Oren Cass, Paul Krugman & Mariana Mazzucato on Trumponomics
Feb 17, 2025
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Join esteemed economists Oren Cass, founder of American Compass and Financial Times contributor; Mariana Mazzucato, UCL professor and author of "The Entrepreneurial State"; and Paul Krugman, Nobel laureate and Substack writer as they dissect the implications of Trumponomics. They explore Trump's tariffs, the efficacy of industrial policy, and the complex dynamics of U.S. trade relations. The conversation also covers the necessity of AI regulation, concerns about economic bubbles, and the intertwined effects of immigration on the economy.
The podcast discusses the contentious effectiveness of Trump's tariffs and their potential impact on American manufacturing and trade deficits.
Panelists emphasize the unprecedented influence of private individuals like Elon Musk on government policy, raising concerns about checks and balances.
Experts argue for a balanced approach to public funding and corporate responsibility, ensuring that businesses contribute fairly to society.
Deep dives
Impact of Trump's Policies on the Economy
The Trump administration's recent policies have raised concerns regarding their impact on the American economy, particularly in terms of inflation and rising prices. The price of essential goods like eggs has increased, alongside inflation rates that contradict Trump's promises of economic relief from day one. Amid this backdrop, economists discuss the administration's approach to deregulation, tariffs, and tax cuts as potential remedies, but skepticism remains about their effectiveness. The shifting dynamics in Washington suggest a more profound re-evaluation of economic strategies is crucial to address current challenges.
The Role of Private Actors in Government Policy
Elon Musk's involvement in federal policies highlights a growing trend of private individuals influencing government direction, a development that many consider unprecedented. Panelists argue that this reflects a Republican backlash against past Democratic governance, wherein executive authority has been used creatively to bypass traditional legislative channels. This scenario raises questions about the sustainability and implications of such an approach, particularly when the shifting power dynamics can lead to deteriorating checks and balances. The discussion emphasizes the need for a coherent strategy that balances efficiency with the overarching intent of democratic governance.
Subsidy Dynamics and Corporate Responsibility
Elon Musk's companies, having benefitted significantly from government subsidies, underline the critical discussion around corporate responsibility regarding public funding. Experts argue that while public investment is essential for innovation, there's a pressing need for corporations to contribute fairly back to society, especially through taxation. This relationship prompts a reevaluation of the balance between private gains and public costs, with proposals suggesting adjustments to how public funding is structured to ensure equitable benefits. The emphasis lies in aligning corporate success with broader societal outcomes, reshaping the expectations of companies receiving substantial state support.
Tariffs and Industrial Policy Debate
The current debate on tariffs presents divergent views on their role in revitalizing American manufacturing and addressing trade deficits. Proponents see tariffs as a necessary measure to promote domestic production and protect local industries, arguing that the historical context of prior free trade practices has not favored U.S. workers. Critics caution that tariffs can lead to increased consumer prices and advocate for more targeted industrial policies that promote production without burdening the public. This discussion illustrates varying philosophies on economic intervention and the best path forward for American competitiveness.
The Future of AI Regulation and Economic Policy
The emergence of artificial intelligence prompts critical discussions on how to regulate this technology effectively to avoid future pitfalls while promoting innovation. Experts argue for a combined approach that integrates innovation policy with regulation, emphasizing the importance of embedding societal needs within technological advancements. Concerns arise regarding a potential AI bubble, paralleling past economic crises, which could lead to significant challenges if unchecked. The call for a robust regulatory framework highlights the necessity of directing technological progress in ways that ensure public benefit and safeguard against negative impacts.
Last week, President Trump signed a memorandum calling for reciprocal tariffs on countries that charge fees on US exports and called his 25% tariff order on all steel and aluminum imports “the beginning of making America rich again.” But is it? We turn to three brilliant economists for their takes (and disagreements) on the real impact Trumponomics will have on the U.S. economy. Kara leads a spirited and insightful conversation about industrial policy, the efficacy of Trump’s tariffs, how worried we should really be about the U.S. 's trade deficit, the odds of an AI bubble and bail out, and, of course, DOGE. Featuring:
Oren Cass, the founder and chief economist of American Compass, a conservative think tank, and a contributing opinion writer for the Financial Times and the New York Times.
Paul Krugman, a Nobel Prize-winning economist who writes a newsletter on Substack, teaches at the City University of New York Graduate Center, and recently retired his New York Times Opinion column after writing it from 2000 to 2025.
And Mariana Mazzucato, a professor of economics at University College London, where she is Founding Director of the UCL Institute for Innovation & Public Purpose and author of the hugely influential book, The Entrepreneurial State.
This episode was recorded on Monday, February 10.
Questions? Comments? Email us at on@voxmedia.com or find us on Instagram and TikTok @onwithkaraswisher
