Matthew Chapman
August 27, 2025
NY Times columnist Paul Krugman. (Shutterstock)
President Donald Trump's increasingly tight leash on the Federal Reserve — most clearly exemplified by his efforts to remove Federal Reserve governor Lisa Cook on unproven fraud allegations — is a massive threat to the stability of the dollar and the economic system generally, Nobel laureate economist turned political analyst Paul Krugman told MSNBC's Ari Melber on Wednesday evening.
"We actually quoted you the very night this news broke and your comparison to other countries that have done what Trump wants to do and why it's backfired for the economy," said Melber. "Explain what you meant by that."
"Okay, so the Federal Reserve, loosely speaking, they control the rate at which money flows into the economy," said Krugman. "And we know that it's important to have some flexibility in doing that. You need to fight things like the financial crisis of 2008. You need to fight things like the inflation of 2022. But we also know that it's a very — it's an easily-abused power. It's way too easy for an autocratic head of state to say, you know, rev up the printing presses because I want to, I want to push up my standing in the polls, just, you know, and you say it's going to cause inflation, well, I've got these guys that I like, and my favorite crackpots tell me it won't be inflationary."
"So we have a system which is that this extremely important but dangerous power is vested in an independent agency," Krugman continued. "It's not free of political accountability. The board of governors is chosen ... by the president and approved by Congress. But they have 14-year terms and we've done — you know, they aren't perfect, but they've done pretty well."
A recent example of a country that seized control of monetary policy for political gain, Krugman noted, is Turkey.
"You had the president, who is an autocrat, first of all, just wanting to see the printing presses roll to make himself more popular, and then bought into crackpot economics and said actually, raising interest rates increases inflation, so I want to cut them instead," said Krugman. "And he didn't change course until inflation hit 80 percent."
"I wouldn't give any president control over monetary policy," he added. "There are very good reasons not to do that. And I definitely wouldn't want to see Donald Trump do that. This is, you know ... he's talking nonsense about all of this stuff. And then the way of it just to say it's not just that he's trying to install, you know, cronies, loyalists at the Fed, but he's also doing this personal attack. It's basically saying, it's not just about Lisa Cook. It's a message to everybody else at the Fed: get in my way and I will ruin your life. And this is not, this is not the America that I want to live in."
Watch the video below or at the link here.
'Fascist capitalism': DC insider says Trump's push to 'control everything' will backfire
Story by Adam Lynch
ALTERNET
ALTERNET
AUGUST 27, 2025
Former Labor Secretary Robert Reich warned in a new essay that President Donald Trump’s growing control over the U.S. economy may cause his downfall as the economy follows the dictates of numbers and value over the whims of a president.
Reich, who served under former President Bill Clinton, ticked down a list of examples of Trump trying to strong-man math like he bullies government officials
“He’s trying to control the Federal Reserve Board, threatening Jerome Powell with unflattering stories about his expenditures on the Fed’s building. He has fired Fed governor Lisa Cook on dubious legal grounds,” Reich said. “He’s imposing his will on key industries, from semi-conductors to steel. He’s given the chip giants Nvidia and Advanced Micro Devices export licenses to sell their semiconductors to China on condition that they pay the U.S. government 15 percent of what they make on those sales.
Not incidentally, Reich adds, Trump has reported substantial personal holdings in Nvidia.
Reich noted that Trump is also converting nearly $11 billion in Biden-era investment grants to Intel “into a 10 percent stake in the company, worth $8.9 billion, held by the government. Presumably, this would let Trump decide on its CEO."
Big tech corporations that were facing federal investigations and enforcement actions suddenly found their federal lawsuits dropped after they poured money into Trump’s initiatives and PACs, paving the way for further malpractice.
Meanwhile Trump’s import taxes (tariffs) “are the results of individual deals between Trump and particular countries, as well as between Trump and big American corporations,” said Reich. “So far, America’s trading partners have agreed to invest over $1 trillion in the American economy. Who will oversee such investments? Trump.”
READ MORE: 'It’s a real gut punch': Rural voters 'stunned' by Trump’s damage
“I don’t know the proper term for this. State capitalism? Fascist capitalism?” Reich wrote, and added that the problem with basing an economy on one man’s deals rather than supply and demand will soon become obvious to every American.
“Authoritarian regimes rely on vast bureaucracies to control industry, as does China’s Xi Jinping. But the new order being imposed on American industry doesn’t come from a vast authoritarian bureaucracy. It’s personal and arbitrary. A single so-called ‘strongman’ is seeking to control everything,” said Reich, adding that this is upsetting business interests who respond to market trends, not a president.
“Arbitrary and mercurial decisions are making the private sector nervous about investing in the U.S. economy, causing global lenders to demand a higher risk premium for lending to the U.S., and pushing the economy toward both inflation and recession — so-called ‘stagflation,’” Reich warned. And stagflation has already ended the careers of presidents.
Read the full essay on Robert Reich’s Substack at this link.
Former Labor Secretary Robert Reich warned in a new essay that President Donald Trump’s growing control over the U.S. economy may cause his downfall as the economy follows the dictates of numbers and value over the whims of a president.
Reich, who served under former President Bill Clinton, ticked down a list of examples of Trump trying to strong-man math like he bullies government officials
“He’s trying to control the Federal Reserve Board, threatening Jerome Powell with unflattering stories about his expenditures on the Fed’s building. He has fired Fed governor Lisa Cook on dubious legal grounds,” Reich said. “He’s imposing his will on key industries, from semi-conductors to steel. He’s given the chip giants Nvidia and Advanced Micro Devices export licenses to sell their semiconductors to China on condition that they pay the U.S. government 15 percent of what they make on those sales.
Not incidentally, Reich adds, Trump has reported substantial personal holdings in Nvidia.
Reich noted that Trump is also converting nearly $11 billion in Biden-era investment grants to Intel “into a 10 percent stake in the company, worth $8.9 billion, held by the government. Presumably, this would let Trump decide on its CEO."
Big tech corporations that were facing federal investigations and enforcement actions suddenly found their federal lawsuits dropped after they poured money into Trump’s initiatives and PACs, paving the way for further malpractice.
Meanwhile Trump’s import taxes (tariffs) “are the results of individual deals between Trump and particular countries, as well as between Trump and big American corporations,” said Reich. “So far, America’s trading partners have agreed to invest over $1 trillion in the American economy. Who will oversee such investments? Trump.”
READ MORE: 'It’s a real gut punch': Rural voters 'stunned' by Trump’s damage
“I don’t know the proper term for this. State capitalism? Fascist capitalism?” Reich wrote, and added that the problem with basing an economy on one man’s deals rather than supply and demand will soon become obvious to every American.
“Authoritarian regimes rely on vast bureaucracies to control industry, as does China’s Xi Jinping. But the new order being imposed on American industry doesn’t come from a vast authoritarian bureaucracy. It’s personal and arbitrary. A single so-called ‘strongman’ is seeking to control everything,” said Reich, adding that this is upsetting business interests who respond to market trends, not a president.
“Arbitrary and mercurial decisions are making the private sector nervous about investing in the U.S. economy, causing global lenders to demand a higher risk premium for lending to the U.S., and pushing the economy toward both inflation and recession — so-called ‘stagflation,’” Reich warned. And stagflation has already ended the careers of presidents.
Read the full essay on Robert Reich’s Substack at this link.
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