COLUMN THAT I AM HAVING AN INTERNATIONAL FOCUS, AND I SPEND A LOT OF TIME IN EUROPE, AND A LOT OF THE EUROPEANS, AND THE CREATION OF THE EURO WAS SUPPOSED TO BE A WONDERFUL EVENT.

IT WAS SUPPOSED TO BRING EUROPE TOGETHER, AND IN THE MEAN, IT WAS AND AND THIS IS ALL OF THE GREAT AND THE GOOD, AND WE ARE TELLING THE EUROPEANS THAT WE HAVE A GREAT IDEA, AND TRUST US.

SO IT IS ACCUMULATION, AND I THINK THAT IT IS ALSO, AND SOMETHING THAT I SHOULD HAVE SAID IN THE COLUMN IS THE FACT THAT NOBODY SEEMED EVER TO HAVE PAID A PRICE.

YOU KNOW, THAT IN THE 30 AND WITH IRAQ, THERE WERE ARGUMENTS THAT PEOPLE SAID AT VERY LEAST, THAT THEY SHOULD HAVE LED A PRICE FOR LEADING US INTO WAR, AND NOBODY DID, BUT THAT DOES LEAD INTO THE WAR THAT THIS NOT WANTING TO TRUST THEM.

>> AND IS THIS BECAUSE PEOPLE USED TO LOOK AT THE VIETNAM WAR, AND THAT WAS A VERY FRACTIOUS PART OF THE WAR, AND TARGETING IN THE STREETS, AND MILLIONS OF DOLLARS OF PROPERTY DAMAGE WITH PEOPLE FURIOUS LASHING OUT, AND THE VIETNAM WAR, AND IT BECAME VERY AND FALSE CONNECTION THAT YOU THINK AND SO SINCE THE 2000s, WE HAVE NOT BEEN ABLE TO CLAW OUT, AND I AM CURIOUS WONDERING WHY YOU THINK THAT WE WOULD?

>> WELL, IF PEOPLE WERE ABLE TO GET OUT THAT ELITES WERE AS WILLING, IF NOT EXACTLY AND THAT PEOPLE HAD A DEMOCRATIC PROCESS TO WORK.

I MEAN, WHY IN THE GUILDED AGE DID THE BOONACATS TRY TO SUBVERT THE ELECTION, AND I'M NOT SURE WHY THE POWERFUL DIDN'T TRY TO AVERT IN THE PAST.

FOR EXAMPLE, WATERGATE WOULD BARELY RECOGNIZE AS A SCANDAL THESE DAYS.

I AM NOT QUITE SURE.

>> YOU WROTE THAT IMPERIALISM, AND SABER RATTLING WERE OUT OF STYLE IN 2000, BUT TODAY, NATIONALISM IS SURGING GLOBALLY, AND DO YOU THINK THAT IT IS MEN AND SO WHAT WE DID HAVE IS WHAT THESE ELITES THAT WE TRUSTED DID HAVE, ESPECIALLY AT THE U.S.

ETHICAL DID IS THAT WE WERE A BENEVOLENT BENEVOLENT COUNTRY.

AND WE CAN TALK ABOUT ALL OF THE THINGS THAT THE UNITED STATES TOLERATED AND FOR COUNTRIES THAT WERE EFFECTIVELY IMPERIAL POWER, AND THE UNITED STATES BEHAVED INCREDIBLY WELL FOR MANY DECADES, AND NOW WE HAVE SOMEHOW LOST RELATIVE POWER, AND WE HAVE BASICALLY LOST OUR OWN SENSE OF BENEVOLENCE, AND SO STUFF BREAKS OUT.

AND SO, WE HAVE, THE WAR IN UKRAINE, A MASSIVE CONVENTIONAL WAR DESPITE THE TECHNOLOGY MIMICS WORLD WAR , AND IN LOOKING BACK AT THE DISCIPLINES, THERE IT IS.

>> IN 1990, YOU WROTE A GROUND-BREAKING PAPER ABOUT WHAT HAPPENS WITH A STRUGGLING ECONOMY WHEN THEAND SO WE HAVE CHANGED THE NATIONAL ECONOMY, AND WHY DO YOU THINK THAT IS?

>> WELL, THIS IS THE POPULAR OPINION THAT WILL BECOME POPULAR IN A FEW DECADES, AND THAT IS THAT BIDEN AND THE TEAM HAVE HANDLED THE ECONOMY QUITE WELL.

THAT IS BECAUSE THEY HAVE LEARNED FROMED AND THEY WENT SOFT ON THE ECONOMY IN 2009, ANDs A AND AS A RESULT, IT TOOK A LONG TIME.

SO THEY HAD ONE SHOT.

AND THEY TEMPORARILY RAISED THE INFLATION, AND THAT IS THE CUMULATIVE RECESSION TO THE WHOLE REST OF THE WORLD, BUT THEY DID.

>> BUILDING BACK BETTER WAS NOT GOING TO HAPPEN.

THERE WERE MANY THINGS THAT WENT RIGHT BUT THE FACT OF THE MATTER IS THAT THE RAZOR THIN MAJORITY IN CONGRESS SAID THAT WE HAVE A CRISIS, AND WE ARE GOING TO THROW A LOT OF MONEY AT IT, BECAUSE IT IS OUR ONCE CHANCE, AND IN RETROSPECT, IT WORKED, AND IT WORKED IN EVERY RESPECT EXCEPT FOR POLITICS.

>> WHY IS THAT?

>> AND SO THE PEOPLE WHO SUPPORTED TRUMP, IT WAS BY LARGE MARGINS, AND IT DID NOT FILTER THROUGH.

SO IT WAS LESS CONTEMPTUOUS, AND THAT CAME OUT TO TALKING DOWN TO PEOPLE, WHICH I TRY TO AVOID DOING, BUT WE KNOW THAT, THIS SS AND SO IF PRICES GO UP, AND WE ALSO GO UP, PEOPLE THEY WE FEEL AS WAGE PRICE SPIRALS AS RELATED TO THEM.

BUT WE HAD A SHOCKING, FAIRLY BRIEF PERIOD OF ELEVATED INFLATION, WHICH WAS BUT PEOPLE FELT ANGRY.

PEOPLE, YOU KNOW, IF WE JUDGE BY CONSUMER SPENDING, PEOPLE WERE DOING OKAY.

THEY ACTUALLY INCOMES WERE ADJUSTED FOR INFLATION, AND UP, AND PEOPLE JUST NOW TRAVELING SEEMS LIKE EVERYBODY IN AMERICA HAS BOUGHT AN AIRPLANE TICKET LATELY, AND SO, THE OBJECTIVE MEASURES OF CONSUMER HEALTH ARE FINE, BUT PEOPLE FEEL THAT THEY MAY BE PERSONALLY DOING OKAY, BUT IT IS THANKS TO THEIR EFFORTS.

AND THE GOVERNMENT, WHOEVER IS IN POWER, IS RESPONSIBLE FOR THE FACT THAT THINGS COST AND TRY TO FIND YOURSELF A THIRD WORLTD DEFEAT, AND GOING DOWN THE LIST, AND YOU CAN SEE THAT IT IS ALL THE SAME THING SINCE EVERYBODY FACED THIS BURST OF INFLATION, YOU WOULD THINK THAT PEOPLE WOULD LOOK AROUND AND SAY, WELL, IT CAN'T REALLY BE THIS GOVERNMENT'S FAULT IF THE SAME THING IS HAPPENING IN EVERY COUNTRY AROUND THE WORLD.

BUT MOST PEOPLE DON'T LOOK AT IT THAT WAY.

>> THEY DON'T LOOK AT IT THAT WAY, AND SO IS THERE ONE PIECE OR TWO AT THE TIMES THAT YOU ARE PARTICULARLY PROUD.

>> AND SO I WROTE A 2005 PIECE SAYING "THIS SURE AS HELL LOOKS LIKE A HOUSING BUBBLE.

IT IS GOING TO BE UGLY."

I TURNED OUT TO BE RIGHT.

I WROTE IN EARLY 2009 THAT OBAMA WOULD COME TO GRIEF BECAUSE HIS STIMULUS WAS TOO SMALL, AND HE WOULDN'T GET A SECOND CHANCE.

MAYBE ACTUALLY THERE WAS ONE, MOSTLY FOR THE TURN OF PHRASE, BUT I WAS MOSTLY TALKING ABOUT EUROPE OF PEOPLE WHO BELIEVE THAT YOU SHOULD SLASH AND THAT WOULD WORK, BECAUSE IT WOULD AND SO YOU KNOW THAT YOU HAVE SUCCEEDED TO TURN A PHRASE THAT YOU USE WHY USE THE INNOVATION WHEN YOU CAN USE THE CONFIDENCE.

SOMETHING LIKE THAT.

>> IS THERE SOMETHING THAT YOU FEEL THAT YOU CAN HOLD TO PULL PEOPLE TO BETTER GOVERNANCE?

>> WELL, I AM SELECTIVE, BECAUSE OBVIOUSLY, SOME PEOPLE HAVE HELD ON TO POWER FOR A VERY, VERY LONG TIME, AND I MEAN, I DO LOOK AT OTHER COUNTRIES, AND WE HAD AND RM AND SO, THAT WAS THE BIDEN ADMINISTRATION, BUT IT IS STILL TENUOUS, AND IF YOU BELIEVE THE OPINION POLLING, AND A LOT OF THE OPINION POLLING OF FEAR IS HUNGRY.

IT IS DEMOCRACY ON PAPER, BUT WHERE THINGS ARE SO HEAVILY RIGGED, THE SEATING PARTY LOSES POWER, BUT IF CURRENT POLLING HOLDS, AND GOD KNOWS, BUT WITH THE RIGGING, AND IF AND IT TAKES A WHILE, AND THERE IS ALWAYS EXCUSES, BUT AS LONG AS THERE IS -- THERE'S ALWAYS HOPE.

I HAVE BEEN IN THIS BUSINESS FOR A LONG TIME.

AND I HAVE SEEN VARIOUS KINDS OF FREEDOM REVOLUTIONS HAPPENING IN SOME COUNTRIES, AND THEN YOU WILL HAVE A POPULAR OUTRAGE AND THEN YOU MEET THE OLD BOSS IS THE SAME AS THE NEW BOSS, AND IT GOES BAD, BUT SOMETIMES IT GOES FORWARD AND IT GOES RIGHT.

>> PAUL KRUGMAN, THANK YOU FOR TALKING TO US.

>> THANK YOU.