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EVERYBODY HATES ELON  
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Paul Krugman
March 14, 2025
Paul Krugman's Substack Blog
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_ The closest thing we have to a Trump economic spokesman is Elon
Musk, who sees dead people collecting Social Security. And here’s
the thing: while there’s still a dwindling Musk/Tesla cult, to a
first approximation everyone else hates Elon. _

At CPAC, Elon Musk was presented with "Chainsaw for Bureaucracy" by
Argentine President Javier Milei, screen grab

 

After Donald Trump won the 2024 election, progressives had one great
fear about his economic policies — namely, that he wouldn’t do
much. Oh, he’d slap on a few tariffs, make a big show of eliminating
“woke” spending, and of course cut taxes for corporations and the
wealthy. But, we worried, he would basically avoid rocking the boat
too much. Instead, he’d parade around claiming credit for the low
unemployment, low inflation economy left behind by his predecessor.

And based on what happened during Trump’s first term, I expected
many people to lap it up, at least for a while. I expected stocks to
rise on the prospect of tax cuts and deregulation; I expected consumer
confidence to rise because Republican views of the economy are largely
shaped by partisanship (this is true for Democrats too, but to a
lesser extent); I expected media coverage of the economy to turn more
positive, with right-wing editorial pages and opinion writers in
particular lavishing praise on the new administration.

I was wrong.

True, between Election Day and the inauguration, things looked a bit
like Trump’s previous go-round. Stocks rose, while America’s
oligarchs put on a truly nauseating display of sycophancy. Hey, Trump
may destroy democracy, but think of the profits:

But once Trump actually took office, he quickly revealed who he was,
and always has been. Investors and CEOs had somehow managed to
convince themselves that Trump wouldn’t follow through on his
threats of trade war. In fact, he’s imposed tariffs higher than
anything he suggested during the campaign — then un-imposed,
re-imposed, and re-un-imposed them. His erratic behavior may be doing
as much damage as the tariffs themselves.

Then there’s Trump’s decision to give vast power to Elon Musk, who
is displaying a combination of arrogance, ignorance and incompetence
worthy of Trump himself. I mean, how clueless do you have to be to
imagine that it would be a good idea to end phone service
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Americans filing retirement and disability claims?

And people are catching on more quickly than I would have expected. At
this point in 2017, the S&P 500 was up 15 percent since the
inauguration; it was down 9 percent as of Thursday’s close.

News coverage of the economy did turn more positive after the
election, as expected — but not for long. The San Francisco Fed
maintains an index of daily news sentiment
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the economy “based on lexical analysis of economics-related news
articles”; the index is now well below its pre-election level:

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Source: San Francisco Fed

And Trump isn’t having a honeymoon on consumer sentiment, either.
The chart at the top of this post shows a tracker from Civiqs
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it’s less well-known than the venerable measures from the University
of Michigan and the Conference Board, but it’s conducted by
reputable people and is weekly rather than monthly, which is helpful
given how quickly things have been changing. The fall in consumer
perceptions since Inauguration Day is striking in itself, but even
more so in contrast to Trump’s first term.

A nerdy footnote: both the SF Fed news sentiment index and the Civiqs
consumer sentiment index are “smoothed”; what you see isn’t the
latest raw number, it’s an average of recent numbers. This is
helpful as a way of making the data less noisy, but it also introduces
some lag, so it’s likely that sentiment has plunged even more than
these indexes are showing so far.

Finally, while I don’t have a number for this, my sense is that
media opinion — even at hard-right venues like the Wall Street
Journal — has turned even more strongly against Trumponomics than
consumer sentiment or news reporting. The mad king himself certainly
seems to think so:

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Will Trump respond to the public backlash by moderating his policies
or hiring some actual adults? That seems less ever less likely. What
has happened, as I noted
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couple of days ago, is that his top economic officials have embraced
“liquidationism,” the view that the economy needs to go through a
period of suffering (“detox”) to compensate for previous excesses.
Shades of Herbert Hoover
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In retrospect, I may have spent too much time in that post showing
that these claims are economic nonsense, and not enough time pointing
out the desperation they reveal.

For one thing, it’s awkward to center your economic messaging on
claims that Americans need to suffer for President Biden’s
(imaginary) sins when Trump’s message throughout the campaign was
that he would fix everything on Day One. It’s also remarkable, if
you think about it, that Trump officials are in effect offering
excuses for a recession that hasn’t happened yet and is at this
point only a possibility.

Also, who’s hearing these messages? I would be curious to know what
percentage of voters have any idea who Scott Bessent or Howard Lutnick
are or what they do, but I’m sure it’s not a big number. (Actually
I’m not clear myself on exactly what Lutnick does.)

Another president might be making speeches, even doing fireside chats,
to reassure the public. But Trump seems focused instead on annexing
Canada, a subject on which he has grown ever more obsessive even as
Canadians recoil at any thought of associating themselves with a
nation that seems to be turning into the Republic of Gilead
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Handmaid’s Tale_.

So the closest thing we have to an economic spokesman for this
administration is Elon Musk, who sees dead people collecting Social
Security. And here’s the thing: while there’s still a dwindling
Musk/Tesla cult, to a first approximation everyone else hates Elon.

Trump won the election because a number of people believed, wrongly,
that he would do great things for the economy. It has taken him less
than two months to squander all that undeserved trust.

_I [Paul Krugman] am an economist by training, and still a college
professor; my major appointments, with some interim breaks, were at
MIT from 1980 to 2000, Princeton from 2000 to 2015, and since 2015 at
the City University of New York’s Graduate Center. I won 3rd prize
in the local Optimist’s club oratorical contest when in high school;
also a Nobel Prize in 2008 for my research on international trade and
economic geography._

_However, most people probably know me for my side gig as a New York
Times opinion writer from 2000 to 2024. I left the Times in December
2024, and have mostly been writing here since._

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* Elon Musk
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* Donald Trump
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* Economic Policy
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