Nobel Economist Paul Krugman Says Trump's Policies Will Leave His Blue-collar Base Feeling 'brutally Scammed'

President-elect Donald Trump and economist Paul Krugman.

REUTERS/Jonathan Ernst, REUTERS/Franck Robichon

• Donald Trump champions the working class but his policies are bad news for them, Paul Krugman says.
• The Nobel-winning economist says tariffs and deportations will hurt instead of help the poor.
• "A lot of people are going to get brutally scammed," Krugman said.

Donald Trump rode to victory in the US presidential race by pledging to put America first and fight for blue-collar workers. Paul Krugman says he'll only make their lives harder.

The economist, who won the Nobel Memorial Prize in Economic Sciences in 2008, criticized the president-elect's plans to raise tariffs and cut taxes during Tuesday's episode of "The Daily Blast with Greg Sargent" podcast.

He told The New Republic show that those and other policies would lead to the working class paying higher prices while high earners keep more of their money.

"Even more than usual for a Republican, he appears to have an extremely regressive economic program in mind, one that really will effectively redistribute income away from working-class voters to the top," Krugman said.

American households are already being pinched by inflation, which spiked to a 40-year high of more than 9% in the summer of 2022 and remains above the Federal Reserve's 2% target.

On top of higher prices for food, fuel, rent, and other basics, many consumers are also paying more toward their credit cards, car loans, and mortgages.

That's because the Fed, in a bid to curb inflation, increased its benchmark rate from zero to north of 5.25% in under 17 months, and has kept it as high as 4.5% for now.

The battle over groceries

Krugman, a former MIT and Princeton University professor and New York Times columnist, zeroed in on grocery prices. Trump said during his campaign that he would reduce them, but he's walked that claim back in recent weeks.

Yet recent surveys show that his supporters still expect him to do so, Krugman said, despite the fact that broader prices are still rising and deflation is almost universally regarded as undesirable for an economy.

A CBS News/YouGov survey, conducted in late December with a nationally representative group of 2,244 US adults, found that 40% of Americans expect Trump to make food and grocery prices go down, exceeding the 36% who expect him to make them increase.

"A lot of people are going to get brutally scammed," Krugman said. Trump isn't just misleading people by saying they'll be better off once he's in office, he also doesn't appear to know how he'll deliver on his promises, Krugman continued. "So the scam is there is no plan."

Trump said last year that lowering grocery prices would be tricky, but improving supply chains and boosting domestic energy production could lower costs for farmers, who could then pass those savings onto consumers.

Tariffs and immigration

Separately, Krugman nodded to the fact that tariffs are a tax on imports, and businesses usually pass on their increased costs by charging higher prices to consumers.

He described their impact as "really bad," and said the fallout from Trump's proposed mass deportations would be "much, much worse." They'd be hugely disruptive and drive up prices in industries like agriculture, food processing, and construction, Krugman said, leaving the US with a shortage of workers for large-scale programs like rebuilding Florida after a hurricane.

The author and blogger also rang the alarm on Trump and his allies' fierce criticism of colleges and skepticism of higher education.

"We've been pulling ahead on technology, but an administration that's extremely hostile to universities and education is going to undermine that source of advantage as well," Krugman said.

"Trump wants to turn the clock back to 1896, and that's not good for the US economy."