Krugman Rips Trump, John Kelly, John Taylor: ‘See? I Made A Joke!’

For days, we’ve documented the truly absurd saga of Donald Trump, John Kelly, and a grieving military widow. Here’s our summary which would be fall-in-the-floor funny if it weren’t simultaneously sad:

Last Monday Trump managed to turn a press conference on tax reform into a referendum on which Presidents cared the most about dead soldiers. That, in and of itself, was a truly incredible feat. That pivot (from tax reform to dead soldier pissing contest) is not only difficult to make, it’s damn near impossible. But he did it. And then, instead of just letting it go, he doubled down on the claim that ex-Presidents didn’t call dead soldiers by dragging John Kelly and his dead son into things.

Meanwhile, he was in damage control mode with regard to criticism that he hadn’t yet contacted the families of soldiers killed in Niger so he scrambled around to call them and when he did, he accidentally insulted a widow. When he was called out on that by a lawmaker who overheard the discussion, he tried to lie about it, but that didn’t work because as it turns out, he was on speakerphone apparently without realizing it.

So then he made John Kelly hold a press conference the sole purpose of which seemed to be to discredit Frederica Wilson. That was going ok-ish until Kelly went off on a tangent about respecting women and the sanctity of Jesus. And then about 24 hours later things really went awry after the media went back and dug up the video of the Frederica Wilson speech that Kelly referenced and discovered that in fact, Kelly was bald-face lying too.

Of course neither Trump nor Kelly are going to admit that they were wrong or that they were lying which is par for the course for the former and just evidence that the latter as succumb to what Notes From Disgraceland calls “the physics of Trump.” To wit:

Whoever comes within Trump’s event horizon becomes afflicted with the same cognitive incapacity as Trump himself. There is a long list of transient (and a shorter list of persistent) surrogates, all of them disposable victims of cognitive asphyxiation: Kellyanne, both Steves, Giuliani, Christie, Newt, Ben Carson, Jeffrey Lord, and a long list of anonymous spokespersons.Not that these people were ever beacons of rationality, but they have broken new boundaries and set new records after entering the domain of Donald Trump. These creatures thrive in the space between real news and reality TV. They roam different mediascapes, mostly to boost the ratings of the mainstream networks – people tune in only to see the spectacle of public humiliation. And the list does not stop there. Now, even former bankers, Cohn and Mnuchin, who, one can argue, may be ethically challenged, but are nominally still highly rational, they are not making any sense either, even when it comes to counting money.

Well, someone else is about to enter the Trump event horizon as his pick for Fed Chair and while it seems unlikely that Yellen would fall for the same shenanigans as everyone else when it comes to pledging undying loyalty to Trump, that’s an open question for the other people in the running. Even more dangerous is that Trump has a characteristically schizophrenic take on the Fed: one minute Yellen “ought to be ashamed of herself” for creating a “false” market and the next minute he’s bragging about that same “false” market (which apparently isn’t “false” anymore now that he’s President) and talking about how low interest rates are good. So who knows what a John Taylor would make of that.

With all of that in mind, consider the following from Paul Krugman. The best thing about this piece is imagining Krugman’s detractors flying into fits of rage while reading it…

By Paul Krugman for The New York Times 

Last week John Kelly, the White House chief of staff, tried to defend President Trump against charges that he was grossly insensitive to the widow of a U.S. soldier killed in action. In the process, Kelly accused Frederica Wilson, the member of Congress and friend of the soldier’s family who reported what Trump had said, of having behaved badly previously during the dedication of an F.B.I. building.

Video of the dedication shows, however, that Kelly’s claim was false, and that Representative Wilson’s remarks at the ceremony were entirely appropriate. So Kelly, a former general and a man of honor, admitted his error and apologized profusely.

See? I made a joke!

In reality, of course, Kelly has neither admitted error nor apologized. Instead, the White House declared that it’s unpatriotic to criticize generals – which, aside from being a deeply un-American position, is ludicrous given the many times Donald Trump has done just that.

But we are living in the age of Trumpal infallibility: We are ruled by men who never admit error, never apologize and, crucially, never learn from their mistakes. Needless to say, men who think admitting error makes you look weak just keep making bigger mistakes; delusions of infallibility eventually lead to disaster, and one can only hope that the disasters ahead don’t bring catastrophe for all of us.

Which brings me to the subject of the Federal Reserve. What?

The truth is that what I’m calling Trumpal infallibility – the insistence on clinging to false ideas and refuted claims, no matter what – is a disease that infested the modern Republican Party long before Trump. And one of the areas where the symptoms are especially severe is monetary policy.

You see, when the 2008 financial crisis struck, the Federal Reserve, led at the time by Ben Bernanke, took extraordinary action. It cut interest rates to zero and “printed money” on a huge scale – not literally, but it bought trillions of dollars’ worth of bonds by creating new bank reserves.

Many conservatives were aghast. TV pundits hyperventilated about hyperinflation, and even seemingly more respectable voices denounced the Fed’s actions. In 2010 a who’s who of conservative economists and pundits published an open letter warning that the Fed’s policies would cause inflation and “debase the dollar.”

But it never happened. In fact, the Fed’s preferred measure of inflation has consistently fallen short of its target of 2 percent a year.

Now, every economist makes bad forecasts now and then – if you don’t, you’re not taking enough risks. I’ve certainly made my share, including a bad market call on election night – which I retracted three days later, acknowledging that my political dismay had gotten the better of my analytical judgment. But I always try to face up to my mistakes and learn from them.

But I guess I’m just old fashioned that way. Four years after that open letter to Bernanke, Bloomberg tracked down many of the signatories to ask what they had learned. None of them – not one – was even willing to admit having been wrong.

So what happens to economists who never admit mistakes, and never change their views in the light of experience? The answer, apparently, is that they get put on the short list to be the new Fed chair.

Consider, for example, the case of Stanford’s John Taylor (one of the signatories of that open letter). Unlike some of the other names on the rumored list, he’s a highly cited academic economist.

Since the financial crisis, however, he has repeatedly demanded that the Fed raise interest rates in line with a policy rule he devised a quarter-century ago. Failing to follow that rule was supposed to cause inflation, which it hasn’t – but seven years of being consistently wrong hasn’t inspired any rethinking on his part.

What it has inspired is a descent into increasingly strange reasons the Fed should raise rates despite low inflation. Easy money, he declared, was part of a conspiracy to “bail out fiscal policy,” that is, an effort to help President Barack Obama. Or maybe it was like the monetary equivalent of rent control, discouraging lending the way rent control discourages building apartments – a bizarre analysis that had colleagues scratching their heads.

What these ever-odder interventions had in common was that they always offered some reason wrong was right – why Taylor had been right to warn against easy-money policies even though higher inflation, the problem he predicted as a result of these policies, never materialized. And never, ever, an admission that maybe something was wrong with his initial analysis.

Again, everyone makes forecast errors. If you’re consistently wrong, that should certainly count against your credibility; track records matter. But it’s much worse if you can never bring yourself to admit past errors and learn from them.

That kind of behavior makes it all too likely that you’ll keep making the same mistakes; but more than that, it shows something wrong with your character. And men with that character flaw should never be placed in positions of policy responsibility.